I recently had the opportunity to interview Andreas Schmidt, CEO of Megafanstore Marketing Ltd., a company that sells fan and sporting goods. Andreas' campaign did catch my attention because he combined and marketed different technologies with his company.
On the one hand, the initiative of Megafanstore started to produce and sell 3D models of football fans in cooperation with 3D Your Body, and on the other hand, in cooperation with FDS Soft, a mobile game app for football fans is being developed in which fans have the opportunity to scan themselves and interact with their own 3D avatars in this game. To attract new investors, it was decided to conduct an IEO on the Latoken exchange that offers equity tokens. Megafanstore will implement a blockchain-based payment system and cryptocurrency used for in-app purchases.
Let's get you acquainted with the Hacker Noon community. Tell us about your background.
I remember when I was 14 or 15 I also had background knowledge about game programming. At that time I was developing car races on the old pet computer and a little later monster hunting games where you run around in a dungeon and shoot monsters. I used the programming languages Pascal, Fortran and Assembler, which no one remembers today. When I was 18 I founded a publishing house and a classmate programmed chart software for the stock market, in which chart booklets were printed out.
And how has the story of this publishing house evolved?
At the time, there was no stock price printing software available on the market, so we were one of the first to offer it. Very fast we had over 1,000 subscribers and subsequently published a monthly print magazine for derivatives and stock markets. In connection with further information offers, we very quickly had almost 10,000 subscribers. At the age of 21, our publishing house generated around 3 million German marks in sales annually, we were listed at the stockmarket and as advertising customers we had almost every investment bank on the market.
During that time, I was also a regular columnist for Forbes Magazine Germany. With our publishing house, we later developed social media and chat rooms via BTX even before the Internet even existed. The following years I was more concerned with IPOs, investor relations and financing, also in the technology area. Financing a client, I then came to football merchandising in the past few years and finally ended up with the 3D project and blockchain topic.
How did you get the idea to create 3D models and how profitable is this niche?
We started with an online merchandise store because one of our business partners with Manchester United had a large global merchandising deal and we became resellers. We market fan merchandising items here and in the process I was able to contribute my knowledge in the areas of social media, e-commerce and football. I was a successful soccer player myself in my youth until my knee didn't want to, but I always remained a soccer fan.
Back to business: We thought hard about which merchandising articles are interesting for football fans and came to the conclusion that a personal figure in the jersey of the favorite club and a trophy in hand could be something that no one has yet offered. Can also be combined with a star next to whom you are standing, a 3D selfie as a sculpture and avatar, so to speak. 3D figures for fans (3D mini fans) are just one way to use 3D printing technology. A figure is the modern version of a traditional photo. That is why we have entered into a cooperation with 3D Your Body.
Can you tell us more about your scanning technology? Does it have any unique properties?
We initially approached several body scan companies, for some reason the leading companies in this area are all based in Germany, especially in Berlin. Finally, we ended a deal with 3D your Body, which already operates 7 stores across Germany. With their technology, people in the areas of wedding, family or, for example, people with their pets can be scanned. We just made a deal where we refer fans with fan shirts and, for example, a scarf or a trophy in hand to their stores and receive a commission for each customer.
The interesting thing about the scanning technology of 3D Your Body is that they use a laser scanner that generates approx. 150,000 data per scan, which after the calculation ensures a very high level of detail of the figures. Other providers, however, use scanners with 100 cameras and work with camera-based technology, which, in contrast to laser scanning, requires a lot of time in manual post-processing.
What advantages does it have?
The advantage of using lasers is that a virtual avatar can be created immediately. The colours here are not as intense as in a photo, but the avatar is immediately available. For example, it is possible to use the laser scanner as a medical application for body measurements to track training results, for example for bodybuilders or fitness studios. There it is important that you can display the exact development data of each muscle or the size in detail.
This was an important point in marketing for me, since I was friend with Franco Columbu, one of the leading bodybuilders and also Dr. chiropractic. We were going to start this project with a scanner at the Golden Gym in Los Angeles. Unfortunately, he died last year, but I am in contact with his friends to continue working on the project.
How else can avatars be used?
The interesting thing about a 3D avatar is that there are many ways to use it. The easiest is to upload to social media portals like Google Poly or Facebook. In Google Poly, you can easily change the background and there is also a simple embedding feature to upload the avatar to a website. You can also use the mouse to move and rotate the avatar. It could be used for games, but also for products.
3D avatars are also used in film production using blue screen technology, which can be used to implement them in film scenes. The data of the 3D avatar is also very interesting, as it can be used for precise measurements, for example for medical devices, to detect attitude damage. It is also possible through avatars to closely follow the level of physical fitness, the structure and the growth of the muscles. The first main market will initially be the games industry as we are able to produce very fast avatars.
Andreas shared an example of figures below.
At what stage of development is the game? And how much investment will be required for further development?
The first prototype of the game is already running and there will be constant improvements and expansions of the game phases. Hopefully we will be signing a collaboration with a club shortly, so we will focus on designing the area around the city of the club as well as the stadium where the fan avatar can run around. The game is then the preparation stage of our 3D world, in which fans of each club will walk around and meet with others in the future, or, as a fan, travel virtually to other cities and interact with other fans.
