Sports Betting: From $0 to $160 Million Exit with Alex Monahan

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire, brought to you by High Level Level, the all in one sales and marketing marketing marketing. Today we'll be breaking down sports betting from zero to 160 million exits with Alex Monaghan, founder of Odds Jam. To drop these value bombs, I brought to Alexander Monaghan and EO Fire Studios. Alex graduated from Stanford University and founded Odds Jam, the Bloomberg terminal of sports betting. Odds Jam was self-funded and acquired by Gambling.com, ticker GDC, for$160 million in December. And today, we'll talk about the sports betting industry.

0:35We'll talk about scaling to 20 million. We'll talk about the opportunities for entrepreneurs within this industry and oh, so much more. And a big thank you for sponsoring today's episode goes to Alex and our sponsors. Franocity has helped hundreds of people leave unfulfilling jobs, invest in recession-resilient businesses, and create legacy income for their families through franchising. Get started today with Franocity's Franchise Funding Guide, packed with real-world strategies to launch your business without draining your savings. Visit Franocity.com. That's F-R-A-N-O-C-I-T-Y dot com. Alex, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:20What is up, Fire Nation? I hope you guys are excited for the NBA finals tonight, and I'm not the only one. But I think something I believe about becoming successful that most people disagree with is probably just to focus on something that is kind of core to you. I mean, maybe most people do agree with that, but you really do have to love it. I feel like as an entrepreneur, I worked more hours than I ever could have imagined doing in a corporate job. But because I was in the sports betting industry, something I'm obviously very passionate about, love sports, I've gambled my entire life. you know, it was pretty easy to pull a hundred hours, stuff like that.

2:05Like I never thought about starting a company until it was something that I was living and breathing and spending all my free time doing. Now you did go from trading to starting a company in that sports betting industry that you're talking about. Tell us that story. What is the origin story of that creation? Yeah, absolutely. So I would say when I was in college, I spent a lot of time, probably like most people just thinking about what do I like what do I enjoy doing and pretty quickly I landed on I like gambling so I always like playing poker like you know there was kind of a casino next to campus so like I would go with friends and spend a lot of Friday nights doing that so honestly I just spoke with a bunch of people and basically asked like what jobs are there and gambling and what kept coming up is trading, trading, trading.

2:58Like trading is basically in financial markets. It's very similar to gambling, prop trading. You're taking risk, you're betting on derivatives, you're betting on, you know, certain companies. So long story short, I quickly pursued a job in trading at this company called Susquehanna International Group, which I absolutely loved. Like literally as a part of the training course at Susquehanna or SIG, They make you learn poker because they believe it helps you make better decisions and kind of think about bet sizing, thinking about when to fold a hand, when to call, how to determine how big of a bet to place, how to approximate your edge.

3:38So I started trading and then I think it was right basically when I started the full-time job. I was playing a ton of poker every single weekend in sports betting legalized in the U.S. In the U.S. it's super weird. It's not like most countries. So in the U.S. it's done on a state-by-state basis. So most states, I mean still over half the country does not have legal sports betting like Texas doesn't, whatever. but Pennsylvania and New Jersey, I lived on the border. I think we're literally the first two States to legalize sports betting. So just kind of being in a trading environment. Um, I mean, you know, kind of the talk at the office went from people talking about what they're doing for the weekend, what games they're going to watch.

4:26Uh, I literally think every single person on my trading desk started sports betting, started looking at sports book promotions, kind of taking their data trading minds and just being like, how can we exploit this sports book? How can we exploit this specific promo? So pretty quickly, I started gambling and then just got really passionate about it. And I spent a ton of time researching sports betting, like, okay, like, how can I make more money doing this? What strategies work? And I felt like all the content was just, I mean, compared to what I was learning as a trader, you know, like very deep math, like you watch sports betting videos.

5:06So much of it is a guy with a Ferrari just being like, you know, LeBron James is the greatest player ever. Lakers are not going to lose. It's a lot that on the Lakers. So long story short, I was like, okay, there's no good content. There's also no Bloomberg terminal. There's no data. There's no good data for sports bettors. I couldn't even like browse odds between sports books. At this point, I was using probably 10 sports books, that MGM fan with DraftKings, Bat Rivers. So basically I kind of was like, you know, if I'm going to start a company, I really want a product that helps me see all this data from all these sports books in real time, because all these books have different prices.

