How one entrepreneur built a free-to-enter lottery site

Here, we look at how serial entrepreneur Henry Buckley looked to shake up what he saw as an underdeveloped sector.

From a personal finance standpoint, it’s fair to argue we are in straitened times. The IHS Markit Household finance index shows the largest rise in living costs for 12 months, and the greatest squeeze on household finances since July 2017. Together with interest rate rises testing the nerves of mortgage holders and stagnant wage growth restricting spending, it amounts to a gloomy picture for budgeting Brits.

Against this backdrop of economic unease, there has emerged in recent years an army of ‘compers’; people for whom entering online competitions and seeking freebies proves somewhat of an obsession.

Often struggling to make ends meet, compers will go to great lengths to boost their income and save or make money. Prominent comper Jordon Cox, known as the ‘Coupon Kid’ for MoneySavingExpert.com, talked of winning £250 of prizes in just a week from his hospital bed during a period of illness. Last month, Brighton’s Diana Coke won £10,000 of prizes including an iPad, £250 Argos vouchers and holidays by entering 100 competitions a day. Mother of two Leanne Kendrick did even better, reportedly winning £35,000 of prizes in just a year – by entering 400 competitions a day.

Addressing the comper market

Henry Buckley started FreeLotteries.co.uk in 2016 with a view to addressing this market. The website offers a free-to-enter cash prize draw, with daily, weekly and monthly cash giveaways, paid for by advertising hosted on the site.

Buckley is an entrepreneur who had, in 2011, turned down £50,000 of Dragons’ Den investment en route to building JogPost, a successful marketing company. His latest business, in which there are two other stakeholders, was inspired by the success of Chris Holbrook, who had built a successful brand with his site FreePostcodeLottery.com, a site giving away cash in a daily draw involving the randomly-selected postcodes of registered users.

‘I wanted to develop that free lotteries idea and offer a more rounded experience based on earning bonus points which can then be cashed in for extra tickets. This would incentivise our players to engage more with all parts of the site and make the experience more interactive,’ he says.

A developer was brought onboard through existing connections to build the backend of the site, and Buckley managed to bootstrap by enlisting favours from friends in graphic design, administration and marketing. The total investment was £15,000 – most of which was allocated to the main overhead of the cash prizes. ‘It’s so important to keep the costs down in a business like this,’ Buckley says. ‘Our overheads are small, we don’t have or need premises or expensive advisers. Apart from the cash prizes, our costs consist of monthly site hosting and developer work.’ Also, the company does not need a gaming licence due to it being free to use.

The site’s complexity meant that the road to development wasn’t without pitfalls. ‘It’s a lot of fairly intricate work for a coder to do, and we had to communicate very carefully what we wanted in terms of the site’s functionality,’ Buckley explains. ‘Often there would be a situation in which the developer misunderstood our intentions and produced something that wasn’t right, and that sort of thing can set you back.’

A helping hand with marketing

The collegiate nature of the companies involved in the sector was helpful in the beginning. ‘There are a few operators using this sort of free lottery model,’ Buckley says. ‘That means rather than competing for users, there is a recognition that our players will have some time for all of us, as there is no charge for them to play.

‘In turn, we managed to get help with cross-promotion marketing from companies that many would deem to be competitors.’ Such collaboration meant that Buckley was able to utilise the databases and social media profiles of other free lottery sites to spread the word, meaning a rapid increase in users and page views.

After a promising start, disaster struck: the site’s initial developer became unavailable, and the search was on to find another. ‘It took months,’ Buckley recalls. ‘When you’re a small team and you are so reliant on a single developer to code new parts of the site, it can hit you for six when that person can’t work for you any more.’ The site had also begun to slow down, an issue caused by a substantial amount of bad code making the user experience frustrating. ‘We’re a site that relies on players engaging with the features we have and if the site slows down they will simply get annoyed and leave,’ Buckley says.

After finding a new, more trustworthy developer, the backend of the site was cleaned up, and new features were added. Now, Buckley is happy with how it runs, and he is looking to get a roster of charities on the site, which will take it in turns to claim cash every time a daily cash prize is unclaimed.

Advice to business owners

What advice would Buckley give to businesses starting out with an online consumer product such as his? ‘I would say, for a business like this, if you’re not from an IT background it is highly preferable to find a programmer that you can offer a stake in the business,’ he says. ‘We learnt the hard way that if your coder can’t work for you any more, you have lost all of that understanding that you had built up with your programmer about how the site should run, and you need to start from scratch with someone else, assuming you can even find someone with the ability you need.

‘Getting someone invested in the future of the business, someone who owns a stake, removes that uncertainty and gives you the solidity to be able to develop the product with confidence.’

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