Teja talks with Evan Kirkham, CEO and Co-Founder at Outlier, a sports betting platform, this week. They discuss playing sports, changing gears on your business plan when you’re already successful, and the importance of surrounding yourself with entrepreneurs who will push your boundaries and get you to think bigger.
(THE FRONTIER THEME PLAYS)
What’s up, y’all? Today we’ve got Evan Kirkham, co-founder, CEO of Outlier, sports betting platform. Hockey fanatic. We had a good conversation about sports and his business, just navigating sort of the intersection of, I guess, I don’t know, influence, politics, financial power. Yeah, it’s a fun conversation. You guys’ll like this one. (THE FRONTIER THEME ENDS)
As a businessman, you’re building a company. (Evan: Yeah.) you love playing hockey, so you’re physically active, (Evan: Yeah.) probably prioritize value, sleep, and health, and eating well. How are you balancing like, all that stuff with having a one-year-old and building a company?
Yeah. I really don’t know that I am <laugh>. Honestly, like, I definitely don’t have like, any sort of quick tip or secret for it. I am just kind of like, a grinder by nature. I mean like, I’ll give you an example. So my wife and I met in law school. I promise it’s going somewhere. My wife and I met in law school. She’s just like, wicked, wicked smart. You know, would barely open the book and like, just crush the test. I was the type of guy who would spend like, 15 hours just like, without standing up, just going through the book to basically make the same grade as her, or to earn the same grade as her, and so like, I’m just, like I said, I’m kind of a grinder by nature.
So I don’t know, man, just putting in a lot of long, long hours, and I mean, if there’s any real secret, like, I do try to have kind of like, deep work focus times. That’s helpful for the work, and then I’m also just like, I try, and this goes beyond work, but I try to like, really like, live in the present, I guess. So like, yeah, when I’m with the baby, that’s all I’m doing, and when I’m at work, that’s all I’m doing. You know, I might receive like, 15 texts. I won’t even look at them until I’ve like, completed my work tasks. So, I don’t know. I’ve been able to, I think just, I compartmentalize well. But yeah, I mean, there’s really no secret. I just… I’m awake a lot <laugh>.
Yeah. How many hours of sleep do you get at night?
It depends [on] how well the baby’s sleeping. I don’t know. Like six. (Teja: Okay.) Yeah. (Teja: Got you.) Honestly, though, honestly, so here’s the sad reality though. I know a lot of people are like, “Oh, I can function on five. I can function on four, or six,” whatever. I’m honestly more of like, a nine hour guy myself. I’ve always been just like, needing a ton, a ton of sleep. (Teja: Right.) So I don’t know. I just, I guess I have some new circadian rhythm now that the baby’s here.
Yeah. You’re probably just disciplined, and like, you wanna like, make sure that’s all done. (Evan: Yeah.) I like nine. If I can get ten, that’s like, amazing.
Yeah, yeah. I’m kind of that like, I want to be that way. I was that way.
Yeah, yeah. Like, I’ll go to bed at a reasonable hour, and then I’m just like, honestly like, the anxiety of like, holy shit, I have so much to do, just like, wakes me up, and I’m like, I’m already up. It’s like, I got five, six hours of sleep. (Evan: Yeah.) You know, coffees and protein shakes,and whatever.
Yeah, and one thing that I probably wouldn’t want to admit to like, I don’t even know who, my coworkers, I guess, is I do lose a ton of productivity like, after 3:00. (Teja: Yeah.) I mean, honestly, shamefully, probably like, after noon, (Teja: Yeah.) but like, from like 8 to 11 or maybe noon, I won’t even look away from my computer. I can bang out like, you know, dozens and dozens of emails, and like, I just, I’m pretty hyper productive from like, 8 to 11, and that’s where I think (Teja: Yes.) the majority of my work gets done for the whole day.
Dude. Okay. Have you listened to Andrew Huberman’s podcast?
Oh, my wife is like, a total fan girl. Yeah, so yes <laugh>.
Okay, so, it’s so funny, ’cause like, I was listening to his podcast. He’s talking about work. He’s like, “I have like, two work sprints,” (Evan: Mm-hmm <affirmative>.) where I like, wake up, and like, I do a 90-minute work sprint,” (Evan: Yeah, yeah.) <inaudible>, and I’m like, “This guy works like, 180 minutes a day. Like, what the fuck is that about? Three hours a day?” And then, actually last week, I started like, trying to do like, 90-minute sprints (Evan: Okay.) where like, [I] put away my phone, like, all this shit, and I segmented it in 30-minute sprints. So I’d be like, take 30, chill for five minutes, just relax, surf Reddit, or something, then 30, then 30, (Evan: Yeah.) and it’s crazy how much shit you can do in just like, a hundred and like, just in a 90-minute sprint. It’s crazy.
Yeah, yeah. I like that. Yeah, just this kind of idea of like, compartmentalization deep work. (Teja: Yeah.) We were just talking, I think, before we started recording about jiu jitsu, and I brought up Lex Fridman, because of the gym here in Austin and all that. (Teja: Yeah.) Have you listened to his, do you listen to Lex Fridman, actually?
