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Pierre Mifsud, Chief Commercial Officer of the VentureMax Group, says the iGaming world presents plenty of opportunities for new companies bursting with rich ideas – so long as they can avoid its pitfalls.
The global online gambling industry has always attracted the brightest minds, creative talents and those with the strongest entrepreneurial spirit.
There is no end of success stories, from boutique studios being acquired for hundreds of millions to tier-one operators merging and consolidating to become undisputed international powerhouses. But where some businesses find success, others can and do fail.
This is because the online gambling industry is tough to navigate. It’s a minefield, and one wrong move can mean game over. You need more than just a great idea or smart product to make it to the top – and financial backing, no matter how much, will only get you so far.
Ultimately, start-ups must master all areas of business, from product quality and customer experience to regulation, differentiation, marketing and funding. And even then, success is not a given.
Let’s look at some of these key areas and see how start-ups can avoid the barriers they present.
Regulation, licensing and compliance
Vast swathes of the map turned from grey to white once the industry embraced regulation. This has opened up significant opportunities for organisations to explore, but it has also presented new challenges to overcome.
Operators, suppliers and other service providers must now secure licences and certifications to launch in regulated jurisdictions, with requirements differing from market to market – and this is easier said than done.
Most organisations have a dedicated department focused on securing the required approvals to enter markets, and then a compliance team to ensure requirements are being met at all times – the cost of non-compliance can be so high as to prove fatal for a start-up.
So think about having a specific team to handle all your regulatory needs, even if it’s just one person, because that’s how you’ll ensure your business can stick around for the long term.
Standing out from the crowd
Such are the opportunities available in this industry, it’s no surprise there are a lot of start-ups chasing after them. This means bringing something new to the table, as a means of standing out, is vital.
This can be something truly innovative – a never-seen-before game format, a fresh mechanic, a piece of technology that solves a problematic issue, or simply finding a better way of doing something already being done.
Technology is a great driver of innovation, and the start-ups that go on to achieve the most often have a proprietary platform, solution, mechanic, etc that takes the industry by storm.
Of course, this is not essential to success, and we have seen plenty of start-ups go on to do great things by improving what is already being done.
Either way, start-ups need to make an impact and won’t get far by copying those that have come before them, so embrace originality and look for a unique selling point that offers something fresh.
Engaging customers at scale:
Of the main challenges for any business – whether B2B or B2C – is engaging customers at scale. This requires a comprehensive marketing strategy that allows the business to engage customers in the right place at the right time via messaging that truly resonates.
With such high levels of competition, it’s important for businesses and brands to be authentic, and to have a clear voice through which they communicate with their audience.
This is why it’s so important for the business to have a well-defined identity and purpose as this is the only way to be heard above the noise made by rivals. It’s also crucial to identify the channels through which you can really connect with customers.
Digital marketing, when done right, is really cost-effective, highly trackable and easy to optimise in real-time so long as the right data is being gathered and analysed.
That’s why this type of marketing is an absolute must for B2B and B2C businesses.
Securing seed funding
The vast majority of start-ups find they need to secure funding to drive ahead with their plans. Organic growth is always possible, but it does take time, and this can mean the business misses a window of opportunity.
But finding the right investment partner can be easier said than done. Some investors are willing to front capital but don’t want to be overly involved in the day-to-day running of the business, while others can require more control and input than the founders want to relinquish.
Start-ups must also consider how they can make themselves attractive to the right investor. The VentureMax Group has an investment division and has clear criteria that businesses need before considering whether to get involved with them.
These include:
- Being early stage with significant growth potential
- Being a business that can disrupt
- Being a business with innovative technology
- Having a strong founding team
- Having scalable and defensible market opportunities
Our approach to investing is that it needs to be a true partnership.
Not only do we want to provide financial backing to the start-up, but we also want to share our extensive experience and help businesses successfully navigate this amazing industry.
So while there are plenty of challenges to overcome, the rewards are great for those who do manage to make their iGaming start-ups thrive.
