Betmarkets’ Co-founder & CEO, Afonso Vieira, has been interviewed for October’s edition of Fepiano, a newspaper that is distributed nationally alongside Vida Económica. You can find the original interview here [pages 16-19; content in Portuguese].
Betmarkets interview at Fepiano
From betting between friends to a promising business
Betmarkets is developing a digital platform that allows anyone to invest in professional bettors through the automatic replication of professional bettors. The startup, founded by Afonso Vieira, one of Fepiano’s founders, won the award of Most Favourited Startup at the Web Summit 2018 and already acquired more than 6,000 active users.
Fepiano [F]: Where does Betmarkets’ journey start?
Afonso [A]: It’s a hard question. My interest in sports, statistics and investments started a long time ago. Still, it was at FEP [Faculdade de Economia do Porto – School of Economics and Management] that, alongside Alexandre, the FID – Fundo de Investimento Desportivo [Sports Betting Fund] was created. It had a cool name, one that sounded professional, but it was only an informal fund where our friends could buy units of participation and check their daily value through a Facebook group. This happened in mid-2014. FID remained active for 2 years but it didn’t take long for us to realize that sports betting is a lot more complex than it looks like – it is incredibly similar to the financial markets.
In order for us to be successful, we had to find traders – that is to say, professional bettors – that would devote their time to find value bets (where the payoffs are larger than what they should be, given the probability of that given event). Looking back, i think that we can say that we created an investment fund that acted as a marketplace, where we just had to raise investment and allocate it to the bets which the professional bettors advised. To sum up, I would say that the experience of managing FID proved the existing necessity for a product such as Betmarkets and made me understand the pain points that we had to sort.
F: How did you transition from FID to Betmarkets?
A: We started FID because we wanted to put in place something different than what was available at that time. Results were pretty encouraging and validated our initial hypotheses that sports betting has all ingredients to become an investable asset: it is liquid, diverse and bears some inefficiencies. The dawn of Betmarkets happened during 2016, when I had to decide the subject of my Master thesis at Nova SBE – which had to be related to entrepreneurship.
The choice became straightforward as soon as I spoke about FID to my future thesis advisor, Miguel Muñoz Duarte. In 25 pages, supporting myself in the Business Model Canvas framework, I’ve drafted, pondered and designed the business model of a platform that would, automatically, do what we did in FID: a platform where the end user could see the profiles of professional bettors, select the ones (s)he wanted to follow and have the bets automatically placed as soon as they were recommended.
F: It’s a very young company, yet to complete 2 years of operations. What are the challenges of developing an online platform? What are the pros and cons?
A: We are talking about a platform that is very heavy on the technological side – not something that one could develop just using WordPress or through other platforms that ease the creation of websites and apps. The first step was speaking with friends who understood a thing or two about coding and selling them the idea of joining the team to develop it, while still not being able to compensate them for such. At the end of 2016, I managed to convince a former colleague of mine from high school; after a full month, almost nothing was built and his interest in being part of the project faded. My entrepreneurial journey seemed to have reached a standstill. That was until the following January, weeks after I defended my Master thesis, when I onboarded another friend – who was already a developer – into the project. Unfortunately, he ended up telling me a couple weeks afterwards that he couldn’t conciliate its full-time job with this side gig.
That looked like the end of the track for the project. I was no longer a student and didn’t have money to hire a developer, so I decided to start working in my family business. However, the “screw it, I have to at least try” moment would soon come and, in June 2017, I registered in several platforms where one could look for cofounders and messaged dozens of people who had a technological background. Ended up getting a reply from a freelancer from Lisbon who had just established his own web development agency. After discussing all development needs, we signed a 6-month contract to develop the platform.
F: Betmarkets has the support of investors such as Shilling Capital Partners and ZeroGravity Acceleration Programme (from Nova SBE). How did these partnerships appear and how does the company benefit from them?
A: As we were developing a first version of the platform, we had to start studying the legal framework in which we would have to establish ourselves. Please note that we are talking about a product that, even though it is not a betting operator, has an obvious connection with sports betting while also being close to the financial world from a regulatory standpoint. One of my best friends, David, who was finishing Law School, gave me a great headstart by sharing valuable contacts from regulatory bodies and local attorneys. It was almost certain that we would not be able to establish this product in Portugal.
The legal roadmap we established saw the costs far exceeding what I could afford, so I had to start looking for external financing. From all of my acquaintances, the only one that had some experience in this matter was my thesis advisor. I spoke with Miguel and serendipity knocked on the door: Nova SBE was about to launch its own acceleration programme – ZeroGravity Acceleration Program – with a €40,000 investment in each of the selected startups and Miguel was in charge of it.