There will be many options and functions that make this interesting. It will also go towards social media so that everyone can communicate with each other. For the first phase of the game we calculate about 50,000 euros development costs. Our partner FDS Soft has had the necessary basic technology and know-how to develop 3D games for several years. So there will be some kind of adaptation of the developments.
Why did you choose Latoken as the platform for the IEO?
Latoken specializes i112n SMI financing with IEO and has a lot of experience and a large customer base. Another advantage is that they have many customers in Asia and China. We will start business in China in collaboration with Great Branding and UEFA in China. It looks like Latoken is a leading marketplace for smaller projects to trade tokens there. We are very excited about the preparation of the upcoming IEO and everything should go smoothly here.
We will offer a realistic project with strong partners at a low valuation of around $ 2 million on the Latoken platform. The level of financing is also very low (approx. USD 350,000), so there should be no problem to close the offer completely. Investors have a good chance of increasing their investment.
What influenced your decision not to offer utilities but security tokens? And what will be the difference for players and investors?
We have already worked on a concept for a utility token as a means of payment, but rejected it. For Megafanstore we originally planned to be listed on the regulated stock exchange. We may come to an internationally regulated stock exchange in the next few years, which is still an option. I think that whole corporate financing with its own ecosystem for financing and running a company via utility tokens no longer makes sense. The crypto community, too, is now very skeptical of utility tokens.
Approximately 90% of these utility tokens have been gone to zero the last 2 years. For investment purposes, an equity token makes more sense for investors, they have a much higher level of transparency and are much better protected from dilution and always have full shareholder rights.
It also makes more sense to use a stablecoin in a blockchain environment so that they can hold a stablecoin in their own wallet and are protected from a precarious financial situation of the company and make payments of their deposited money at any time can.
When you look at the latest discussions in the crypto community, stablecoins are one of the hottest topics. So far, strangely enough, nobody has come up with the idea of offering micropayments with stablecoins.
Why did you choose to use a cryptocurrency rather than PayPal or other payment platforms?
We will offer a fan wallet and a micropayment system with a stablecoin for various reasons. When you offer a game or betting platform, you can usually upload credits that you buy in advance with FIAT, in Europe mostly through PayPal. The money is then in treasury of the company and is then debited from the internal account for each action.
Our concept is that we strive for cooperation and a kind of profit sharing with large clubs. Their approval would not be given if a club were to directly market a product for fans to transfer money in advance to a third party. That's why we need a kind of segregated account where the fan still has full control and can withdraw the money at any time. We can also use the technology and wallet for some kind of voting system.
How do you want to promote the game and earn money with it? Is there a business model? How big is the market potential?
The main idea for promoting the soccer game app is to create a product that clubs can use as an additional tool for fan activation, to create an additional source of income and to actively promote the game to their fans with their social media channels. The interesting thing is that we can implement the club sponsors in the game and also offer prizes for rankings or honor points, or just convert the money the fans have invested in the game into natural goods such as goods or VIP tickets etc.
A fan will spend a lot more money in the game if they know that their favorite club will benefit. The 3D world and the app offer enormous opportunities for monetization, since a remuneration can be calculated for certain actions in the game, for example to expand the game or improve skills.
How big is the market potential?
With $ 68 billion in global revenue, the field of mobile gaming has become an important industry, and mobile game apps are now used by 2.4 billion people. The development of the market for mobile games could mean enormous sales potential for football clubs. So far, this market has not really been explored by clubs, but it is likely that this will happen as soon as an offer is made. Every club is working to improve its digital strategy and wants to get this development under control.
The leading clubs have a global reach of 300 to 500 million followers worldwide and most of them use smartphones and some kind of social media. It should be possible to get some of them to become active in such a game. Since there will certainly be a high number of users, it is also important to have secure solutions for micro payments.
A number we know are the 100 million users of soccer games such as FIFA 20 and Pro Evolution Soccer, with 100 euros each being paid for the game. A free app with a simple game logically has even greater potential and would bring substantial ongoing revenue.
What do you mean by the voting system you mentioned?
There is already a voting and lottery system that some clubs use with their own fan tokens. The respective club offers its own Fantoken, which can be used, for example, to vote on the Player of the Month, the favorite goal or some general questions, such as what needs to be improved at the stadium, etc. These Fantoken are from a blockchain Company and trading these tokens is also organized on their platform. But I don't think it makes so much sense to create a token for each club and teach football fans how to open a wallet and handle crypto transactions.
In my view, a very simple solution with a stablecoin and a fan wallet makes a lot more sense. We will now implement this solution in our fan wallet so that fans can finance their gaming and we can also use it for voting or surveys at the clubs. Incidentally, this is nothing special on technology side, other coins or tokens also use their token owners' votes based on blockchain technology.
I see that you have already worked with 3D Your Body and FDS Soft, but to develop an ambitious project like this you will need significantly more connections and partnerships. Can you tell me if you have other partners and who they are? Are you negotiating with someone?
