Startup Spotlight: Jock MKT

Welcome to The Modern Day Renaissance Man newsletter. I, Trey Layton, write about the things that interest me, often covering topics such as startups, sports, and entertainment. If you'd like to receive these newsletters directly in your email a few times a week, go ahead and subscribe to never miss an email!

Happy Wednesday, folks.

Another week, another drop in the markets. Now, though, the southeastern US is also prepping for a massive storm. Hurricane Ian is expected to hit Florida today. Severe rainfall is likely to remind millions of Americans that they don't actually own an umbrella. Seriously, though, hoping everyone that will be impacted stays safe🙏

The sports world has been effected by the storm, too. Many schools have canceled classes for the rest of the week, and the Florida, UCF, USF, and South Carolina football teams have all rescheduled their Saturday games, either moving them up to Thursday or pushing them to Sunday.

The pros aren't being spared, either. Tom Brady and the Tampa Bay Bucs have had to move this week's operations to the Miami Beach to avoid the disruptions. No word on whether Tom's NFT series made the trip.

Now to the real question: how does this impact your fantasy team?

I'm currently in second to last place in my family fantasy football league. While I still have plenty of time to turn things around, the Chargers' usage of Austin Ekeler and Mike Evans' temper commitment to protecting his quarterback might continue to derail what has been a tough season.

While I consider myself to be a diehard sports fan (would absolutely name my firstborn Jimbo if it meant that A&M wins a national championship), for whatever reason, I've just never been able to get into the NFL. However, I'm the exception. Last season, the league saw a record 17.1 million average viewers for regular season games. I would imagine that Roger Goodell isn't losing any sleep over one Trey in Boston not watching a little Sunday afternoon football, beer and wings in hand.

However, I began to play fantasy football with my friends a few years ago, and it has completely changed the way that I look at the professional game. Now, I actually do tune in to every matchup to see stats and watch red zone drives when I get the ESPN app notif that Jalen Hurts is on score alert. I've formed attachments to certain players and get genuinely excited when they score, loudly and proudly informing the strangers around me that "I picked him! That's my boy!"

The interactive component provided by fantasy football has to be one of the coolest ways to bring engagement to a traditional entertainment product.

The market for fantasy sports has ballooned as well. It hit the $19 billion mark this past year and is forecasted to approach the half a century mark by 2028. This includes an extensive (and expanding) list of sports which fans can play, from professional and college football to racing to even gaming.

Most of the major sports betting sites such as FanDuel and DraftKings have their own fantasy platforms, but they are also joined by free offerings from ESPN, CBS, and various non-media entities. Each tends to provide a similar format whereby users begin the season with a draft of all available players (generally individual offensive skill players, a kicker, and a defensive unit), then players set their lineup each week to try to score more collective points than whichever other league member's squad they've been matched up against. Points are rewarded individually to players based on their real in-game stats, so you're able to manage your team through picking starters based on point projections, make trades, and choose waiver adds and drops like you're Kevin Costner in Draft Day but without the constraints of a salary cap.

Given the size of the industry, it's a surprise that there haven't been more companies popping up to innovate on the existing game and platform model, but it seems that one worthy candidate has emerged in Jock MKT.

Jock MKT is taking the popularity of fantasy sports and combining it with the fairly recent retail craze for stock trading. From bidding on an athlete's "IPO" to winning real payouts based on in-game results, the platform attempts to evolve the game to provide a fresh take on traditional fantasy sports.

To start, users get to bid on "shares" of an athlete using real money before the athlete's relevant contest begins, whether it's Josh Allen stock for an NFL game or Bryson DeChambeau in a golf tournament. Then, the value of those shares increases or decreases during the game as users trade them (like real stocks), though it is expected that these prices would respond to the quality of the player's performance. At the end of the event, users receive a real payout on all of the shares of different players that they are still holding.

There are two game modes, Market and Contest. In Market mode, users can buy in at any price during the IPO and can cash out freely, whether that's getting paper hands five minutes post-draft/IPO and selling when Kyrie's share price rises or hodling to the very end and getting your payout.

In Contest mode, each player begins with the same number of chips with the same buy in which they can then use to bid on players in the IPO and throughout the contest, and payouts are allocated based on final rankings of chip holdings. Diamond hands only in this game mode.

Obviously, I would never engage in such heinous behavior as sports betting... Gambling is so shady amirite? However, if I did... this concept is pretty neat. It combines the degenerate hobbies of day trading and sports gambling. I might as well just make my Twitter pfp a money now.

However, from an investor lens, there are a few causes for concern. First, regulation around gambling is uncertain at best. While there has been some positive progress with more local governments moving to adopt accepting legislation, there are still only 33 states in the US in which sports betting is allowed. This already severely cuts into the TAM, and it doesn't help that the company seems to have little international presence in major markets such as China which are more interested in sports such as esports and basketball.

Second, there isn't much of a moat for the team, and I see the product as one which can be easily replicated by its much larger, far more heavily capitalized competitors. If something like this takes off, it might have a first mover advantage, but it would have to get really lucky for an ESPN not to notice its traction and roll out its own similar game mode to its millions of existing users. Not that big companies would ever copy smaller competitors' products, though... /s

Finally, there is little information on the website about the team itself, but it claims to be a group of "traders, analysts, poker players, and sports bettors." While these might be the type of people that would succeed in playing an app like this, something that kind of sticks out to me is that it never mentions sports fans.

While the team might be able to create a complex app for traders and technical bettors, something about it just seems a bit off in that I'm not convinced that they're necessarily committed to building the app that everyday users would enjoy as much as the more technically sound bettor looking to make serious money at the expense of more casual players.

The product is fresh, it's innovative, and it seems fun. From a consumer perspective, I hope they make it. However, I fear that the path to unicorn status is a long one, and not necessarily one that Jock MKT will be able to travel.

Cheers to another day,

Trey