Dante (La Divina Commedia) “Nel Mezzo Del Cammin di Nostra Vita…” Invoost, a Fantasy Stock Market Game
Founding a startup and taking it to the long, tortuous road to exit (IPO or acquisition) is much like Dante Alighieri’s journey in La Divina Commedia, from Inferno (getting started, convincing friends and family to invest), to Purgatorio (launching, having some customers and not enough money) to finally Paradiso (IPO or acquisition).
“Nel mezzzo del cammin di nostra vita me ritrovai per una selva oscura” (Midway in our life’s journey I found I was in a dark forest). The first startup in the Dante Series is Invoost, a Spanish startup (think fantasy stock market game) that has moved from Spain to Silicon Valley. Invoost’s “dark forest” is navigating the the U.S. regulatory structure marking the fine line between gaming and on-line gambling and getting plugged into the Valley’s VC and angel communities.
Co-Founders? There are three: Jonathan Levy, Johan Wilsson and Tyler Maglione. They met in an MBA program in Spain.
Product? A stock market game for the people who don’t have $10k or $20k to play in the real stock market and don’t want to play on virtual stock exchanges because they are boring. You pay/invest $10 and join a virtual trading room. There are 10 traders ($100 in prizes). The $100 is real money. Each trader receives $10k in virtual money to trade on the NASDAQ for one day (there are different durations and markets available). The trader who generates the highest return wins 50% of the prize pool, the 2nd and 3rd place traders win 30% and 10% respectively. Simple? Yes! Fun? Yes!
You sign up at the website (yes, it works, I checked it) and instead of playing against the world (the guys with their sophisticated algorithms and supercomputers), for as little as $10 (two cups of coffee at Starbucks), you play against a small number of real people (maybe 3 other people). You pick your stock and the game follows the real stock market to see whose picks have made the most money in the time allotted. The time limits of the tournaments vary.
Business Model Invoost keeps 10% of all money (entry fees) and the winning players keep 90%.
Target Market People who are interested in the stock market (that would be everyone) and we reads sites such as WSJ or FT. “In 2011, CNBC hosted a free million-dollar trading championship and had almost half a million players participate. The direction for this product is obvious: strategic partnerships with digital media companies who want to monetize the traders. The product could be licensed as a white label to these media giants.
Legality This is the major sticking point with this product, however, real money fantasy sports and educational games are legal to operate without regulation in the U.S. under the Unlawful Internet Gambling Act of 2006.
Takeaway If you are midway in your life’s journey, want to learn about the stock market and don’t have much money, Invoost is the game for you.
Suggestion Start thinking about other ways to monetize the game since the U.S. regulations on fantasy gaming vs. on-line gambling are starting to blur.