5:47I want to be able to track line movements. I want to be able to see line discrepancies. There was nothing like it at the time, at least in the U S and there was also no good content. So kind of the initial thought process was if we create a Bloomberg terminal for sports betting and then actually do good content on the math behind sports betting, how you can use data to your advantage, how you can find line discrepancies, we'll kind of be able to carve out this portion of, you know, we'll be able to grow a subscription business for people who don't just want to, you know, look at their phone, watch SportsCenter and throw together some crazy parlay.

6:25So that's kind of was our niche. And it was already something I mean, during the peak of COVID, especially when I wasn't going into the office, I was probably spending like 60 hours a week gambling, reading about gambling, talking to professional sports bettors about gambling. So I was spending probably 60 hours a week talking to, you know, reading about sports betting, betting on sports myself, looking for line discrepancies during the peak of COVID. So ultimately, at some point, when I was sitting at home during COVID, I was like, I think I want to make this a full-time thing. And that's when we started looking into how to get data, how to launch OddsJam, what types of content we'd want to create.

7:09And ultimately, took the plunge and started the company in April of 2021. Now, you decided to not raise any VC funding. Why is that? Talk us through that mindset. Because a lot of people think that's the only way to go or that's the dream, but you did not do that. Why? We thought about it at a few points, but my co-founder who actually grew up with, I went to college with him, his first business that he started before OddsJam, they raised a ton of money. and ultimately he was spending, I remember when we started Odds Jam, he told me he was probably spending half of his time fundraising, meeting investors, creating presentations for investors.

7:57So we felt like in many ways, he wasn't even able to drive his company forward or really put everything into the company because so much time was spent dealing with investors. And also he didn't have the power to make decisions that he actually thought were best for the business long term. So at Odds Jam, we started and at first we didn't make a ton of money and it definitely would have helped with marketing, but we ultimately chose not to just because once money was coming in the door initially, we did have some pitches with investors, with VCs, but ultimately just giving up control what would have been required.

8:35We thought the best path was just keep it lean, don't spend money we don't have and just try to grow from there. So maybe it slowed down growth initially, but I feel like ultimately not having VCs and not having to spend a ton of time catering to investors, creating presentations, traveling, let both me and my co-founder just kind of hire the people we wanted to hire, both focus on the company completely, put everything into it and not have any maybe external voices telling us what to do or external busy work, kind of guiding us around, like doing things that aren't actually driving Odds Jam forward and getting out the word more, making more revenue or building new products.

9:18So we ultimately chose, yeah, to not raise money. We thought about it at points, but ultimately never ended up doing it. Fire Nation, we have a lot more to talk about around this topic when we get back from thinking our sponsors. Have you ever dreamed of hopping around with kangaroos in Australia or bungee jumping over 400 feet into a canyon in New Zealand? I have, and I did. Oh, and I also cuddled up with a koala. True story. That's right. Kate and I toured Australia and New Zealand with some good friends of ours who knew these places well, and we think that's the best way to travel, as if you're a local.

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11:36And it's pretty crazy because OzGM ended up scaling to$20 million in a pretty reasonable timeframe. How did you accomplish this? What specifically worked for you? I think really what worked for us is just trying a bunch of things and doubling down on what worked. like I would say the first few months of the business, we weren't really growing. Maybe we were about$20 ,000 MRR monthly revenue. And we ultimately ended up getting this advisor who actually was a user. And when a user cancels their Odds Jam account, we'll send them like an email initially. Why did you cancel? We just want some feedback.

12:18We're a new company. And the response to the email was basically, Hey, I'm in Florida. I don't have any sports books, but would love to chat with you guys, provide some advice. I actually started a sports subscription business. So this ended up being our first advisor. And he really pushed us to create content. I remember a very blunt call with him where I mentioned how we're growing is we're paying influencers. We're paying people essentially to get out the word about the product on YouTube. YouTubers who make sports betting content, we're trying to pay them. That's initially what we were doing.