Yes, of course we have partners for the blockchain, the FanWallet is developed by Blue Orion with FDS Soft. Blue Orion is a well-known blockchain developer that specializes in the Stellar Network. They have won several awards and have been recognized and supported by the Stellar Development Foundation. Hans Woppmann, the CEO of Blue Orion, has been working in the blockchain area since 2014 and is also very active within the German community.
Blue Orion and FDS Soft have already developed the basic wallet functions, which now only have to be adapted to our needs. Technically, this is not a particularly high effort. We only have the combination that on the one hand we use an excellent wallet for micro payments, use a euro stablecoin and also use the infrastructure for a voting and survey system. In addition, we also have a cooperation with GMEX Technology, a well-known IT company in the blockchain sector, because of the wallet project they may also be cooperation options with GMEX.
MEGA tokens are already traded on Stellar DEX. What is the situation like at the moment?
Trading the Mega Tokens works perfectly and you can get a trade filled within a few seconds. However, the demand from the existing crypto scene is low. This is largely due to the fact that existing players do not understand the difference between an equity token and a utility token and believe that any number of tokens can be issued. I think it will take some time before there is more understanding.
Another point is that almost all utility tokens, be it on Stellar or on the Etherium blockchain, have gone to zero in recent years. Mega is currently trading at around $ 2.00, which is slightly above the offer price of public-private placements, but with a very low trading volume.
Why did you choose blockchain and how is it used?
We originally planned to be listed on a regulated securities exchange in Canada, which we could do later. Since the cost of trading the security token is much lower and the shareholders received a very quick solution to make their shares tradable, we opt for the blockchain. This way, every shareholder has the opportunity to sell their shares now or to buy them via the Stellar Decentral Exchange.
What are the benefits of partnering with UEFA?
We work with The Great Branding, who is the licensee of UEFA for the licensed UEFA fan products. We plan to develop the project into a franchise concept for football companies under the UEFA umbrella. We have found a retail partner in China and the start with the first stores is planned for May. Then we get a small share of all the earnings.
We are also in talks to find partners in other countries. The next project is to create a UEFA edition with 3D minifigures with the best football stars. Of course, it is important for us to work with The Great Branding, as they have had business relationships with 100 clubs in Europe for a long time.
And the last question. How do you see the future development of cryptocurrency and blockchain?
The entire crypto and blockchain market has consolidated well since the end of 2018, which was helpful for the long-term development of the market.
Much progress has been made in the regulatory directory of the market over the past year. Governments strongly support the advancement of blockchain technology and new laws are passed by governments. I had a couple of talks with leading market players and regulators (UK and Germany). Regulators are open to further development, but new laws are still needed to unlock the potential.
A fundamental decision came from Germany, where banks can now offer bank accounts with cryptoassets. This should spur market development, as investors don't have to open a wallet with certain risks, but they can keep their assets in their bank account and have the secure option of allocate cryptoassets in their investment strategy.
With this development, the demand for asset-backed tokens and security tokens is likely to explode in the next few years, but not as quickly as many crypto fans hope. Infrastructural basics are first developed. Some more general standards for the securities market also need to be defined. I see a mass adoption in this area starting in 3 years.
The number of utility tokens will decrease dramatically, the main question is where a use case makes sense. The problem with the most useful token is that the purpose of having your own token for maintaining your own ecosystem is not there. As a result, many of the existing cryptocurrencies or tokens will disappear from the market and there will be a further consolidation around the now top 100 cryptos in the market cap rank.
I see a much faster mass acceptance of blockchain technology in payment solutions and micro payments with stablecoins, which we now also offer to the football industry with 2.4 billion followers. There will surely be many other similar solutions for different industries, for example for the entire media industry - the music industry can use this to get paid for qualified content. There will also be some changes in the market from the leading cryptocurrencies, there will likely be more hardforks on Bitcoin and Etherium, and there may also be some new crypto currencies on the market with more transaction capacity and higher speed. We had a problem with BTC and Etherium in the past, so the hard forks came and Lightning networks were developed to increase the speed.
Of the top cryptos, I see an outperformance on Bitcoin, Zcash, Monero, Cardano and Stellar and maybe BAT.
Z-Cash and Monero are private blockchains that keep all transactions anonymous. In the area of data protection in particular, there are many applications in which this matter plays an important role. Second, I see Cardano as the next level ethereum. It also has a great team, including Charles Hoskinson, the co-founder of Ethereum. Stellar has its strength in the connection of existing payment systems as well as its integrated exchange and anchor system.
It also offers established and trusted stablecoins like EURT. Finally, BAT (Basic Attention Token) is used in the Brave browser and rewards users with tokens for advertising. Bitcoin should inevitably outperform, as Bitcoin is the symbol for the entire crypto movement and is seen as the counterpart to the entire central bank-funded currency system. Bitcoin has some sort of political meaning, and is seen as a weapon against the establishment, according to Steven Bannon (ex-Trump advisor).