Launch and Demo with Delane Parnell (PlayVS) | Disrupt SF (Day 3)
11:07PM Sep 7, 2018
Our next our next guest is the founder of a company called PlayVS. And he is essentially bringing eSports to high schools. So with that please welcome to the stage, Delane Parnell.
What's up, cool guy.
Out here in a trench coat. I like it.
Okay, first. I just need to know quickly. What is your favorite game?
Oh, today? Madden. Because we're playing in the Madden league in our office right now. And I'm down right now to the defending champ 11 12 in the seasons standings.
Wow, it's a nail biter.
So let's talk about, it's PlayVS?
I want to say play vs. I've been like covering you.
It just comes out. So I'm sorry.
Let's talk about. What?
We're going to work on that.
Yeah, yeah. I think so. That's the right call.
How does it work? Like, briefly. I don't want to spend whole lot of time on this, but explain to these people what PlayVS is all about.
Yeah, so PlayVS is a company that we started last year and we're building the infrastructure around High School eSports. And so what that means is we went out and partner with this group called the NFHS, which is effectively the NCAA of high schools. They decide what sports should be played in high schools and they deploy them downward, statewide.
And we went out and partner with them exclusively to introduce eSports as a sanctioned sport in high school. So we go partner with game publishers, we turn your video games into high school sports, and we built software to automate everything from the onboarding of a school into eSports, but also the competition within the league.
The rules, refs, schedules, and all the stats
Everything that an athletic director would do. Everything that a player needs. Everything that spectators need like stats and you know standings and rankings and profile views.
And then also your your streaming and as well?
Yeah, so we go out and we partner with third parties to distribute the content so that people can spectate in.
Yeah, because, I think it's like the first time that we talked it was like really clear to me. I played high school sports my whole my whole high school career, I guess not my whole life. And you don't think about like all of the moving pieces of getting all these like leagues together and districts, etc.
You partnered with the NFHS and when we when we first talked about it you said there were a few other companies in the running and that you kind of won that partnership.
And the deal with them. How did you do that like what was the, do you know what I mean?
Yeah. No, people asked this a lot when we were fundraising. Awesomely the question we were just like we're closers. We did we did a bunch of stuff. I think the thing that we did most was that we just understood how to build a relationship and we we understood that the tradition of the NFHS. Like what they're about, the way that they thought.
And we presented them a vision that was very collaborative, or how together we can create what eSports looks like in high school versus other groups that, you know, sort of presented what they wanted to do.
And you know that doesn't work for a group that's been around for a 100 years that, you know, operates and governs every high school sport that's, you know, in the high school system today.
Yeah. You have an investment from science.
Tell me the story of how you met Peter Pham.
So So I have a friend named Marcus. He convinced me to come out to SXSW in 2017. Flew down, went to a house party called the culture house hosted by listener and cross culture ventures. And I believe product hunt is also involved. And I just happened to be, now to paint the picture. This is a house party. There's hundreds of people here, there's a single level dance floor which, you know is where most of the people are. And I'm sort of walking by the dance floor. Now everyone is simply just talking except for Peter.
And I noticed him on my way. And I know who he was, he didn't know who I was. But I noticed him on my way. And along the way Suzy from cross culture pulled me and said hey do you know Peter he wants to do something to eSports you should talk to him.
And the entire time I'm talking to Peter which is 30, 40 minutes, he's simply like dancin. And anyone who knows Peter Pham knows how he dances, so it's pretty awkward. But we got through the conversation, we exchange contact and over a few months, he convinced me to move from Detroit to LA to to build this company.
One of the things that I think is going to be a challenge for you. And I'm curious how you're going to address it is that in a lot of ways, in eSports, like it's not like any other sport where you have like the NBA and then you have like basketball itself. And then you have ESPN right? Like it's just all one company.
That runs everything.
And so, in a lot of ways, you're kind of at the mercy of these publishers on their launch dates, their release dates, their rule sets, all of these things. Um, how do you build a business knowing that you're kind of, in ways, dependent on the whims of a totally different company?