12:54And what he said to me was pretty blunt, but ended up actually being very good advice, which is if you're not able to create content about your own product and you're the biggest believer in it, you quit your job to start this company. You're spending a ton of time sports betting. If you're not creating content about your own product and kind of putting yourself out there, how are you supposed to convince other people to, you know, start putting out content about your product, which I thought was very powerful. So ultimately, we like a few months after launching, launched a YouTube channel, started, I started sharing bets daily, making sports betting strategy videos, kind of explaining how I think about sports betting for more of a markets trading, you know, quant approach.

13:38and that really resonated. So a lot of YouTube videos started to take off. And even the ones that weren't particularly salesy, the ones that weren't, here's how you use this tool on OddsJam, the ones that were much more just, you know, hey, here's why I started sports betting. Here's why I enjoy sports betting. Here's, you know, some high level thoughts about sports betting. Things like that, I think really resonated with people. And ultimately, I mean, some of our YouTube videos took off. Some are in the hundreds of thousands, some are in the millions now. But that ultimately just kind of created a community of people who were data-driven sports bettors and helped the business grow.

14:20So still to this day, about 50 % of our customers come from organic content. And most of that is YouTube and Twitter. I love that advice you got because you got to think about the reality of Fire Nation. when you're paying an influencer to promote your content, guess what? They're also promoting other competitors' content as well because these individuals on YouTube, guess what? That's what they do. They are promoting other people's sports betting content because that's what their YouTube channel is about. It's sports betting and they're looking for sponsors and partners. So you need to be an individual who's saying, hey, can I create organic content that's meaningful, that will connect, that will tell the story of my company, that will connect us on a more intimate level.

15:02We're not just odds jam. We're actually a company that people can get to know the people behind the name of the company, behind the brand. Now, what do you think is the future of the sports betting industry? I mean, you are really tied into this. I mean, you have your finger on the pulse. What's the future? I think the future of the industry is very interesting for a lot of reasons. I think it's very interesting from a regulation perspective. So what you've had happen in the sports betting industry is tons of sports books have launched. They're pumping money in. Some have already gone out of business if they can't compete with the big dogs like FanDuel and DraftKings.

15:43But you also have a lot of other companies that have launched, such as daily fantasy sports companies that, in some ways are pretty similar to sports betting. They work in different ways. They only focus on player props. So they have some differentiating factors compared to traditional sports books. Like you can't do straight bets. You can't bet on teams to win. You can only do players. So you've seen all these different companies that aren't exactly traditional sports betting, point spreads, money lines, totals, but are more player prop focused. There's also a new wave of peer-to-peer betting sites.

16:20So exchanges, they're called launching. And long story short, there's just been a lot of innovation in the type of sports gambling company. There's now exchanges, tons of daily fantasy sports companies. So I think we'll continue to see a ton of companies launch and try to innovate on what is most attractive to sports bettors. and I would say what they're finding is people really love player props. They don't care as much about betting on who's going to win a game. They care more about betting on what is LeBron James going to do tonight? What is Otani going to do tonight? People prefer to bet on player props.

16:59It's a much more popular bet type. And also just if you think about it, for one game, Dodgers are playing the Pirates right now. If you can only bet on one team, who's winning? The Dodgers or the Pirates? In terms of player props, you know, each team has nine players. There's tons of different options. You can bet on hits, runs, RBIs, home runs. So people are really flocking towards player props, player prop type sports books. And that is super interesting. And then also, I would say a lot of the world has gone to big payouts. People aren't as interested in, you know, betting$110 to win$100 on a point spread.

17:37a lot of these new companies and a lot of sports bettors nowadays are just interested in parlays, which is basically, how do I turn 10 bucks into 900? How do I create long payout shots that are going to hit at a reasonable rate? That's what's really become popular are parlays, player props. And I think there's been a ton of operators, sportsbooks, fantasy sites, and definitely new companies as well that are kind of catering to that. But I think as sports betting continues to legalize, honestly, we're just going to see more of it everywhere. I mean, if you go to a state like New Jersey, New York, where sports betting is legal, you can't turn on a game without hearing FanDuel, DraftKings 50 times and seeing tons of commercials.

