A Note About Expectations
What should your realistic performance expectations be with using our product for making football picks?
After more than a decade of selling sports predictions, we’ve learned that setting realistic expectations for our customers is critical. So let’s talk about expectations as they relate to playing in various types of office pools.
If you only take two things away from this article, here they are:
- You’re probably not going to win your pool this year, even with our help
- Using our picks to play in pools is still a good long term investment
Now let’s dive deeper.
1. Your Baseline Odds To Win A Pool
First, we all need to agree on some basic concepts. Here is the most critical one, by means of an example:
- All else being equal, if you play one entry in a yearly football pick’em pool with 100 total entries in it, your chance to come in first place in any given year is 1 in 100, or 1%
- Therefore you are expected to win that pool once every century
Of course, it’s not quite that simple. In a 100-person pool, if you’re better than most of your opponents at forecasting winners and applying an optimal picking strategy, your odds to win the pool in any given year should be better than 1 in 100.
If you’re twice as good as your average opponent, for example, you would expect to win that pool every 50 years, instead of every 100 years.
This logic scales to all pool sizes. The average competitor in a 20-person sports pool is expected to win once every 20 years. If you’re twice as good as average, you should expect to win that pool once a decade. If you’re worse than average for your pool, you may only be expected to win once every 30 years.
In addition, just because you are expected to win a pool every 20 years according to probability, that doesn’t mean that you are guaranteed to win a pool in that time frame. You could get lucky and win within five years, or you could get unlucky and not win for 32 years.
2. The Risks
The most important observation here is to note the time horizons we are quoting for the frequency of expected pool wins: years, decades, centuries. If you are buying our advice and expecting to win a pool every year, that is not realistic.
Even with the most sophisticated analysis on earth, there is almost no way your odds to win a pool are going to be 20 or 30 or 50 times better than your average opponent.
If you have those sorts of expectations, we will not be able to satisfy you in the long term as a customer. We may get lucky and win you a pool in the first year or two that you sign up, but eventually, luck evens out. Eventually, you’ll get frustrated by the fact that we are not meeting unrealistic expectations.
From an investment standpoint, if you’re putting money into sports pools, you are engaging in an extremely risky activity. If your pool is like most pools, you are risking some of your money for the long-shot chance to win a LOT more money back. We cannot magically make all that risk go away, even with amazing analysis.
In addition, some types of pools are simply more volatile than others. Even though our overall edge may be similar across different types of pools, our year-to-year performance in contests like NFL survivor pools is bound to be more variable than, say, a 17-week-long NFL pick’em contest.
3. The Edge We Give You
Based on the research we’ve done, and depending heavily on a variety of factors such as your pool size, rules, and the skill level of your opponents, it’s realistic to think that using our advice will give you odds to win your pool that are perhaps two to 10 times better (potentially even higher in some situations) than your typical opponent. Less than two times better may also be the reality in rare cases (e.g. a very small pool filled with highly savvy opponents).
4. You Should Expect To Lose In The Short Term, Win In The Long Term
The moral of the story is that even using our picks, you’ll never be expected — i.e. have a greater than 50/50 chance — to beat all 20, 50, 100, or whatever number opponents you’re up against in your pool this year. Whether you use our picks or not, you are expected to lose any given sports pool.
That is, of course, the bad news. The great news is that in the long term, sports pools are typically fantastic investments, and getting even 2x odds to win or higher compared to the average pool competitor is a very big deal. It means that if you keep using our recommended picks in pools year after year, and your pool’s prizes are substantial enough, your investment in purchasing our advice should pay off nicely. The dynamics of pools are such that you don’t win often, but occasional wins make up for years of losses — and then some.
What is needed, therefore, is a long term perspective. If a hugely popular sports event that inspired a nationwide office pool craze happened every single week, the value of our pool picks would become evident a lot more quickly to all of our new customers. Unfortunately for us from a business perspective, that’s not the case, since there are only a small number of hugely popular types of sports pools in the U.S. and they each only happen once a year. There’s always going to be the chance that you sign up for our picks for a given pool on a year where we happen to not do particularly well.
