We believe focus generates context, relationships, and drives returns.
Current Product Offerings Are Dull
A focus on speed to market has created undifferentiated
products and created an industry ripe for disruption.
A key part of our thesis is that regulations create barriers to entry and slow innovation, but also create opportunities.
Innovation Within Regulations
Compliance organizations and regulators must approve each piece of software or technology used to deliver betting experiences to customers in each state. This keeps traditional technology companies and their IP largely out of the industry.
Outdated Industry Technology
Major pieces of tech infrastructure used by many of the largest operators were built in the pre-cell phone era. This limits product differentiation and expansion in an environment where consumers are increasingly demanding more from their experience.
Regulations have limited innovation in a rush to get to market, which in our opinion creates two material investment opportunities:
Next generation products can disrupt the all-too-similar consumer-facing products.
B2B “microservices” can upgrade specific parts of antiquated platforms. Given how important these can be to creating differentiation, they can extract a material portion of the profit pool from the large B2C providers.
How we evaluate new opportunities
Attractive business model and growing competitive advantage
Proven and increasing traction
Focused and collaborative management team
Expected returns commensurate with investment risk
Business opportunity supports attractive return
Business can scale profitably
do what's right, not what's easy to win
Our expertise/network creates value
Business is on the right side of change