Yeah. I like, he’s like, yeah. He is interesting. I have my thoughts on Lex, but I like listening.
Okay. Well, the reason I bring it up, is have you listened to his episode with Walter Isaacson yet?
No, I haven’t.
Okay. Well, he interviews Isaacson, who just wrote the bio on Musk, and I’m sure this is in the bio on Musk, but he was saying that what Elon does, or his like, superpower, is that he’s like, or one of his superpowers, is that she’s just amazing at compartmentalization. So he’ll go from worrying about like, First Amendment issues for like, this, you know, 30 or 90-minute sprint, and nothing can pull him away from it. He’s just like, laser-laser-laser-focused on it, and then the second he puts it down and picks up like, a new issue about, I don’t know, a Tesla battery, then all of a sudden he’s just like, so deep into the battery, that it’s as if the first issue had never been there. Anyway, so I think that’s pretty interesting, and actually Lex asks like, “Is there a way to replicate that? Can I replicate that? Can anyone replicate that?” And Isaacson says something to the effect of, “No, nobody can replicate it. It’s just innate.” Like, it is just who he is. It’s almost like, I mean, he even goes so far as to say like, “It’s almost like, a disorder that he’s like, able to block everything else out,” but anyway…
Yes. Totally. That makes sense. Like, that’s the only way that dude could have like, a billion kids, and also three or four companies that are (Evan: Yeah.) different companies, and they’re all…right? Yeah. Yeah, that’s super interesting. (Evan: Yeah.) How much do you get out of like, biographies and like, biographical data of like, what successful people do?
I love, this sounds so lame, but I really love business bios, and so, I mean, yeah, I’ve read Jack Ma’s, and Steve Jobs, and Phil Knight, and whatever…a bunch of them. And I don’t actually know, and this is maybe a comment on like, my reading generally. It’s really hard for me to ever like, pin down the lessons that I’m getting out of a book. Like, actually right now, I’m reading like, a World War II history. [The] reality is like, in six months, I won’t actually, I’ll probably remember like, three discreet facts from like, a 900 page book, right? Like, so I don’t really know what I’m repeating, but my whole reason for reading biographies, is I know that it’s making like, an impression on me. So that’s my whole philosophy with reading, is I’m not gonna beat myself up for not like, remembering or being able to adopt the specific, I don’t know, peculiarities of the person that’s being…of the character, but like, maybe it’ll impress something on me that I don’t even know came from the Phil Knight book, but now I’m just like, I act differently, because in that moment, yeah, it just, it made an impression on me. So I don’t know if that answers the question, but that’s sort of how I think about reading generally, is I’m just looking to consume things that’ll make an impression, and I’m not too worried about retaining any actual lesson.
That’s powerful. That’s interesting. It’s like, sometimes I think about like, how subconsciously, if you hang out with people, their norms kind of create like, boundaries on like, the way that you think, right? (Evan: Yes.) Simple example is like, you know, if you grew up in New York, and you live in New York City, it’s like, most people get married at like, probably late 30s, early 40s, (Evan: Yeah.) I would imagine, right? (Evan: Yeah.) And so like, the behavior of the community kind of orients you, not intentionally, you’re not like, “Oh, all my friends…” (Evan: <Inaudible>.) Right? It’s like, you’re just like, “Oh, like, people are dating. Like, this, this, this.” Compared to Nashville, and probably Texas, and (Evan: Yeah.) like, maybe not Austin as much, but probably still Austin, right? (Evan: Oh yeah.) People get married young. Like, it’s normal, right? (Evan: Yeah.) and that orients the typical person down a certain pathway.
I totally agree, yeah. Surrounding yourself with like, a culture, and people, and literature, or whatever, that, again, you don’t really know what lesson, or learning, or behavior you’re trying to craft, but knowing that like, I wanna align myself with like, these business people, therefore I’ll read their biographies, (Teja: Yeah.) and in some kind of almost unconscious, subconscious, or unconscious way, I am aligning myself with them.
Yeah, (Evan: Yeah.) totally. Totally, (Evan: Yeah.) and especially like, with tech startups, I feel like there’s a different scale of thinking, (Evan: Mm-hmm <affirmative>.) and with maybe other types of businesses that, you know, at least I’ve found it helpful to like, interface like, with other tech founders and like, other tech people, because it’s like, okay, like, they’re thinking about the world a little bit differently.
Yeah. Yeah, I tend to agree with that, too.
