Ep. #1226 - Fueling Fan Engagement
In today’s episode of Startup Hustle, Matt Watson and Ross Fruin, Co-Founder & CEO of GridRival, talk about fueling fan engagement. Discover how GridRival, fantasy sports leagues, and sports betting revolutionize the fan experience. Gain insights into the challenges faced by motorsport fans, real-time sports data capture, navigating regulations, compliance, and more.
Want to learn more about Ross’s local startup scene? Check out our top Portland startup picks featured on Inc.com. Discover the up-and-coming startups in Portland, including GridRival!
Covered In This Episode
Fantasy sports have exploded in popularity, captivating millions of enthusiasts worldwide. They combine sports knowledge, strategy, and competition in a virtual arena, redefining the fan experience. GridRival provides a platform for motorsports fans to engage in a similar fashion.
Listen to Matt and Ross discuss the motivation behind the formation of GridRival and the challenges of acquiring the initial user base. Ross also explains how GridRival works and fuels fan engagement through fantasy and sports betting.
The conversation turns to various issues Ross encountered as a non-technical founder. These include data capture, language, localization, and seasonality challenges. Matt and Ross also delve into dealing with compliance and regulatory requirements. They wrap it up with the future of GridRival and tips for entrepreneurs.
Engaging your base concerns all startup founders, fan or not. Find out what works in this Startup Hustle episode.
- The reason behind GridRival (1:37)
- Getting the first users onboard (4:08)
- How does GridRival work (5:59)
- Fueling fan engagement through fantasy and sports betting (8:55)
- Different user experience for motorsports fans (15:21)
- Building GridRival as a non-technical founder (16:31)
- Motorsport’s seasonality (21:38)
- The data capture challenges in motorsports (24:24)
- GridRival’s global market (30:25)
- The language and localization challenge (32:14)
- Dealing with compliance and regulatory matters (35:42)
- The future of GridRival (38:13)
- Ross’ tips for entrepreneurs (40:44)
I always saw my friends playing season-long fantasy football, March Madness, and all of these tools that elevated the interest or excitement of some of the sports they really liked. It creates this level of camaraderie and community and kind of smack talk and all these things that, as a race fan my whole life, I never could participate, and eventually got sick of it. I wondered why nothing like this existed for some of the sports that I loved, which I really enjoyed.– Ross Fruin
Fantasy sports have to really help with fan engagement, right? I’ve done a tiny amount of using DraftKings, FanDuel, or one of those things. I bet the Chiefs would score, you know, a touchdown on the first drive or some crap like that and it made it more exciting to watch the game. I would imagine there’s got to be a lot of studies that show that that really increases engagement.– Matt Watson
Revenue is not necessarily something that is talked about a lot, but it doesn’t mean it’s not important. But I think the reason they’re focused on sports betting is they know if somebody has money on a specific driver at some race they would otherwise never care about, the likelihood they’re going to stay in tune for a NASCAR the entire four hours during the broadcast is exponentially more likely.– Ross Fruin
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt Watson 0:01
And we’re back for another episode of the Startup Hustle. This is your host today, Matt Watson. I’m very excited today to be talking about fueling fan engagement. And I think we’re gonna be talking about some racing today, which sounds like a fun topic. We’re with Ross Fruin and his company, which is called GridRival. Excited to learn more about that today. Before we get started, I do remind everybody that today’s episode of the Startup Hustle is powered by Full Scale. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably that only works directly for you. Visit FullScale.io to learn more. Ross, welcome to the show, man.
Ross Fruin 0:37
Thanks, man. Appreciate it. I’m glad to be here. Looking forward to it.
Matt Watson 0:41
So I’m gonna I’m gonna guess where are you at the Formula One race the other day, Las Vegas. I knew I knew you were gonna say you were there.
Ross Fruin 0:48
I wasn’t. I’m not going to Vegas Vegas as a couple of weeks out. But the US GP in Austin was last week. Yeah, it was amazing. I’ve been this my seventh year, actually. And our team goes now. We get a big 45-foot motorhome that we park out there along the back street at Circuit of the Americas. And we’re there the whole almost the whole week from Wednesday to the end of the day Sunday and kind of do some activation stuff. And it’s usually obviously a really huge networking and business development opportunity for us. And then, of course, there’s there’s the race, which is always exciting to watch as well.
