“Follow your passion,” business-builders are told. “Do what you love and you’ll always be successful.” Nik Bonaddio is doing exactly that – and so far at least, his twin passions for sports and numbers are letting him come out a winner.
An honors graduate of Carnegie Mellon University with a Masters Degree in Information Systems Management, Bonaddio was a college athlete. He won several AIGA Student honors, was a two-time All-American athlete and a fourteen-time All-Conference athlete. He describes himself as “very athletics-oriented… despite also being a total nerd.”
Since graduation, he’s been part of a serious fantasy football league, and as you might expect of a former college competitor, he’s determined to beat his rivals. Tracking the stats needed to produce good predictions though turned out to be harder than he thought. The information supplied by ESPN and other sources was very weak, he explained. While the sports channels were quick to hand out advice, there was rarely any supporting information behind their recommendations.
“[It was] almost as if they were just rolling a dice or throwing a dart at a dartboard,” he told us.
With so much information about players and games available though, Bonaddio assumed that there had to be a better way to collect data, analyze it and produce predictions of player performance based on hard numbers. In September 2010, he combined his knowledge of information management with his love of sports to launch Numberfire, an analysis engine that uses a series of mathematical models to crunch player data. Each model compares current situations with those that have happened in the past to predict the chances of a player’s success in the future.
From Concept to Launch in Three Months
The site took just two months to build, much of which was spent collecting and organizing the data, then another month to refine the models. All of this was done while Bonaddio held a full-time job. (He’s been the creative director for a number of companies and used to be the lead designer for Yahoo’s OpenID/oAuth implementation.) While his company was very supportive of his side-project, much of the work on Numberfire was completed in his spare time.
According to Bonaddio, the result is a system that has proved more accurate than the typical fan (or ESPN) because it combines a fan’s understanding of the sport with a computer’s objectivity.
“We understand that certain statistics are more important than others,” he says, “and… we eliminate human bias/limitations of human analysis.”
The results speak for themselves. By the time the season ended, Numberfire had outpredicted ESPN and Yahoo! almost seven times out of ten. It had also picked up about 7,500 registered users and 40,000 unique visitors. In November, Sports Illustrated began taking bi-weekly content from Numberfire, generating a big boost to the site’s own numbers.
Perhaps most importantly, Numberfire also received “a ton” of emails from people saying that the site had helped them to win their leagues.
Where Numberfire didn’t come out on top though is in revenues. Registration during the season was free and none of those fantasy football players who beat their friends paid for the recommendations they were receiving.
A Model for Start-up Success
That’s likely to continue, even as Numberfire expands into other sports — a growth plan that will take more time and more developers, says Bonaddio. But while the basic projections will remain free, Bonaddio does have plans for monetization. The kind of data analysis used in Numberfire can also be used for trade and roster analysis, he points out. And a planned handicapping tool will help sports gamblers to place smart bets. When Bonaddio trialed the tool during the playoffs, Numberfire came up 9-2 against the spread. In the future, these additional tools will all be available on a premium subscription basis.
It all sounds like a good foundation for success and a model not just for predicting the win rates of football players but for fulfilling the ambitions of anyone with a business idea of their own:
- The product was built in a relatively short space of time while still holding a full-time job.
That’s not always going to be possible but being able to feel the success after just three months of effort must have been highly encouraging. Setting bite-sized milestones instead of depending on a long-term goal isn’t a bad approach for an entrepreneur with a good idea and little time to develop it.
- One completely free season allowed time for testing and branding.
While its first free season didn’t raise revenue, Numberfire has been able to use the time to test its data models and build a name for itself. The site got lucky with its association with Sports Illustrated but that luck wouldn’t have happened if the player predictions weren’t accurate.
- Know how you’re going to make money.
With the basic platform tested and working, and with 7,500 registered users, Numberfire is in a great position for the start of the new season. Most importantly, Bonaddio knows how he’s going to generate revenue from at least some of those users. If only a fraction are in the habit of placing bets, for example, then the value of the increased chances of winning their bets should outweigh the cost of a subscription — allowing Bonaddio to hire those extra developers he needs to expand into other sports.
The biggest lesson to take away from the rise of Numberfire though isn’t its short timetable from concept to launch. Nor is it the site’s free beta phase. The ready monetization plan is certainly important but most important of all is the fact that Numberfire has fallen exactly into the nexus between two of Bonaddio’s passions: information and athletics.
Bonaddio had been thinking about the idea for Numberfire for some time, telling himself that he would do it one day but always coming up with excuses for not doing it today. His advice for other would-be entrepreneurs thinking of following their own passions comes straight from another winning sports company: “just do it.”