Shotcall: From Fans to Friends
Originally posted on MergerSight. You can follow our venture capital and technology M&A content here!
Overview
Shotcall is an e-sports marketplace that directly connects content creators with their fans through streamed video games. The platform focuses on maximizing engagement by allowing users to directly connect and play games with their favorite influencers in streamed one-on-one sessions. Alumni of Techstars’ Seattle accelerator program, Shotcall recently raised $2.2 million for its seed round led by New Stack Ventures and Initial Capital. MergerSight got the chance to sit down with co-founder, Thomas Gentle, to discuss how they think about the intersection of e-sports and streaming, what they are building, and the company’s growth plans.
“Fans are at the center of the entire global value chain in the gaming world…They dictate what games are bought and which content creators rise and fall out of favor. They pay the bills for everything. And yet their interactions are weak. And if you take a look at the data, they have a high desire and a high willingness to pay more if you were to give them what they truly want. And that is engagement.”
- Thomas Gentle, Co-Founder of Shotcall
E-Sports Streaming & Company Value Proposition
Gaming is a key social activity. As Betaworks Ventures’ Peter Rojas tweeted, online gaming facilitates the four key elements needed for developing friendships: proximity, frequency, duration, and intensity.
Pre-pandemic, online gaming platforms were already becoming increasingly popular as various media platforms offered viral distribution for a counter-intuitive yet enjoyable activity: watching people play video games. However, it is no surprise that the current environment has catalyzed a gaming “growth spurt,” accelerated by people’s desires to feel interconnected and, through certain game types, recreate physical experiences in the digital world. According to Statista, Twitch and Youtube saw a 10% and 15% increase in viewership, respectively, between March and June 2020. That said, since gaming is a highly social, collaborative, and enjoyable activity for a large segment of the population, streaming and e-sports is no longer a favorite pastime for just the stereotypical user types (gamer nerds!).
Centered around the act of playing digital games, Shotcall’s platform seeks to foster stronger communities, by allowing fans and creators to interact in more meaningful ways. The shared video game experience is the platform’s key feature but complementary activities help provide a holistic and immersive engagement. Live streaming through Youtube, Instagram, Periscope, and Snapchat has offered fans a window into the lives of their favorite celebrities and micro-influencers. E-sports streaming platforms like Twitch, as Bessemer Venture Partners noted in their investment memo, brought “audience, technology, and distribution to video game watching.” Shotcall takes all of this even further by providing an avenue for more intimate relationships to be formed between both users and hosts, as well as amongst the fan base themselves.
For fans, the one-on-one or small group interactions, complemented by Q&A and coaching sessions, is almost like offering a path to friendship with their favorite creative generators. This is particularly important as “fans are at the center of the entire global value chain in the gaming world,” as Gentle puts it. Players have a lot of influence on which games are popular, what platforms are used, who falls in-and-out of favor, which merchandise is bought, and the list goes on. As for content creators, Shotcall is a platform they can leverage their distribution power, independent of their brand partners. By offering more of their time and an even bigger window into their personalities to their admiring fans, they are able to truly build their own businesses around their individual charisma. Ultimately, while gaming is the central activity, Shotcall could potentially be another passion economy platform through which deeper-level online communities and fan-creator relationships are formulated.
Product
Shotcall’s web marketplace allows streamers to curate various types of community events such as tournaments, coaching sessions, and Q&As. After registering for free, fans can book either one-on-one or pre-determined sessions with a specific streamer. Pending approval by the content creators, fans can then communicate with them and start playing a game of their choice. Both stakeholders are able to communicate directly, and they can easily share their experience(s) on social media for other fans to engage with. Going forward, the company is working on seamless integrations with Twitch and Discord. The seed capital raised will be used to fund growth with a specific focus on improving certain activity metrics. Furthermore, Shotcall is looking to further strike partnerships with icons and creators.
One important thing to highlight is the vertical differentiation between Shotcall and existing platforms. As we have seen with the likes of Open Table, Uber, and Grubhub, great marketplaces are not just aggregators. The platform must offer new experiences versus the status quo. For Shotcall, they do more than just aggregate icon distribution channels. They are differentiated in terms of quality through the various direct engagement features available through their platform. Compared to social media platforms with live streaming capabilities, Shotcall offers fans the opportunity to form deeper-level bonds with the influencers they enjoy watching or admire through more direct, interactive touchpoints. Moreover, as their platform is constructed around the social experience of gaming, that allows their product to be dynamic, catering to the popular demands of players and creators.
Business Model
For gamers, the marketplace is free to access but Shotcall monetizes on a pay-to-play model wherein fans purchase sessions with their streamer(s) of choice. The company has a revenue-sharing agreement depending on the type of event that was hosted and the streamer’s partnership status with the company. That means that when a creator hosts paid sessions and events with fans, Shotcall takes a small percentage of the revenue — but never more than 25%. For streamers, the opportunity to get paid directly and efficiently is a key advantage of Shotcall’s model, especially in comparison to their competitors in the e-sports segment.
An interesting claim made by Gentle in another interview with TechCrunch, was on the platform’s ability to push up users’ willingness-to-pay. The direct and more intense engagement between users and their content icons increases the users’ perceived quality of the platform, relative to the status quo. This is how Shotcall adds value. Referring back to the four key elements of friendship development, proximity, frequency, duration, and intensity, the core and ancillary experiences the company offers heightens all categories for the stakeholders involved.
Team
Shotcall (f.k.a. Rift) was founded in 2018 by Thomas Gentle, Gordon Li, and Riley Auten. Meeting at the Georgia Institute of Technology during their undergraduate years, the three were inspired to start the company after collectively agreeing that playing on a live stream with Tyler1 and Doctor Disrespect, two famous streamers, would be an experience they would ultimately be willing to pay for. They each have a strong software engineering background, with Gordon and Riley beginning their careers at Amazon. Their passion for gaming experiences and content creation is evident in how they think about the problems to be solved and how to endogenously build a platform that adds industry value. Clearly a clever team with a passion for the business and an understanding of the industry, it will be exciting to see how the Shotcall team can continue to execute.
“Fans have been kept on the sidelines…a viewer is only a viewer…it’s an accepted norm that fans are perpetually benched.”
- Gentle on the problem/pain point that motivates him and his team
