Video of Two Person Live Draft

I'm posting a video of a two person baseball live draft on Draftbug. I narrated the video as I played, and discussed some strategy tips for this type of contest as well as my thoughts on how to apply those to opening day schedules. The quality of the video (and the narrative) is pretty bad...and that's why I'm posting it here (it was also posted at The Waiver Wire a couple of days ago). If you have any suggestions for how to make the video more entertaining, we want to hear them! Should it be sped up? Do we need a narrator with a better voice? Two narrators (one for color and one for play by play)? More explanation of the mechanics of the game? Alternate between the two players explaining what they're thinking as it progresses? Music? Special effects? Move more of the strategy discussion to an introduction?

Characteristics of a Pro

Aside from 'making a lot of money', what characteristics define a professional in any form of speculation? Here is my list:

1. Good bankroll management. You need to play aggressively enough to maximize earning, without taking a substantial chance of going bust.

2. Understanding where your edge comes from. If you can't explain how and why you're going to be able to 'beat' a game, then it's very unlikely that you can beat it in the long run.

3. Good recordkeeping. Keeping records is essential if you want to understand how big your edge is and make optimal size (and type) bets.

4. Avoiding results oriented thinking. You simply can't get caught up in the day to day and week to week swings in your performance. Nobody wins all the time, and as long as you have a theoretical and statistical understanding of your win rate, you should avoid looking at results as much as possible. The ideal player of daily fantasy sports wouldn't even pay attention to the games each day. I have to confess that I haven't reached this state of enlightenment yet!

5. Gaining an edge from as many sources as possible. You can't be satisfied getting an edge from just one source. Pros should maximize their advantage by gaining as many edges as they possibly can - always working to improve statistical models, get better information, and avoid unfavorable situations.

Are there other characteristics that YOU think pros should have?

Brief Update

I wanted to update everyone on what's going on. We'll probably start having some more substantial posts next week, but in the meantime:

-I'm talking to three more potential participants in Draftbug Millionaire. At least two of the three are VERY accomplished fantasy sports players.

-Daily baseball contests at Draftbug were launched yesterday, so we now know what the 'standard' scoring system and roster configuration will be, which is obviously an important part of any statistical modeling we do.

-Josh and I are beginning to come up with a plan of attack for the early part of the season.

-I'm also still working on giving Draftbug Millionaire a more 'finished' feel that will make it an enjoyable site to come back to every day. If you have any suggestions, email me!

Beginners

It's probably worth mentioning that you don't need to be a fantasy baseball expert to particpate as one of our 'Draftbug Millionaires'. One of the reason I mentioned the story of the 'Turtles' was to suggest that it would be interesting to include some who is a relative novice in the project. That said, we would need to make sure that you've got the right skill set and outlook to have a good chance of success. You should be very comfortable with (and enjoy) math and statistics if you're going to be able to work with (and help improve) the approach we'll be taking.

Turtles, John Henry, and Draftbug

We've already stirred up a minor controversy with Draftbug Millionaire, as I apparent didnt' exlain very well that the discussion of building a $70 bankroll up to $25,000 in one baseball season was more of a thought exercise than a specific goal for the project. This isn't a bankroll challenge in the strict sense. Our goal is for the participants to become 'pro' fantasy sports players. I fully expect that as they become confident in their results and ability to win, they're likely to choose to supplement their starting bankroll with additional deposits. And in some cases, it may take more than a year (possibly much more) to get to the point where they're earning $25,000 or more per year. At this point, we don't even know exactly when the amount of traffic on Draftbug will be able to support that kind of earnings.