Matt Watson 1:28
Well, so tell me a little more about what you got and what you guys do. And how did you get into this? How did you get into creating software for racing?
Ross Fruin 1:37
Yeah, we, so one of the things that you will find fairly consistently amongst motorsports fans is a lot of them are not traditional sports fans. Okay, that was very much how I was growing up. And so as a result, I always saw my friends playing season-long fantasy football, March Madness, and all of these kinds of tools, if you will, elevated the interest or excitement of some of the sports that they really liked. And it also created, you know, if you’ve ever done any sort of fantasy league, you know, innately creates this level of camaraderie and community and kind of smack talk and all these things that yeah, just and so as as a race fan my whole life and kind of like a lesser of a traditional sports fan, I never was able to participate, and eventually got sick of it. And wondered why nothing like this existed for some of the sports that I loved, which I really enjoy. There’s not a lot of motorsports that I don’t enjoy. Formula One is obviously at the top of the list. I started watching it when I was in my teens. And so, eventually, I just kind of got I got sick of it. I was running my last company was actually totally unrelated to the media space, and started this as a side project. Purely with almost no, I would say almost no business intention. So it was literally to scratch an itch. I had to get to play season-long fantasy Formula One. And a very long story short, the game launched in 2017. It was a desktop web-only, barely worked on a mobile phone. We ended up signing up about 20,000 users the first week that was online. And I’m sure we’ll get into it, but for obvious reasons, it made me start to pay a lot more attention to what we had just maybe accidentally done and kind of went from there.
Matt Watson 3:31
So is your goal originally, just to like you were just to use it with five of your buddies or something? It was gonna be kind of just something
Ross Fruin 3:37
The goal was, the goal was, I mean, I definitely had some ambition around growth and the audience, you know. I wanted to put something into the world that I thought had some opportunity, I just didn’t know exactly know what that was. It didn’t matter at the time. And so it was definitely built with the intention of both satisfying a craving that I had, but also being able to, to scale and add other users, you know, to be able to come and play it.
Matt Watson 4:06
So how did you get those first users?
Ross Fruin 4:08
Yes, so it was almost exclusively through direct response marketing. So my, my last company was a media buying agency and we manage, okay. You know, we’re one of the earlier companies that manage Facebook ads, Instagram ads, that space is very much changed since I’ve left it five years ago. But you know, back then it was if you were really tactically gifted in that space, you could be very, very effective. And so we were, I think that first year we launched, we spent, you know, 10 or 15,000 bucks on ads, and that’s how we got the initial 20 25,000 players. And so you know, we were acquiring users at 60 and 80 cents back then, which is crazy crazy to think about, but yeah, so that’s how the initial group came. And then one of the things that we found that really made the product enticing, you know, in the sports betting space customer acquisition costs are just outrageous. And I dabbled in it enough to understand that back then. But one of the one of the dynamics that we found very quickly was that almost every single user that we acquired through some sort of, you know, paid ERD, whatever media, any investment that we made, would result in one other user that was created by that person. So they’d invite people in. Oh, that makes total sense. Yeah. So and that has stayed consistent. And as the product has developed, and as I’ve as we’ve been able to invest, you know, into the actual mechanisms that allow that stuff to happen easier, that referral viral growth rate has continued to, to improve over the years.
Matt Watson 5:45
So tell us a little more about the experience of how people use this. So I’m watching Formula 1. Am I creating a team and playing against my niece? Is this is it also has some form of gambling built into it? Tell us a little more about like how people use this.
Ross Fruin 5:59
For sure. So there’s, there’s kind of like two primary buckets. So there’s a free play product, which is our league game, that’s a product that is not monetized, we are unlikely to ever monetize it, because we really look at it as kind of the driver of demand and engagement on the application. When people play season long fantasy leagues they’re engaged for, you know, near the entirety of the season, they’re coming back to the product every single week. And so we actually look at that as the core tool and product to ultimately get people interested in some of our paid games, which are not legally considered sports betting in the United States. They are considered fantasy sports. We have, we have to, we have two primary products in that category. So one is the I would say they both fit into the category of daily fantasy sports, but one is more of a traditional kind of draft style game where you, you’re in a pool of other players, maybe it’s two people, maybe it’s 1000. And there’s an entry fee associated with it, maybe it’s $3 could be, you know, hundreds of dollars. And you compete with other players for a chunk of the price. Okay, so that’s game one, we are in beta with another game that we’re ready to launch that’s a little bit opposite and much more simple, where you basically build a lineup of over or under or head-to-head matchup picks like to, to driver matchups, like, who who’s going to finish, you know, higher, who will have better qualifying position, this guy or that guy. So almost no learning curve to do that game. And then the way it works is, you know, depending on how many of those get correct you you actually get a payout. That’s a multiple of your entry fee. And that game is against GridRival versus against other players. So both those kind of fit in the category of fantasy sports, but yeah, there’s, there’s, there’s kind of two core types of product. And I think there’s very different players for each with with some obvious overlap. I think, you know, we have a pool of players that don’t actually do our season long game. And then we have a lot of players who are three to 50,000, at this point have registered on our season long game. And then there’s obviously, you know, the really the target audience for us is that overlap of the people that are playing season long, and you know, have interest in actually competing with real money.
