The Business of Poker - The Road Less Traveled
All industries are competitive. Some may be more cutthroat than others, but if a market leader in a certain business sits on its laurels, you can bet some enterprising firm will be there to take its market share. I recently had a spirited conversation with a friend who is in the music business about how brutally competitive his business is, given that it had downsized multiple times in the past decade. He argued that because his industry was on a downturn, that it was 'worse' (more competitive) in his world, because you had an infrastructure that at times was still trying to operate in the old system, but an economic reality that could not support that old system.
My argument was simple. In the infancy of any industry, since the growth is at such a blurry pace, and the early entries have such market share, and market valuation, you get a lot of people wanting to be in that business - a lot of people with a lot of money, and they throw that money around pretty freely. As the industry matures, the good ideas and good execution are rewarded, while those who did not have a great plan, or executed their plan poorly are left behind to wonder what could have been. It is during this 'gold rush' phase, while the rules of the industry have not yet been established, that any industry is at its most competitive place.
As you might imagine, the poker business is seeing a lot of ideas, and money coming in. Some of these ideas will be proven out to be good ones, and some of them not so good. I have seen, and heard just about all the ideas coming into our burgeoning world, and in many cases, I can immediately say 'Right - that has no chance', or 'Hmmm - maybe'. I may not be right, but my experiences over the last couple years have developed a fairly keen eye for the kind of idea that might work.
One such approach recently intrigued me. I heard through the grapevine that a room had been launched called 'Green Tie Poker'. At first, I thought, OK, just another room...they wear Green Ties...I get it. I soon learned that this company had hired Blake Mycoskie to be their spokesperson/marketing consultant. I thought I had no idea who Blake was, until I sat down with him, and it sunk in. Those of you who watch reality TV might remember Blake from season one of "The Amazing Race". Blake and his sister finished second in that race by four minutes. First place got one million dollars, second place got zero.
Even that was not how I had heard of Blake, however. I live in Los Angeles, and my background is in 'showbiz', and so every once in a while, the Hollywood rumor mill will find its way into my Inbox, and once I spoke to Blake, it clicked. Blake was a young entrepreneur who had made some money in some 'outside of the box' businesses. In college, he had a laundry service that catered to college students, and used some pretty unique marketing approaches. Then, he moved on to selling ad space on the side of buildings, and made a bit of a name for himself. How I knew Blake, however, is that he took his laundry money, his building ad money, and packed up, and moved to Los Angeles. He had a dream to start a new cable network called The Reality Channel. This is where I knew Blake from. Blake's new company bought up reality shows looking for a home for their re-runs. This was quite a big deal in the TV business until FOX decided to be in the same business (or just prevent another entry), and pretty much quashed the dream of The Reality Channel, costing the company millions, and its founder everything he had.
Now still in his twenties, Blake needed a new place to hang his hat, and had to start over. Enter Green Tie Poker. The goals are the same as all the other online rooms - build a brand, build a self sustaining player base, blah, blah, blah. But, the approach is different. This site wants to be as much a lifestyle site, as a poker site. They have things like a concierge service, and instead of adding money to prize pools, they add prizes to prize pools like 'win beer for a year', sponsored by Beck's.
Having been pitched by every type of poker room in the business, I found this approach a twist on what was fast becoming a very old story. Granted, there are a few rooms out there trying this, or a similar approach. But, I found the addition of Mycoskie to make the whole formula more compelling.
As I sat with Blake, it was clear that this was not a 'celebrity spokesperson'. This was a smart guy who was going to give this business a shot.
"My background was I think the reason why I was chosen for Green Tie." Blake said "I've been an entrepreneur, you know, since I was eighteen years old. I've had four different companies. I sold one of them to Clear Channel. I took some time off and I loved it. Beautiful girls, partying, I mean it was what I was doing. So, we wanted to see if we could incorporate that lifestyle element into an online poker room. We went live July 10th."
But did he know anything about the poker business? "No, not at all. Yeah, it was a crash course, literally. I went up to Canada and met the Ultimate Bet (Green Tie is part of the UB network) people and, and literally sat there for a few days just soaking up everything. I didn't even know what rake was at that point."
Soon it came to marketing ideas, and that is when he seemed to find his comfort zone. His days as a playboy served him well, and gave him the idea for Green Tie's integration of men's lifestyle issues into the online poker world. "I don't think that there are a lot of great men's lifestyle plans out there right now." Mycoskie continued "I mean, Playboy: Hefner's done an amazing job for a long time and he's still probably got twenty more years. But, with the exception of Playboy, I don't know that there is a lot out there doing it really well. My whole concept is I want to try and take the Maxim magazine, Esquire magazine approach and put it together with poker. They have given me pretty much free rein to do a lot of marketing initiatives. I wanted to create something where it wasn't just about winning a sit n go or a multi-table tournament."
"So, I wanted to create things that were non-cash prizes that would be fun. Fun, exciting experiences, things that I would want to do, you know?"
"A lot of my friends are big club owners, party promoters, people that are really into the hard core New York, LA lifestyle scene. I thought we could incorporate this lifestyle into a perk for our players. So I contacted a couple of my friends and said, why don't we create this VIP service. So, we've created a program through our site where we can link in to a concierge's network that exists already. Right now if you have twenty-five dollars in a Green Tie account, you can contact our concierge services in six cities and we can arrange things like calling ahead so that our players don't have to wait in at a night club, for example."
Although not savvy to the poker business at first, Blake quickly saw how the business was running, and it led him to an interesting conclusion.
"A lot of players now are jumping around, whether it's chasing this deposit bonus, or that freeroll, and it not healthy for the business. I don't want to be in the business of, and this is my fear of how my poker business could go where it becomes a situation of constantly having to do a promotion or a sale to get business. You get into that trap, and your margin is suddenly evaporating into thin air. I mean, today you are offering a hundred and fifty percent deposit bonus. Next week, it needs to be 300%. At some point, it's going to attract an Internet-type bust." Mycoskie said
I found my time with Blake to be interesting, and especially refreshing. It is really unique to find a person who is as candid about their failures, as their successes, and ultimately, I think this is a lesson we could all take something from.
For now, this entrepreneur is on a new type of amazing race, and only time will tell where he finishes.