Yeah. You don’t wanna get too far down the Silicon Valley like, rabbit hole, but…
It’s true. It’s true, and you need to like, and this is something I’m trying to do. Like, I have a, and not like, our businesses, I’m sure we’ll get to talk about this in a second, not that our business is like, super far along, but one problem I’m running into right now is the people that I, like, if I just go to like, a networking event here in Austin or something, (Teja: Yeah.) I’m regularly around people that are actually like, one or two steps like, behind me with their business, (Teja: Yes.) which is fine. Like, I mean, that’s exactly where I was two years ago or whatever, but I’m trying to be really intentional about finding people like, at the next level, because I don’t necessarily have anything, back to the discussion we were just having, I don’t necessarily have any like, discreet questions to ask them. So it’s not like, “Oh, I really need to ask you, you know, I really want your help on whatever,” or “Go to market strategy.” I don’t have an ask, but I just want to like, be around you, because I know that that’s how I’m gonna level myself up. So I’ve been trying to do a lot of that now where I’m like, okay, are there, you know, groups or like, a lot of it happens organically, where I’m like, oh, like, I met this really cool dude, and he’s got a Series B company that’s really crushing. Like, you know, let’s go get drinks, and like, I wanna meet your friends.
No, I totally feel that. Like, you want to be in the, like, what do they think about? What’s the scale of their thinking? (Evan: Yeah.) How are they addressing some problems? Totally. No, I feel it. You go to any entrepreneur event, and it’s like, 90% of the people are like, I have an idea with an <inaudible>.
Exactly. Which, hey, great, but I’m not learning a ton with that.
Yeah, totally. Totally.
Evan, via Outlier promotional video (12:24):
(PROMOTIONAL VIDEO AUDIO PLAYS) (CHILL, ELECTRONIC MUSIC PLAYS) Hey there, and welcome to Outlier. We’re really excited for you to check out our first of its kind sports betting platform. If you’re like most sports betters, you’re interested in leveraging data to make smarter bets, but what you’ve probably found is that it’s not that easy to make data-driven sports betting decisions. It’s a big win if you can find raw data related to the matchup or the particular player you’re interested in betting on. It’s an even greater victory if you can make sense of the data, which was likely presented in the aggregate, and it’s a borderline miracle if that data gives you full context and full confidence, not just about how the team or player has performed in the past, but if the team or player will cover the particular line you’re planning to bet tonight. That’s where Outlier comes in. (MUSIC AND PROMOTIONAL VIDEO AUDIO ENDS)
Cool. Yeah, okay. So Outlier. So you were a securities lawyer before this, (Evan: <Laugh>. Yes. Yeah.) so maybe you’d be interested to kind of like, talk about like, your pathway to starting a tech company, getting into sports betting, like, you know, what’s interesting about that to you? I know you’re an athlete, so maybe there’s like, some interesting things there.
<Laugh>. I’m not an athlete, right? I do play hockey, but I don’t know if I’m an athlete <laugh>.
But like, I know you see, like, you play sports, and like, you’re in…
No, I take it seriously, but, okay. [I] appreciate that. I’m from Dallas. I’m actually from the suburbs, Flower Mound. Grew up there, did my undergrad at the University of Mississippi, learned a ton at Ole Miss. Actually, this is probably a totally separate discussion, but small town, deep south, taught me a lot about relationships, and networking, and like, interpersonal leverage, which sounds kind of weird. (Teja: Oh, yeah.) A quick aside, so in Texas, and this is probably true in New York, or I don’t know if it’s true in New York or whatever, but in Texas, money is power, if that makes sense. Or money is status, I should say. (Teja: Yes.) In Mississippi, proximity to power is status, and what I mean by that is like, the most, like, the highest status I guess you could probably have, like, as a student at University of Mississippi is, you know, I’m a 10th generation Mississippian, whose dad is best friends with the governor, and it doesn’t matter that my dad’s a mechanic, I still have all the cred, because I have proximity to the governor, and so I learned a lot about like, politicking and relational authority, I guess, or power. So anyway, learned a lot of that and other things in Mississippi, then I actually worked in politics, because that’s what that community breeds.
So I worked in politics for about three or four years. I did like, during my undergrad, I spent every summer on Capitol Hill, or at a lobby firm, or working with Senator Kay Bailey Hutchinson from Texas. Then I took the fall of my senior year off, and I raised money for Mitt Romney. We could get into politics if you want, but I’m very much like, a Romney Republican. (Teja: Yeah.) Spent fall in Boston at headquarters and did a lot of fundraising for him, and then when I graduated, I moved to DC, and worked for the Republican Senatorial Committee, another lobby firm and think tank. Eventually, when I got honestly pretty burned out of politics, I moved back to Dallas and went to SMU law school. [I] graduated there in 2017. I worked as a securities litigator from ‘17 to 2020. I worked for a firm called Carrington, Coleman, which is about only 50 or so some odd attorneys, downtown Dallas, really, really great litigators. They’ve got business too, but they’ve got like, really good litigators, and so I worked with a boss who gave me a ton of opportunity. I actually got to sit at least second or maybe third chair for four trials: federal, state, jury, judge.
I got to like, take witnesses, argue motions in front of the judge, all of that, which was really great, because I had always been a, I was a high school debater. I debated in college like, competitively. I was on the moot court in law school, so I was always gonna be a litigator. So I did that for three years, and I had this kind of like, existential moment where I remember specifically, I’m sitting across a table from one of our clients, and he’s in the countertop business, just like, installing granite countertops. Nothing I necessarily wanted to do, but, you know, I’m all suited up, you know, like, professional attorney sitting at the top of this, you know, skyscraper in downtown Dallas, seems like I’m the guy with like, in the better position. The dude walks in there with like, flip flops and you know, t-shirt or whatever, sits down across from me, and I have this moment where I’m like, oh, like, I wanna be in your position. (Teja: <Laugh>.) We’re fighting your fight and battling your battles, and I’m just kind of like, a hired mercenary, (Teja: Yeah.) and I didn’t see where the real reward was in that. (Teja: Yeah.)
