A week ago, it became known that the large European venture fund Mangrove Capital Partners, which had previously invested in companies such as Skype, Wix, and TransUnion, is planning to participate in the ICO of eSports network, DreamTeam. We talked with the creator of the project Alexander Kokhanovskyy and learned why smart contracts are needed in the space of video games and how he convinced the venture fund of this necessity.
First of all, tell us about the DreamTeam project itself.
DreamTeam, no matter how pathetic it may sound, is the world’s first eSports and gaming platform, where there is a full set of tools for players who want to create and develop their teams for profit. On the one hand, we unite all participants of the system, including professionals, players, managers, trainers, and analysts, and attract advertisers and platforms that buy content. On the other hand, with the help of blockchain and smart contracts, we are building a unique, innovative PayPal for the eSports market. This year, we will fully integrate all parts of this system on Ethereum smart contracts and enable the participants of all cyberspaces to settle with one another.
That is, in the gaming industry there are big problems with payments, which can be solved with the help of smart contracts?
I have a lot of experience in video games. I was a player on the team Natus Vincere, then coach and manager. I participated in various world competitions, in which I did not get my prize winnings after a victory. That is, the obligations of the contract were not fulfilled, and our team was simply told: “Thank you, goodbye!” And that’s all. This is the first problem that DreamTeam aims to solve.
The second aspect is local sponsors who are ready to invest in their own advertising through teams. Customers do not know how to enter this market or with whom to interact. Even if sponsors understand all the subtleties of advertising in eSports, who will give a guarantee for the fulfillment of obligations of the two sides? It once happened that a team was paid a fee before their tournament. Before the competition, at night, the gamers were celebrating someone’s birthday, and in the morning two people did not attend the tournament. And the money had been paid to everyone in advance. There’s no problem that can’t be solved by a smart contract, as the system cannot be deceived.
To solve problems in eSports, you created the DreamTeam ICO. How did you convince a serious venture fund of the need to invest in your project? After all, there are clearly competitors on the market.
We tried to cooperate with Mangrove Capital Partner a few years ago, so we knew something about each other. eSports is the fastest growing (by 35% per year) digital market on the planet. And many venture capitalists and investment funds are looking at this tidbit, as they understand that gaming will soon become the leading sport. In five to six years, gamers will surpass in number those who play football.
Mangrove looked at several eSports projects but chose us. We were honest in the negotiations with them. I believe that our advantage was a close-knit professional team. And we are like eBay or Amazon, only for eSports, where the seller can find a buyer. Of course, we have competitors who make certain modules for specific types of eSports, but it is not very convenient for gamers since they have to go to different sites. We want to combine all these modules into one.
Could you give some advice on attracting large funds by the numbers?
I think it is not difficult to attract a fund to your project, the main thing is to observe certain rules. Here’s what you need:
A unique idea.
No matter how trivial it may sound, investors will not invest in the project without a new idea. Offer original and unusual ideas, something that did not exist on the market before you came along, which really will help make the processes better. For example, our project can be compared with Kinopoisk (“Film Search” in English). Viewers who want to watch a movie do not need to go to multiple sites anymore. They do not look for actors, the description of the film, and the list of directors on three different websites. The current situation in cyberspace looks like this. All the functionality is distributed across different platforms. We want to unite all this, and that’s why we are doing a project on the concept of Film Search.
Serious funds will take a long time to look at your project. Therefore, your team must know the sector of your ICO. Experience is not a year or two. Personally, I have been living and breathing eSports for seventeen years now. I’m in it like Neo in the “Matrix.”
Scale of the project.
Look at the scope of your project and its current scale. Perhaps, in the beginning, it makes sense to have a small investor who will help shape your idea, develop it, and make a big story out of it. If you target a market of 50 million people, then this will not attract large business participants. An interesting project is that one which is designed for the market of a billion people, in which there are huge prospects, and where the potential will only grow.
Trial beta versions of the project.
Large funds will not support an unrealized idea without this aspect. The creators of the project should have an accurate product that will demonstrate your intentions and seriousness. For example, we have already started a working blockchain test. The first smart contract on our platform was the payroll contract for the Igrokub team. That is, right now you and the investors can go to the platform and see the gamers’ income. If the system works, you will be considered.
The passed stages of the development of the project.
Suppose you are baking pies and selling them at your stall. Then a brilliant idea comes to mind, and you say, “So, I have been baking pies for ten years, I know everything about it, and now I want to build a factory for the production of pies.” Great, but you only know how to do this in a small business. Who will help you build this plant? Who knows what equipment is needed? Who can competently build the logistics, establish a sales market, and ensure the inflow of new customers? At this stage of development, a lot of people choke on it, because they try to skip a few levels, and they do not work out the project’s small details. It is important to realize all that is in your thoughts.
Do not wait for investors, just act.
Once you fully develop your project and consider every detail, run the beta version and start promoting the ICO yourself. If the idea is cool (and it should be), then the investors will find you. It makes no sense to seek only money. Let investors come to you. You must choose them, and not the other way around. The stars on common thoughts and ideas must come together from both sides.
What do you plan to do next? Will there be any cooperation with venture funds?
We, of course, plan to conquer the world. We do not build smaller plans. About 40 local European funds with investments of $50 to $60 million wanted to invest in our project, but we needed a bigger player, such as Mangrove Capital Partners. Now we will look for an American fund that will go into the next round of the ICO. We want to concentrate on the U.S. market as it is in this country that most gamers are residing. For convenience, we are building an office in Los Angeles. As for the users of the project, we plan to amass 3 million players (500 thousand so far) by the end of 2018. This audience could be assembled earlier, but sometimes we lag in marketing because there are a lot of new features on DreamTeam. I want to tell about all of them.
Are you considering the Asian market? After all, China, for example, has many gamers.
Yes, but we can seize the Asian market anyway, we do not need capital from there. Capital is needed from America. That is where the largest average check on the planet comes from. This is the most obvious way. We, of course, are considering all options. We also have local venture funds from Russia and Europe that are considering our project. We have not yet negotiated with any Asian funds, but we’ll see what happens next.
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