Matt Watson 8:19
Well, fantasy sports of all kinds has to really help with fan engagement, right? Like, I’ve, I’ve done a tiny am, I’ve never done a lot of fantasy stuff. I’ve done like a tiny, tiny amount of like, using DraftKings or FanDuel, or one of those kinds of things. Like, I bet the Chiefs would score, you know, a touchdown on the first drive or some crap like that. And it kind of made it more exciting to watch the game and like, are they going to do it? Are they going to be ahead at halftime by six points, or whatever it is? Yeah. And I would imagine, there’s got to be a lot of studies that show that that really increases engagement, right?
Ross Fruin 8:55
Absolutely. I mean, I think it’s the number one reason why you saw early on large investments from sports leagues themselves into the two companies that you mentioned. I think, as an example, in our industry, NASCAR is one of the only motorsports leagues that I know of right now that actually employs two guys that I’m pretty close with whose sole job is, you know, building the NASCAR sports betting audience, and when you talk to them about their goals for that division of the business. Revenue is not necessarily something that is is talked about a lot doesn’t mean it’s not important it is. But I think the reason they’re focused on it is because they know, just like you said, you know, if somebody has money on the line on a specific driver at some race that they would otherwise never care about the likelihood that they’re going to stay in tune for a NASCAR the entirety four hours of an event during the broadcast is exponentially more likely. So I really think of real the category of called the competitive entertainment category to to include, you know, even free place these low fantasy, paid daily fantasy and then another category of which you’re referring to is more traditional sports betting as really an entertainment tool, more than a you know means of participation and and ability to earn money. I think there’s a very small percentages of overall sports bettors who are that diehard I think it’s overwhelming majority of people who are playing as a form of entertainment.
Matt Watson 10:36
Which I think makes total sense. And I don’t think that’s really a problem, right? It’s not like one of my family members that has like a major gambling addiction. That’s a whole different problem. But you’re spending five bucks to bet my niece that’s so and so would win a race or whatever might be fun. And then I can ridicule her for the next week if I win.
Ross Fruin 10:54
Matt Watson 10:57
But you guys only do motorsports?
Ross Fruin 11:00
Yeah. So we you know that that was, I’d like to think that I, you know, orchestrated this off from the beginning. And I saw this stuff coming. And to some degree there was there small elements where I saw opportunities. But by and large, like I said, it started to kind of scratch an itch I had. And then the both of the the intersection of those industries. So motor sports, and in sports betting started to become at the same time very, very compelling. So I knew that there was an under investment in motorsports. I knew that motorsports in general, as a category was really behind when it came to anything related to digital to fan engagement. And I say this, putting myself in the position of you know, being in 2017 and 18. That was very much the case. Formula One, as you may or may not know got acquired in 2017 by a stateside company called Liberty Media, who has done an absolutely tremendous job at reinvigorate that brand. And I think you’re starting to see things happen. Similarly with NASCAR IndyCar so there’s kind of this like resurgence of growth amongst the motorsports audience. At the same time, sports betting was legalized so to speak in 2018, through the repeal of a law called the Professional Amateur Sports Protection Act, which essentially allowed states to now create laws that regulate its sports betting. And so, those two things were happening at the same time, and we kind of just really saw it as an opportunity to, to capture an audience that was really underserved. And it still is today, you know, because this is a heavily regulated industry. And, you know, regular regulatory stuff happens slowly, so to speak. We’re, we’re we’re four years post, that bill PASPA being repealed. And you still see the majority of focus amongst the major operators in this country. FanDuel DraftKings? You know, bet MGM Caesars focused tremendous amounts of energy on the NFL and the NBA, right, and some other traditional sports and rightfully so that’s where the most amount of people today are placing wagers I think Motorsports and other niche sports are way, way more nascent. But when we looked at the opportunities, and we did the market research, we found that the motorsports audience was large enough by itself, you know, to create a venture scalable business with obviously a lot of assumptions. The primary one being that it will over time become an audience that bet as a percentage of of the overall audience that that participates with real money games, in a similar fashion that people with traditional sports have. So that’s going to take time. And that’s ultimately the investment that all of our all of our investors have made into the businesses that we’re going to be the brand that’s able to figure out how to convert those votes.