It’s intellectual, it can be intellectually stimulating, no doubt, but I’m fighting somebody else’s fight. So I wanted to fight my own fights, and so that brings me to roughly 2019, 2020. I’m the kind of guy like, probably you are, like, probably a lot of the people that hare watching this are, that they’re always having kind of startup ideas, right? Like, oh, this should exist in the world. That should exist in the world. So for a period of about well, maybe six months or a year, I was just openly posting my startup ideas on LinkedIn, because my theory was, or my idea was, if it just stays in my head, it’s just gonna die on the vine. Like, what do I care if someone goes out and starts the company that I thought would be cool. Like, great. That exists in the world.
So I just started posting about it openly. I was watching a Thursday night football game, and two kind of notoriously awful commentators were on the call. I’m a huge Dallas Cowboys fan, and I thought to myself, I’m like, “Dang, like, a Cowboys super fan should be able to call this game, and I should be able to tune into that commentary rather than this commentary,” and so I had the idea for a social sports talk app called Colorcast. I posted it on LinkedIn, and the very next morning, one of my contacts DM’d me, and he is like, “Hey, take that down. Let’s go get lunch.” That turned into the first $10,000 check, which eventually turned into a hundred grand. Was able to build the team, start building product, hiring, raising, hiring, raising, and eventually I just, and it was only probably 250 grand at this point raised, but at that point I was like, “I need to be a better steward of this investor money. I’m gonna quit my law job.” So that’s kind of what brought me into the startup space with, again, the first product called Colorcast.
That’s sick. Okay, there’s so much there.
Yeah, I know that was a lot, but I just like, I just gotta roll it all out.
Yeah, yeah, totally. Okay, so, I mean, like, if you want to, I would be super interested in hearing more about like, interpersonal leverage (Evan: Yeah.) and like, how being like, close to power (Evan: Yeah.) plays out. Like, you know, so if you were to start this company in like, Mississippi, how would that be different than maybe running it in Dallas or in Austin?
So, I really love Mississippi. Like, well, I say this kinda half-heartedly, but I don’t know if I’m serious about it, but like, (Teja: <Laugh>.) if there was enough industry there and enough talent there, I might still be there. The problem is Mississippi has this giant brain drain, because the people who get educated and wanna like, be really entrepreneurial, they honestly go to Nashville, Atlanta, Dallas, or DC, (Teja: Yeah.) and so there’s like, there’s this brain drain that they’re trying to fix, but it’s really hard. The state’s obviously very, very poor. Exploring this idea of like, proximity to power again, so it is something I learned in Mississippi, but I think that it extends beyond politics, and it extends beyond the South or Mississippi. To give you an example, when I was raising money for Mitt Romney, one of the biggest insights I’ve had is about kind of the donor class. So in reality, I was like, I forget what the title is, like, assistant director of finance for the Midwest or whatever, and basically all that meant was [that] I’m a glorified party planner. So I’d get one really high net worth individual in, you know, Detroit to anchor a fundraiser.
He would then, you know, we would then talk to all the high net worth individuals in Detroit, in the surrounding area and say, “Hey, if you pay 75 grand, you can come to this dinner. You can listen to Mitt give a speech, you can take a picture with him,” whatever, all that. Well, what I didn’t realize at the time, and I only realized after going to a few of these events, is although those individuals were pro-Mitt, pro-business, whatever, the reason they came to the event was not for Mitt, it was to sit at the table with the other dude who paid 75 grand. (Teja: Interesting.) It’s this idea that like, kind of getting, I don’t know. It’s like, people were willing to pay to get their network correct. (Teja: Yeah.) Anyway, I don’t know if that, how much that relates, but that was another insight I had about this kind of idea of, yeah, proximity to power, and turns out that’s like, what the donor class is all about. But yeah, I don’t know. It’s all like, Mississippi taught me a lot of just like, soft skills and, I don’t know, never burn a bridge. Keep really, really close to all of your contacts, give more than you take. I don’t know, I can spit out a bunch of other random shit <laugh>.
So sometimes like, driving towards an outcome, this is the way that I used to view the world, is like, I always thought like, the world was like, purely meritocratic and like, purely competence based. Like, if you’re really good then, and I think that’s true over like, an infinite time horizon. Like, I think that true, like, if you’re the best, you’ll be the best, and people will recognize that and like, (Evan: Okay, yeah. Yeah.) I do think like, being a cool person and just like, being helpful like, helps you like, take like, a green shoot, you know (Evan: Totally.) like, to kind of skip some things, which maybe actually is under the umbrella of competence. Like, I don’t know.
