As we mentioned earlier this month, Mock Draft Central is for sale. Originally the board of Mock Draft Central decided to place the company for sale via an auction on eBay, which was scheduled to start today. However, in the wake of the pending sale becoming public, Mock Draft Central has delayed the auction while it is exploring other offers. Mock Draft Central indicated to me that other term sheet offers are welcome. If it does not receive a satisfactory offer, it fully intends to reschedule the auction.

I guess we will all just have to wait while we find out what exactly is going on behind the scenes. Good luck to Mock Draft Central as it continues to negotiation.

I get asked a lot how did I get started in the fantasy sports industry, especially considering my background as an aerospace engineer. Well, I started by putting up a website and writing about the industry. Ultimately, I sold that company, and found myself starting a new fantasy sports company, again. These are the main steps I took in launching and growing Fantasy Ethos. By the way, the title of this post very well could say fantasy baseball, fantasy sports, fantasy hockey, fantasy ________, but I just choose football since its the most popular fantasy sport.

Find a niche First, you have to figure out what you are going to do in the industry. Maybe it is a piece of software that you programmed for yourself that you would like to take public, which is what Mock Draft Central and Draft Analyzer did. Perhaps, you have an interesting way of giving fantasy advice, which is how Matthew Berry got started with the Talented Mr. Roto, which he later sold to ESPN. Whatever you want your niche to be, make sure it is unique. If you are going to do something similar to other businesses, make sure you know everything about that niche, included failed attempts to penetrate that niche.

Make sure you size up your niche. For example, I will consider Fantasy Ethos wildly successful when it gets over 1,000 users a day every day. Fantasy ethos appeals to a very small fraction of fantasy players and to members of the fantasy industry. That’s it. If you think you site can succeed on that small of a market, then go for it. Make sure you understand what the minimal number of customers is.

One more thing, you should prepare to change your niche. Rarely do you ever end up where you set out to go. I only started writing about the fantasy industry because I was trying to look for a niche. Turns out that was my niche. ProTrade started with an exchange-based fantasy sports game and morphed itself into Citizen Sports to focus on the growing Facebook and social media market.

Build a Website Once you figure out what you want to do, figure out what to call your business, buy a domain name, and then launch your website. If your site is mostly going to be content, you can be running in an afternoon with the installation of a WordPress blog. (Aside: I recommend not using a “wordpress.com” free account because if/when your business grows, you will want your own domain name and a little more control over the site.)

If you already know what you want, use our GoDaddy link to purchase the domain name and hosting, as it helps me pay our bills.

Once you have your site launched, get to work. The easiest way to get into the fantasy sports industry is by being active in the fantasy sports community. Get out there as soon as you can.

Be Patient Most small successful small business in the fantasy industry took at least three years before they started generating any significant income, and about five years before the owners felt like the company was really rolling. Part of the growth problem in the industry is that fantasy players are creatures of habit, and keep doing the same things year after year. The other, and probably bigger issue is that fantasy players are secretive. It is not like finding a good restaurant that you will tell everyone about. If fantasy players find the next great thing, they will not tell anyone about it. They use it to only help themselves. These habits make new customer acquisition a struggle. Which brings me to my next point.

Bootstrap Spend as little as money as possible. With the time line to develop a successful fantasy sports business three to five year, it will take a while for investors to get a good return on their money. Consequently, build with as few dollars as you can. To be clear, I am not saying invest in lower quality products and cut corners. Spend when you need to spend to make a high-quality product or service. Spend $250 to get a clean, fresh design for your website from an online designer, but do not spend $10K to have an advertising agency develop concepts for you. Spend money to make sure your website has plenty of bandwidth. Spend on customer service. Always.

This also means that you need to take as little outside funding as possible. I can count on one or two hands the number of fantasy companies that are netting over $1M per year. If you take in $500K in funding, you are increasing the odds against yourself in succeeding and making money on your fantasy business. There is no easy solution to this problem, but the best solution is to figure out how to do more for less.

Market To be successful, you will need to market your business. You should/will spend at least as much time marketing your site as your improving your business. Luckily, there has never been a time that you could market a product as easily as you can now without spending money, which is even truer for fantasy companies, since they are mostly internet-based. Between engaging customers on blogs, twitter, facebook, social media, etc and search engine optimization, there are plenty of ways to drive traffic without spending much money. Find where your customers are and engage them there.