While Draftbug Millionaire isn't really a 'bankroll challenge' in the traditional sense, the challenges that were popularized in poker by Chris Ferguson were one of the inspirations for the idea. Another inspiration was the story of 'The Turtles', a group of traders in the financial markets who were trained by two famous investors as the result of a bet about whether traders could be 'made' or whether they had to be born with some innate skill. It turned out that traders could be 'made', as a large number of the 'turtles' were wildly successful, earning hundreds of millions of dollars. One of them even bought as baseball team! John Henry used his earnings from trading to purchase the Boston Red Sox. I see a lot of parallels between financial markets and fantasy sports, so I suspect that successful fantasy players can be trained in the same way. In fact, I see all forms of speculation (financial markets, fantasy sports, gambling, etc.) as basically the same activity...but I'll save a detailed discussion of that for another day.

Statistical Modeling For Fantasy Baseball

The approach I'll take initially with Josh and the other participants initially will be to share the daily projections generated from my statistical model, and let them know in general terms what factors the model is taking into account. I'll probably wait to 'open the kimono' and share the actual spreadsheet where the statistical model is implemented until we've worked together for a few weeks, since I'll be sacrificing some of my own potential profit playing fantasy sports each time I share it with someone. I want to know that the people I share it with have the motivation and ability to help me optimize the model.

Since I think it's tough to make speculative decisions using a model you don't have confidence in, one of the first projects we'll work on is likely to go be to try to quantify the average error of my existing model's predictions each day, relative to other means of projecting daily performance. With hundreds of players in action every day, it should only take a week or two of data to get some pretty meaningful results. We can also supplement those results with backtesting using data from last year.

Once the Draftbug Millionaires are comfortable that the model is providing useful projections, they'll be able to work improving specific aspects of the model. There are MANY areas where it can be improved. Despite its being (apparently) much better than what anyone else was using for Rotohog last year, it really is painfully incomplete.

One of the many examples of how the participants could help improve the projections is that right now when I evaluate 'platoon advantage' (the benefit that hitters receive if they hit with the opposite handedness of the pitcher they're facing), I'm just making the same adjustment regardless of who the hitter or pitcher is. While that's accurate enough for hitters (since they all have similar platoon advantage/disadvantage over time), it's very inaccurate for pitchers, who do have long-term, sustainable differences in the degree of their platoon advantage. Maybe Josh will be the one to figure out how to incorporate this into the model. I can think of at least 20 or 30 other, similar improvements that can be made. How do we project a pitcher's innings pitched for a specific game? Can we track bullpen fatigure and reliever availability? Should we incorporate weather?

Introducing Josh Culp

I mentioned earlier that we've already got one fantasy fanatic on board the Draftbug Millionaire team. Josh Culp is exactly the kind of person I pictured when I started this project way back...this morning. He loves fantasy baseball, finds money motivating, and his idea of a good time is playing around with an Excel spreadsheet. I asked him to write up a paragraph or two to begin introducing himself to readers of Draftbug Millionaire, and here's what he had to say:

Making money while doing something you love... such a cliche. Thanks to Alex here at Draftbug Millionaire, that has now been added to my agenda of things to do. My name is Josh, but I mainly go by "Posey" (thanks to my uncanny similarity of basketball playing style to James Posey of the New Orleans Hornets). In my spare time I run a Fantasy Sports site, Future of Fantasy. First of all I'd like to thank Alex for putting me on the "team". While Fantasy Sports have been around for quite some time, I don't think it's even close to reaching it's peak. I think that sites like Draftbug are the future of Fantasy Sports, and the potential is endless.

Earning $25,000 in one year playing Fantasy Sports is not an easy task, and will take a lot of knowledge and teamwork. So what do I bring to the table? Well, I have been addicted to Fantasy Sports since the day I joined a baseball league in 2003. My addiction has yielded great results, as I have won four of the last five baseball seasons for my competitive money league. I am hoping that the skills I have acquired over the years will make me a valuable asset to the Draftbug Millionaire team.