That’s actually a really good point. I do think like, social competence (Teja: Yeah.) is, and like, relational and situational competence, street smarts maybe? I don’t know, that’s probably wrong, but something to that effect (Teja: Yes.) is really, really powerful but is undervalued and like, under taught, and that might be because it’s really, really hard to quantify. It’s easy to be like, “This dude crushed his SATs.” It’s really hard to be like, “This dude is cool,” you know?
[A] hundred percent. (Evan: <Inaudible>.) <Inaudible>. This dude is cool. I want to give his company an opportunity. Like, you know, and like, the cooler you are, I feel like the more like, runway you have (Evan: Mmm <affirmative>.) to like, get something right, you know? (Evan: Yeah.) Or like, if you’re not cool, even if you’ve got a sick thing that you’re selling, it’s like…
Yeah. People don’t wanna work with you, or yeah. (Teja: Yeah, yeah.) That’s interesting. I’m gonna think about that a little more. I even see it like, right now, I was just talking to a founder, I obviously won’t tell you who it’s, and we were talking about like, raising in this environment, and we had raised, actually kind of before the economic regime turned, but by all measures, he was outperforming our metrics, and he is having a hard time raising, and it kind of boiled down to like, he’s like, “I just don’t know if…” he’s like, “I just don’t feel like I’m connecting with the investors,” and it has nothing to do with the metrics. It has more to do with just like, maybe the pitch is wrong, but it’s actually like, deeper than that. It’s not even about the pitch. It’s just like, maybe they just don’t connect with you as a human (Teja: Yeah.) when you first get on the call, and that’s a really important box to check.
It’s the vibe. Like, the (Evan: Yeah.) <inaudible> needs to be dialed. Yeah, but it’s hard. I mean, I don’t know if our fund would be happy with me sharing this, but like, I mean, in one of the early stages when like, they went and they presented like, their, you know, this is what they want to do, we went to a nice dinner, and then we went to like, a brewery, and we each all had like, six drinks, (Evan: Mm-hmm <affirmative>.) and it’s like, fun. There was no business discussed. (Evan: Yeah.) It was just, we had fun, talked about random shit, and honestly like, I was like, man, I just like these guys in any environment, and, you know, I hope that they felt the same way about me. (Evan: Yeah.) Hopefully they still do. And so yeah, that’s like, so, yeah. It’s so important. I mean, it’s hard to like, over zoom and shit, to like, build that type of rapport. (Evan: Agreed, agreed.) It’s just hard.
Wait, full circle on this, because I do have one more kind of Mississippi anecdote that I think (Teja: Yeah.) brings this all together. So after my sophomore year of college, I was in DC and kind of like, interviewing for internships, whatever. Stupid. I mean, I was like, what? 18?
No, I’ve been there. Dude. (Evan: Yeah, yeah.) Yeah, yeah, yeah. I’ve interviewed for <inaudible>, because you’re like, you want college credit, you know, you’re like…
Oh, for sure.
You need money. You’re just like, “I need to pad my resume,” (Evan: Yeah.) “to get a real job.” Totally, yeah.
So there was this lobby firm that’s in…well, let’s leave it at that. There’s this lobby firm who is kind of at the top of what’s called like, or kind of referred to as like, the “Mississippi Mafia”. So (Teja: <Laugh>.) like, Mississippi is very well represented in DC. Like, you will meet so many people, and it’s partly because that’s where a ton of the subsidies goes. So they just have, they’re like, very overrepresented. Plus they understand how to like, work there. Well, so anyway, all that to say, I’m 18 years old, the managing partner who was, and this sounds like, a bunch of nepotism, maybe it is, who graduated from Ole Miss, was at the same fraternity as me, I mean, but was like, mid-late 50s. He’s like, “Yeah, come in for an interview.” Okay, here’s what the interview was.
So I walk in, and they’re like, “Hey, come in,” you know, “Come into his office.” I won’t name the name again, but, “Come into his office.” [The] second I walk in, he has like, a wet bar in his office, and all he wanted to do was, and this is now like, 2:00 in the afternoon, all he wanted to do was slam like, four whiskey neats with an 18-year-old and talk to me about like, “Oh,” like, “gimme an update on what’s going on at Ole Miss.” So the entire interview was just a vibe check. You know what I mean? And so I’m like, ah, man. Like, that’s obviously the extreme where it’s like, the entire thing was a vibe check, and there was no merit, but in some ways, it’s like, maybe, yeah. They definitely, the Mississippians definitely understand that piece.
Yeah. Maybe the vibe is the merit.
<Laugh>. Maybe the vibe is the merit.
Just your ability to drink <laugh>. (Teja: Yeah <laugh>.) Anyway, I don’t know. I don’t know if I should even be telling that story, but yeah. That reminded me, like, that was a very weird experience as an 18-year-old. I’m like, okay, I did not expect, I’m coming in there with like, a padfolio and all this. He’s like, “Do you want it on the rocks or neat?” Oh, you know <laugh>.
