Football app start-up teases with racy name, $ 1 million prize
Friends and now business partners – Jeff Johnson and CJ Karchon – are building a business with a sexy name: FourPlay.
They offer a free mobile app that allows you to choose four winners of professional and college football matches each week.
It’s a simple concept: select a commissioner, join with friends, and if all your teams win, you win. It’s an electronic version of a game – available on Apple and Android phones – that the co-owners said they played when they were younger.
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“Every week we send out all available matches,” said Johnson, 32. “You all go in line and you make your choices. You have to choose four teams every week. That’s what makes fantasy different. We choose teams. There’s a twist to that. We use spreads for teams. You can tease the 14 point spread each way in your favor. “
The app keeps track of the choices – and does the math.
But, the company is an example of a Detroit metro tech startup that boasts an extraordinarily high investor valuation ($ 6.8 million), but has very few players (1,300 last year) and has so far. ‘now generated little revenue (around $ 3 per user).
“We have been playing fantasy football for several years,” said Karchon, 30. “Now our lives are getting busier and we have families and things are taking up more of our usual time. So this game is fun. I animated a game like this for five years, using the email, excel and we just created a night – and we decided, we need to automate this thing. “
The co-owners of the company – who have other full-time jobs – want to attract more players (the app is free) and in order to do so, they swing a prize of $ 1 million to the players (the commissioners get 100 $ 000) who go an all season picking only the winners.
The next step, the partners said, is to seek more investors to roll out similar games for other sports.
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Here in an edited conversation, the partners talked about the game and the business:
Question: So you didn’t invent the game?
Karchon: Well, we invented this form of play. The rough basics have been around for a while.
Q: So how did you learn to play it?
Johnson: It all started at the Oakland Hills Country Club. I was invited to play in the Oakland Hills League eight or nine years ago, and I was totally addicted to it. I told CJ about it: “You have to play this game!” We’re big fantasy football guys. Anyone our age, who got into it 10-15 years ago, if you talk to them you will find that they are fed up because it takes so long. When we got into this, we didn’t have a career, a woman, or anything like that. Now everyone is doing it. We started running this game for our friends, and everyone got hooked. Every year there was a waiting list to enter. Everything went as we expected. People who played last year are coming back and signing up. We have had a very good fundraising experience for this. Investors know how much money there is to be made in this area. We found it very easy to fundraise.
Q: So let’s take a look at some stats about the game. How long has your version of this game been around?
Johnson: We started last year and went from 20 people to just under 1,300 users. The way we make money is the freemium model. It’s hard to get people to pay for a game they’ve never tried. We decided to give it away for free. But we’re users ourselves, we know what we’re spending money on, we polled all the guys who played to see what they’re spending money on, and we put purchases integrated into what we call power-ups. They increase interactivity for the game, strategy, expert-gurus choices, if you need advice. Stuff like that. We are receiving feedback from users on what bonuses users want to see. Last year we made $ 3.33 per user for the year which we found to be a huge success. Most app companies don’t make any sales in the first year. Our users got out of the door and started spending money. We will get that much, much higher this year. This is how we make money.
Q: Do you have employees?
Karchon: We have a full time graphic designer who takes care of all of our marketing, email, social media stuff. We have a manager. Because our game is so unique, we are our own source of information, so we have an associate who organizes all the gurus and makes sure that all the choices arrive on time. And we have a our development team. In total, that makes four people.
Q: How much did it cost to develop the app?
Karchon: I would throw a number 300.
Q: Three hundred thousand dollars?
Q: So how much does it cost to run the business for a year?
Karchon: We have private investors and angel investors – and it’s a private entity – so some things are sensitive.
Johnson: CJ and I don’t take a salary. We haven’t taken a dime since we started this. We only have one full-time paid team member.
Q: So when do you expect to be profitable?
Johnson: It’s too hard to say. Hopefully, with articles like yours, we will have new users. We just don’t know.
Karchon: Our top of the line is two years.
Q: What kind of investment did you get?
Karchon:Some things are sensitive. We are currently doing another round of funding. We have raised a number of dollars since the start of the year. If we spent $ 300,000 in development costs, it is significantly more.
Johnson: We would not want that number published.
Q: So how do you justify this huge valuation?
Johnson: It’s an art. We did not invent it ourselves. The first year we went to Finnea Group in Birmingham city center, where Jack DiFranco helped us develop the assessment for our first round. They looked at the growth rates of fantasy football. They looked at Fan Duel and other games and mobile gaming apps, and they used it as a benchmark for us. Frankly, what some of these other app companies are getting that aren’t making money, like Twitter, is valued at $ 14 billion, and they’re not making any money. They have a lot of users and everyone says they’re going to make money, but they never have. They are losers.
Q: Let’s say it doesn’t work, it doesn’t work the way you want it to. When do you unplug the plug?
Karchon:When you can’t pay the bills.
Q: When is it?
Johnson: I don’t think that will ever happen. He thinks it’s too easy to fundraise for this idea.
Contact Frank Witsil: 313-222-5022 or email@example.com.
Title: Co-founder, co-owner
To live: Vice President in Family Business, IET International
Family: wife, Jesse; little girl on the road
Hobby: Golf, sport
Education: Indiana University, Bachelor of Commerce
Auto: 2013 Jeep Grand Cherokee
Title: Co-founder, co-owner
Education: University of Mississippi, Bachelor of Accounting
To live: Financial advisor, fund manager
Auto: 2014 Ford F-150