Smarkets (Jason Trost, CEO) Interview - November 2010 - Discussion Thread
Welcome to the discussion thread for the recently published interview with Jason Trost, CEO of Smarkets.
This interview was sent exclusively to Premium Members via email on Friday 19th November 2010 - if you didn't receive it for some reason then send a PM to munk with your email address and he'll get a copy to you*.
Big thanks to Jason for the interview!
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A question I have heard asked a few times in the "chatbox" is how safe are client funds? I think people want to know if when they deposit that money is ringfenced in a seperate account for people balances, or do Smarkets use all the money as they see fit as they go along?
Im pretty sure it would be ringfenced but I cant remember where I saw that so if it could be confirmed that would be good.
As a side point (and I dont mean to be rude or have a go here) but I thought it was a bit rich to say you try: "to solve the problems we felt plague other systems; we've found it's often hard to find the markets you want in a hurry"
Well you cant find an awful lot of matches on Smarkets AT ALL let alone specific bets on those matches, First Goal scorer, etc etc. Actually whole SPORTS are missing, Horse Racing being just one! You cant really have a dig at other sites being a bit tricky to navigate around when they do at least have the decency to list the odds in the first place!
You also say: "whilst we don't currently have anyone on the team who's been entrenched at another gambling company in the past, we see this as a positive thing as it forces us to re-think everything we design and build."
Well thats one way of looking at it I suppose, but I think if I was to (for example) go sailing across the channel one of the things I would make sure of is that at least, AT LEAST, one of my crew had been sailing before. So that somebody knows what they are doing! Its just common sense. Its all very well to think that we can re-write the rule book on navigation and we dont need all those old fashined maps and compasses but in practice what would happen is we would likely drown. It is a very brave move.
RE "We are currently considering ways to bring commissions more in line with those seen on financial exchanges, where liquidity providers are rewarded and takers are charged on a passive-aggressive approach"
I am all in favour of lower commission dont get me wrong and the rewarding people who offer bets and charging the people who take them (As seen at Matchbook) I think is a brilliant way forwards but... the low %s charged on financial deals is possible because the contracts are often for £10,000s to £1,000,000s at a time. They are not £20 here or there which is what the majority of your bets will be if you are marketing to the "Social Network" recreational type player? If you are only going to be making 1% or so on turnover, are you sure that is a profitable business model?
You seem to be setting your pricing for one type of market then advertising to another?
"we're totally focused on building the best betting platform out there" =
Have you actually tried to lay a bet on Smarkets yourself? That is a genuine question, have you? Because I have, and I was trying, and it is not easy!
Thanks for the interview though it was an interesting read.
Have a plan and stick to it
Hi Andy -- thanks for posting the interview. I'm very happy to answer your questions and think you bring up some salient points.
* how safe are client funds?
Client funds are something we take extremely seriously, as do our regulators. I wrote a blog post addressing some of these concerns in great depth here: Are client funds safe at Smarkets? Smarkets Blog
* You cant really have a dig at other sites being a bit tricky to navigate around when they do at least have the decency to list the odds in the first place!
Fair point. We're still a young company and will have more sports soon. The gist behind this statement was we want to make an easy-to-use betting website. Using other betting websites is difficult, navigation being one of the common problems. Obviously navigation is easy with fewer events. We have plans for site search that will be very useful as we add more betting events for example as well as many other UI enhancements.
* Responding to the point about experience
We have a lot of experience from the financial industry. We see sports trading as an extension of the financial markets. We think this brings a fresh (and better) perspective to the industry.
* If you are only going to be making 1% or so on turnover, are you sure that is a profitable business model?
* Have you actually tried to lay a bet on Smarkets yourself?
Yes. It's setup the way cash-settled futures are traded. We felt the Betfair way of trading is wrong. We're considering implementing a "Betfair compatibility" mode to make the transition easier.
Thanks for the feedback, Andy. We're hard at work creating the best trading platform in the world. Opinions of any type is extremely helpful and we look forward to incorporating your feedback.