No, like, so I was actually having this conversation with Taylor and maybe like, with somebody else, I don’t know, but like, it’s like, you look at a resume, and like, within in five minutes of a conversation you’re like, “Okay, this person’s smart.” (Evan: Yeah.) So like, everything they don’t know, like, they’ll figure out in like, a month. (Evan: Totally.) Like, why do you need to go like, dive into their exact skillset and what they’ve exactly done. Like, they’ll (Evan: Yes.) like, over two, three years, can you, like, if there’s a conflict, are they gonna fucking freak out? Like, (Evan: Right.) if there’s a disagreement, can they disagree and commit easily, or is there gonna be a whole song and dance to be like, (Evan: Yeah.) “We need to do this. It’s really important.” Like, I feel like you actually pick that up just hanging out, right?
Yeah, it’s so true.
How they talk about their wife, like, all that shit like, gives you a perspective on like, them as a person that (Evan: Yeah.) is actually important, like, more important than like, okay, do they know like, how well do they know Python?
Yeah. Cocktails, baby. (Teja: Yeah.) It’s all about the cocktails <laugh>.
Yeah, yeah <laugh>. That’s sick. Okay, so Colorcast. That’s the original instantiation of the business. (Evan: Correct.) Still in the sports space, and then maybe what…two part question. What prompted the pivot, and then what stage are you guys at right now? Like, seed stage, Series A, you know, where are you guys at in the journey?
Yeah, I’ll answer the second question first so that I don’t forget it, frankly. So we’re at seed stage. We launched Outlier in January. We have grown it to like, almost a hundred thousand plus users. (Teja: Sick.) We charge $20 a month, so we’ve gotten like, pretty significant ARR fast. (Teja: Whoa.) Yep.
[A] Hundred thousand users?
Yeah, and those aren’t all concurrent, and those aren’t all our subscribers. I’m just talking about like, total user base over time. (Teja: Yeah.) Yeah, so that’s grown really, really fast, and yeah. Now we’re like, “Ah, do we raise another round? Do we just like, get profitable?” So we’re running into some of those questions, which are actually kind of fun to contemplate, (Teja: Yes.) but yes, that’s where the business is now. The reason we pivoted, I’ll give you like, the whole pivot story, ’cause I think it’s actually pretty cool, and hopefully there’s some lesson in there for someone else. But yeah, we were doing about 10 and a half thousand monthly active users on Colorcast. We were doing about 500 broadcasts a week. So by all intents and…and like, investors were very interested. They were like, “Oh my god. This is like, growing, and you guys have kinda cracked the nut on marketplace content,” all that stuff. We were actually literally in the middle of raising a round, like, and it was going well, all the stuff. But me and the two co-founders had this like, come-to-Jesus moment, where we were like, “Okay, this is going well now.”
We did see some like, softness in the business, and we weren’t quite sure how to continue to scale and all that, but our main concern was actually like, the macroeconomic environment, and we had the thesis, which was when this economic shift that we’re living in now, this new economic regime comes into being, you’re not a business unless you’re generating revenue, and I think that now people totally get that, but at the time, we were still in this economic regime of the past, which was grow, grow, grow, grow, grow, grow, grow, try to figure out how to monetize. That just doesn’t really exist right now, in my opinion, and we called that shift really early, and we were so convicted about it, that we decided to literally hard pivot into something that would generate revenue now. We already had relationships with FanDuel, DraftKings, MGM, and Caesars, because part of our contemplated monetization strategy for Colorcast, was a broadcaster says, “Hey, this is a really great bet.”
We surface that bet, you take that bet, Sportsbook compensates us. So we already had relationships with the Sportsbooks, and we were already ingesting and mapping their APIs, but what we found is that when, and this is credit to our product team, they’re exceptionally good at mapping the APIs and basically pairing any given sports bet with really hyper contextualized and visualized data that’s like, easy to understand, easy to use, and so we started down this road of, okay, what would it look like if we hard-pivoted, and I’ll save you the whole step-by-step process. There’s like, a very clear four step process to the pivot, including like, literally thousands of interviews and surveys, all this sort of like, stack ranking exercise, an Amazon PR exercise that we did, all sorts of stuff, and we eventually came upon Outlier.
Of course, most of our investors were like, “Okay, guys, like, smart. I agree about the revenue. Get there fast.” A few of our investors were like, “What are you doing? Like, we invested in Colorcast, and literally, we’re trying to close around right now about Colorcast,” but fortunately, we launched it, and it just took right away, and so those investors are now like, “Oh, good job. Congrats. Always believed in you,” which is kind of funny, but (Teja: <Laugh>.) <laugh>, yeah. So, but honestly, if it hadn’t took, the conversation would be like, very different. So I’m very thankful for that, obviously. (Teja: Yeah, yeah.) But yeah, that’s kinda how the pivot came to be, and we’ve kept the team super, super lean with really, really high performers. Yeah, and we’re just going deeper and deeper down the sports betting rabbit hole and pushing, we’ve done something like, 80 plus app updates in the last nine months. Like, we’re just, our team’s pushing code like, twice a week. So, yeah. That’s pretty much all of it.
