New Business Idea- Virtual Trading Cards

[GreatThinker]

I need some advise, ideas on getting capital, and business partners for this idea.

I want to start a website that has to do with sports, but has the concepts of the stock market and ebay.

Users will be able to buy a "pack" of virtual trading cards. These cards will be used like the stock market, as a card will be able to increase in value based on how the player does in their specific sport. Right now I want to tackle the NBA and NFL. For example, based on specific areas, the users card will go up in value. Lets say you have a kobe bryant card (rarer than others) If kobe has a 40 point game, 10 rebounds, 6 assists AND his team wins, the card will go up a substantial amount. The amount is based on a money table that has the specific amounts defined. The gains and losses can go both ways. The Stock market part of it comes from knowing how long to keep a card to maximize profit. These cards can be traded,sold, and bought using a ebay-feel auction part of the website. The pack of cards is totally random, using a random function that will be researched and developed by a gaming commission that most gaming companies use (such as partypoker, yahoo games, etc.) This website will not only make money from buying packs and small fees from trading and selling, but from the advertising point of view. Since users will access this account daily to check the status of the card, then advertising will be a big part of it. Most of the advertising will be on college campuses since that is an untapped market for a website like this. There is really no competition for a website like this, since no one else has thought of this. Any feedback is appreciated.
Great Thinker


DeShea Witcher
dwitcher@fourth-and-goal.com

[mebreezy]

Intriuging. I know I mispelt that.

Anyways... Interesting idea and I'd like to see it happen for ya. You really remove the "love of the game" that traditional cards bring, but you bring more of a profit-making game to the table. If it took off I'd join.

[bjgomer13]

helluv an idea except for the fact that it's kinda already being done. I am a huge sports fan (espcially nba) and on NBA TV a couple of months ago they had a guy on talking about his company (i can't remember the name) which basically is combining the stock market with fantasy sports. It essentially is the same concept you mentioned minus the trading cards....but one huge thing they have on their side is that they are actually partners with the NBA. I would think that your idea with the trading cards with have somewhat of a market for younger people, but based on listening this guy's explanation to how complicated the "nba marketplace" becomes, I'm not sure the average 10 year old could really get into it unless you simplified it a lot and targeted that market.

The guy also has a company where you can buy stock in your team which gives you the ability to purchase championshiop tickets (nba finals, super bowl, stanley cup, final four, etc.) at face value. You purchase the rights or stock at the beginning of the season and over the course of the season the price of that stock goes up and down based on the likelihood of them getting to the championship, at which time you can buy or sell.

I mention all this stuff because I remember at the time they interviewed this guy, I remember that I was ticked I hadn't thought of either idea first.

[GreatThinker]

Any other thoughts/suggestions ? I need comments

[akula]

ok, I've thought about and, I can see what you're saying. your product will alleviate information scarcity and help gamblers make better decisions.

there is a standard set of advice available for people who want ideas on getting capital, and business partners.

is there any point for me to proceed?

[Nick]

The basic idea you had initially is great and has a lot of potential, but the rest of it sucks.

It is far too complicated. Let me say that again: far too complicated.

Unless you have significant experience and capital behind you, if you want to have any hope of success you need to keep it as simple as possible.

Pick one sport. Go with trading cards, that is a good idea. Forget the stock market side of it, thats too complicated. Don't make people pay for the cards at first- if you do it won't take off. Make it so each person gets X number of cards per week automatically. Focus on providing a fantastic trading card experience, and work on growing the popularity of the cards. Monetisation: people can pay for extra packs, but don't make it much at all. If you want to take it further, create a system that allows people to buy, sell and trade the cards with one another. Take a % fee of each transaction, again keep it very small.

Next step is to finalise your business model. Goodluck.

[nado]

The hardest thing I can see is somehow managing to convince people that these cards are valuable enough to buy/trade/sell. Without the value and people wanting to get a hold of them, they are simply pieces of cardboard with pictures on them.

[GreatThinker]

Thank you all for your comments. If I do use some of your ideas (Nick I think yours was the best) I will be fully compensating for them. It is not like me to recieve ideas and not give some type of compensation for it. Once again thank you.