Matt Watson 13:55
So do you guys have competitors that do this in motorsports?
Ross Fruin 14:00
Kind of depends on how you find it. So we don’t have a direct competitor, meaning there’s, there’s not anyone to date that’s focused purely on real money gaming, you know, competitive entertainment for just the motorsports audience. And there’s certainly overlap. So kind of some examples like on the free play game side. You know, Formula One and NASCAR have their own season long fantasy league game. So we kind of, we kind of compete with them for free users actually think it’s a positive thing, because they’re using their first party audience to expose people with these types of games. And ultimately, when people want more they seek it. On the other side, you know, there are more and more places like FanDuel DraftKings, where you can kind of where there is some lines and availability to wager on sports like Formula One and NASCAR because those are the two largest in the motorsports space, but not necessarily in an authentic way. And then certainly when you reach outside of some of those major sports, it’s really, really hard to find Have a lot of opportunities to participate in not only an authentic way, but sometimes even at all. Like if you’re wanting to, you know, bet on NH AR drag racing or Formula E or the Weather Tech series in IFMSA. Like it’s Yeah, I don’t even know there’s a lot of places that have data for that.
Matt Watson 15:21
Yeah. And I would imagine you have a totally different user experience to, you know, very focused on racing. So you’re gonna have a much better experience, I imagine as well for those users.
Ross Fruin 15:33
Yeah, I mean, I think any, it’s the it’s the niche product focus, writing time, you’re focused in a specific way on a specific audience, I think the value proposition you can deliver is much more unique than somebody who’s focused on everyone.
Matt Watson 15:45
I do want to take a minute to remind everybody that finding expert software developers doesn’t have to be difficult, especially when you visit FullScale.io, where you can build a software team quickly and affordably. Use the Full Scale platform to see what developers are available to join your team today. Please visit FullScale.io to learn more. Well. So Ross, tell me about how did you build the software? Were you? Are you technical yourself? Did you have technical co-founders? Like what did you guys have to go through to build this?
Ross Fruin 16:13
Yeah, definitely the latter. Not technical in the traditional sense, I think I’m a technical person, but I’m not a trained engineer. So I don’t write code. And so it’s definitely been a painful part of the journey. Being a non technical founder, I think, early on, we hired an agency to build the first MVP before I even had went full time, the start as a side project, which we might have skipped over. But and then when I did, when I did go full time, I, I spent, you know, four months after we launched, it was obvious that going the contractor route, going, going the contractor route moving forward was not going to, to work, I think, to really, to build something of scale, and to do it at speed. And you really need somebody in that capacity, who understands the problem you’re solving, who understands the user who has a certain level of passion. So I, I spent a couple of months trying to find that person, and ultimately did find an individual who was able to fill that role for about two and a half years. And then just this year, actually, we had to go through quite a difficult transition were original co-founder, CTO kind of just got to a spot where, you know, we needed to bring somebody in who had more business experience more experienced running teams and building technology, both at this stage and at scale. And so brought in a new CTO that actually started just this June. So just kind of getting going in that direction. That’s been very, very beneficial to the company thus far, but definitely not a technical co-founder, I’ve had to learn a lot of hard lessons as a result of building a technology company. But it’s been it’s been a fun journey. And I think one where in any case, I will walk away with a tremendous amount of knowledge and expertise around, you know, building mobile applications and building technology.