I submitted the application in October 2017 and was accepted in January 2018. Receiving the news of the €40,000 investment in the project swept me off my feet and I started dreaming of the things to come. Well, those dreams were tarnished the following day when the freelancer – who was supposed to present the first version of the platform in a matter of weeks – told me he would not deliver it. Fortunately, since I had secured the €40,000, I started to look for a full-time developer.
Through LinkedIn, I sent dozens of messages to profiles who I felt could be suitable and two people got back to me. João, Betmarkets’ first employee, was hired in a couple of days! In March we launched a first beta version of the platform and, in May, I hired a second full-time developer, Tadeu. Both still work at Betmarkets! Having developed the platform, it was now time to sort out the legal challenges in order to start accepting clients’ deposits.
Yet again, luck was at our doorstep, as Manuel Sena – Weeel’s co-founder and our mentor through ZeroGravity – made himself available to help us without expecting anything in return. We are very thankful for his help. He introduced us to one of the best law offices in Portugal who helped us define a clearer roadmap on the hurdles we would have to surpass to legalise our business. We soon realised that we would need a lot more funding to pull it off and Manuel was fundamental for our success in raising a €150,000 investment from Shilling Capital Partners in August 2018.
Shilling invested in startups such as Uniplaces, Unbabel and Zaask and, today, its wide professional network is available for us to use. As we speak, we are starting the licensing process while we implement a temporary structure to operate while we still do not hold our own license.
F: What happened in the last 12 months, excluding the legal matters?
A: Even though the official launch of the platform has been experiencing delays, the platform that is currently published is almost the same as the one that will be the real deal. The only significant difference is that the latter will allow the users to work with real money instead of the virtual one they are currently using.
Our work has been done as if the legal challenges were already sorted: we have already tested and optimised several acquisition channels and iterated the platform based on customers’ feedback. It is not a complex product, as we can benchmark it with platforms such as eToro, but forcing it to be extremely simple for the user to interact with has been the major focus of our work, and what has given us the most significant dividends. The least amount of features available and the clearer they are, the best for the user.
Regarding conferences and awards, we exhibited in the Web Summit 2018, where we were one of three startups that had the most meetings with investors, and were finalists in both Startup Avalanche from Techsylvania (Cluj, Romania) and Startup Launchpad from iGB Live (Amsterdam, Netherlands). From the 17th to the 19th of September we exhibited at Betting on Sports, in London, and in the beginning of November we will be back at the Web Summit, this time sporting the category of a Beta startup.
The team also grew from 3 people to 5 with André, now my co-founder, and Gaya, our product owner, joining the team.
F: What feedback do you have on the aceleration programme?
A: I highly recommend every entrepreneur to experience going through an acceleration programme. Both my Bachelor and my Masters were connected to management – I knew I wanted to be connected to the business world – but the learnings were far fewer and in-between than the ones I received during the 6 months of the acceleration programme.
There I had the chance to meet on a weekly basis dozens of people who were once in my shoes, be part of a strong community composed of other founders, each one with a different background and vision, and access a strong network of mentors who have proven to be extremely relevant in our path. If there’s one thing I have learned during the programme was that our success relies heavily on the people we know and who are ready to help us.
F: What advice would you give to someone who is establishing his/her own startup?
A: Read and ask questions. In other words, focus on learning. In our office we have a small bookshelf and placing it there was a deliberate decision. Familiarising yourself with the Lean framework is also fundamental: being agile, microexperimenting and frequently iterating are required for the success of any project.
Starting by strategies that will have an impact, even if they are not scalable, solving relevant problems, executing small while thinking big and learning from those who have surpassed the same challenges are fundamental tips I would share with any aspiring startup founder. Above all else, founders should surround themselves with extraordinary and capable people whom they fully trust.
F: … and to FEP students?
A: Even though I’m only 25, it seems like my journey through FEP was in an entirely different life. I belonged to AEFEP [Students’ Union], founded Fepiano and was part of both FEP’s soccer and the University’s tennis teams, while I practised tennis and competed at an international level. My advice would be for them to devote their time to doing many different things, especially those that they enjoy doing!
They should also never give up: if I had not been rejected by FJC [Consulting Club] and FICT [Business Case Club] I would have probably never founded Fepiano, taken part of AEFEP or even continued to practise tennis at that level.
If any of them consider that a startup internship would be interesting for them, we’re hiring two people (part-time, paid position, no experience necessary) to focus on our growth metrics at Betmarkets – feel free to reach out to me through email@example.com.