I bootstrapped OddsJam and OpticOdds to a $160M exit less than 4 years after founding, while having 50%+ profit margins along the way.
I’m a 5x founder with 3x exits and now see that my success (and failures) boiled down to a few key principles, which I’ve outlined below. I would have saved hundreds of millions of dollars and years of failed execution if I heard this advice sooner…I hope you can do the same:
When you’re getting started, find your closest competitors and copy them, but make your product marginally better and half the price. This is a low-risk way of getting your first few customers. Most companies die in the maze of getting product market fit. Get PMF early and then out-iterate your competition.
Ride off the backs of initial distribution (influencers for b2c / distribution partners for b2b) while quietly building your own audience in the background. Over time, we acquired customers from our own audience which drove our CAC to almost $0 and allowed us to invest more in other areas. Focus on being the best content creator to drive your CAC down so you have more operating leverage.
Hire your best customers. Our first employee was our first and, still to this day, best customer, Randall Knaak. He was a middle school PE teacher and woke up at 3am every day to use our product. Truthfully, I hated him. Every single time I pushed a new PR, he would immediately find and report the smallest bugs. He never let me catch a break. But when we were drowning in customer support, we hired Randall to lead the effort and he did something I never thought of…he turned our customer support into a sales machine. I realized online businesses rarely get to talk to their customers and any interaction with a customer might be the only time you ever talk to them. Randall showed me the value of in-housing customer support and treating it like a core offensive function of the business and how far you can go with hand-to-hand sales, even for a b2c business. When we were tight on cash, we would routinely run sales to raise $200k in a day from our customers instead of wasting time begging VCs for dilutive capital.
Rip the Amazon playbook and monetize your cost center. We did this by reselling the same data to businesses. 1.5 years after launch, we launched a b2b business to power other apps in the sports betting industry. The key insight here was to launch a startup program where we got to see the fastest growing products in the industry before anyone else, and acquire them at extremely attractive terms. This became our best acquisition funnel and we acquired 3 businesses over the years, with each acquisition returning over 10x.
First focus on core product then focus on product growth. Nothing matters if your core product sucks. Pricing and packaging is one of the biggest levers you have for immediate growth and most companies are, 1) reluctant to change their pricing and packaging, and 2) afraid to charge too much. We started off by charging $6/mo and A/B tested pricing all the way up to $499/mo. We found $199/mo was optimal and stuck with it. It’s hard to move retention. The only way we were able to increase customer LTV was by introducing new plans/products to customers to increase ARPU. We were always surprised how high the willingness to pay is for our customers. Some customers pay us over $1k/mo for a b2c product. They literally pay us more than their rent! One note here is to not bother expanding downmarket. Customers that pay you the least are your shittiest customers, have the lowest retention, and bother your support team the most. Focus on going upmarket.
Most people are scared of competition. I’m not. I welcome competitors and view them as my outsourced R&D motion. Let them experiment on new products/features and relentlessly copy what that works.
You as a founder have to be in the weeds. It’s the only way to build intuition and respect with the team. In my first business I was hands off and I had 0 clue what was going on…in this business, I am aware of every “spec of dust on the gnat’s ass” at all times.
Selling your business is fucking hard. It’s emotionally draining to build up hope and then for a deal to fall through. We had 3 potential buyers during our business. The first one was a PE firm that we walked away from. The second one was a venture-backed company that was unable to raise the money to buy us. The third one was the one we ultimately sold to, Gambling.com. Develop relationships with your buyers years before you plan to sell. Bring on a CEO to de-risk the transition plan for a buyer (any sophisticated buyer knows there’s a slim chance they can retain you long-term). Speed and confidence of close is worth more than just getting the highest deal price. There’s so much I can talk about here that I’ll save for a future post.
Don’t tell anyone about your business and how well you’re doing. Keep this to yourself. In this world of AI, the cost of product development continues to go down, and maintain the information asymmetry you have on the quality of your business.
As the saying goes, if you do the same things as everyone else, you’ll get same results. The principles above helped me break out of the mold and build a repeatable motion of success in my startups.