What is Esports Innovation Group (EIG)? With Co-Founder & Co-CEO, Michael Broda
By: Esports Innovation Group, Eig
Tags: Esport, Metaverse, Esports Podcast, Esports Business, Esports News

Listen to the podcast: https://www.buzzsprout.com/1890098/9569845

Michael Broda — Intro

Tell us about yourself Michael.

I was a former investment banker, I was doing business my whole life building up companies, restructuring companies, doing CEO, CFO positions. After investments I did in the past, I discovered the esports industry a couple of years ago. I joined through investments I made and later I continued as CEO of esports.com, built up Esports Players League (ESPL) and made some footprints in the industry.

Michael Broda — Journey

How did you get into the esports industry? What excited you about the space coming from an investment banking background.

I like technology, I like all the disruption that happened in the early 2000s with Amazon, Facebook, etc. Technology gave us a lot of industry changes in the past. I think that looking at the next wave of changes coming via AI, blockchain and all of that, I think that the esports industry is the perfect place to apply it. We are still at the very beginning of the esports industry, we will see a lot of growth and the only thing we are waiting for is the infrastructure to be built. That’s what Esports Innovation Group (EIG) is focusing on.

Michael Broda — Experience

How has your experience in investment banking influenced you in the esports industry and what have you brought with you from your past experiences?

The common denominator is that in the investment banking industry, I did financial derivatives, stock trading and all that… is you’re basically dealing with Zeros and Ones. You build up algorithms, and if you have the right underlying information, you can analyse it properly and execute on it, then you’re gonna win. In the investment banking industry it’s very easy, you buy or sell shares, then you see the result. In esports it’s more complicated, but the underlying information is the same. You have data, the Zeros and Ones, and you’re moving these kinds of data back and forth.

What have you learned from your experience in the esports industry so far and how did that lead you to founding EIG?

I’m fascinated by the speed of information, you need to be very careful how you set up your business, how you work with the community and how you build up a community in the industry. It’s really difficult, the industry has its own rules, the community is the industry, these are the clients and why you are developing products and services. They are extremely good with technology, and that means they are extremely good when it comes to information, usually the gamers can develop new things, new ideas, they can execute on them, they could potentially develop their own games really fast. I think this is a challenge for every company to work with such an exciting target group.

EIG — Unique Value Proposition

You Co-Founded EIG with Nik Adams, how did you both meet and what was it that both of you saw in the industry that convinced you to form EIG?

When I was the CEO of esports.com, we hired Nik Adams as an advisor, he helped me especially to understand the community, the history and the differences to other industries, and since Nik was from Twitch as well, he really knows the industry from the beginning. He was involved in many major deals and has a huge understanding of the community, the market, and many other parts of it. This was really exciting for me. I add the other half to it, the financial background, the tech architecture and company building per say, and that’s why we made a really great team to build something crazy.

What is EIG and what is the unique value proposition that EIG proposes to its investors and to brands?

We are not building 1 company with 1 topic, we are focused on building an entire ecosystem. That’s not because we have such huge ambitions, but rather because we think it is necessary. We don’t think it’s easy to build 1 tech stack or 1 tech solution and win the market, because the market is still fragmented. You can’t have 1 state of the art AI module and the rest of the industry is left unserved. So we decided to build the full value chain through our investments and putting them together as an outstanding B2B and market service. This is the difference, we have the market access already, we have launched a couple of B2C projects, and then we can buy, acquire and build tech, to test it out in the market so we can develop it further.

What is the demand in the market that EIG is targeting to serve and how do you do that?

