The growth of many startups in the industry has been sparked by the new wave of innovation and disruption. In many different sectors—most especially in financial technology—we note the rise in deals made globally with startups, and more recently, a CB Insights report stated that AI startups raised a record of $26.6 billion worth of investments in 2019, garnering more than 2,200 deals worldwide.
For unicorns and soonicorns (soon-to-be-unicorns), the opportunities and possibilities can be endless, especially when technology is on everyone’s side. I had the pleasure of sitting down with Sudhir Kumath, Co-founder and CEO of Sparskills Technologies, India’s youngest startups in the gaming market. The company runs online poker and fantasy sports with more than 600,000 registered users. In this fireside chat, we discussed the relevance of digital integrated business services to drive sustainable growth for unicorns and soonicorns, and covered a few more: the priorities and challenges of a growing startup company in the gaming industry in India, the value of finding the right partner and their characteristics, the role of high-tech, high-touch, and the importance of advanced analytics and AI in today’s startup environment in the gaming sector.
Sid: Welcome to the fireside chat, Sudhir. Could you please tell us a bit more about Sparskills?
Sudhir: Thanks for having me here, Sid, and it’s an absolute pleasure! Sparskills is in the online skill-gaming space, which is the fastest-growing segment in the online gaming space in India. We operate www.9stacks.com for online poker, and www.faboom.com for fantasy sports (cricket, football, and Kabaddi).
As any other early-stage startup, growth would be your top-most priority. Could
you share some of the opportunities and challenges you face as you go along?
Sudhir: You’re spot on – growth is what makes start-ups tick, and we’re no
different. We’ve been live for about two years, and we double in size every six
months or so. This obviously places a lot of stress on all our resources –
especially the team, customer care, tech codebase as well as servers, and all
our internal processes.
Sid: You had a successful Series A round a few months back and are planning a Series B soon. How do you go about executing on the non-linear growth expectations that your investors would most certainly have? Do you partner with third-party service providers as you scale up or do you do it organically yourself? Could you share some examples?
Sudhir: We do partner with third-party providers – it is impossible to scale if we try to do everything by ourselves. However, the exact list of what is “in” and what is “out” keeps changing. For example, when we started we had outsourced our entire Finance and Accounting function – over time that was brought almost entirely in-house. Customer care started fully in-house, and eventually now it is run at an external provider but supervised directly by us. Analytics started in-house, got outsourced, and now we have it in-house again! As for marketing, we have an in-house design and planning team that comes up with new digital campaigns and then get social media influencers on board to make it successful; but we do work with specialized external agencies from time to time.
Much of the sourcing decision between in-house versus third-party comes down to
how you define what is core versus what is non-core. Where do you draw the
Sudhir: My general rule is that if something helps us strongly
differentiate against competitors, and we can build our team in a reasonable
period, then it makes sense to do it in-house. Analytics is a good example – we
see that as core now. Tax is at the other end – it is important to get right,
but it’s not a differentiator – so we prefer to outsource that to a specialized
Sid: Besides growth, the other big priority for product-based startups is UX or CX. How you blend High Tech (e.g. chatbots for customer service) with High Touch to ensure a high level of customer stickiness?
Sudhir: In our case, the product itself is online / app-based, so UX starts from the minute a player searches for us and reaches our website, and extends all the way through gameplay and customer care. We have experimented with chatbots for onboarding users (on FB messenger) but not for customer care. Our experience is that in the gaming industry, players prefer to talk to real persons if they are facing any issues. That person will then leverage tech to respond instantly.
What role do Advanced Analytics and AI play, if any, in your product roadmap?
Do you invest in these capabilities in-house or do you partner with other
Knowledge Services firms?
Sudhir: AI / advanced analytics are absolutely critical for us, in many
different ways. I’ll give some examples:
- Detection of bonus fraud, collusion between players, attempted cheating during tournaments, etc. – and such detection to be as close to real-time as possible
- Using AI to optimize which games a user sees, especially in fantasy sports. This is similar to the way a recommendation engine works in e-commerce
- Detecting potential churn and preventing it – we started with standard recency-frequency kind of analyses, but we go a lot deeper now, and we have a lot more historic data to work with. A related area is maximizing revenue from each user
- One other area, where we are probably leaders in the Indian industry, is the use of analytics to help players improve their own game.
We have worked
with external firms at different times, but primarily these are core
capabilities that we need to keep in-house.
Sid: What advice do you have for other unicorns/soonicorns
on the lookout for Digital Integrated Business Services partners? What are the
key characteristics you look for in a dependable partner?
Sudhir: When we look for partners, we typically follow an “experiment and
then trust” cycle. We will first do a small pilot project, get comfort around
the quality of work as well as responsiveness of the team, and then make it
permanent and scale it up. We’re too young as a company to give advice, but
maybe just one piece: start with a company that has a great reputation and
speak to a couple of their customers first!
Thank you very much for your time today, Sudhir, and for sharing your insights
into how Unicorns and Soonicorns can drive sustainable growth through Digital
Integrated Business Services. Wish you the very best and look forward to seeing
Sparskills in the list of Unicorns soon.
Sudhir: We’ll keep our fingers crossed! Thanks.