What Can New Daily Fantasy Sports Sites Do to Stand Out?

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We’re in the middle of a prime period of history for fantasy sports startups. The DFS industry is experiencing explosive growth, regulation is minimal and operators can piggyback off the increased awareness fueled by advertising paid for by the biggest, established brands.

Perhaps most importantly, startup costs are being pushed down with the emergence of white label solutions that provide ready-made fantasy platforms complete with customer support, payment processing, software, stats and existing player bases to plug in to. MGTSports.com, for example, powers both DraftDay.com and FanThrowdown.com.

In the process of researching and reviewing daily fantasy sports sites, I’ve come to realize that there are many more sites already operating than I ever imagined. It may be a good time to get started, but that does not mean success is guaranteed or even likely. There is already a strong lineup of competition, especially from the established big names.

Without naming names, it seems clear some DFS apps are struggling to carve out marketshare. One fantasy sports site, for example, looked promising just a few months ago with large guaranteed prize pool competitions, interesting promotions and coverage of all the major sports in the US. Look a little closer, though, and you see the games only run sporadically and the site’s social media accounts haven’t posted anything new for months.

Most new fantasy sports sites don’t do anything to differentiate the product. All new DFS sites host contests and leagues for the NFL, MLB, NBA, NHL, soccer and college sports but it doesn’t really stand out in any way. There aren’t any new types of contests or other distinctions that mark most fantasy sports startups as different or unique.

If new fantasy sports companies don’t innovate and offer anything different than what is already offered by the likes of FanDuel and DraftKings, why would people join, and more importantly why would they deposit? Most new DFS apps have less name recognition, smaller contests and smaller prize pools. In this crowded space, new fantasy sports websites need to either be well funded or provide a model that offers something new and unique.

FanDuel and DraftKings set the bar for straightforward fantasy leagues for the major North American sports. Each has received hundreds of milliions of dollars in venture capital and are actively forming partnerships with major sports teams and leagues. Competing head to head with these DFS industry giants would be the most inefficient strategy imaginable in getting a new site off the ground.

The third-largest fantasy site, DailyMVP.com (now closed), understands this concept and is using it to great success. DailyMVP covers the same sports as all the other fantasy sites, but it uses a completely different model. Leagues here aren’t run in the traditional salary-cap model seen at FanDuel and DraftKings.

In contests at DailyMVP, you’re restricted by no salary cap – you can draft a team full of superstars if you want. The catch is that each player each week has a certain number of projected fantasy points. You only get points when your picks blow past their projections. The goal is to spot undervalued players (also an important concept in salary games), but you’re not limited to balancing a team budget.

Furthermore, DailyMVP hosts both games that involve a whole roster of players and quick-pick games in which you choose just three or five players. For example, they host 3 types of NFL games: one in which you pick three QBs, one in which you choose a QB/RB/WR and one in which you pick a whole lineup.

Another site that is doing well in differentiating itself is Victiv.com (now closed). Victiv hosts traditional salary cap leagues but is powered by arguably the best software in the industry. When drafting teams at Victiv, you can sort your picks by average per-game rushing, passing, fantasy points accumulation and so on. Overall, Victiv is defining itself as the most statistics-friendly fantasy site on the market.

They also provide anonymous heads-up games, allow you to save lineups, they implement an effective algorithm for setting player salaries week by week and are the only site that accepts deposits via Bitcoin. They’re also good at coming up with creative, worthwhile promotions. Just recently, Victiv announced a $300,000 Guaranteed NFL contest that will hand out Super Bowl tickets in addition to cash.

DailyMVP and Victiv are just two examples of DFS apps that are doing it right. Nothing is guaranteed in this increasingly competitive industry of course, but the best chances of success come to those who differentiate themselves.

Merely starting your own fantasy sports site isn’t far-fetched – especially considering the massive amounts of money being thrown around by investors, advertisers and the players themselves. The real challenge is found in building a sustainable model that can remain competitive in the already-crowded online fantasy industry.

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