Joey Levy is now on his third startup. A venture with boxer and influencer Jake Paul that went right into raising a $50M Series A round to take over the sports betting space.
On the Dealmakers Show, Levy talked about dropping out of college to start his first venture, licensing your technology, customer acquisition and content creation, and the three most important things for an entrepreneur to have an opportunity to be successful.
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Dropping Out Of The Ivy League To Launch A Startup
Joey Levy was born and grew up in Broward County, Florida.
Growing up to be a tech entrepreneur in Miami wasn’t really much of a thing back then. Though we’ve all seen the tremendous growth of South Florida as an emerging entrepreneurial hub.
Levy says his grandfather was a very entrepreneurial businessman and an inspiration to him from a young age. He says that he always craved that independence, and to make his own money.
Starting work at 14 or 15 years old, Joey tried everything from tutoring to working in sandwich shops, to other small side gigs.
When it came to college, he followed his interest in studying history. Having read up on other successful people, he saw some common threads of going to top universities.
So, he charted a path to get into an Ivy League school, get the best grades possible, and then expected to start out with a nice six-figure salary at Goldman Sachs, while figuring out what was next.
He got into Columbia and moved to NY. Everything was going according to plan until he saw the rise of FanDuel and DraftKings. He had long been into fantasy sports as a hobby.
Though, while he saw these companies doing a lot of things well, he felt the experiences were just too intimidating and complicated for casual sports fans.
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So, in his sophomore year, he began working on his own project, which became his first company, Draftpot.
He soon found the business of marketing, gaining customers, and building revenue addictive. Eventually, he missed a final exam in favor of meeting with investors for this venture. Which led to him dropping out of college to pursue it full-time.
They launched in early 2015. Things appeared to be going well. Customers were being acquired, and things were growing. They were investing in ramping up ahead of the coming football season when the New York Attorney General shut the industry down.
An insider trading scandal between FanDuel and DraftKings led to cease and desist letters for everyone in the category. The space was temporarily deemed illegal gambling.
It was crippling. Their $2M seed round money just wasn’t enough to see them through it. He managed to achieve an exit for the business. Though three years later, that legal ruling would be repealed, leaving individual states to pick their own laws around sports betting. Of which 30 states already have.
Innovating In A Space With Big Competitors
During the break, Joey Levy discovered traditional sports betting. Again finding it was complicated and unfriendly to the casual sports fan or new players. It was all spreadsheets and confusing numbers.
At the same time, he had seen what Robinhood had done in the stock market and investing, and what others had done in making complex markets accessible, with better customer experiences, which brought in a whole lot more new people to their industries.
He saw how big the sports betting market was. With DraftKings worth around $10B, and $20B for Fanduel, with 3M active users, and $3B in annual revenue. While still each representing maybe 2% to 3% of the market share.
Joey saw the opportunity of building a better product experience. One for a wider crowd, which would provide entertainment value and enhance their consumption of sports.
With this vision, he launched his second venture, Simple Bet, in 2018.
They started with direct-to-consumer micro-betting and play-by-play bets. Then saw the opportunity to provide their technology to other large entities through licensing.
Unfortunately, licensing technology as a backend supplier meant that he was back to not being in control of the front-end user experience.
That led to the decision to split the business. Then going on a new venture with Jake Paul, now known as Betr.
There seemed to be great synergy between Jake Paul as an athlete and content creator, and what they could do in terms of customer acquisition.
With such a big space, with so many dollars in it, they skipped the seed round and went right to raising a $50M Series A. They also recently acquired another company out of Canada for over $7M in cash and stock.
Storytelling is everything which is something that Joey Levy was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.
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The 3 Factors That Enable An Entrepreneur To Be Successful
If you want to be successful as an entrepreneur yourself, these are the three ingredients Joey Levy says are essential.
- Being smart enough to identify opportunities before they become obvious to others
- Being humble enough to admit and learn from your mistakes, and make adjustments
- Being determined enough to push through all of the challenges that will come your way
Listen in to the full podcast episode to find out more, including:
- Customer acquisition and product experience
- Taking market share in a big space, with well-funded incumbents
- Joey’s own $15M investment fund