By the way, I think most of my revenue would come from advertising like what facebook has done. Anyone know what steps it takes for a site to be based on advertisements like facebook? How did they recieve such a huge contract? (Turned down 750 million and looking for 2 billion)

Thanks Again
DeShea Witcher

[nado]

Anyone know what steps it takes for a site to be based on advertisements like facebook? How did they recieve such a huge contract? (Turned down 750 million and looking for 2 billion)

Traffic, traffic, traffic

and

Members in a demographic (uni students), Members in a demographic (uni students), Members in a demographic (uni students)


They actually received an extra $25mil in funding through the whole "we don't want 750mil, give us 2bil!" thing.

cheers
nathan

[Nick]

A business idea that has a means of revenue apart from advertising is far superior to one that relies on advertising as its sole avenue of revenue. This is because:

1. You need to be beyond wildly successful to make the kind of money that Facebook is looking at. There are thousands upon thousands of websites out there that simply do not achieve any decent traffic, and a lot of them are probably decent ideas. In reality, Facebook was largely a fluke. To achieve that success is like winning the lottery, and the average person has about the same chance of doing so. Check out the article in this post for more about this: Startup Reality Distortion #4: Flickr, MySpace and Others Did It, So You Can Too

2. You need a ridiculous amount of traffic to be as successful as Facebook, and have unmatched access to such a lucrative audience. The university student market is difficult and expensive to access for advertising purposes, and there are many, many products and services targeted at them, as they have very few liabilities, poor saving patterns and therefore high disposable incomes. Combine this with the sheer size of the university student market, and the fact that 65% of its members access the site daily. Facebook is being valued so highly because it has unbelievable access to this market, and noone else does. Virtually no websites, even if they were extremely successful, would even be targeting such a lucrative and large market, and expect its market to visit daily, while being largely the only competitor in the market.

3. Thirdly, and this is an important one, a business which relies solely on advertising revenue needs to be very successful before it can even begin to start paying off its debts. You need deep pockets to fund ongoing marketing with this revenue model.

These reasons are why I have a personal rule to never entertain any business idea that relies solely on advertising revenue. Sure, such an idea may have potential, but in starting a business potential is merely a prerequisite and counts for next to nothing when it comes to success. I'd recommend keeping this in mind when evaluating the profit potential of your business idea.

[financeguy]

I collected a lot of trading cards when I was growing up and the biggest thing about it, is you get to hold them and see them, and most importantly, show them off. There was that aspect of bragging rights that you got, as silly as it really is. Most of my cards are gone, a few I gave away and a few I still have.

I think a big problem you'll have is differentiating you website as investing over gambling. And regardless of the definition, I would speculate that there are a lot of legal matters involved if you go either way. Trading digital nothingness backed by nothing will lead to a lot of fraud and illegal practices if it's a free market concept. There will be too much liability. And to be honest, I don't see enough people signing up for that.

I think the fantasy sports idea works better than the card idea because people want to create their own super teams. They feel like they own the team and run it. Just like when people play video games. But with the cards, it's a lot harder to create that same euphoria. Because the euphoria with cards is from them being tangible and showable. That's why they make them very shiny, with pieces of game bats and jerseys inbedded in the cards. That's something tangible.

Another problem you face is this..how many sports card shops do you know of in your area? As someone who grew up buying them and went to a few sports memorabilia shows growing up, a lot of sports shops have closed down. There just isn't no business in it anymore. And the main reason why, there aren't that many legends anymore in sports.

The reason being, most athletes take a long time to reach legendary status. And over time they drop off or out. Then you have to wait on new legends to be formed. For example Jordan. Known for his championships (as in plural). People would tune in just to see this guy because he was a spectacle. The same thing with Nolan Ryan. It's a lot harder to find that anymore because it takes some time to reach that notariety. And as soon as you do, you don't really have much time left. There are a few people who saw the legend in Jordan before everyone else, but the people who buy cards don't buy them because they think he might be great. They typically buy them because they want to show that they are a big fan.

Another problem you have is a lot of the value in cards now is in the condition the card is in and they have Beckett Grading Services to grade them. Nobody just wants a card anymore. They are boring and worth only $20 or $5 or whatever. But a card that is graded a BGS 10 goes for big bucks! And again you have the euphoria.

So you have to get around those obstacles and see what you can do, to restore the euphoria or hype in the whole process.

One suggestion is to back all your digital cards with the actual card. This would allow other people to trade up digitally. They could mail in their cards and keep them in safekeeping like a stock certificate. And just like stock certificates, if anyone ever wants their card delivered, you charge them a fee to have it processed and mailed out.

Another viable option is to sell a share of a card. For example, someone would need 100 shares of a card to actually own the card. So they can own percentages of cards.

Either way, I think it could work, it would take a lot of work and I don't think it would be all that profitable unfortunately. Good luck.