Sure. And so to some degree, I happen to agree with you there. And so, that was one of actually the principles that we've established, that I knew that we had to resolve to be able to get this company off the ground.
And, and what we found is that in Esports or in general, and similar to twitch, for example, when you have leverage over to publishers, they're like, typically willing to work with you. And the leverage that we have is that publishers want to make their games eSports.
First off, like they want to turn your video games to eSports and they want them to have trajectory at the which means like a professional scene and a collegiate scene and they want them to be sustainable. And if eSports as eSports continues to grow its going to mirror traditional sports in many ways and historically the best players have been high school player so that youth system is really important and today kids don't play organized eSports.
They simply play, you know, multiplayer mode, you know which friends in real life or online. And so that's an extremely important demographic to publishers and that they're unable to reach especially when they're in high school. And we're we happen to introduce eSports into high schools, which is the most native community for that demographic. And so we've been able to win over publishers given like that.
The other side of it that I think is is interesting is the impact that we can have on eSports as an industry. Like if our company grows, and when our company grows, eSports will grow as an industry and to some degree that means will also define the games that matter in eSports, right?
We go out and we partner with a game publisher, and we build out this incredible system which millions of kids are playing in seasonally, well within High School in and outside of high school, then, you know, that game will continue to grow at the collegiate level eventually, if there's a popular collegiate level and also the professional level and that gives them sort of longevity there and so publishers have been while oftentimes difficult to work with, not for us, like most assumption, that's, that's a
to work with. They've been incredible to work with, for us and understanding and patient and helpful. And so we we've been able to develop really strong relationships with game publishers
Well until like, at launch, right or in this phase one of PlayVS you make money from the students themselves just pay a small fee to be in the league.
Um, when we talk about a few years from now, let's say you get millions of students out here and they're playing eSports in high school. Obviously, there's a huge opportunity there for all of this scholarship money from colleges to do recruiting eSports organizations can do recruiting based on your platform like how, what is your primary revenue source 10 years from now?
Sure. And so I think participation fees, which is how we make money today is still a big part of our business. It'll be the core driver of our business. And so what we do is we charge $64 per kid per season to participate in eSports. And so that's the equivalent of $16 a month. But you pay it upfront.
Parents today are spending about three to 400 bucks per kid per season per sport for their kid to simply participate. And oftentimes school funds that as well. But you know, generally as the parent and most most schools and states because pay to pay is sort of a rising tide and traditional sports.
And so I think that's an incredible opportunity for us and, and we'll be able to sustain our business, there given our margins, I think there are additional opportunities for us to monetize, whether it be through content or sponsorships. Our events are micro transactions, right?
Imagine today and traditional sports can spin our parents spin hundreds to thousands of dollars to be able to capture the highlights of their kids to help them even be recruited to a collegiate level. We're able to do that through software. And we've already built some of that technology and we could charge kids for an instant video after their match of just their highlights or we can charge them a season pass and that's a very high margin business for us.
So there's a bunch of opportunities for us to to capture revenue from the the audience that we, you know, we were building.
I guess a more specific way of asking that question is in 10 years when you become the de facto platform for understanding essentially, like minors and their skill level.
Does that then turn into an enterprise play that's more valuable than 16 bucks a month?
Sure. So I think there's a lot of things that we can do around performance analysis, like how to build teams very much in like a Moneyball approach also coaching in eSports, like, like how kids get better and the things that they should be doing, and we're not at the stage where we're ready to disclose what those ideas look like, but we are thinking about them, and we're building for them, and we're excited to be able to turn those things on.
Sounds like I'm right.
Yeah, no, you're right. You're right. Data. Data is an important part of business.
Ok. So again, we're talking about kids we're talking about like 13 to 18 year olds, right? 14 to 18 year olds.
Gaming culture is a swamp, it is a cesspool. I play games, I hear the way that those those kids talk, and adults, frankly.
And it is not good. It's a very toxic environment to be in.
