Fresh off a 4th place finish in the NALCS, Sebastian was kind enough to share some insights into the Rocket’s and Clutch Gaming’s short and long term goals, non-endemic organizations entering the esports space, and more. Read the interview below!
First of all, congratulations on the 4th place finish in the NALCS. That’s quite an accomplishment for being one of the new teams in the league. Talking about the LCS, what was it that drew the Rockets to build a League of Legends team, instead of any other game?
Thank you. Hopefully we can build on our finish and make a strong push this summer split.
To answer your question, before we even began looking at the different esports ecosystems, we built out internal metrics to analyze which games we wanted to explore and how to delve into them. I was particularly concerned that the biases I had from previous teams and what I had seen in the esports would color which ecosystem we wanted to be a part of. We started with metrics such as unique viewership, MAU of the game itself, growth rates, etc., and then set out to apply different coefficients to back test the analysis if we were trying to make the decision in 2014, 2015, 2016, 2017, etc.
Regardless of the different models we put together, when we went out into the market to analyze the various games in esports, be it Dota 2, CS:GO, Hearthstone, or otherwise, League of Legends jumped off the page. For what the Rockets want to do in esports – build a sustainable esports organization that can both grow and last for many years – League of Legends, and particularly the NALCS, was what we wanted.
There has been a lot of buzz lately around other non-endemic organizations entering the esports space, with a large majority being from traditional sports. How has it been working with the Rockets and entering the esports space?
I am reminded everyday as I work with the members of the Rockets how lucky I am to be a part of this organization. Similar to how not all esports teams are run the same, non-endemic sports team organizations run the gamut of quality.
Not only does the organization have a great ownership in Tilman Fertitta and his family, I find myself incredibly lucky to work with and learn from people like Tad Brown, Daryl Morey, Rafael Stone, and Gretchen Sheirr. It’s given me a great appreciation for what well run organizations can accomplish.
I think the public generally likes to group all non-endemic organizations in the same bucket of people who provide capital, as though these organizations are purely venture capital-esque investors. However, there is certainly a difference between your “money in – money out” non-endemics and teams such as the Rockets and the Warriors who are making larger investments into entering the space not to make a quick return, but to grow the space over time.
What are the Rocket’s and Clutch Gaming’s short and long-term goals from being in the esports space?
In the short-term, we’re trying to make sure Clutch Gaming has a solid foundation to grow our presence in League of Legends and put together a consistent winner. We’re going to make mistakes, but we want to learn from them quickly and iterate into our next goal. But to be explicit, that desire to learn from mistakes drives a lot of the reasoning why we’re focused on one game in League of Legends. Teams such as Team Liquid have a solid track record that were built over many years of excellence in multiple genres. However, it’s much harder to see your mistakes when your focus is spread too thin.
Long-term, once we’re confident in the systems (be it operational or analytics-based) we’ve implemented, we want to continue to help esports grow to maintain a steady course for the years to come.
We continue to see a lot of endemic and non-endemic brands enter the esports space through Overwatch League, NALCS, and professional teams. Have there been any entries that have surprised you and why?
Actually, the only groups that surprise me are less the ones who’ve entered, and more the ones who haven’t. There’s definitely a class of brands who I would love to see involved in esports.
Unfortunately, they haven’t found the right angle yet.
If I had to guess, and please do take this as pure conjecture, a large part is probably a risk tolerance calculation. Esports has grown very quickly. Look at it from the team space itself; the price of entry seemingly goes up at arbitrary points (if I had to guess, there’s probably a step-function element to the ecosystem’s pricing). As a result, the players have gone from mom-and-pop startups to established organizations like the Rockets.
Now imagine if you’re a brand. It’s definitely hard to make assessments on one’s risk tolerance if the players you want to work with changed between the first time and second time you evaluated the space.
I do think that is currently changing. 2018 is the year of franchising and the promise that organizations are here for the long haul.
What brand(s) would you like to see enter the space and why?
Per the previous question, I think you’re going to start seeing every asset class that’s in sports and entertainment marketing right now enter esports. And I do mean every asset class.
For example, I imagine deeper penetration of beer and liquor companies into esports. There’s been this poorly propagated stat suggesting that all of the viewers of esports are somehow 15 years old. But the age breakdown of esports viewership skews much higher and well above the drinking age. Does the space have underaged fans? Yes. So does every traditional sport. Insofar as this asset class is marketed responsibly, I see no reason that the NFL is fine advertising alcohol, but that esports should not.
On a personal note, I’d love to see a tea company enter the space. I’m a huge fan of tea (drinking some right now) and we should have tea sponsors!
Week 5 Day 2 at 2018 NA LCS Spring Split in Los Angeles, California, USA on 18 February 2018.
Previously, you’ve shared your thoughts and insights on using data and analytics within your organization. Can you share with us a little why you’ve placed so much emphasis on data and how has it helped Clutch Gaming find success?
As much as I love data and analytics, I’d say we’ve placed the majority of our emphasis on empiricism. It’s just really hard to be right continuously over a long period of time relying purely on intuition. Sure, there are outlier individuals and organizations that proport to do so, but what we’ve found on the Rockets side is that having hypotheses, testing them, and implementing the results has created a history of sustained success.
I often hear that analytics and data just doesn’t work in esports. But it’s literally worked for every other industry and space on Earth. It’s worked from politics to tech startups, from religion to sports teams. Why should esports be any different?
While it remains to be seen if our emphasis has helped Clutch Gaming in the short run (our results could just be variance!), but we’re confident it will build out our edge over time.
What are you most excited to see within esports as it continues to gain mainstream notoriety?
I’m loving the growth of people embracing esports as unifying activity.
Over the past few months, I’ve had a chance to talk to kids in middle school and high schools in the Texas area. These kids are starting esports clubs and forming varsity esports teams. I believe that these students are learning the same lessons I learned in high school on my varsity swim team. They may not become pro gamers (I certainly did not make it as a professional or any type of competitive swimmer), but the friends they make and the lessons they learn will help them throughout their lives.
That and the ability for the esports community can share its passion for competitive video games with the greater world?