Yeah. That’s sick. I mean, yeah. I’m sure that took a lot of psychological conviction and just like, self-belief and belief in the team, ‘cause yeah. I know. It’s really funny. It’s like, as the founder, or founding team, it’s like, there’s a greater risk, not of loss, but of not achieving like, business potential, just in the typical way like, investment deals are constructed, and so I feel like founders in general, like, our risk appetites and like, we have closer access to the data, like, are way higher than the investor base, (Evan: So true.) you know, (Evan: So true.) and like, our visions are way longer, right, ’cause we’re able to see beyond the P&L, right? (Evan: Yep.) You know, it’s interesting, like, sometimes you just have to be like, fuck. Like, if this is wrong, like, we’re fucked, and I’m gonna look like an idiot, (Evan: Yep.) but I feel compelled to make this bet. Like, I just have to.
Exactly. Like, that’s exactly what it was, at first. So like, when we were looking at Colorcast versus, well at that time, to-be-named Outlier, (Teja: Yeah.) we were like, okay, what is the clearer path to revenue here? We already had a user-based Reddit. We literally had no product (Teja: Yeah.) for Outlier, literally nothing, and some of the code for the APIs, all that, but whatever, basically nothing, and we were like, okay, we can either try to grow Colorcast to some unknown number of users, 300,000 monthlies, a million monthlies, I don’t even know what it’ll take, or we can quite literally start from scratch, rebranding the whole company, building an entirely new product, and see if it takes, (Teja: Yeah.) and like that was the decision, and we’re like, I think the latter is somehow a safer bet. (Teja: Yeah.) So, yeah. It’s crazy <laugh>.
Totally. No, totally. It’s like, sometimes like, yeah, it’s funny. I was having this conversation with a friend of mine, and she was like, talking about like, two decisions. One seemed more risky than the next, (Evan: Mm-hmm <affirmative>.) and you know, like, and it might be intuitive for us, but it’s like, risk is always just one side of the decision. Like, the other side is upside, (Evan: Yeah.) you know? (Evan: Yeah.) Right, and so it’s like, even if this is slightly higher risk, it’s like, the gain towards like, a path that you feel is profitable and (Evan: Yeah.) accretive to the business is like, way higher than continuing down the standard way, right? I’m biased, but we built the company, we raised like, really, I mean, 15 grand when we first started the company, (Evan: Yeah.) ’cause we went through an incubator, but then we basically got the profitability, and then we raised like, over a couple of years, and then we raised like, our first like, private equity Series A.
You raised after profitability?
Yeah, for sure.
Okay. Well, that’s cool. Okay.
Yeah, ’cause practically, what it actually allowed, was like, there was no like, if we don’t raise, we run out of runway, (Evan: Mm-hmm <affirmative>.) and I think what that did for us psychologically, is like, we could be really methodical about like, hey, here’s the path we want the business to go. What investor is aligned with the path that we want the business to take (Evan: Nice, nice.) versus having to try to frame the business in a way that appealed to every investor, you know?
Yeah, this is why I wanna become profitable, because, I mean, for a bunch of reasons, but like, the optionality and the almost like, patience that it affords you (Teja: Yeah.) is really, really, really valuable, in my opinion, to making good, long-term business decisions.
Yeah, totally, and like, the people with like, the biggest businesses that are adding the most value, like, it’s like, Carlos Slim, you know?
Carlos Slim, I don’t know. Who is Carlos Slim?
Wasn’t he like…he was like, the Mexican dude who like, had a, hold on, let me make sure this is like…
Okay <laugh>. I’m like, oh, should I know this guy?
Yeah. He’s like, a business magnate. He’s got like, a bunch of conglomerates.
Okay, okay, okay. Sure.
This, this, this. I mean like, these guys, they own their businesses, you know? They haven’t sold 90% of it to <inaudible>, (Evan: Yeah.) but like, having a strong and fundamentally strong business, I think like, you then have that as an option if you want to do it, but like, you’re still in control. You’re satisfying your customers. Like, that feels really good, I think.
Yeah. Yeah, yeah, yeah. Absolutely. Well, congrats, man. That’s our goal, is can we get profitable to give ourselves that optionality? Yeah, like, that’s choose-your-own-destiny. That’s make-your-own-destiny at that point.
Totally. We’re not profitable today, by the way, since we raised, obviously, (Evan: Oh, nice <laugh>.) a ton of money, so…
We started spending harder <laugh>.
Yeah, for sure, and it’s always like, scary. Like, you’re like, holy shit, this is so much, but you know, the bet is like, you wanna invest in the company’s growth, you wanna take market share like, this, this, this. (Evan: Yeah.) I love our guys. They always make fun of me, ’cause like, I’m never wearing like, nice clothes, and they’re obviously like, the super buttoned up, like NBA, like, league-educated.
These are the private equity guys?
Yeah, yeah, yeah <laugh>. (Evan: <Laugh>. Yeah.) My guy and gal, yeah. Robert and Laura. They’re sweet. What do you want to share about Outlier, in terms of like, follow on, product plans, like, where’s the business going, maybe more tactically?
