Chiliz’s CEO Alexandre Dreyfus on the $27m investment: Get the fans involved

A strong advisory board with well known people from the esports industry, such as Fnatic’s CEO Wouter Sleijffers, Team Vitality’s CEO Nicolas Maurer, streamer “Dr Disrespect” and former players such as Hong “yellOw” Jin-Ho and a big first investment of $27m with an aim to change the esports industry, certainly raises some eyebrows.

We decided we had to find out more and so booked a meeting with Alexandre Dreyfus, chiliZ’s CEO.

From left to right, chiliZ’s Chief Strategy Officer, Max Rabinovitch; Chief Technology Officer, Thibaut Pelletier; and Chief Executive Officer, Alexandre Dreyfus

Esports Insider: Can you briefly describe what chiliZ is and who you are?

Alexandre Dreyfus: People describe me as a web entrepreneur, but Mediarex is a global sports and entertainment company that has been around since 2006. The team is made up of 20+ creatives, developers and gaming industry veterans, myself included. As well as developing chiliZ, we also run The Hendon Mob, the biggest live poker database in the world.

ChiliZ is our venture into the esports world, and we aim to organise, empower and connect fans to players and teams in today’s most popular leagues and tournaments. We believe there are two challenges facing the esports world – the first is fan engagement, and the second is monetisation and funding. We have thought long and hard on how we can get fans more engaged, to transition them from passive spectators to becoming actively involved in the teams and leagues they support, and we believe the answer lies in, what we call, democratised team management.

“We want to create the next generation of esports leagues”

Just like the way in which traditional football clubs like Real Madrid and FC Barcelona are governed by their fans, teams on the chiliZ platform will be managed by their fans. This solves the problem of fan engagement but also allows fans to fund their favourite organisations in exchange for a say in how they are managed. We want to create the next generation of esports leagues, and by this we mean leagues driven by the fans.

ESI: You decided to do a token sale and go the blockchain route. Why do this instead of more traditional funding methods?

Alexandre: There are basically two different reasons behind this choice. The first one is technical. We needed a foundation  that was transparent, where information could not be altered, and this was blockchain. This leads us to the second point, which is more of a legal standpoint – in order to enforce this transparency – for a fan to have a binding right of ownership over the voting rights, we needed a token system, where the token is attached to this legal right.

ESI: So how does the token fit into this then? What can you use it for?

Alexandre: Once a team joins the chiliZ platform, the organisations are basically selling the voting rights for management decisions. These decisions could be things like who should be on the roster, which maps to play in CS:GO or for which games to have tournaments. The voting rights are connected to the chiliZ tokens – by buying more of them, the more voting rights a fan would have.

“The organisations are basically selling the voting rights for management decisions”

In exchange for voting rights, the teams and organisations will get access to funds, as well as fans, that they previously did not have. It should also result in a more invested fanbase, as the fans have, quite literally, invested in the team. So it is basically a new way of engaging fans, but also a new way to monetise those fans for the teams and organisations.

ESI: What problem do you see yourself solving that traditional funding models have failed to solve?

Alexandre: I don’t like to use the phrase “solving problems”.

I rather see it as we invent and evolve something new. However, the esports industry needs funding, and we can offer the industry funding through increased fan engagement. In exchange for that funding, the organisations and teams will have to give up some decision rights to the fans who have provided that  funding. What we give, that traditional funding models do not, is the opportunity to basically run a “mini-ICO” on our platform, to raise money for such things as new rosters, player acquisitions and inclusion of new games.

ESI: You received a large amount of money, $27m (£19.8m), how will you use these funds?

Alexandre: It is a lot of money, no doubt. However, we feel that we need that to fuel this initiative. We don’t want to risk running out of runway and be out in a year.

We’re in this for the long term, to onboard leagues and teams. We probably need to acquire companies and assets. There are many good ideas out there that would do good being part of a bigger group than standing alone.

We are already in talks with various teams, with the aim of onboarding 6-10 organisations by the end of this year.

ESI: You come from the poker world that was booming, but then ran into trouble and is now in a more stagnant state. Did you learn anything from your stint there that you can avoid doing in esports?

Alexandre: (laughing) I think blaming the whole failure of the poker industry on me would be a bit harsh!

We believe there are two challenges facing the esports world – the first is fan engagement, and the second is monetisation and funding

The problem for poker is that the game did not, and has not, evolved. Fifteen years ago, the game looked basically the same as it does today while everything else has changed and improved. If you are not evolving, you will eventually run into trouble. VR might change this, but it is not a mainstream enough product to save the poker world. Esports on the other hand is evolving faster than ever and is in a constant flux of reinvention with new games and game formats, so I just don’t see esports running into the same problems as poker.

ESI: You have a very strong advisory board. How did you reason around that decision?

Alexandre: For us it was not about the money.

Many companies that are doing ICOs have an advisory board to maximize how much money they raise. As you can see we did not have that problem. We rather focused on two different areas. We have one advisory board focused on how to build a profitable and sustainable business. But we also needed the experts in the esports industry to help us build a network and reach the right audience.

ESI: This all sounds very interesting, finally let’s ask the media favourite – where do you see esports in a few years from now?

Alexandre: For me esports is an entertainment product. Not only competitive gaming, but it is entertainment and we need to build on that. For us, the fans are the key to that and that is where we see esports in a few years time – having fans a lot more connected. So, in a few years time the “e” in esports is not just for “electronic”, but rather “entertainment sports”.

ESI Conclusions

During our chat it was  evident what a passionate leader Alexandre is and how much he believes in how they can change and more importantly improve the industry. They have certainly got the financial backing to succeed as well as a strong team of talent and advisors.

Looking at their website they are recruiting for even more people from within the industry so if you are considering sunny Malta and have that experience, you should head over to have a look. We are sure that we will hear more about chiliZ going forward and we be sure to follow up and see how their plans are taking shape in the future.