you truly believe that this is going to explode, you're going to change the world.

And ours crashed and burned.

Harsh Jain and Bhavit Sheth know all  about bouncing back from failure.

We started off with a traditional  fantasy sports format.

We wanted to get revenue  through ads on the platform.

That was the model, which was popular  at that point in time across the globe.

Over two to three years, we actually ran out of  

all the initial funding that was  put in by my family and friends.

That was 2008, when the duo were just 22 years

old. But they would eventually pioneer  an industry in India worth $4 billion.

Today, their company, Dream Sports,  counts 10 million monthly active users.

Harsh and Bhavit are co-founders of  Dream Sports, a sports tech firm from India

that owns one of the biggest fantasy  gaming platforms in the country: Dream11.

Fantasy sports are online games where  participants can create a virtual team

of proxies, tracking real sports players.

Game participants then earn points and win cash prizes

based on the real-world performances of these players.

I started following football as a Manchester United fan, and went to high school in 2001, to the U.K.

Got to know about this thing called fantasy football.

And I got all my friends back home hooked  onto it as well. Bhavit was one of them.

What is the appeal of fantasy sports?

Everyone who is a sports fan has an  opinion of how sports should be played,  

or what player should be selected, whether  the strategy for that game was right or wrong.

What fantasy sports tries to do is get  that opinion into a more structured format.

I keep comparing fantasy sports  to popcorn for your movie.

You have popcorn because  it makes your movie better.

Fantasy sports does that for sports.

It deepens your engagement and makes that  sports event 100 times more interesting.

Harsh returned to India in 2007, and shortly  after, India's own cricket league was launched.

Cricket is hugely popular in India and the  Indian Premier League, or IPL, is proof of that.

The 2021 IPL season saw 660 million fans  watching on television and streaming online.

A five-year contract for broadcasting  rights fetched $6.2 billion in 2022, 

making the IPL one of the richest  sports leagues in the world.

An avid cricket fan himself, Harsh set out to look for fantasy cricket  platforms in India,

but the search was fruitless.

He decided to take matters into his own hands.

I told my friends that we  have to solve this problem.

There's a billion Indian cricket fans,  and they don't have fantasy cricket.

Harsh's hunch was right. Besides being home  to hundreds of millions of sports fans,  

India is also one of the fastest-growing  digital economies in the world.

The country is already the largest  market for mobile app downloads,  

with an estimated 1 billion  smartphone users by 2026.

Sensing an opportunity, Harsh partnered with  his childhood friend Bhavit to launch Dream 11,

providing fantasy cricket that was free to play, relying on advertisements for revenue.

It also enabled players to create one  fantasy team for the entire season.

The duo said they received a couple of million dollars from family and friends as starting capital,

but in less than two years, they were strapped for cash.

The ad revenue wasn't coming in because  these product people in India didn't  

understand fantasy sports, so  they needed to be educated.

At that point in time, we were  wondering, what should we do now.

We knew that fantasy sports  as a model should work, right?

It works globally, there has to be some  format in which it should work in India,  

we just didn't know what it was.

So at that point in time, we decided to start a  

digital agency through which  we could earn some revenue.

Red Digital, eventually became one of the  largest digital agencies in India which,  

in turn, helped to fuel Dream11's growth.

By diverting revenue from Red Digital  into research and development for Dream11,  

Harsh and Bhavit decided to pivot  the fantasy gaming platform from  

being reliant on ads to a “freemium” model.

On the monetization side, what  we did is the built in contests  

where you need to pay to enter the  contest, and we build a prize pool.

And then if you win, you win prize money.

Inherently, every time someone joins a contest,  

we keep a certain percentage of the  entry amount that the user pays.

They also changed Dream11 from a  per-season to a per-match format in 2012.

That actually brought down  the commitment that person  

had to make from multiple months to a single day.

Some of the times, people are interested  only in certain teams in a tournament.

