KUALA LUMPUR, Nov 29 — Melvin Wong’s entrepreneurial journey is so typical of technical founders: Build the business gradually and then, either get comfortable with a business they control that generates enough cash flow, or pursue an opportunity they see for a breakout from the life as a behind-the-scenes tech enabler for others.
 
Wong has decided to break from his comfort zone and pursue the big win. He is seeking RM3 million (nearly US$1 million) in funding to take him to the next level where he can build his dream of creating a digital sports media company.
 
He is funding it through his mobile app company Justmobileinc.com, which he launched from his bedroom in 2005 with RM13,000, having already failed in an earlier venture where he was the chief technology officer.
 
Calling it his “short-term, long-term plan”, Justmobileinc has a strong base of customers in the market and “gets inquiries without us having to go sell our services”, says Wong. It helps fund the current startup, Fanxt.com, which is not generating revenue yet.
 
Wong actually made the pivot in October last year and has already made some progress in signing exclusive three-year contracts with five national sports leagues across Asia and even in Europe — all this just in the past six months.

He has signed up leagues in Taiwan, Hong Kong, India, Finland and most recently the Philippines. None is generating revenue yet, with Fanxt paying for all digital media platforms it builds in exchange for revenue share. He is working on breaking into Singapore, Indonesia, Korea and Japan concurrently.
 
Wong (pic) sees this as a long-term play and wants to grab as many contracts as he can, confident that they will eventually pay off. The target for this year is to sign 10 contracts, which he is certain to fall short of.
 
“Basically, as a digital sports media company, we will offer anything digital to clients, and that includes building Smart TVs apps, Facebook apps, mobile apps and websites. The real money maker though is when we build them Fantasy Games,” he says, offering Taiwan as an example.
 
With the football league there still nascent, the relationship begins with a website for the Taiwan Intercity Football League and a mobile app to help fans get more engaged with their teams.
 
“We will build them a fantasy game when they have enough fans engaged through the platforms we have built for them,” explains Wong. The hope then is that some fans will migrate from the free version to the pay-to-play version.
 
Fanxt is already the official Fantasy Football provider for the Veikkausliiga, Finland’s top football league; Hong Kong’s First Division football league and India’s I-League top division football. Besides football, Fanxt has developed apps for Formula 1 racing and Motor GP.
 
The idea of the exclusivity is to ensure the relationship has time to blossom, and that Wong, through his startup Fanxt.com, can gain enough traction with the fans of that league to go on and offer premium services that are paid for and able to attract sponsors.
 
There is a similarity with gaming, with Wong taking on in-app purchases and buying skills and other virtual goods for the virtual teams fans to assemble.
 
Fantasy sports has blossomed mainly because of the Internet, which allows fans to easily manage the stats of the players on their teams. Basically how the games work is that participants act as owners to build a team that competes against other fantasy owners, based on the statistics generated by real individual players or teams of a professional sport.
 
Fantasy owners are in charge of all aspects of their team. They can cut players, add players, bench players, or even make trades with other owners in the league. This is part of the strategy of running a successful fantasy team. Owners need to know when to sell high or trade for a player who might be underperforming but seems ready for a breakout.
 
With all these elements in play, such games are defined as “skills games” in the United States and thus betting is allowed, which has led to their increased popularity too. It is too early to tell how the individual countries in Asia deal with this as the game/hobby is still birthing.

Malaysia a major market

Surprisingly, many of those fans come from Malaysia, with the country ranked as having the third highest participation in fantasy football with 156,000 users, according to premierleague.com. [Perhaps this is where long-suffering Malaysian fans go to ease the pain of a football team languishing in the bottom rungs of FIFA rankings.]

 
Wong, a sportsman himself, having represented his state in fencing and cycling, saw the opportunity in fantasy sports, a market that is well established in the United States, where it is estimated to be worth anywhere from US$3 billion (RM9.6 billion) to US$4 billion, says Wong, without providing a reference for this figure.
 
A check on the subject reveals that some interest is picking up in Europe, with online betting company Betwayis sponsoring Trinity’ Mirror’s fantasy football competition in a three-year deal worth £600,000 (RM3.1 million).
 
Meanwhile, it took less than two weeks for CBS and Yahoo Sports to sell all their fantasy football online ads, with sponsorship values ranging from high six figures to US$3 million each.
 
“It is beginning to gain some traction in Europe, while in Asia it is practically non-existent,” says Wong.

This is where he sees opportunity, especially after having witnessed the interest among sports fans in the region through the contract work he did for clients, starting with a mobile-based fantasy sports game for Maxis in 2007/08. He then quickly moved on to other platforms, mainly Facebook and websites.
 
The 2010 FIFA World Cup (pic) then saw Wong launch his own fantasy game on Facebook. The response was thrilling.
 
“We had up to 2,000 concurrent users playing the game and we had to restart our server every hour,” he claims. It opened his eyes to the potential of the market.
 
But business was good just being a white label for clients. “We used to do lots of white labelling work, and the margins were more than 50 per cent as the engine used was the same, we just had to skin the games differently,” he says. The engine was built in-house with a team of five developers and was ready in early 2007.
 
In 2008 his attention was diverted because of a US$108,000 grant won to design an interactive TV game show that ran on 8TV called “You Play You Win”. The grant was given by the Malaysian Communications and Multimedia Commission (MCMC).
 
Euro 2012 reignited his interest in fantasy sports, with 65,000 visitors over two months to the Facebook page and website Wong built. This led to the launch of Fanxt and the pivot in his business model.
 
This year, he has again won another grant from the MCMC, via its Content Industry Development Fund, worth US$309,000, to develop apps for platforms such as Smart TVs and for other sports such as rugby, rally and cricket.
 
As with all grants, he has to meet milestones to get disbursements. At the same time, Smart TVs are not an easy market, as Wong explains that even within a single manufacturer such as Samsung, there is no standardised platform, with various Smart TVs having different technical requirements for apps.
 
But with a bigger team in place — he has 25 people now — winning this grant will not distract Wong from trying to grab as much market share in Asia as possible, and he is even looking beyond this region to Latin America.
 
“I have hired a Paraguayan who is based in my Kuala Lumpur office to help me penetrate that market,” says Wong, confident that he will make inroads there based on the wins he has already secured in Asia.
 
Now to raise that RM3 million that Wong needs. — DNA