If we look at end-to-end solutions that serve B2B services such as Shopify for example, when you want to set up your shop in the ecommerce sector and you have a really good idea for a product, or want to connect your marketplace, you can go to Shopify to get your end-to-end solution. Imagine if you just want to sell your products but you need to deal with data warehousing, tech development, payment services, go to market solutions and many more really difficult things when it comes to technology. That’s why Shopify offers a great solution to this kind of target group. This is exactly what we are doing in the esports industry. Many companies who want to get in touch with their clients and audience like Traditional Sports Clubs, Brands and Telcos end up having to do much more than they should. This isn’t their core business, just like how it is not their core business to run an esports event. So we identified that these end-to-end solutions are needed by these industries so they can focus on their core business and achieve their goal of reaching this audience, increasing their visibility and collecting data about this target group. This is what we deliver.

EIG — Portfolio Companies

What companies are currently in EIG’s portfolio?

We are working really closely with our portfolio company TwoG Nation, which builds tech platforms, tournament engines, and the full tech stack behind esports platforms. We also have investments in Znipe.tv which delivers premium streaming technology with products such as ProView for League of Legends esports. Another company is Fantasy AI which is a dedicated AI team connecting the dots in the industry. We built up ESPL, which is a tournament platform running especially in Southeast Asia. We are also invested in esportsido, building the metaverse, there’s Vibadou which is a social media platform for teams and a couple of others that you can check out on our website esportsinnovation.group.

How does EIG choose the companies to invest in? What are the unique characteristics you look for? Could you share an example of a company in EIG’s portfolio?

When selecting a company, we are always thinking about the whole value chain of the esports industry. There are several stakeholders like the community, the publishers and the brands. We aren’t only thinking about the value chain of today but also the value chain of the future. As we continue to assess the value chain, we see that tech plays a very important role in it. With this general understanding, we try to find the right startups and tech solutions that fit within the value chain. It can be in the area of audio, streaming, match making, or many others. We either look for these companies or incubate them ourselves to fill the role within the value chain we aim to create. From time to time, we see very interesting companies that have ideas of how to solve a specific industry problem. When this company fits, we are keen to invest. One of our most recent investments was in Five Vectors, a company on the West Coast of the USA. They focus very much on the audio part of the experience. By analysing what is happening in the game as it happens, they are able layer audio solutions on top which are powered by AI. We didn’t have anything like that in our portfolio, we were very impressed by the tech, the team and we think that part of the sales process of this company can be delivered via EIG in larger B2B solutions. This was the reason why we invested in Five Vectors.

What are some of the top highlighted achievements of EIG and its portfolio companies so far?

We are very proud of the success we had at ESPL. The company we built up as a really good tournament organiser especially in Asia and Latin America caught the attention of investors Warner Music, Genting Ventures and companies close to the industry. They invested into the industry through us and also created products with us. From that perspective, we are very proud of that accomplishment. We have also invested alongside BITKRAFT Ventures, the biggest esports VC fund in the world from what we’ve seen so far. We’re already working with huge brands in the industry as well. Such as VSPN, the biggest esports company in the world. Also, Paytm International, as their exclusive esports partner to deliver esports solutions. Paytm is one of the biggest fintech companies in the world backed by Softbank and Alibaba. On top of that, we have done big campaigns for companies in the US like Uber.

EIG —Esports Industry & Targets

Where are EIG’s offices located and what are the regions that EIG is currently in as well as looking to expand to in the near future?

Our offices are basically all over the world now. Our company is mostly working digitally, we have part of our team in the US, in Los Angeles and New York, we have companies all over Europe like Sweden, Germany, Prague, Belgrade, Serbia and our team in Asia such as India, and in Southeast Asia in places like Kuala Lumpur and Singapore. We are really global, and I think we are showing that you can build companies in the digital space remotely. The COVID situation forced us to work online, and I think we are utilising all the benefits of it.

What do you see as potential challenges and opportunities in the esports industry for startups in the space and for brands?