That strategy paid off. In 2013,  when Dream11 was taking off again, 

the duo decided to sell their  digital agency, pumping the proceeds

back into building their fantasy sports platform.

Harsh and Bhavit began to see  the fruits of their labor.

In 2019, the Mumbai-based startup joined  the ranks of India's unicorn club.

Dream11 now offers over 10 fantasy sports, 

including cricket, basketball,  football and baseball.

There have been rival platforms in India. What makes you guys stand out?

It's an open secret that I talk about.  I still don't play fantasy football on Dream 11.

I still am committed to fantasy  football on fantasy Premier League,  

the reason we created Dream 11.

The reason I'm saying this is because of  the network effects of fantasy sports.

Once you and your friends are playing or are  connected over one network in fantasy sports,

for a rival to get you to play there, you  have to move all your friends with you.

The company's revenue model meant that it was one of the rare unicorns in India making a profit.

In fact, Harsh and Bhavit say that their company has been in the green since 2020.

Most entrepreneurs forget that funding cannot be taken for granted.

Every funding round that we've  ever had, has always had us 

projecting 12 to 18 month  runway, and then flipping to

a breakeven and profitability.

If your unit economics don't lead to  that, then your valuation is wrong, 

or the amount of money you're raising is wrong,

your fundamentals of your business are wrong.

We ran out of money in 2010. I think  unfortunately, that's a very hard

lesson to learn, which a lot of founders  need to learn that money isn't free.

This razor-sharp vision has  supercharged Dream Sports' growth.

Dream Sports's investors include  Chinese tech giant Tencent,  

American investment firms  Tiger Global and D1 Capital.

In 2021, it raised $840 million,  valuing the company at $8 billion.

But is fantasy sports a game of skill or luck?

There is growing concern among  regulators in India and other countries

about fantasy sports fueling addiction, especially among its youth.

This will shape the future of the mobile  gaming industry, including how it is taxed.

The company has been embroiled in  multiple lawsuits over that question.

In 2021, the Supreme Court of India ruled that  online fantasy sports are 'games of skill.'

Despite the ruling, Dream11's  paid games are unavailable

or banned in 6 states in India at the end of 2022.

A government report even noted  there were reported cases of youth

taking their lives over online gambling debts.

I will relate fantasy sports to the stock market very much so, because based on past

performance of a stock and expected future  performance of a company, you're buying a stock.

Now, does that guarantee you that that company  or the stock will go up or down? No it doesn't.

Are there things that are out of  your control? Yes, all the time.

So I would say, fantasy sports is  like picking a stock portfolio,  

where each player is like a stock.

The company claims only 20%  of its users are playing with money

and there are safeguards in place to ensure responsible play.

There are some contests with 10 million  people playing against each other.

We always try to make sure more than 50% of them  at least win their money back to keep it engaging.

But the first prize can win two crores  which is about $250,000 for half of $1.

99% of our users have never won or lost more  than 10,000 rupees $120 in the entire lifetime.

We have responsible play that makes sure you can  set limits, when you lose X amount to 2X amount,  

3X amount, you get a warning,  you're suggested to take a break.

Because we're not here for making you  win or lose large amounts of money.

And that's how we scale so far, we don't  have any ads on Dream 11, we haven't had

them for the last seven years,  since we've pivoted to this model.

Despite the regulatory hurdles, Harsh and Bhavit  plan to continue their expansion in India.

The country has the largest fantasy  sports user base in the world,  

and the industry is projected to be  worth an estimated $20 billion by 2025.

We still want to focus on India, we see we  have 150 million users on dream 11 in India,  

there are 800 million online sports fans in India.

Maybe when the day comes in  our next couple of years, 

when we start hitting 300 million users in India,

that's a day we might look  at growing internationally.

We started when we were 22 years old, so 

we pretty much had nothing  but an engineering degree.

I think it was purely seeing a problem.

And being extremely passionate about it yourself.

I think that's all most founders need.

Maybe the rest of it you learn along the way.