Matt Watson 18:10
Well, one question that comes to mind is, you know, looking back, do you wish you had a technical co-founder? Do you think it would have changed things? A lot more? Yeah,
Ross Fruin 18:18
For sure. I think I think I wish I would have the right technical founder, you know, if I could go back, there’s, I think we’d all changed some things up, right? If we could go back a few years, I think what I would have tried to do is just slow down and and really spent the time to vet, a co-founder, I think where we were when I did go find one is more of a position of survival, right? We needed somebody to fill the role. And I think the challenge too, as you get older, it’s harder and harder, there’s a smaller pool of people who can kind of up end their life and leave their job and have no income to come to the company. And so I found that that has gotten, you know, as, as I’ve aged, right, in my cohort of people in my community, there’s not a lot of them at this point who could just leave their job, especially ones that have, you know, high income to quit and go to a startup. So I say that all to say, you know, I don’t know if if things would have went any differently if I took a little bit more time or maybe could have hired a recruiting agency to find somebody but the reality was, you know, four years ago, when that process was taking place, we didn’t have, you know, three $400,000 a year yeah, available to pay somebody who was who’s worth who’s worth what we needed. So I look back and I say it is what it is. It’s part of the journey. And I feel fortunate that we have made it here despite some of the challenges and having to move people around like that. But Yeah, I would, I would, I would say, to answer your question in a much shorter way, if anyone’s listening to this, as a non-tech co founder, my absolute encouragement would be to find that partner and take the time to make sure that you guys are on the same page with what you value, both inside and outside of the business because you know, you’re going to be tied at the hip. I think if you even if you have very different worldviews of stuff that are not aligned to business, it can cause friction. Sometimes it’s healthy friction, and a lot of times it’s not healthy friction. And then inside the business, really make sure that you guys have a skill gap, that doesn’t overlap too much. I think that’s one of the things that I in my last business, I had a co-founder as well. And I think there’s just too much overlap and what he wanted to do and what I wanted to do. And in the current setting, it’s been very successful because we both really heavily rely on each other skills. And so those are some of the things that I would really encourage anyone going through that process to consider.
Well, it’s hard when you have co-founders or even or even other executives, an early-stage company like this, that you have to be able to trust and delegate stuff to, right? And so if you have two of you that have competing visions for things, you’re always going to be going to be fighting about those things. So yeah, some of those challenges.
Yeah, if you guys are having to micromanage each other, you know, as partners as and really, as executives, more importantly, in the in the organization, I think that it’s probably a sign that it’s not going the right direction, right? If you guys are not aligned and executing on initiatives and and being proactive and stuff like that, I think it will lead to two issues.
Matt Watson 21:38
So let me ask you this is what kind of seasonality do you have with this business? Is this in 12 months of the year? Or is there certain times of the year where there’s no racing at all?
Ross Fruin 21:49
Well, unlike some of the major traditional sports, we are fortunate that there is racing 12 months a year. Is it a flat in terms of number of fans that are watching? Definitely not because you have series? You know, I guess you’d say there’s traditional sports 12 months, the year too, it just depends on what you consider traditional sport and but not all of them are the same size and produce the same amount of you know, fan engagement as the NFL does, right? So we’re kind of in a similar spot like Formula One NASCAR IndyCar some of those major series typically run if you look at the season, it’s like, kind of starts mid end of February and goes through, some of them end in like late September, some of them go till November. So that’s kind of like the core of the motorsports season. And then you have all of these, these series that I would call maybe. I don’t know, B series, right. They’re not the biggest motorsports fan bases in the world. But they do have significant following right, millions and millions of viewers that that go through different parts of the seasons. And a lot of times in the offseason. Formula E is a great example, has a little bit of a different season than Formula One and some of the others, I think because they probably have a better time getting viewership during the Formula One off season, a NASCAR season, nitro rally, Travis, Travis was Toronto has rallycross league similar thing. Drone Racing League. Right. So there’s a lot of these kind of, yeah, again, I feel like second tier sport is doesn’t do them justice, but you know, non mainstream motorsport series that do have coverage over the whole year. So not all those are live on our platform yet. And it is the intention to to bring them on. And I think they will be for certain a tool that will help us not completely removed, but I would say diminish the dip that occurs outside of that kind of traditional motorsports schedule that I mentioned of like February to November. So we are fortunate that even with those we really don’t have a three month offseason, you know, it’s it’s, it’s pretty small.