For brands, it is extremely important to be in the esports industry. To do pilots, to test the industry and reach their customers. Because it will get more difficult to connect with this target group. You need to be authentic, esports and gaming is a really important way to connect with your customers. The question isn’t if a brand should enter the industry, but how, when and how much. When it comes to startups, I think it is not easy to make money in the esports industry. Maybe it isn’t the right time, because there isn’t a lot of money in the industry yet. If we look at the games industry being over $200 billion, while esports just has $1 billion, so compared to that it’s really small. But there is a huge potential for it to go up significantly. That’s why it’s important to work with companies like ours or other VCs who help you to get traction and revenues fast. Because if you start with an industry that has a small cheque in the beginning, while you get access to publishers, place your product on the market and you think it will take you 6 months, suddenly it takes you 18 months, at which point you run out of cash. So, I think it’s not that easy. Sometimes if you have a unique idea you might still succeed, but the rate of companies not succeeding in this industry is much higher than in other industries. I think companies like ours help to bring startups successfully through the ‘valley of death’ which everyone is familiar with from the startup world, as well as get better and faster access into the industry with ultimately faster execution.

How big do you expect the esports industry to be in the next 5 years and what is the market size that EIG is targeting?

I think we should also start to think about what really is the esports industry. When we look at the generic esports industry numbers, we are often just talking about big tournaments, ticketing, merchandise and sponsorships. But there are many more things that are happening within the esports industry that are not part of the calculation. So we are very optimistic about the market size in the future. When it comes to marketing, we know that digital ad spend is about $440 billion USD, and we know that esports will definitely be a percentage of it. It won’t be 50%, but it can be 5%. There is a huge potential to go above and beyond the current estimates. One of the reasons esports and the infrastructure was not successful yet was also due to connection, new technology like 5G, cheap access to technology and computing power. This has all changed recently, there will be computing power hosted on the cloud in the future. In India, 5 years ago, not many people had internet access, and now almost everyone does. Everyone can now become a gamer easily. That’s why all these changes turn all the gamer customers into esports customers as well, because it is becoming a lot easier to compete with anyone online in the world than it was 5 years ago. So it’s hard to estimate what will happen in the next 5 years, we are very bullish, we could say it’s $5 billion when it’s actually $20 billion or the inverse is also possible. There are many factors at play, but we see the potential, it might not be in 5 years but in 7 years or it may even come faster.

What will success look like for EIG?

Success comes from our products and services being successful. When we see our clients and the community using it and it’s getting traction. For example, we come up with algorithms that make matchmaking a lot easier for the gamer to help them find tournaments easier and have fun. We are customer centric, we want to have a good solution. Like I said in the beginning, the industry is really fast in communication, you need to have the best product. No one really cares about the brand name of the product itself, they care about UX/UI and really giving value to them. For us it’s really important to give the best products and value to them. When we do all of that, success will come with it.

Who should be interested in contacting EIG? How can they get in contact?

Anyone who wants to discover the esports industry, it can be startups or intrapreneurs who want to achieve something and have an idea who wants to build something that fits in our value chain. Especially brands who are looking for interesting ways to engage with the community using the tech available. As well as our potential B2B partners like Traditional Sports Clubs, Telcos, Fintechs who really want to use the B2C reach via the esports industry and we can develop solutions for them.

Featuring Michael Broda, the Co-Founder and Co-CEO of Esports Innovation Group. If you’re interested in finding out more about what EIG does please visit our website at esportsinnovation.group, or email us at team@esportsholding.com.

And if you liked what you heard or read, follow us on our page on LinkedIn and Medium @EsportsInnovationGroup, we will be covering more about EIG’s activities as well as sharing more insights into the industry and how EIG’s solutions can enable your business to champion esports.

Until then, have a great week ahead, and see you next time.

About EIG

EIG is a Venture Corporation enabling businesses to champion esports through its proprietary technology, alumni of industry experts, strategic partnerships and portfolio companies. Headquartered in Basel, Switzerland with offices in Los Angeles and New York, USA including partnerships with some of the largest esports brands internationally — EIG exists to enable businesses to champion esports into the future through its innovations and access to cutting edge technology for the benefit of gamers everywhere.

EIG Channels: Website | LinkedIn | Medium