If I had a beer for every countless night I've spent awake twiddling with spreadsheets for fantasy, well, I'd at least have a fridge full of beer. Using Excel spreadsheets, and even more advanced Statistical programs is becoming the norm. My familiarity with spreadsheets and machine learning programs grew dramatically while taking Statistics courses and a plethora of Business courses at Iowa State University. I feel that combining the "systems" and thoughts of a group of experts (which we are establishing) will eliminate any bias, and result in mucho dinero.

Like I said, websites like Draftbug are the future of Fantasy Sports, and I'm glad to be a part of it in the early stages. Allowing people to wager on their Fantasy Sports skills is the next generation, and that generation has arrived. With the proper compilation of experts and money management techniques Draftbug Millionaire is set up for a lot of success. Jai Ho! (Victory to thee)

Starting Bankroll

Our first future fantasy baseball pro is on board with Draftbug Millionaire. He's going to be writing up a post to introduce himself in the next few days, so I'll wait until then to comment on what about his background makes me think he'll be a success at this.

In the meantime, I'll discuss his starting bankroll. While nothing is set in stone, it looks likely that he'll start with $70 at Draftbug - $50 that he'll deposit, and another $20 that we'll provide him. So is it realistic to build a $70 bankroll into a large enough bankroll to earn $25,000 in a year?

The answer is 'maybe'. I played around with some assumptions in a spreadsheet. If we assume that we can achieve a 10% ROI (return on investment) and that we risk 10% of our bankroll each day of the 180 day season, we're only going to have about $415 at the end of the season. It's going to take a long time to go pro at that rate.

If we make some more aggressive assumptions...that either our ROI is 20% (which may not be completely absurd if we can enter enough large, multiplayer contests) or that we risk 20% of our bankroll each day, then our bankroll can grow a little faster - to $2,423 by season's end.

If we make extremely aggressive assumptions...that both ROI and percentage of bankroll at risk each day are 20%, then our bankroll would be $78,354 by the end of the season. Now we're getting somewhere. I'm not saying that a 20% ROI is possible or that there's a way to put 20% of bankroll at risk each day without going broke. Just that IF we can do either of those, we can grow our bankroll more than 1,000 times, thanks to the magic of compounding.

One of the things that I think separates a 'professional' in any form of speculation from an amateur, is that the pro should have enough data (and enough detail in the data) to make a reasonable estimate of their expected ROI in various types of contests. We obviously won't have that on day one, but it's going to be a pretty important task for us to work on, because the more accurate our estimates of ROI, the better we can determine how much to put at risk in each contest and each day.

While our team of future pros obviously won't be revealing all of our 'secrets' here at Draftbug Millionaire, we will be talking about some of the concepts we're looking at in our day to day play on the site. Many serious gamblers or investors who have read this post are probably thinking that our 'risk of ruin' is going to be unacceptably high if we're putting 20% of bankroll at risk each day. In a future post, I'll talk about why that may be true on some days, but not on others.

Also, given the extremely aggressive assumptions we had to make to achieve our financial goals in one baseball season, it's likely that we'll either take more than a year, or supplement our initial bankroll with additional deposits once we're confident that our strategies are working well. Either of those is acceptable.

Will YOU Be A Fantasy Pro?

I probably should have been more clear about this upfront - we're not going to just take the first people to show an interest in participating. I only want to take those who I think have a real chance at doing this successfully. Part of the evaluation of that will be based on 'feel'. Some other things that would be advantages:

-Past success at fantasy sports...especially points leagues
-Success at sports betting or poker
-Math or statistics background (or knowledge)

If you're interested, send me an email with some background info on who you are, why you want to do this, and why you'd be good at it. I'll respond promptly, possibly with some follow-up questions.

