Originally Posted by derek_richmond
Hi Dave Jung,
This I find particularly interesting and good to hear.
However, I am always concerned when I see another skin set up on a network which doesn't have any clear way of attracting new players that otherwise wouldn't have joined that network.
There must be a huge duplication of work by sites on a network.
For example, let's say there are 10 skins on Merge, each with an affiliate manager, each with some support staff, each with a CEO, each with a website developer etc.
Why is it that the rake needs to be spent to pay all of these different people?
Wouldn't it be far better to all consolidate the backend staff, and then spend the rake saved instead going into advertising?
For example, how will Hero Poker provide more fish to the Merge network than if it never existed? Or will it just spread the existing rake across more staff, reducing other skins advertising budgets?
This is nothing personal at all towards Hero Poker, it's just I've been thinking this for ages and feel it's an inherent problem in the network system that really needs addressing. As it's the first time I've seen the CEO of a new skin making the OP (as well as a fellow former PwC employee
) and you have made a lot of interesting replies I thought it was worth asking
I completely agree with you and to be perfectly frank that is why I was brought into the network with welcome arms, even though If you look around for HeroPoker on the rakeback sites, I'm not there as a strong RB affiliate pushed site. Even though we launched at the Aussie Millions in late Feb, but again, the more I think about it, I've set our company up as more like a uber mini boutique version of Stars: we have reputable pros, we do viral videos and we advertise over affiliate programs and spend the marketing dollars.
There are some industry considerations though, to give you some background,
1. Networks are platform service providers, so they do balance the growth of the network and the benefit that a new skin does provide as a minimum. The problem is really an issue of quality, whereas the network itself still has a similar net gain from having 50 or 100 sites, but the actual risk is diversified or there are a few dark horses mixed in there to possible bring in new markets.
2. The issue is a freerider issue, if 'Skin A' is doing mass marketing and other skins are just feeding off that mass marketing, and player funds are moving from 'Skin A' player to other sites and 'Skin A' has no chance to recoup their marketing spend, then 'Skin A' has no motivation to simply prop up the others in the network and will engage in the same RB affiliate behavior.
3. Merge has held its own up to this point and even grown, because a massive area of liquidity is sports book players who have massive bankrolls and don't give a crap about bankroll management because they are only single tabling anyways in their spare time between bets. Had Merge or Bodog not had this base player base, then things would be much the same as many other poker networks that have only had poker and come and gone. And the same thing applies for both the ipoker and microgaming networks but on a casino side; simply poker for sports books or casinos is just a valued added feature that is why most sportsbook/casinos really don't give a crap if the poker is growing also as its not screwing things up.
4. That being said, this is not an indefinite situation as seen with ipoker last year where they simply banned whole swaths of players who clearly were playing on some type of under the table rakeback affiliate deal and who were sucking money out the system faster than their existing players could add it in, and also making it a really crappy playing environment. A great poker game is one where it has a variety of different players, not just 9 nits and one casual player who actually wants to play a board and have fun rather than get knocked around every time they are in the big blind or out of position. So the network needs to manage the quality of the games or simply put the ecosystem will eventually start to crumble.
5. I sincerely believe that Merge's management is top notch and well aware of the entire framework and are seasoned in this and have been slowly and deliberately pushing towards more quality. The biggest sign of this is that after June 1st there will be no RackBack given, so sites MUST engage in marketing or they will eventually be hurting really bad. Why?
Well first off, I was under the impression the internal memo was still under discussion, but some sites jumped the gun and announced it to their affiliates right away. Why? Because there are other things in the internal memo that have been disclosed by these sites as well that I guess basically spooked them into actually announcing it and now making it policy for all intent purposes lol.
