Dream 11 is not in the business of gaming. But Dream11 is in the business of ego. Dream11 The company that became a unicorn just 3 years ago, Today that company’s valuation is more than 8 billion dollars. And not only this, Where many companies were facing losses in 2020, There Dream11 in 2020, Earned a profit of 189 crores. Many people among us even today think that Dream11 is a betting company. But the truth is something different. Now the question is, Is Dream11 a scam or not? Or is this company doing something with us, About which we are not aware? and What is the business model of Dream 11?
Today Dream11 is one of the most valuable startups in India. With 100M active users, Today this company is dominating the fantasy gaming market. But have you ever thought, Who had no one to give funding to them at one time, And whose application is still not present on the Google play store, How did they reach up here? And this is the place, Where all the company’s business secrets are hidden Which many people among us don’t know.
How Dream 11 was started?
So this story begins back in 2008 When harsh Jain returns to India from the US after his studies. And this was a turning point in his life. Because at that time IPL was started in India. As IPL started, People’s way of watching cricket was completely changed.
Where people, used to sit & enjoy cricket a full day, Now that same fun, Were able to take in 3-4 hours. Which took cricket’s viewership to the sky. Harsh Jain analyzed a critical thing in India. The people who watch cricket, are very judgemental. They often say that Dhoni should play like this. Kohli should play like this. If they did not play like this then they could have won.
And by observing this thing, Harsh Jain had an idea. The idea was simply that, In foreign fantasy, gaming has a huge scope. Why not bring fantasy gaming to India & launch it in cricket? And this is the place where Dream11 started.
Very few people know this, When dream11 started, Then at that time this company was not like what it is today. At that time this company was fully dependent on ad revenue. Because of this, there was no growth. And there was not even the slightest chance of profit. Years passed and Harsh continued.
Finally, in 2012, He made a product-market fit. After this the fortune of Dream11 was changed. Interestingly the company was not able to get any funds, Today that company’s funding amount is more than 10k crores. But has anyone ever thought, Why is dream11 provided with this funding? Well, the truth is, This company is smarter than you can think.
To understand that, It is necessary for us to understand these 3 things.
- What is Dream 11 business model?
- What is Dream 11 real product?
- Most importantly, Why is it dangerous for us?
Is Dream11 a Scam or Not?
What is Dream 11 business model?
So see, Dream11 operates on the “Prize pool commission model”All the users who play games on their platform, All those users need to pay some entry fee. In exchange for that entry fee, they get 100 credits. By using these credits, People can form their own teams. And the winning team gets the prize money.
For example, there is a tournament on Dream11, Which has 1 lakh teams. That means 1 lakh people can play this game. Now every player to play will pay an entry fee of Rs.49. Which means companies total revenue will be RS.49 Lakh. The tournament is conducted and later results are announced. And after that, the price money pool is formed, Which means this Rs.49 lakh is Collected by the company, and 80-85% money from this, The company distributes back among people as prize money. And the remaining 15-20%, is the company’s profit.
Now because to make a team and win, You just don’t need luck, But skills, cricket knowledge & judgment are also necessary. So the government of India, Does not count fantasy gaming in betting. Because here luck has very less role to play.
But cricket betting happens in this way. Consider that there is a match between Chennai and RCB. And Chennai has more chances of Winning. Everyone can see that. Now in such a case, Bookies will buy some Chennai players And will help Chennai in losing the match. In this case, Bookies earn a huge profit.
But the users in fantasy gaming can choose players from both teams, So whoever wins the match, won’t matter at all. So here there is no chance of fixing it. But still, dream11 charges money to let people play, So even today it is against Google guidelines. So even today you won’t get their application on the play store.
But the question is Even in this case, Why is the startup getting so much funding? Well, it is like this because even today many people don’t know That dream11’s actual product is not their game. Their actual product is EGO. Emotional intelligence & the design of everyday things.
Why is it dangerous for us?
So we will see, How does Dream11’s actual business model work? Their business model has two aspects. Winning and losing.
Consider that you have enrolled your money on Dream11, And you won. Now, in this case, the small achievement that you have received You will be addicted to this thing. And this addiction happens because, As you win, this win inflates your ego. And by default, you play this game again.
Now let’s see the second scenario. You pay money, play and lose. Now in this case, As dream11 has done its marketing in such a way, To win in dream11 you need skills and knowledge. Now you won’t leave this game. Because this has become a challenge for you. Now as you lose, this game has challenged your ego. And now you have the motivation To play again and to win again. Hence, you again start playing this game.
And interestingly, There are two more things that make this game addictive.
- “Low entry barrier“.The entry barrier for playing this game is very less. Take Rs.50 and go to any casino or bookie, I can give you a guarantee, With Rs.50 no one will allow you to enter. But to play on Dreeam11 you just need Rs.50.
- “High exit Barriers“. You can’t leave the dream11 platform even if you want to. Because of one reason, That reason is the “Sunk cost fallacy”. To see how it works. When you start making a team & playing on dream11, not only your money but your time is also invested. So if you win, Then your happy hormones force you to play this game again. But even if you lose, as you have invested time in playing this game, So to recover that time in terms of money, You play this game again. Ok so as I have wasted this much time, Let me invest some more time, Who knows maybe I win.
This loop goes on in a similar way. And to make this thing more strong, Dream11 has set Rs.200 withdrawal limit. So unless and until you don’t have Rs.200, You will keep on playing. You win or lose, Company will earn money in every way. And this is one reason, Investors are paying so much funding to them. Plus the thing that this company is doing, That thing is so addictive, That in upcoming time, This company will earn more profit.
I know, Many of you must have this question in mind, This company is helping people to earn money. Then what is wrong with this thing? And this thing brings us to the important question, Why is it so dangerous for us? So see, You pay Rs.49 and start playing the game. Consider that, You won Rs.100.You paid Rs.49 and won Rs.100.This is a 100% game. Why shouldn’t I play this game? But there is one thing that people are unable to see. That is their time.
Not only dream11 but any fantasy gaming platform The time that it consumes, The value of that time, Is more than the money you earned on that platform. Because investing the same time somewhere else, You earn so much more. And learn so many skills. You can improve your health. And don’t know what more things you can do.
The problem is even today many people, Value their money more than their time. And by taking advantage of this These companies steal our time from us. Your that time, In which by working hard you could have become someone. The Rs.50-100 on these gaming apps won’t make you rich. But with your skills and knowledge, you can achieve that Which can never be provided by these gaming apps.
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