Q&A: 20SHOTS on the product appeal of a crossover between fantasy and sports betting

UK start-up 20SHOTS, the brainchild of Jacob Kalms and Declan Spiro, is looking to bridge the gap between betting and fantasy football in the UK with its free-to-play Fantasy5 football game which just completed its debut season. In its first year, the product has seen a CPA of 64p with 62,000+ signed up users and week-on-week retention of 78% with no push notifications.

Here, EGR Technology catches up with co-founder Kalms to find out how the idea for 20SHOTS first came about, the development expertise that goes on behind the scenes and how Fantasy5 has achieved organic growth with a strong social media strategy and no marketing campaigns.

EGR Technology: Where did the idea come from for both 20SHOTS and Fantasy5?

Jacob Kalms (JK):  Me and my business partner Declan [Spiro] have been friends all our lives and we’ve both been working in the gambling space. We both love to play fantasy with friends and to gamble and thought there must be others who would want to bet on fantasy. So, we did some research, ran some face-to-face surveys and made sure that we could price up the markets. Then at the beginning of 2019 we began to raise money to start the business and not long later the business began.

EGR Technology: How has your background in marketing and Declan’s background in data science helped you to create the perfect business model?

JK: Declan was working at one of the world’s leading sports betting hedge funds as a lead data scientist. That’s put him in a great position to be able to build out a team and for us to then price out these new markets that have not been seen before. I’ve worked in management and also in the social ad space since its inauguration. So, I’ve been heavily involved with Facebook, Instagram, Twitter ads, YouTube, so on and so forth. But for this product, we’ve mainly gone to market organically so I haven’t had to use my social ad skills, but more managing and building out a team.

EGR Technology: Fantasy football is huge in the UK – how did this influence the product and what is key from a technology point of view to keep a fantasy football audience engaged?

JK: Fantasy football is definitely mainstream and growing now in the UK. And that was the main reason why we started both our products – our initial fixed-odds products, followed up with Fantasy5. Fantasy players are extremely engaged in general, so for us it was more about tapping into those communities and offering a product that they were used to, rather than creating something that was maybe new from a technological standpoint. We weren’t trying to fix something that wasn’t broken. We were just trying to enhance the user experience whilst offering a new product they felt familiar with. A big part of keeping the user engaged was the rules and the procedure. Keeping everybody in line with what they’re used to and offering them something that’s new but comfortable.

EGR Technology: What would you say is the USP of Fantasy5?

JK: We’ve created a free-to-play product that is different to anything else that’s out there. We can manage the risk on a week-by-week basis ourselves by choosing the players’ points targets. And we’ve managed to create a free-to-play product that engages with the large fantasy audience while also pushing them to a sports betting product which hasn’t been done to my knowledge in the fantasy world yet.

EGR Technology: You built your own tech from scratch with a lean team during lockdown – how did you do it, how big is your tech team and what were the challenges?

JK: I think it’s good to maybe differentiate between our products. So, we have 20SHOTS, which was the first product that we raised money on and built, and that is a B2B fixed-odds fantasy software provider. Through an API or a plugin, we allow sportsbook operators to offer fantasy markets and allow you to bet on overs, unders on any individual player or team (any amount of players) and several other fun markets.

We then released our new product at the beginning of this season called Fantasy5, which I’ll get to.

20SHOTS was created with a development house in Bulgaria. We weren’t big on outsourcing but this company have invested in us, and they’ve only taken equity as payment so it’s not your normal outsourced work. They only get paid based on completion. We have an excellent relationship with them, where we have a core team who works every day on our product. And when we’ve had to scale or we’ve had to hit deadlines, we’ve been able to scale up our dev team to 14 developers when we needed to. This dev house has over 300 developers and they create the trading platforms for the world’s leading banks so they’re very well positioned to create a similar system.