I'm not going to get into those other policies in the memo, but what would spook a site into such a strong reaction, I think its obvious if think about it because RB only really gives value to a grinder when there is a rb associated promotion because even if you're running bad, with your rakeback and your rb based promotion, you will end up with something at the end of the month-whereas even with rb, if you run bad and continue the volume, I dont' care if you have 80% rb, you still go broke. I'm not saying that rb promotions are off the table, but there is more to that memo than what other sites have disclosed. That being said, I'm not trying to slag these other sites because #1. they are running a business too,
#2. they will have to engage in marketing and if they have an existing affiliate network, why not use it and
#3 if you've never actually done marketing, real marketing strategy, then you're pretty screwed anyway if you can't give out RB, so they will need a buffer to figure things out.
But for Hero, hell, I swear I didn't discuss or ask for it, but I'm like a fish in water after June 1st.
So to begin this part: first off 'fist pump' to my fellow alumni of PwC, I was in the performance improvement advisory division attached to an audit division. And to answer your question, will Hero be bringing in a wide range of players.
Yes, I do feel I'm the most well positioned to do so and even pre-recent events I was committed to doing that for the network regardless of cash flow issues because our investment was already set up without any revenue consideration for a two year branding exercise. But we have opted to move our timeline up a bit further but in terms of my mass marketing achievements.
1. Primarily responsible for opening up and initiating the current steady growth of Poker in Asia (it is as big as it sounds and not an exaggeration, but keep in mind that it is in the context of having the full support of PS at the time with their uber bankroll, but still it is not a small achievement) and that is a whole universe of new players.
2. Was primary business figure for doing the actual legislative process for legalizing poker in Macau in the Casinos with the Macau Gaming Commission (DIJC) along with Danny McDonagh (APPT tournament director).
3. Established the first joint marketing gaming venture with SJM with the biggest card room in Macau at the Grand Lisboa, you may have heard of it, its called PokerStars Macau.
4. Established the biggest regional tournament in all of Asia by player numbers, the Macau Poker Cup.
5. Opened the Taiwan market to TV Poker content on a regular basis
6. Did first viral online poker reality show based out of Singapore
7. Worked directly with 411 productions (WSOP EPSN production crew) for two years on the APPT 2007-2008
8. Hand picked and developed the first Asia Team pro from local player base
9. Set up first overseas relationships for the Macau Poker Cup live satellite in Japan
And what was the result? Well, Macau has like 5 major poker card rooms now, and in terms of growth and revenues, I can't comment on that, but lets just say, during my time it increase from 2006-2010 about 25 times from its 2006 number. The player number in Asia alone in Stars will still exceed that of even what Ongame has now for its entire network.
The business strategy I sent in place for Asia was valid up to mid 2010 and the fact it has grown shows that I did my work. And I worked like a mofo and didn't see my wife for nearly 8 months of the year and out of the first 6 months of my first son, I missed the first 3 months due to work and travel. But, that was my choice and I won't say a bad thing about Stars, it was an amazing place to work at, the senior executive staff are all extremely top notch, I know it is a very ethical company for the industry it is in and I absolutely was 100% devoted to my staff and team. My line manager always, gave me the benefit of the doubt and I never felt constrained there and always appreciated. But I wanted a new challenge, and I thought that challenge was in private equity, but I'll tell you, this is infinitely more harder, and if this should work the way I have set it up to work, then I want my own HBS case study written about it. lol. Ok, not meant to be a sick brag, but when it comes to business marketing strategy, I ain't afraid of anyone and given the time and the minimal sufficient resources I will find a way to manage the competitive forces, even if I have to choke on humble pie, I'll survive to make it happen. My uncle was VP of LG Electronics, I know what sacrifices it will take to really make things work and my family do support me on that as well.
But just to note: this is my business to business attitude, I don't think you can 'will' a successful business, it need to be afforded to you by your clients/players who recognize your sincerity and respect.
So to answer your final question:
It is not my intention to bring in more fish to the network,
I want to bring in a couple of continent of players into the network.
I didn't quit Stars cause it was too tough, it wasn't tough enough.
Regards from one ex-PwC to another,