So, big thing on deck is something that we’re gonna release in like, four weeks. I’ll preface, I literally preface every single one of my answers, I feel like, but, okay. So we have a product now called Outlier Premium, and it is actually, lemme take one more step back. The betting landscape, there are two better types. There are what are called “bottoms-up” betters and “top-down” betters. Bottoms-up betters are the sports betters that look at all the stats, and know a lot about LeBron James, and think that they have edge over the sportsbooks by looking at the stats, knowing how LeBron plays, knowing how we’ll match up against so and so, again, looks at all the historic data, makes the bet. That is what we’ve been catering to to date. That’s what we call Outlier Premium. Very stats-heavy without feeling overwhelming, graphic representations of different like, matchup scenarios, all sorts of stuff.
We cater to the bottoms-up better, awesome. That’s how we’ve been growing. The second type of better is what’s called a bottom, or sorry, a “top-down” better. The top-down better doesn’t give a damn about LeBron. They might not even know who LeBron James is. Their whole strategy for betting is looking at price discrepancies between sportsbooks or having, it’s basically like, a Wall Street trader, where they are like chart mystics, right? Like, they know, okay, “With one hour left before tip off, I know that there’s gonna be a price move upwards on this line, so if I can pick the line off now, I’m beating the quote/unquote ‘closing line value’”, or they know that this bet has particular expected value, because you know, it’s priced this way on one book and priced dissimilarly on the other five books.
So that’s the top-down folks. We are about to release a product that caters very much to the top-down folks. Everything from a product related to expected value betting. We even have an arbitrage product where it’s like, okay, you can get, you know, the Cowboy’s money line on FanDuel, you can take the Eagle’s money line on DraftKings, and no matter what, you’re gonna win $50. Right? So it’s very much just like, odds comparison, line shopping, looking for inefficiencies in the market, et cetera. We’re releasing that product in about four weeks, and it’s gonna be significantly higher price than what our current product is. So the whole team’s been working on that, and really excited to get that out. As a general proposition, I think that the way that we want to evolve the product and the business is to keep leaning further and further into the pro betters.
We started with like, an intermediate better, and now we’re going like, more, and more, and more, and more, and more pro (Teja: Hmm <affirmative>.) with the intention of then eventually going very novice, (Teja: Hmm <affirmative>.) and the reason we’re doing it that way, is because the intermediates and the pros give us really great product feedback, because they understand sports betting a hell of a lot better than the novice. So it allows us to iterate on the product a lot more intelligently than if we just went after novices right away, but then the other thing too, is it socially validates the product when we do go to the novice, (Teja: Hmm <affirmative>.) and it’s like, okay, well, all of the smart betters are already using it, but now we’ve made it really simple for you. So it’s kind of like, and I’ve never really used this analogy before, but it’s as if we, like, we wanna build E-Trade or a Bloomberg terminal, before we build Robinhood.
So that’s sort of the way we’re like, thinking about product right now and thinking about like, the development of the business, and I think that’ll set us up nice in the long term. But yeah, that’s kind of the newest product coming coming down
That’s sick. (Evan: Yeah.) Awesome. Where can people find Outlier on the interwebs, and where can people find you on LinkedIn, if you’re still dropping startup ideas? Like people will still want those.
Honestly, the only reason I’m not dropping startup ideas, is because I feel like my investors are gonna be like, “Stay focused!” <Laugh>. I still have ’em.
<Laugh>. No, that’s how you build a community. Like, you know?
Maybe you’re right. Maybe you’re right.
<Inaudible> this personal brand, like, as an exec. It’s like, super important.
No, it is. For real. Yeah, I feel like I spend honestly, yeah, a lot of time doing that. I feel like people mute me on LinkedIn now, but <laugh>, whatever.
<Laugh>. Taylor’s on my ass like, every fucking day. He’s like, “Post more on LinkedIn,” <inaudible>.
Yeah. Honestly, by the way, just a quick aside, awesome hire. Like, Taylor rocks. Like, he is a networking genius, content genius.
Yeah, and he’s chill.
Yeah, and he’s cool dude and plays hockey, so…(Teja: <Laugh>.) But all the soft skills, all the soft skills, he is just oozing soft skills. (Teja: Yeah.) Yeah, you can find me on LinkedIn, Evan Kirkham. You can find Outlier two ways, you can, or on any social we’re @OutlierDotBet. D-O-T bet. Outlier dot bet. Or you can find us on the web at Outlier.bet, (THE FRONTIER THEME FADES IN) or you can just find us in the App Store. Outlier. (Teja: Cool.) Yeah, and then, I should say this. Seven day free trial, so sign up, check it out, but then actually, most importantly, is we are like, hyper, hyper focused on feedback. Even though we’ve like, done well, and we feel like we’re in a good spot, we always want more feedback. Like, it would be a great day if we got a hundred tickets with feedback. Like, that’d be an amazing day. So we want more of that.
Awesome. (Evan: Yeah.) Well, thank you Evan. Appreciate you, man.
Abbey, via previous recording (45:34):
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