Key Takeaways from One-Zero (Part 2)
Insights from the Indianapolis based SportsTech conference
Introduction
In my previous post, I discussed my three main takeaways from each panel discussion at the One-Zero Sports Tech conference in Indianapolis (see post here). In this post, part 2, I'll examine the keynote speakers and key insights from those sessions.
Keynote 1: Master of Scale
Speakers
Jeremy Levine (Underdog Fantasy)
Key Takeaways
My biggest takeaway from this talk was how difficult it is for an early-stage company to break into the online sportsbook (OSB) industry. DraftKings and FanDuel collectively control roughly 77% of the US market (DraftKings 32% and FanDuel 45%). Despite sizeable fundraising efforts and partnerships with strong consumer brands (Penn and Barstool) no new entrant has been able to pose a legitimate threat to DraftKings or FanDuel, at least as measured in market share capture. This could change as pressure mounts on incumbents to refine their business models away from pure customer acquisition and instead begin to focus on profitability.
Underdog Fantasy has been able to gain traction (50M raised at a $485M valuation in July of 2022) by focusing its efforts on pick em, fantasy, and other online betting games rather than a pure-play sports book model.
Jeremy Levine attributed much of the recent success of Underdog Fantasy to his focus on hiring the best of the best, along with finding people who are curious and have a thirst for knowledge.
Keynote 2: Staying in the Fight, A Story of Founder Resilience
Speakers
Key Takeaways
Fight Camp is a connected fitness device that focuses on boxing and sits at the intersection of fitness and gaming. They were an early pioneer in connected fitness that extended to modalities beyond bikes and treadmills and were instrumental in exposing boxing to a broader audience.
Khalil Zahar echoed the sentiment of previous speakers that it's better to cut deep and cut once than having to do multiple rounds of layoffs. He made this mistake during one of the significant corrections in connected fitness valuations, and the second round of layoffs killed his team's morale.
He emphasized knowing the size of the market you are targeting up front and ensuring it's sufficient to support venture capital investment. Fight Camp started out targeting elite fitness professionals, boxers, and people already familiar with the general fitness benefits of boxing. Khalil quickly learned that this market was too niche to support their growth objectives. They had to take a step back and focus on educating a broader fitness community about boxing as a viable fitness alternative before selling to this market, i.e, they created the market that they are now selling to.
Keynote 3: The Founding of Betr
Speakers
Jeremy Levine (Underdog Fantasy)
Key Takeaways
One of Joe Levy’s core motivational drivers with Betr and previously with Simple Bet is an obsession with a simplified user experience. Betting can be notoriously convoluted if you are unfamiliar with the jargon and interpreting odds and lines. The companies that can attract first-time bettors will be more successful in gaining market share compared to a strategy focused on seasoned gamblers exclusively. A simplified UX is key to this objective.
The best product doesn't always win. To succeed, startups need to compete on the product development, marketing, financing, and growth fronts. Believing that having the best product will be sufficient in the marketplace is a mistake. Good marketing and successful capital raising first will allow the flexibility to focus on building a great product along the way.
Betr's entire strategy has been centered on creating hype around the product first and foremost, primarily through creating an entire marketing company around the brand and co-founder, Jake Paul.
Conclusion
In my final post, as part of this One-Zero series, I'll look at the companies who had their demo day at the conference as part of the TechStars Indy SportsTech Accelerator. Thanks as always for reading.
Great stuff Joel