Diary of a start-up: stuck between the silos 10/02/2010

David Sargeant, founder, Zukido

RUNNING a start up provides many challenges - and customer company politics is one of the best. 

My company, Zukido, creates both in-running sports betting applications and mini-games. These products are totally complimentary when sitting on a web page together; most punters like the mixed concept too; and mini-games definitely drive up the revenue of an in-running page, with a good knock on effect into casino sales revenue. However the mixed product concept runs some companies into difficulties. 

However many gaming businesses split themselves into product silos - sports, poker, games, bingo, etc - and staff are organised into these silos for marketing, operations and product development reasons, with the profitability of these individual product streams normally has a direct knock-on effect onto the bonuses of the groups of staff. This is where my problem occurs.

Mini-games are usually run through an operators' games room, so comes under ‘games revenue’. However I am trying to sell a mini-games product onto a page 'owned' by the sports betting department. So which will get the revenue, Sports or Games?

A sports product owner has it in their best interest to cross sell other sports products rather than divert his potential bonus into the games managers’ pocket.

 A forward thinking company can deal with this. In fact many companies are trying to end the product silo set-up completely, where possible. Marketing is becoming less and less product driven, and instead driven by customer target groups. 

This makes sense because cross-selling and up-selling increases the bottom line. Sports betting customers that become sports and casino customers add a magnitude to their lifetime value. 

This all may sound like basic CRM philosophy to a lot of organisations, but many companies still struggle with the concept that they are pan-gaming companies, not product-based companies (e.g. “we are a sportsbook with a casino on top”). 

The companies that are succeeding are the ones with cross-selling and up-selling at their core, and not ones limited by the silo approach. But then no-one ever said running a start up was going to be that easy...

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Posted: 10/02/2010