This is enough to get you started. As I think of new points, and learn new lessons, I will continue to write about them, which means you should keep checking here for new content.

If you would like to add to this discussion, please comment on the article, tweet the article, or email me at derrick@fantasyethos.com.

Is on fire? Maybe I was having a Little Caesar’s moment? As we reported earlier, The League is a new fantasy football sitcom that is aired and produced FX. More importantly, The League arrives on your television tomorrow night.

Fantasy football is the medium that The League uses to explore everyday things like friendship, marriage, parenting, and pretty much just life in general. Of course, there will be regular story lines revolving around the fantasy league within the show, which is an endless source of hijinx.

Having an original sitcom centered around fantasy football is definitely a major plus for the fantasy football industry. Aside from this being yet another major indication that fantasy sports has gone mainstream, The League has the potential to lure in additional fantasy players once they see how much fun the characters are having (or not having, as the case may be).

My DVR is set to record, and let’s see what happens. Lets just hope it’s as solid as a sleeper pick, and not a first round bust.

Additional Coverage:

• FX’s losers in ‘League’ of their own (SF Gate)

That headline is what I imagine the conversation must have gone like right before one guy shot his friend while checking fantasy football scores on Sunday. Now, I am praying that this argument had nothing to do with fantasy football, and it was purely coincidental that they were checking fantasy football scores at the time. Maybe they were playing Russian roulette over who would get to claim Shonn Greene off the waiver wire, and this was just their creative away of doing it.

Why should this not have happened? It is just fantasy sports! The name of the industry should give it away, it is about “fantasy” or in other words “pretend” sports. I love working in this industry, but taking the games too seriously is a problem. They are supposed to be fun, remember?

(Twenty minutes later, but a very important rant later) Turns out a second article had additional information, and alcohol and stupidity were involved in the fantasy football shooting. This is not surprising, and gets into a whole new argument about gun safety, for which this is not the place.

Seriously, I have known friendships that have ended over fantasy sports and that is just silly. This is supposed to be fun, do not take it too seriously, okay?

I’m sorry did someone say there was a recession? Judging by the $5.5 Million dollars that Watercooler just raised, you would never know it. Last year, Watercooler’s March Madness game on Facebook had over 1.7 million active users, instantly making it a major player in the world of (social) fantasy sports, and now it has a war chest to take the company to the next level.

If there is an immature market in the fantasy industry, it is within social networks. While fantasy players are well-entrenched in their habits, Facebook holds the potential to be a game changer in the fantasy industry. Over 100 million Facebook users actively socialize online, and it is only natural to transition these users to socializing over fantasy sports within their already existing networks. However, none of the big fantasy sites have made a major shift to making their games fully accessible via Facebook, which creates a big opportunity for new fantasy sites to become major players. Currently, this companies that have entrenched themselves in this niche is Watercooler and Citizen Sports.

One item of concern about this funding arrangement is that the $5.5M funding round was lead by online gambling site Betfair. From a legal perspective, there is a thin line between fantasy sports and gambling. I think it is not worth blurring that line, but that is just personal preference. The two can legally coexist, and Watercooler seems up to the challenge.

Congratulations to Watercooler on its new piggy bank, and I look forward to seeing how it spends its money.

Additional Coverage:

• Watercooler Inc. Announces $5.5 Million Series B Funding Led by Strategic Corporate Investor Betfair (Press Release)
• Watercooler raises $5.5M to expand social fantasy sports game business (VentureBeat)

The Fantasy Sports Trade Association (FSTA) is once again accepting applications for its fantasy industry awards. In case you were unaware, fantasy sports companies have their own awards, and the FSTA is currently the most recognized of the awards.

Currently, only FSTA companies may nominate or are eligible to be nominated for FSTA awards. The entry deadline is Novermber 20, 2009. The FSTA awards will be given out during the FSTA’s winter conference in Las Vegas on January 26-27. It is good to see that rival companies are able to come together and recognize the ones that are leaders in the industry.

Awards and recognition are always fun, so if you think there is a worthy site out there, feel free to nominate them for an award.

