January 25th, 2010

Business Profile: Fantasy Sherpa

Monday, January 25th, 2010

Company: Sherpaville Enterprises
Launch date: April 1, 2005
Became full-time operation: immediately
No. of employees: 1

Disillusioned by a second merger-fueled layoff in his career as an actuary, Scott Swanay decided change direction and take his love of numbers into the fantasy sports industry. FSB.com recently asked him 10 questions to find out how things are going so far.

1. I’ve read about your career before Sherpa. For those you haven’t can you describe the path that led you here?

I graduated from Harvard in 1987 with a degree in Applied Math & Computer Science. After school I worked for 17 years as an actuary in the property-casualty insurance industry before deciding I’d rather apply math to fantasy sports than insurance.

2. What kind of work/preparation did you do with fantasy sports before turning it into a service and a business? How long had you been playing fantasy?

Before launching my fantasy sports business, I spent about a year working on a new baseball stat that I marketed to the 30 MLB teams. In the meantime a friend from my running team invited me to co-manage her fantasy baseball team with her. As a former actuary I put together all sorts of spreadsheets to prepare, but found that I coudn’t find most of the information I was looking for. After creating it for myself, I decided the ~10 million other fantasy baseball enthusiasts would probably be interested in the same info, so I joined the Fantasy Sports Trade Association (FSTA), did my market research, and decided to go full steam ahead.

3. Where did “Fantasy Sherpa” come from?

Sherpas guide people to the top of a mountain; I guide people to the top of the standings in their fantasy baseball and football leagues. The idea for the Sherpa came, oddly enough, from my college singing group: We once went on a tour and split our 60-person group into three subgroups for attendance/tracking purposes. Each of the subgroups had a leader who was designated a “Sherpa.” When I was deciding on a name for my company almost 20 years later, the name came back to me, and that image fit the image I wanted to create for my company.

4. What kind of startup costs did you incur and what steps did you have to take to launch your company?

Lots of startup costs, most of them related to the development costs involved in taking my ideas and turning them into a marketable service. I create all of the algorithms underlying the websites myself, then hire website developers to turn my visions into reality.

5. How did you go about making yourself known within the industry and with potential customers?

I attended Fantasy Sports Trade Association conventions and networked with as many people as possible. Through those connections I’ve been invited to participate in a number of expert leagues, which also helps. I spend a lot of time blogging, marketing myself through fantasy sports interest groups on social media websites, and contributing articles and analysis to other fantasy sports-related websites. I also do as many television, radio, print, and online interviews as possible to get my name out.

6. Your site lists preseason rankings and projections and in-season updates to those projections for baseball, with just the preseason version available for football. What kind of market have you found for those?

The market for the preseason products in both baseball and football has been good. People appreciate that they can customize the rankings to reflect their leagues’ unique scoring systems, and they also like that the rankings include a quantitative adjustment for position scarcity (the drop-off in fantasy value between the top-rated and mediocre options at each position). However, I see the in-season updates as my main contribution to the fantasy sports industry so far. People appreciate remainder-of-season forecasts that are updated daily and include objective, data-driven adjustments to reflect injuries, trades, minor league call-ups, role changes, etc.

7. How does your customer base break down between baseball and football?

Right now the split is probably 60 percent baseball, 40 percent football — but the baseball service has also been available longer than the football service, so that could easily change in the future.

8. What other sources of income does Swanay Sports Consulting draw from?

Subscriptions to the fantasy baseball and football services are currently the main source of revenue. I also do some freelance work for fantasy sports magazines, and I’m looking into licensing my projections and services to larger fantasy sports websites.

9. Assuming the company is profitable, how long did it take you to reach the point of profitability?

Profitability is an ongoing challenge, but one I readily embrace. The main goals at this point are to increase my presence in the market and add more innovative services to the websites that people will be willing to pay for.

10. What plans do you have for future growth in services, products and/or areas of focus?

In the short term I want to add more products to both the baseball and football sites and explore potential licensing deals with other websites. Eventually, I’d like to translate the websites into other languages (particularly Fantasy Baseball Sherpa) and market them to people in other countries. I also have protoypes already for basketball and hockey sites and will look to add those, and possibly others (soccer, anyone?), in the future.

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