Matt Watson 24:02
So I’m curious, what what was the hardest part about building the software and the technology and the business? From from a technology perspective? And, and the one that I’m thinking about the, in the back of my head that I wonder if was complicated was do you have to have a bunch of data about the stats about who’s going to win and sort of creating like a lines for those or whatever. And
Ross Fruin 24:24
So, I will take all of my answers related to my own growing, you know, growing pains a learning curve around technology and technical debt and like the traditional stuff that most tech companies will deal with no folks that specifically kind of on this industry. I think you you nailed it on the head. The biggest challenge that we have to solve in our space is around data. And what I mean by that is is sports statistics, whether real time or not real time about who finished where and how many overtakes did they have and all that sort stuff because that data is what powers everything, what’s it’s what powers the real time data and scoring that comes on to application when you’re, you know, have your TV open, and you’re watching a game. It’s also what gives people on our trading team who write set actual lines for some of our daily fantasy pickup game that I’ve matched, or that I’ve talked about earlier, the insight and information to be able to have confidence in in the lines that we’re setting. And so one of the absolute biggest challenges with our space, and I say, the motorsports fantasy space versus like, traditional sports as if you were starting today, you know, let’s say you wanted to go build another one of the, you know, 100, fantasy football applications out there, you’d have a trillion competitors. But it would be very, very easy for you to find data providers that give you every single statistic that’s happening during a game in real time, you could deliver that to your application, you could do all sorts of cool stuff with us with it. For us, one of the biggest challenges we have to overcome is that, again, outside some of the outside of some of those main motorsport series Formula One NASCAR IndyCar Moto GP, there’s no data provider that’s producing that stuff, in any sort of significant and meaningful way for us to be able to use. So when we want to go into, you know, let’s call it drag racing as an example. That’s a very specific problem we’re going to solve have to solve internally, we have to be able to capture that information somewhere. Whether we have people that are on the ground, whether we have people watching TV, at the end of the day, a lot of these big data providers that do provide companies like ours with this data, might be surprising to a lot, but a lot of a lot of the ways that they create that data is still, you know, they stuff, six guys in a room during an NFL game with 12 monitors, and they’re keying all this stuff in manually. Yeah, I think some of those things are going to change the future with computer vision, and you know, all the interesting things that are happening there. But that’ll be something that has to happen in house for us to ultimately solve it at scale.
Matt Watson 27:18
There’s a local company here in Kansas City called ShotTracker that kind of, I’ll say, revolutionize this for basketball.
Ross Fruin 27:24
Ya know, we’re ShotTracker, and I ran, I think, two shared portfolios of investors. So I’ve actually met the founders.
Matt Watson 27:33
David, Davey and Ross. They, they do some pretty cool stuff, you know, they track the basketball and no one if you make shots and all this stuff, and really incredible the stats that they could they could get from from tracking all that stuff. And obviously, you’ve seen that in soccer, too. Or now now everybody wears like these weird like vest under their shirt that tracks someone or their shirt on field. And
Ross Fruin 27:54
Yeah, so I actually think that’s the future of data capture, which is a combination of that and like and then computer vision, I think like in another 10 years, you’re not going to have people keying this information in, I think, you know, the the football is going to know that it was just thrown for 17 yards from one guy to the next guy in which guy it was. And so I think it’s a really exciting space for sure.
Matt Watson 28:16
Yeah, there’s got to be enough cameras recording all that stuff now that you can use AI and video recognition stuff to do all of that. I would think so.
Ross Fruin 28:25
Yeah, it’s coming.
Matt Watson 28:27
So you must have you must have a few people that just watch racing all day.
Ross Fruin 28:32
We do. Yeah, we’ve been we’ve been fortunate to attract, you know, a certain type of, of team member. There’s not a lot opportunities to work at the intersection of these two spaces. So we have a staff that definitely has a handful of folks who really are excited to be working at the intersection of of two things that they really love. So there’s definitely a lot of racing that a lot of watching racing that occurs on the GridRival team for sure.
Matt Watson 29:07
Yeah, it’s gotta be question number one in an interview, how much do you love racing? Yeah, for sure.
Ross Fruin 29:12
It definitely has been at this stage. I think like, I kind of wonder, you know, at scale if we’re we’re always going to be able to be hiring, you know, diehard patrons and fans. I think at some stage, I think at some stage, it’s going to be tough to be that picky. But certainly, certainly at this stage, it’s been really critical to get folks on that really understand the mission and enjoy the product.
