August 3, 2002
The poker market in general, and online poker in particular, were benefiting from a nice little boomlet in 2002. PokerStars was doing well, although the numbers were almost laughable compared to today's. But we were regularly signing up 25-50 new players a day, seeing respectable and growing fields for tournaments and had cash games that ran almost all the time (harder than you might think back then).
The online poker market had gotten crowded very quickly, and by the summer of 2002 there were about fifty sites with sufficient liquidity to support reasonable games. We were all rising with the tide. PokerStars was doing better than most for the best possible reason - it was, in fact, the best online poker site out there, and this isn't just pride talking. The software in its 2002 state would stand up well against today's competition.
All of that having been said, we were still very, very far behind the competition. The 900 pound gorilla in the market was Paradise Poker, the site on which Sharon and I made our entire original poker bankroll. In August of 2002, Paradise Poker's market share was somewhere in the 80% range. PartyPoker, who had launched just a few months before us, was in a distant second place, and the rest of us were all bunched up together. But we all knew the market was growing quickly; a few percentage points of a potentially gigantic market seemed like a reasonable goal. And there was always the chance that the leader would stumble, although for the life of me I couldn't imagine how.
The one huge edge that PokerStars had from the beginning was truly superior multi-table tournament software. It just worked the way you expected it to - meaning that it looked and felt like it was written by poker players. It was, and it showed in practically every way.
But the best thing about it was the simplest - it could support very large tournament fields, which allowed players to put up very small amounts of money with the potential for a gigantic return. This was the one edge we had in the market in general and against Paradise in particular - incredibly, not only didn't they have multi-table tournament software at all, but they would go another two years before catching up.
One of my favorite marketing techniques is going straight to users and giving them a good reason to tell the company's story for us. I knew we had great stuff, and looked for any way I could to get it in front of players. We sponsored a number of poker events, talked to the press, wrote articles.
One of the first events we sponsored was an annual poker event in Las Vegas called BARGE. Lou Krieger had tried to talk me into attending BARGE for years, but every August I found some excuse that kept me away. Now that I was in the poker business, though, it seemed to make sense. From what I had heard, BARGE was an eclectic cross-section of the poker world, and this was supported by posts and stories I'd read online.
I contacted Chuck Weinstock, one of the organizers of BARGE, and told him that PokerStars was interested in being involved in the event in some way. I was thinking of it like a convention, or a trade show - maybe we'd set up somewhere and show our software and give away some swag. Chuck set me straight pretty quickly - BARGE was more like an enormous home game than a conference. He also told me that Paradise Poker was already a sponsor, but there was room for one more.
I agreed to make a contribution to BARGE that would be used to help pay entry fees and other expenses. In addition, I donated some very swanky, very limited edition PokerStars wool/leather jackets to be given to the winners of three of the poker tournaments at BARGE. I only had twelve made - they were $225 each - and they seemed just right for this crowd. (You can see one of them here - I was wearing it when I danced with Chris Moneymaker less than a year later.)
My counterpart at Paradise Poker, Bruce Davidson, attended BARGE that year, as well. He seemed like a decent guy, much as I wanted him to be a slug (easier to compete with slugs). Bruce, who was VP of Marketing for Paradise at the time, kept a pretty low profile during the event, but he stirred up some attention by putting a $500 bounty on himself for one of the BARGE tournaments.
It was a good idea that created a lot of buzz. I couldn't just copy it, so instead I decided to challenge Bruce to play me head-up. We'd each put up $500, and the winner got to designate the charity that would receive the combined $1,000 prize pool.
The match got a lot of attention, as well. In fact, a sort of pari-mutuel pool developed, and when we sat down to play we had an audience of about 30 people. We had fun, and after struggling early, I won. I might be competing against the industry giant, but I had gotten a little dig in.
[Note: the day after BARGE, I wrote a trip report that I posted on the RGP (rec.gambling.poker) newsgroup. The full trip report is at the end of this post. I described the match more fully there.]
I came away from BARGE with a different sense of both Paradise Poker and the poker market in general. I knew that we were onto something pretty strong when we started to see fields of 300, 400, sometimes even 500 players. We had just held the first World Championship of Online Poker (WCOOP) and generated over $230,000 in prize pools. And in talking to BARGErs in 2002, it was very clear that tournament poker was developing a groundswell.
The World Series of Poker hadn't yet had its boom years - Chris Moneymaker's win was the next year - but it had been growing at an impressive pace, doubling the number of entries from 1997 to 2002. Other smaller tournaments at poker rooms in California had been seeing larger and larger fields for small buy-in events. And there we were, with the market's best software, a growing market and a competitor that didn't seems to realize what their customers wanted.
Next up: The boom flips the market
Dan's 2002 BARGE trip report
I had the pleasure of attending my first BARGE this past week. PokerStars
and Paradise Poker cosponsored the event, which was conducted at Binion's
from July 30 to August 4.