With today being another lazy Sunday, I thought I would point you to some articles that you could lazily glance over when you are not busy stalking your fantasy football team on the your league’s real-time scoring.

• Ten reasons why … you read fantasy columns (OPEN Sports) – Does it count as reading a fantasy article when you are reading an article about why you read fantasy articles?
• 10 Things To Do During The Bye Week (Predominantly Orange) – Clearly this Broncos fan does not play fantasy football, because the fantasy football fan never has a bye week. The list does contain some valid things that you might want to do in case you do need to take a week away from fantasy.
• The Number, The Feeling, The Line (Hardwood Paroxysm) – DJ Turtleface reflects on how he seems to be able to destroy his fantasy basketball league annually, despite continuous improvement by other league owners. This year he may have to take his riskiest strategy–depending on rookie production. He seems happy with it, but let’s see how he feels about it in three months.
• Draft Day Dilemma (Study of Sports) – A fantasy basketball owner struggles with his first round pick and ends up having his decision made for him through a strange twist of events.
• Fantasy Issues: Time to pick ‘a team’? (Sporting News) – When you have multiple fantasy teams, you tend to pick a favorite one, don’t you? It’s okay to admit it, we all do it.

Enjoy these articles while I continue contemplate why people continue think that Brett Favre has fantasy value.

Ronnie Lott, whose blows were so punishing that similar hits are still referred to as Ronnie-Lott hits, is taking on fantasy football players every week now at Trench Fantasy. Trench Fantasy is a fantasy football game where players draft the guys that have historically gone unnoticed by fantasy football–the linemen, the defenders, the men in the trenches.

The chance to interact with a football legend is definitely a big thrill for some fantasy players, and should help Trench Fantasy get more attention. Historically, endorsement by real athletes has had mixed results for fantasy sports companies, but since Trench Fantasy is appealing to a different kind of fantasy player, it may work. Fantasy players that are interested in defenses may get a much bigger thrill out of competing against Ronnie Lott than a regular fantasy player might.

In addition to Ronnie Lott, Trench Fantasy has also signed on Richard Dent, Lincoln Kennedy, John Randle, and a number of other trench legends, as it outlined in its article Play Trench Fantasy Heads Up Against Our Ambassadors!

I will now leave you with this Ronnie Lott highlight reel:

I love contests. Especially the kind of contests where it is free to enter, and if you win, you get something of value. The Sporting News is hosting a contest to find burning questions for its 2010 Fantasy Baseball Yearbook. To win a free fantasy yearbook, all you have to do is email a question to which you are dying to know. That simple.

While most fantasy baseball fans have checked out mentally until spring training, there are still thousands of fantasy players who are already contemplating what will the 2010 fantasy baseball bring. Those are the fantasy baseball players who are wondering what fantasy baseball position changes will occur. For some fantasy players, there is No Offseason.

Even though the contest may be out season, I love it. Contests like this are usually pretty cheap, likely to get attention, and help you interact with your users.

If the Sporting News selects your burning question, you will receive a free copy of the 2010 Fantasy Baseball Yearbook. To enter, email your questions to dailymail_bb@sportingnews.com and be sure to include your address. The deadline for entries is Nov. 7.

The easiest way to get people to do something new is to make it free, offer prizes, and make it similar to things that they are used to doing. FanDuel’s Tweetball fantasy football is a simple game that easily meets all of these criteria, while creating a simple and elegant fantasy football game that is played exclusively on Twitter.

FanDuel is hosting this game to drive traffic towards its main suite of pay-to-play fantasy sports games that you can find on its site (See: FanDuel Launches Fast Head-To-Head Fantasy. Aside from finding a simple, low-cost way to market itself, Tweetball may ultimately be a product that FanDuel can build a business around. It is easy and fun to play, does not require fantasy players to change their behavior (as long they tweet), and is easily accessibly by anyone. Plus, add in the potential for the game grow via a viral expansion loop, and FanDuel ultimately may have a success on its hands.

To play Fanduel’s weekly fantasy football twitter game, a player tweets a quarterback, running back, and wide receiver and includes the “#fanduel” tag and a link to the game (as pictured above–pretty simple, eh?). The team with the most points each week wins a Fathead of its choice.

Tweet and win!