You're capturing these these kids when they're younger, and a lot of ways you have rules around what games you're playing. I think that makes a difference in the way that people communicate with each other to an extent. Do you feel like you have a responsibility to help reshape gaming culture?
Absolutely. Yeah, hundred percent. We talked about that a lot. And that's something that we have even dialogue with publishers on and and beyond. You know, what we want to do most is that we want to teach kids who enjoy playing video games, how to play them competitively, and like what it means to be an esports athlete.
Today like they're sort of left to you know get it out you contextualize that like from the things that they're doing online with no sort of oversight and so in our league is is the benefit is that happens on school campus with oversight from a coach or many coaches at the school there are actual bylaws and you know rules even a school level on the state level and obviously even our platform level that are important that kids have to adhere to.
It also encourages kids to do well in school because there's eligibility because it's an actual sport within the state. So you have to come to school you have to do good in school or do well in school to be able to actually play games and in that oversight and inclusion of an adult to help supervise the time that you spend gaming I think it'd be really helpful.
And in general another element to that that we're most excited about is how do we get more how do we like narrow the gender gap in gaming right like today girls don't feel safe gaming online and generally they don't feel safe gaming in sort of open bracket events. And so how do we make girls feel safe being a part of gaming, like the gaming culture, and obviously, the, the esports scene, which is something that they care about.
And even beyond that, like, how do we get game publishers to develop games that appeal to young girls. And so I think that's a greater problem. But that's something that we're having open dialogue about, and where we plan to implement even in this upcoming season.
So I'm sorry to keep, like guessing at future business models. But like, is it possible for PlayVS to become an agency of sorts, because you end up with the data around the skill level of these players, you build relationships with them, and to some extent, right, it's all going through the school but at the end of the day, if they're building their career off this PlayVS
platform. Do you have leverage when colleges and eSports come around? Or when endorsement deals or sponsorships come around? Like, is that something that you're thinking about?
I think that's something that's native to our business. Precedent was set there with when you look at what IMG is done with WME, I think we totally could go that route, if that's the route that we choose to go.
Well, I think the, the, the bigger thing is like, there are a lot of opportunities given that we sort of exclusively own eSports in high school and and how valuable that demographic is and how important gaming is to just society in general.
And agency could be a route that we go in, we're not interested to that business today.
And if we were I think we probably partner with an agency. There are people who are just really good at what they do there, and maybe it makes more sense to work with them.
So like, in one respect, you have this, market, right, like us high schools, what does what percentage are in? and so so not right now, but capable of?
So we covered all so twenty thousand high schools, which are all the high schools that have sports we have an exclusive relationship
Right. So you have 20,000 High Schools
16 million kids
60 million kids. You have a fresh batch of freshmen coming in every single year and have seniors leaving so yes huge addressable market. But like it can't grow really well unless we grow right unless we we scale down middle school we scale at work college we we scale even beyond that adult recreational and also we globalize. And so that's all part of our plan.
My last question is like, how defensible is a platform like this, like, what's to stop twitch from just getting in on the infrastructure play?
Sure, but to see the right like twitch Well, in general, right, that relationship with the school system is the most defensible part of the business, right? We understand how to deploy a sport statewide to integrate schools to get kids excited about it, given that is directly through to school.
And that's an entire process in itself. And we have an entirely different product that one board schools also competency like twitch does streaming like they don't do competitions where we're mostly focused on is competition infrastructure how, when and why people play.
And and we've also built a really complex league engine, which is how people actually play like, generally people play and head to head matches. So like me versus you or my team versus your team, which is a single match or they play in tournaments. We built this really complex league engine that allows people to play over an extended period of time with different competition formats, all sort of culminating in an event.
And there's a bunch of variables there in itself, because it's statewide and takes them into account classes, which are like different skill levels and school sizes in all sorts of stuff that, you know, other people just hasn't built and I think is a, you know, pretty unique to us.
Cool. Unfortunately, we're out of time, but I think you and I could talk eSports for a really long time.
Yeah, we'll talk later.
Give it up for Delane. Thank you, man.