Traffic

If you've visited Draftbug already, then you may think that we don't yet have the traffic needed to support someone playing in $1,400 of contests every day. That's true. It's also unlikely to remain true beyond mid-April. As the number of players on the site increases, there should be a 'virtuous cycle' of more players providing more 'action' to the potentially higher volume players. Out of the several hundred players already registered, there are a handful who already play $1,000 per week or more of contests at a variety of other sites. Some of these people are just waiting for baseball season to begin and for more opponents to become available, before they dive in. Two things should cause a 'tipping point' of traffic to occur soon:

1. Baseball season. I can't stress this enough. While baseball is only a little more popular than basketball and hockey, fantasy baseball is FAR more popular than fantasy basketball or fantasy hockey. While only a handful of people have been playing the basketball and hockey contests, many new players are signing up at Draftbug in anticipation of baseball season. This alone should give the push we need to start seeing traffic an order of magnitude greater than what the site has now. And that in turn will allow enough money to enter 'the market' that we'll start running some much higher buy-in contests.

2. Draftbug is part of a network of sites or 'skins', all operating on the same software platform and sharing the same contests. Only two other skins have been launched so far, but more are on the way soon. As more skins launch, more traffic will flow into the contests.

We don't know exactly when there will be enough traffic to support the volume of play we'll need in order to make $25,000 per year, but it's going to happen. And it's probably going to happen long before we've developed the skills and bankroll that we'll need to earn that much.

How Can Someone Earn $25,000 Per Year At Fantasy Sports?

How can someone earn $25,000 per year playing fantasy sports? I'm not going to be able to give all the answers in one post, but here are some reasonable assumptions. For now, let's focus on baseball. Its the sport where I'm an expert and can make some reasonable estimates of achievable levels of performance. We'll assume that we need to make the entire $25,000 each year from baseball...but keep in mind that in reality, we should be able to make a substantial amount of money at other sports too. The same goes for using Draftbug as our sole contest platform - this blog will be about making money playing there, but keep in mind that there are other sites (although not as good of course) where our Pros will be able to earn additional money if they choose. So we're taking a very, very conservative approach here.

Let's assume that we can earn a 10% 'return on investment' on our play at Draftbug Baseball. That's not a particularly conservative estimate when it comes to heads up contests, but large multi-player contests should have enough weak players in them to allow higher rates of return, so 10% seems achievable overall. So how much would we need to play in order to earn $25,000 per year? That's easy - $250,000 per year. With 180 days in the season, that means we'd be playing in a little less than $1,400 of contests per day. Does that pass the 'smell test' of something that sounds plausible at some point in the future? I think so. There are people playing more poker than that each day. And fantasy baseball should be more scalable than poker. While most people's online poker performance drops off substantially as they play more and more tables simultaneously, one should be able to pick lineups for dozens of contests at Draftbug without any real degradation of results.

Welcome To Draftbug Millionaire

Welcome to Draftbug Millionaire, where we'll be following the exploits of a group of fantasy sports players seeking to 'go pro'. We're still working out many of the details, but the basic idea is a group of fantasy sports enthusiasts, starting with small bankrolls, will seek to earn enough money playing in daily fantasy sports contests on Draftbug to support themselves. We're going to 'cheat' a little though, and allow them to earn a portion of their income through any revenue that this blog generates. This project is going to have a 'rolling start'...I'm eager to get going, but we're missing a few things right now, like participants, 'rules', goals, and more. For now, let's assume that the goal will be to earn $25,000 per year (pre-tax) from contests, as well as whatever referal earnings this site can bring in. This is kind of arbitrary, but my goal will be to have 5 people participate. Last year, I came in 1st out of more than 40,000 people who participated in Rotohog Fantasy Baseball. My primary edge over other contestants was my ability to evaluate daily player projections using Sabermetric concepts. That's the same skill needed to excel in contests at Draftbug, so I'm planning to closely collaborate with the future 'Draftbug Millionaires' and provide extensive coaching. You don't need to be a fantasy sports expert to participate in this venture, but you do need to have a similar statistically-minded view of the world, and you'll need to be willing to write blog posts on a regular basis. You'll also need to be willing to make a small initial deposit into Draftbug...something on the order of $50 (which I'll supplement with an additional $20 or $25).