Matt Watson 29:34
It’s like, you know, our company, we have 300 employees in the Philippines and they are they don’t know anything about most of them don’t know anything about the NFL and, or like hockey or like certain, you know, American sports like they know a lot about basketball. They they you know, follow NBA basketball. They’re huge fans of that. Yeah, like NFL and stuff. They have no idea. Yeah, I’m sure I’m from Kansas City, right. So I’m like Patrick Mahomes and Travis Kelce, and the Taylor Swift drama and all these things like, actually, the rumor was Taylor Swift bought a house right next to me. And they were here. Oh, boy. Wow. Yeah. So we’ll see if she actually moves in. But yeah, they do they have no idea. Because they’re not NFL fans and stuff. So it’s how submarines who would question like, how, what part of your audience is outside of the US? Or is it all US based?
Ross Fruin 30:25
No, it’s definitely very global. Again, because our sort of free play product is available everywhere in the world, our real money gaming products, obviously heavily regulated. So that’s live in about 30 US states right now. And we’re hoping to be live in the UK. Sometime around, you know, q1 q2 of next year. But yeah, the free play games available everywhere. If you look at the makeup of it, though, it’s it’s probably 40%. Us 30%. United Kingdom, okay, excuse me. And then the next major chunk is Canada. And then after that, it’s kind of like, mix of mostly European countries, because racing is really, really big in Europe, Italy, Germany, and then, you know, some peppering of different countries, but it’s mostly concentrated in those three, anything that’s by and large, just because that’s where we’ve heavily invested into, you know, advertising and content. I think, if we really wanted to, like, crack the German market, I think that like, we could do it when the timing was right, but definitely not immediate focus.
Matt Watson 31:35
So your advertising and all of those different countries?
Ross Fruin 31:35
These are the three that I mentioned. Yeah, we all just say we have, we’re not currently doing it. We don’t spend a lot on media, these days, usually at the beginning of the season, to kind of get, you know, a bump and new users and kind of expand the audiences when we find that to be most successful. But typically, through the remainder of the year, we actually don’t do that at all.
Matt Watson 32:05
So I mentioned earlier, like nightmares of building software, like number two on my list then has to be like language localization, that had to be a big
Ross Fruin 32:14
Well, so that America YouTube’s like, that’s very much a future problem. So I’m, luckily, luckily, the three places that we that I mentioned that we’re live in, like very English dominant, okay, countries, and so we haven’t had to deal with that. And every now and then, you know, we’ll get some user that emails us from, you know, somewhere in France, or like, somewhere in South America that’s responding in some other language. And when we convert it, it’s usually them swearing at us about, you know, we don’t have any English and stuff like that. And so yeah, I think like language localization, if that’s a problem that we ever have to solve, things will be going very, very well for us. Because, you know, we have to build a application that’s unique to, you know, a specific country for the purposes of language. I think that that means expansion plans have have gone quite well. So certainly a future problem. Definitely not one that we’ve had to deal with at this point.
Matt Watson 33:11
Yeah, definitely. As you look to continue to grow, right, that’ll be a big blocker like, well, we can’t grow into these countries, because don’t don’t support the language. And for, for those who are listening that don’t know, like, you got to use the software and say, in India, they flipped the commas and decimal points. Yeah, for sure. I mean, they’re backwards. And
Ross Fruin 33:31
there’s so many other issues, too. I mean, they the types of phones they use, and I mean, it’s just you’re having to optimize for so many different and unique situations that are not iPhones. Yeah, exactly. You know, it’s a lot. It’s a lot of Android, it’s a lot of phone brands that we’ve never even heard of. So Oh, yeah. It’s tough, it’s di would be a very tough market. It’s actually a market where fantasy sports has been very, very successful. So it’s probably one that at some point, we’re going to consider. I think also in that bucket, that’s one of the big challenges just currency, right? You know, who and reconciling if you want to have a pool based game, and you want people from the United States and from the UK, and let’s throw in another one called India to all be able to join the same pool that has, you know, paid for all those a very, very complex on the ledgering side and, and reconciliation side. So that’s
Matt Watson 34:27
done with those exchange rates changing every day.
Ross Fruin 34:29
Yeah, exactly. That’s actually a problem. We’re in the midst of thinking about for a UK launch.
Matt Watson 34:35
Well, and so how do you deal with the legal part of it, all those countries? I mean, yeah, you have to block certain countries you like you can’t can’t use it in India or whatever. Do you have that too?