Whether our picks win you a prize the very first time you sign up involves random luck as well as our level of skill, and there is nothing we can do to change that. And if our picks don’t win you anything for your first two or three years as a subscriber for a particular contest, mathematically, that may not be a big shocker at all.
This reality can be really hard for some customers to grasp, and we get that. You paid money for something, you want something in return.
All we can say is, our site has been around for over a decade now, and our approaches have had very strong success across multiple types of sports pools. It is extremely unlikely at this point that our historical performance in pools as a whole has been due to luck and not skill, and our growing list of long term customers attests to that.
What You Paid For, And Why Our Pricing Makes Sense
Here’s the economic rationale behind why we price our pool picks as we do, and why it’s worth it in the long term. First, a base case example:
- Bob plays in a 30 person pool with a $100 buy in
- For simplicity’s sake, let’s say it’s winner take all (first place pays $3,000)
- All else being equal, Bob is expected to win that pool once every 30 years
Here’s the cost/benefit analysis for Bob:
- If we can make Bob twice as likely to win this pool, it is worth an extra $3,000 every 30 years to him; in the long term, that works out to an extra $100 per year in expected profits
- If we can make Bob three times as likely to win this pool, it is worth an extra $6,000 every 30 years to him; in the long term, that works out to an extra $200 per year in expected profits
- We charge Bob $49 for our picks for this pool (or less that that, effectively, if he plays in multiple different pools)
- Even at $49, in the long term Bob would be expected to earn a 69% return on his investment in TR’s pool picks if we double his odds to win, or an 138% expected return if we triple his odds
That’s a pretty amazing ROI. It goes up even further if Bob enters multiple pools and/or pools with bigger payouts; it goes down if he enters pools with smaller payouts.
If you’re serious about entering and winning pools with at least moderately sizable payouts, we are confident our advice is worth the money, no matter what happens in any one year. The exact value to you, of course, will vary, and it depends on how many pools you’re playing in, what the prize structures are, and the level of edge that our advice will give you given the skill level of your opponents.
If you’re playing in a single 20-person pool with a $5 buy in, then no, paying $49 for our picks doesn’t make economic sense, in terms of expected return in dollars. However, we still have plenty of customers who are in low-money pools that buy our advice because the emotional value of winning — including getting a year’s worth of bragging rights over their friends, office colleagues, or family members — has very real value to them. They are happy to pay us some money for a higher chance of achieving those goals.
From our perspective, a better way of guaranteeing customer satisfaction with our pool picks would be to only sell, say, a 25-year subscription to our pool picks for something like $1,000 or $1,500 per pool type, or maybe $5,000 for all the pools we cover. Then we’d feel comfortable adding some sort of discount or refund if our picks didn’t have at least one or two killer years across that timeframe.
Would you sign up for that, though? We’re guessing very few of our customers would. Most people don’t have $1,500 lying around to spend on a long term investment in sports pool picks, no matter how prudent that investment may be.
Ideally, we’d just like to have you invest money in a fund that we set up and operate, where WE go out and enter thousands of sports pools using our investors’ money. This way, we could optimize picks across the entire portfolio of pools we enter and really engineer a fantastic expected return. Unfortunately, that just isn’t feasible right now, especially in the USA. Great idea for the future though.
So we really have no choice but to break the cost down into smaller, more manageable chunks. We charge for single seasons, or we charge for a yearly subscription, and that’s how we arrive at our pricing.
Wrapping It All Up
In closing, using our pool picks cannot eliminate the fundamental risk profile of entering a sports prediction contest against many other people. If you want guaranteed results, then the best thing to do is to take the money you were going to use for your pool buy-ins, and instead put it in a savings account, where it will earn a near-certain 0.04% in interest this month. That’s a whopping 4 cents for every $100 invested.
Your investment in PG’s pool picks should pay off handsomely in the long run, and we’re around today because we’ve got the repeat customers to prove it. But we’re going to have plenty of ups and downs along the way.