The challenges we faced included when we went to ICE,  Covid happened and all our leads went dry. We had just started to sell the product and had to pivot quickly. In March/April last year when football had stopped, we had very little idea of what the landscape would look like. We could see that the industry was moving towards free-to-play products and the US has always been a target for us. So we created a free-to-play product that we can run B2C as well as B2B and went to prove the concept in the UK. We managed to get Fantasy5 live within four months.

EGR Technology: How many players signed up to Fantasy5 during its debut season?

JK: We only ran a tiny bit of marketing from October to February in comparison to what some operators are spending. We now have over 60,000 signed up users, of which we see week-on-week retention of about 78%, which is excellent. I think the key thing here is that our CPA was around 64p for those 60,000 players and we haven’t really tried to spend money. We didn’t release the game with B2C in mind, we just did it to show the operators what we can do. We saw how well it did so we’ve just kept it going. We will probably keep the B2C arm open because the average player comes to our site 3.8 times a week for over three and a half minutes each session so they’re pretty decent numbers for a free-to-play game.

EGR Technology: How did you use social media to grow your player numbers and how did you keep those customers engaged and invested in the product?

JK: With regards to the player numbers and how we’ve been able to grow the product, our product is built for B2B purposes. So, we don’t have, for example, push notifications. We don’t have any social aspects within the product that helps us with these metrics. However, that being said, we have over 15% of our community following us on social media. We’ve been able to build a great community there and tap into the already pre-existing fantasy community, which is huge. And they all talk about our product without us having to prompt them so that’s helped on a retention and acquisition front. We also have 50% of our customers who have accepted marketing emails from us so we’re able to communicate with them via that channel. It’s not your best channel without push notifications as you’re missing a major tool in that space, but we’ve been able to retain and engage our customers quite superbly.

EGR Technology: How big an opportunity is the intersection between fantasy football and betting in the UK compared to the US?

JK: To me, it’s a different landscape. Fantasy is heavily intertwined with sports betting in the UK. However, no one’s really taken advantage of that. Before we started, we ran plenty of surveys and we found that 45% of weekly sports bettors play fantasy in the UK. That was a massive stat to us and proved that we should continue with this idea. There’s a market here.

But our focus was also on the States. There, fantasy is deeply ingrained in the sports system. In media they talk about it on a daily basis. It’s part of the build up to games, it’s spoken about in commentary in games. And on top of that, the big players there, like DraftKings and FanDuel, were the first place you could really gamble online in some form of way. They set the tone and they laid the groundwork for sports betting. So, I think in the States sports betting is now going to become bigger than fantasy, like we see in the UK. However, the crossover between the two is huge. And that’s why we’ve just released Fantasy5 Basketball. We see that as a way of complementing both the industries and I think the fantasy industry will now need to cater to and adapt to the betting industry, which they haven’t had to do before in the States because they were the main players. We know in the UK how big sports betting is and I don’t see it being any different in the States. I think that’s going to really change the landscape there. And we want to set ourselves up to be able to offer a unique product in that space.

EGR Technology: At 20SHOTS, have you or do you plan to experiment with AI, machine learning or other new types of technology?

JK: We’re a start-up and our focus was scaling our products. We had this influx of players right from our launch and we had to cater to that, which we did. Now it’s new features and new sports. We just created multi-sport for Fantasy5 where we’re now set up to be able to release new sports extremely quickly. Our sports betting product and risk management system is very advanced and we have certain aspects to it, which currently the sports betting industry don’t use when they’re pricing up in-play markets. Our focus isn’t on our tech, it’s on building a product that is comfortable for the user to use, comfortable for the operators to be able to integrate in one or two days and releasing new sports.

EGR Technology: Do you have further product iterations planned or what’s next for Fantasy5 and 20SHOTS in terms of product development?

JK: Our focus now really is the B2B deals. We’ve got some in the pipeline and hoping to go live with a few top-tier operators in the new season across both our fixed-odds product and our Fantasy5 product. That’s our focus, and then new sports such as NFL, cricket, ice hockey and baseball.