Luminari sat down with Darius Eghdami, a former big 4 CPA from KPMG. We spoke to him about how he’s changing sports betting using blockchain as CEO of his startup, FansUnite, in Vancouver.
When did you first know you were an Entrepreneur?
I started a sports handicapping website while I was in school at UBC in 2009. For those who don’t know – a handicapper is someone who sells their predictions for money, and I realized you could make a lot of money selling predictions. My co-founder, Duncan McIntyre, and I would sit at the back of classes and pick games every night, everything from NHL hockey to Swedish Superettan soccer, and sold access to our picks for $70 a week. Sadly, we quickly realized that the handicapping industry was fraught with scam artists and competitors who were clearly not disclosing an accurate representation of their previous performance.
We knew something had to be done to bring transparency and credibility to the handicapping business – and this later served as the impetus behind starting FansUnite.
So how did this turn from a classroom project into the FansUnite that sports bettors know today?
It took a few years before Duncan and I decided to step away from our sports handicapping business and start on the FansUnite platform. By this point I was working at KPMG, studying for CPA modules, and working on FansUnite whenever I could spare. FansUnite recreated the experience of betting on sports by giving members a free virtual currency to place their wagers. Bettors could then track and analyze their own results, as well as the results of other bettors on the platform – all with fully verified and transparent records. To this day, members continue to make picks and help each other win by following the picks of proven winners on FansUnite.
So you were doing this while you were at KPMG, what happened next?
We secured seed financing after the first 9 months to build the actual platform. It was an intense period for me, juggling a start-up and studying for our CA final exam (the UFE). I remember having to literally run from a study session to go and pitch an investor before racing back to mark my partners exams – keep in mind I’m an out of shape accountant at this point, so you can imagine what I looked like giving my pitch. I knew I had to make a decision on whether to go full-time on FansUnite.
That’s a great story, so I’m assuming that’s just what you did?
It was a tough decision, but ultimately a straightforward one. Once I’d gotten my designation, I left the firm and started work on FansUnite full-time. We went through a lot over the next 9 months or so, going through developers, redesigning our UI on the site and just putting in a lot of long hours. We were lucky enough to be 1 of 10 companies accepted into a highly sought after accelerator program in Colorado, where we further iterated and improved our platform and continued acquiring users. Upon returning to Vancouver, we were very quickly introduced to a prominent VC in Canada. He ended up offering to make a significant investment in the company, and during the due diligence process he ended up making the decision to acquire us in full.
That must have been a hard decision; what did you do?
It was an incredibly tough decision, but my team and I made the decision to accept. Looking back, it was the right move for us to make. It was an acqui-hire, so we were all still able to continue working on the project and fulfilling our vision for the company. And Victory Square has been instrumental in our development by opening doors for us with investors, contacts in the gaming space, and skilled workers to help us improve our platform.
So what have you been working on since then?
Having spent the past several years in the sports betting industry, with a direct line of communication to thousands of bettors in our chat and via email, we’ve noted several critical issues that are a recurring problem. These issues include: unjustifiably high margins; entrusting fair resolution of bets to a party with a vested interest in the outcome; a lack of transparency with regards to operations and betting transactions; and having a single point of failure for your personal and financial information. This new platform is setting out to solve these issues for sports bettors by utilizing machine learning and blockchain technology to develop a totally unique sports betting platform.
You mentioned it’s unique, is there anything else out there like this?
We have a totally unique value proposition for bettors. The industry is ripe for innovation like this and the community is really excited about what we’re doing. We’ve just expanded our team with the acquisition of SaberCruncher, a machine learning team focused on applying deep learning to sports data, and they’ll be a key component in allowing us to offer a historically low 1% margin to bettors. In addition, we’re keeping social mechanisms that bettors enjoyed from our previous platform and emphasizing bettor collaboration as a means to increase everyone’s probability of profitability. This platform is going to represent a significantly more profitable future for bettors.
Can you explain blockchain for the people who have heard of it but don’t understand it?
A blockchain is an open, distributed ledger that distributes the responsibility for recording transactions from a central authority to all peers on the network. This paradigm introduces significant security benefits, as well as increased transparency – all peers on the network have access to the full history of transactions on the blockchain. Applied to sports betting, this means a blockchain-based solution is more transparent, as the controlling entity is unable to alter results or bets post-event. This represents security to bettors, knowing that their wagers will be resolved exactly as entered – with bets being automatically resolved by smart contracts with results immutably stored on the blockchain.
What other ways will it help sports betting?
We designed this platform from top to bottom with bettors in mind. Another significant concern for bettors is player limiting, as winners on traditional platforms are limited or restricted from betting on certain sports if they win frequently. We also provide additional privacy to bettors, by only taking minimal personal information for KYC purposes and not storing any financial information outside of an Ethereum address. Bettors can hide behind the anonymity of the blockchain and bet worry-free knowing that we can’t limit individuals if we don’t know who is betting.
Why do you think so many CPAs are interested in foregoing traditional corporate jobs for positions with start-ups?
I think start-ups provide more variety, force you to wear many hats and get involved in more than just strictly accounting. That’s really what appealed to me, in addition to being able to work on my own dreams as opposed to someone else’s. Being able to take my dog to work isn’t half bad either.
Did you always plan to do this? Or did you just fall into it?
I always had a sense that I was probably going to leave public practice after getting my designation. It gave me an amazing foundation in business and I’m grateful that I got my start at a fantastic company like KPMG.
At the same time, I’ve always known that I wanted to start my own thing. It’s immensely gratifying to come to work every day and work with my closest friends on developing a platform that we know is going to move an entire industry forward for consumers.