18:23So I think it's just kind of becoming normalized in society. Very similar to maybe, I don't know, it used to be very taboo, gambling. Oh, gambling's bad. It's not legal technically in the US. But now with nonstop ads, you hear sports broadcasters talking about it. There's nonstop money flowing into getting more and more young people gambling. It's become much more normalized, maybe similar to marijuana in states where that's legal. It's just become more normalized. And it kind of is, for better or for worse, infiltrating daily life where nowadays I feel like I barely know people who don't bet on sports consistently in Virginia because it's just everywhere.

19:11These books have such compelling sign-up offers. Everyone's doing it, so maybe a peer pressure effect. And also, you just see it nonstop. So, you know, who doesn't want to tail Shaq's parlay that he gives out for game six of the NBA finals? Like, especially just the focus on getting big celebrities, big athletes to kind of endorse these sports books and really get people gambling. I think it's just going to continue to infiltrate society. Alex, a lot of our listeners here, I mean, they are entrepreneurs, they are small business owners. what advice do you have for them? People that are interested in newly legal markets like sports betting.

19:51I mean, it's always important to get on the trends early when the opportunities are there, that's where the real money is made. So what would your advice be in this category? Yeah. For new markets, I would say just, it's always important, I guess, as an entrepreneur, but just staying really close to the user. As I'd mentioned, just in sports betting alone, There have been, since we launched the company, hundreds of new sports books, fantasy sites that have launched, peer-to-peer betting exchanges. All of these platforms work in slightly different ways. So we've been able to grow, add new product lines just by staying very close to the customer and just kind of having a pulse on what books are people interested?

20:33What books are people seeing on social media? Oh, these new weird peer-to-peer betting sites. Maybe we should create a product for that because now a lot of our users are seeing their content, wanting to sign up for these peer-to-peer betting sites. How do we develop a product that is compelling that we can charge$50 a month for, add value to the end user? And I think that's been really helpful for us because at OddsJam, we've continued to add product lines. We have a B2B product line helping other companies like bet trackers and all sorts of companies get access to real time sports betting odds.

21:09So just kind of talking nonstop to customers, people using the product and honestly just doing it yourself. Like I am a big believer that I still spend a few hours a day looking at, you know, kind of as lazy work in some ways, but following, you know, who's growing on social media in the sports world, in the sports betting world, what companies, what sports books, what, where, where is their presence going? TikTok, whatever, just, and then betting myself personally, I still do just to try to make sure I'm staying close to the customer so I can really understand what do these people want and what's hot nowadays and what are people betting on?

21:51What are people following? And I think that's critical for both marketing and also for product development, just to know what do people want? So if people are listening to this right now and they're just impressed with the way you've created and, you know, how you had success in selling Oz Jam. And now you're still very much so, you know, fingers in the mix and fingers on the pulse and in this incredible industry that is just growing at such a rapid rate. How can our listeners connect with you? How can they learn more from what you have going on? I'm pretty active on Twitter. So I give out bets every single day and I constantly am getting DMs with just questions about business or just sports betting concepts in general, the math behind sports betting, which sports books are trustworthy.

22:37So on Twitter, I'm Alex Monahan, a hundred. And then people can also email me. It's just alex at odds jam.com. Uh, most of the questions I get are unsurprisingly related to sports betting parlays, stuff like that. But, um, I'm always happy to answer any questions about sports betting data or starting a business or anything, honestly, whatsoever. I have had a lot of fun starting this company and learning about this crazy industry. And I'm always happy to help out. Well, Fire Nation, you are the average of the five people you spend the most time with. And you've been hanging out with AM and JLD today.

23:18So keep up the heat. And for links to everything we talked about, visit eofire.com. Just type Alex in the search bar and the show notes page will pop right up. And Alex, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Thank you so much. It was a lot of fun. Hey, Fire Nation, a big thank you to our sponsors and Alex for sponsoring today's episode and Fire Nation, freepodcastcourse.com. If you are interested in learning more about podcasting for free, I'll catch you there or on the flip side. Franocity has helped hundreds of people leave unfulfilling jobs, invest in recession resilient businesses and create legacy income for their families through franchising.

24:00Get started today with Franocity's franchise funding guide packed with real world strategies to launch your business without draining your savings. Visit Franocity.com. That's F-R-A-N-O-C-I-T-Y.com.