GBR recently caught up with Andrew Paradise, to learn more about San Francisco based Skillz, their inspiration, strategy and mission. Skillz was founded in 2012 and currently has 50 employees between their San Francisco headquarters and a Boston office. The eSports infrastructure provider currently works with over 1,600 mobile game developers and has more than 7 million registered players.
When asked about the original inspiration for the company, Andrew says, “I came up with the idea for Skillz one day while playing a mobile game. The game control buttons were strategically located next to advertisements to make players accidentally tap on ads while trying to play the game. I realized that there had to be a better way for game developers to monetize their content without upsetting their players.” That’s how Skillz was born, with the goal of providing an alternate revenue stream for developers while increasing player retention and enjoyment via competitive eSports. Note that several recent reports put the 2016 eSports market between $500M and $750M with the market predicted to grow 150% by 2018. Thus, the timing for founding Skillz was fortuitous.
Thus far, Skillz has secured over $28M in funding from well-known venture capital firms as well as major sports team owners from the NFL, NBA and MLB.
More specifically, investors include:
- David Bonderman’s Wildcat Capital Management
- The Kraft Group, owner the New England Patriots
- Marc Lasry, co-owner of the Milwaukee Bucks
- Sterling VC, owner of the New York Mets
- Luol Deng, small forward for the Miami Heat
RT: What does your game/product/technology offer and how does it work?
AP: We offer free eSports infrastructure to game developers that is fully customizable and allows them to host competitive tournaments inside any mobile game and broadcast those competitions to fans all over the world.
RT: What makes it unique from other products in the space? What is your competitive advantage?
AP: We established the mobile eSports industry back when Skillz was founded in 2012. Several companies have popped up since then trying to mimic what we’re doing. We’re pleased to welcome competitors into the space, as their presence validates both our business model and the market opportunity. We believe our technology stack, tournament management system, live streaming capabilities, and player base make us the clear industry leader.
RT: What additional services/products do you provide?
AP: Skillz provides comprehensive eSports infrastructure to mobile game developers, improving the gameplay experience for end users and driving improved engagement, retention and revenue. We enable end-to-end, cross-platform tournament administration, anti-fraud and anti-cheating, player matching, payment processing, customer service, and embedded video streaming.
RT: Why would/do customers use your product? How do they find you?
AP: We have over 7 million players competing in our tournaments who use our product because they love the thrill of competition, equal playing field, and awesome prizes. The most common way that new users discover us is by pressing the ‘multiplayer’ button in their favorite game.
RT: What platforms and game engines does your product(s) run on?
AP: Skillz supports cross-platform competitions on iOS and Android smartphones and tablets. Skillz can be easily integrated into mobile games built in almost any development framework, including popular engines like Unity, Marmalade, Unreal, OpenGL, UIKit and Cocos2d.
RT: What other tools or tech does your product support?
AP: In addition to supporting iOS and Android mobile devices, Skillz also supports streaming sites like Twitch and YouTube. We enable any online streamer to organize and host their own private competitions and broadcast them to fans around the world.
Skillz holds multiple issued patents and have filed more that are awaiting approval, all of which reflect the various aspects of the groundbreaking technology they’ve built.
RT: Why will our readers be interested in your product?
AP: Skillz is making competitive gaming accessible to players at all levels, using the mobile devices that people already own. The fundamental reason that mobile eSports have been overshadowed by PC and console titles is because mobile games simply haven’t been in existence as long. With over 2.1 billion daily gamers, mobile is the next frontier for eSports.
RT: What are the opportunities you see in the market where you’re currently positioned?
AP: As the eSports provider for over 1,600 game studios, Skillz accounted for more than 20% of all eSports prizes awarded in 2015. The biggest opportunity is to continue growing the eSports market, which is forecast to hit $9 billion in revenue by 2017.
RT: What are the risks and challenges you think you face, and what qualifies you to overcome them?
AP: The main problem we’ve encountered is a lack of knowledge surrounding eSports. The common assumption is that only hard-core gamers can participate, but the reality is that all sports (including electronic sports) are for everyone. Take basketball, for example. There are 450 players in the NBA, but over 30 million people who play the sport across the U.S. alone. It shouldn’t be any different for eSports, which is why Skillz is delivering competition to the 99%, making eSports accessible to players at all levels.
RT: Who or what is your competition? Briefly explain what makes you better than what rivals offer?
AP: Our biggest competitor is probably television, which competes with us for our user’s time. Gaming, however, is more interactive, stimulating, and social than television, and eSports offer the opportunity to build on the gaming experience. We provide our players the chance to engage in the type of celebrated competitions that have been a staple of human culture since roughly 2000 BC when athletes competed in a variety of traditional sports.
Andrew concludes, “In a world where mobile gaming is nearly ubiquitous, tomorrow’s athletes aren’t just hard-core gamers who play first person shooters. They’re also the people standing next to you on the train or walking past you on the street. Skillz provides everyone the opportunity to access fair and fun competitions, and with that opportunity, I think you’ll be surprised at who will emerge as tomorrow’s sports superstars.”
A little about Skillz’ founders:
Andrew Paradise is a serial entrepreneur with a successful track record. Prior to Skillz, Andrew founded AisleBuyer, which was sold to Intuit (NASDAQ: INTU) in April 2012 as well as Photrade, which was sold in 2009 to MPA Inc. He has also worked in venture capital and private equity investing for Fort Washington Capital Partners and The Watermill Group. Andrew learned to program at age seven by hacking a video game with a hex editor and later wrote his first game in Pascal. Andrew founded Skillz because he believes in making mobile games more fun for players while making game creation more lucrative for developers.
Casey Chafkin is the Chief Marketing Officer and co-founder of Skillz. As a stats geek turned marketer and the fourth employee at AisleBuyer (now Intuit GoPayment), Casey is an expert in mobile payments and performance marketing. Prior to AisleBuyer, Casey worked at CarMax (NYSE: KMX) where he re-launched the company’s consumer offering and lead loyalty research. Casey received his B.S. in economics from Duke University and his MBA from Harvard Business School. Outside of the office, Casey has continued to pursue his love of statistics as an avid poker player and a co-author of a recent paper covering programmatic trading strategies within sports handicapping markets.
GBR Analyst’s View:
Skillz seems to be in a unique position, one that benefits mass market democratization of competitive gaming, either for virtual status, virtual currency or real money. We think their strongest competitor for adoption right now is likely a game developer building similar features into their game or game engine directly. However, since they have an early-to-market SDK that works with Unity and other popular game engines, this will certainly reduce that resource requirement for the many mobile developers using these engines to develop their games, further lifting Skillz adoption.
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