The serial entrepreneur was already no stranger to lightbulb moments. In the 1980s, he set up Electric Blue, the world’s first soft porn on VHS. “We dubbed them into numerous languages... not that there was much dubbing to do.” He then “got into the internet quite early,” and ran a series of successful SaaS businesses.
It was last year that Cole decided people might be ready for a re-cast version of the celebrity stock market – in the form of Football INDEX. “For the last three years, I’ve watched, along with everyone else, social media enable ideas to lap the earth at the speed of light. I thought about what would happen if we could harness that to drive the celebrity stock market. So I resurrected it. Perhaps I had too much time on my hands...” But Cole settled on a new twist: a football stock market. “It’s a completely new gambling concept. We are, in effect, the reverse of spreadbetting – we take bets and turn them into a market.”
Users (known as players) sign up and buy players for as little as £1. Building a portfolio, they can then sell players, and earn dividends on the performance of those within their portfolio, which works like futures. “The dividends are our mechanism for creating market dynamics. By using fixed odds betting, we can reward players with small prizes on a daily basis if their footballers do well.” Football INDEX also gives players the capability to cash out early. “When a player wants to sell his bet, he’s actually making a request to us, the operator. There’s the illusion that they’re selling to each other, but all transactions are via us, not peer-to-peer.” That just gives players a smoother run of things, says Cole – you’re not waiting for a direct match.
Since setting Football INDEX up in October of last year, things have gone well for Cole. “We’ve got well over 20,000 registered players on the site. Top line revenue for January was four times our target.” Most players have signed up in the last couple of weeks, and hot on the heels, Cole has received considerable funding from keen investors – “it’s actually gone ballistic”. He and his team have also been working with a 21 year-old “social influencer”. “It sounds niche to people, but this is an individual with over 100m social media followers. This is an important route to market for us.”
When it comes to the technology behind the platform, Cole has done what many businesses are doing: he’s looked east. But rather than setting up an office in India, he’s gone for Bangkok. “People don’t realise it, but the city is quite a big tech hub now. There’s a lot of startup activity, and we’re talking to an Asian VC who’s interested in distributing Football INDEX across territories over there.”
Of course, as the platform grows, the trends are becoming increasingly evident – and interesting. “Jamie Vardy was a fairytale story. He didn’t exist in our top 200. Then he broke a Premier League record and has stormed his way to the First Team list. Our players were backing him before the general public. We’ve got players who know a lot more about the game than we do.”
The platform has the “Footie” index – and the analogy with the FTSE is as strong as the name suggests. As in 1984 when 1,000 “points” of value were attributed to the largest 100 companies in the UK, Football INDEX took the top 200 players and did exactly the same thing. “We launched with 1,000 points, which indicated the price of the footballers on that day. And we gained over 10 per cent in three months.”
While I talk to Cole, Wayne Rooney is number four on the platform. “Would we say that? Should he really be number four? That’s the value of celebrity for you. In the top 10, Rooney is the only Englishman. It does make a difference. We know how good Lionel Messi is, but it doesn’t always show on the platform, and that’s possibly because he gets relatively little press coverage over here.”
I ask Cole if he’s planning on developing a forum side to the platform – the answer is probably not. “It’s not like bingo where players have a chat with one another. We’re a real money exchange, so we’ve got to prioritise development.” Interestingly, several Twitter accounts have been set up to share trading tips, and one guy set up a “I’m a Football INDEX trader” thread.
Cole doesn’t intend on sticking with his company forever, though. “Grow and sell – that tends to be how I do things. I’m not going to be the chief executive of this when it becomes a medium to large-sized business. I like the early stages – the vision and execution. I’m always looking for gaps in the market for big sectors with massive growth potential, rather than the garage brewery-style ideas.”
With Football INDEX, he says, the vision is “to see people in the queue at Pret thinking, ‘I haven’t got time to check my stocks, but I’ve got four seconds to check Football INDEX’ – and that’ll give them a warm glow.”