“There hasn’t been anything new since poker” is a lazy way to look at the iGaming industry and one which fundamentally misunderstands how companies evolve in smaller ways day by day. Disruption is a media-sexy word and by definition is about game-changing ideas that uncovers a brand new market. However just because you aren’t disrupting doesn’t mean we aren’t innovating to make existing market places more effective.
David Sargeant, Innovation Consultant at iGaming Ideas attended Clarion’s igaming industry council (iGIC) last month and participated in the innovative and organic open space methodology. Gaming leaders discussed the key trends, challenges and opportunities for the industry til 2020 and beyond. One of key themes was innovation v disruption and in the below article, David tells TotallyGaming “you don’t have to be disruptive, but make sure you’re innovating your product.”
Products and technologies are changing all the time. For example sports betting has evolved its technology to support thousands of events a month, each with hundreds of markets, and thousands of things to bet on. These all have instantaneous omni-channel price changes, and settle in real time due to in-play requirements such as cash-out. Add to this the emerging unique personalised interfaces and messaging and you have a very sophisticated tech-industry. These may not be sexy uber-style industry shifts but this is sophistication that many static-price stock based industries don’t understand.
Disruption is by definition difficult and made even harder in iGaming by existing within a highly regulated framework. When someone has written a list of rules that define the products you can or can’t offer this creates a big barrier to overcome. Before gambling startups can even begin they have to work out whether their idea is legal or not which can be a costly process. If they are legal then they must apply for licenses which also takes time and money – something startups don’t often have.
Regulation doesn’t change for unproven ideas and small companies are not the ones that can afford to change regulation. Therefore a catch-22 exists – the idea must become large to change the regulation, but the regulation stifles the ideas even getting off the ground. Therefore, at least in regulated markets, we have an industry that is expensive to change and potentially expensive to startup in.
To top this off any large company finds it hard to justify risk taking. Do you go with a known product with a known ROI or do you gamble with an unknown product with unknown returns?
This is exacerbated by many companies having technology bottle necks. When you are having to fight to get ideas onto a roadmap filled with good ideas it is very hard to ever launch. The modularisation of technology platforms and the rise of integration platforms should alleviate some of these issues but I am not sure I know of any gambling operator without a technology backlog.
So you can change the culture of your company, you can make innovation a state of mind, but unless you build dedicated roles, budgets and a business environment that encourages innovation then new ideas will never get off the ground.
As a result small riskless ideas that impact day-to-day business get priority and external unproven ideas are always a hard sell. So companies have to look for other ways to innovate without interfering with core business.
Create new resource; we are seeing a rise of R&D teams and innovation hubs; WHLabs in Shoreditch, Betsson in Holborn are among many.
Utilise outside resource; by partnering with technology experts, such as app factories, agencies, and dev shops, operators can make sure they have the best team for each project. Ladbrokes have a close relationship with Chelsea apps factory for example.
Utilise outside knowledge; some companies utilise existing knowledge bases by partnering with incubators and accelerators. This means you don’t have to absorb all the risk yourself, and in some cases can try out ideas elsewhere first. My incubator, iGaming Ideas, partners with operators startup by startup to ensure the best match and the best chance for launch success.
Internal innovation teams; streamline the integration experience giving startups a single point of contact into what seem like large unwieldy organisations. Unibet’s innovation team is excellent in this regard.
Outsource the ideas; WHLabs startup competition saw 250 entries, 2 of which received six figure investments.
So innovation can mean continual evolution in big and small ways. This ensures competitive edge and can be done in a way that does not upset core business, at least while you are looking for that next big disruption.
This article was originally written for Totally Gaming: https://totallygaming.com/blog/you-dont-have-disrupt-innovate-your-product