Ross Fruin 34:44
Yeah, for sure. So that’s done kind of at the app store level. Both app stores allow you to meet or deliver to certain countries and then we also go a level deeper. So we we use geo-based I’m targeting technology called X point. And one of the things you’ll see if you ever log in in the United States and you’re trying to play Cash game, you have to go through a pretty heavy verification process where we actually locate your coordinates on your phone using your phone’s GPS, to determine if you’re in a state where you’re eligible to actually play. So there’s kind of like two layers of location check that we utilize to ensure we’re, we’re compliant with state and federal laws.
Matt Watson 35:29
Yeah, that’s got to? Well, I mean, brings up another question for you is, do you have like a team that just deals with this, like compliance kind of stuff? Do you have like an attorney or somebody that like, they just have to constantly deal with these kinds of things?
Ross Fruin 35:42
I would say, we have, we have partners. I don’t we don’t have anyone internally, that’s like, you know, we don’t have a Chief Compliance Officer or we have that title filled. But like, it’s not someone’s full time job yet. I think that’s probably a further stages of growth, we’ll definitely have to. So we have both attorneys, and we have a compliance agency that we work with that we have kind of regular calls with that kind of fill the void and check the boxes that we need to check out as as a very early stage startup. But it is a significant barrier, in this business to doing almost anything is yeah, you know, you really have to be careful about being applied with local laws. And it’s a process involves a lot of applications, lots of background checks, and it’s kind of never ending. But the flip side, if you’re looking at it from an optimistic point of view is it creates a lot of entry barriers for potential competitors to come into the space.
Matt Watson 36:43
And I mentioned earlier, I, I use FanDuel. I think I’ve literally used it once for a Chiefs games, because it became legal in the state of Kansas. And I did it and I bet on Chiefs game or whatever. And I just happened to go to my dad’s house to watch the game. Well, where I live, I’m, I’m like, less than half a mile to Missouri from my house, as I go to my dad’s house, and then I can’t load the app because I’m in Missouri. And it, you know, as you described it, you know, it’s using the geolocation stuff. And so I couldn’t actually use it when I was at my dad’s house. So that first for some people like me, that’s crazy. You live in between two states and different laws and all sorts of
Ross Fruin 37:25
The complexity of how our government runs with state-by-state regulation. Not everything is regulated federally. In the UK, it’s very different. So you know, we have a gambling license there. And it gives us access to the entirety of the United Kingdom with one license versus here,
Matt Watson 37:46
including Ireland and Scotland. And all that kind of fits.
Ross Fruin 37:48
It’s Great Britain is what the lights just the license target. So, but yeah, very, very different market and the United States. And as a result, very capital-intensive industry to enter if you want to have market access in every single state where it’s where it’s possible.
Matt Watson 38:09
So what is what does the future look like? What’s next for you guys?
Ross Fruin 38:13
Yeah, I think it’s kind of like a couple of main categories, obviously expanding into different sports. So we’re different motorsport series, I guess, is a better way of saying it. Currently, on the game, we have season-long games for Moto GP and Formula One. Next season, we’ll be adding NASCAR and IndyCar on the paid side. We have NASCAR and Formula One. And we’ll be adding some of the other sports, IndyCar, as well. And then, you know, as we grow, continuing to go down that funnel and solving that data problem we talked about, and just onboarding, more and more different types of racing series that people can participate with. More a kind of gamification. I think the experience is really, really important in this industry. The product is becoming more and more important. I think the threshold for what was required of a successful product four years ago in the sports betting paced space, when PASPA was repealed, is very different than it is. I think there’s there’s a subset of the audience that just all they just want to do is they just want to place a bet, right? They don’t necessarily care about the experience or how easy it is. And I think that’s a small subset, I think the bigger subset of people are going to rely much more on the entertainment value that it creates. And so we have a lot of ambition for new types of games, we want to add new ways that we want to engage the fan. So I think that’s a big one. And then our ultimate goal is to actually have our own sportsbook, which is an exponentially more difficult challenge in every single way, especially in the United States. It’s more difficult from a compliance perspective. It’s just it’s a lot of layers of complexity. And so that’s why probably maybe like a post-Series B type goal for us. But those are, I’d say, kind of the three buckets that come to mind.
Matt Watson 40:09
That’s awesome. Well, if you need to hire software engineers, testers, or leaders, Full Scale can help we have the platform and the people to help you build and manage a team of experts. When you visit FullScale.io, put in your requirements, and we will help you build a team. The difference is we specialize in building a long-term team that only works directly for you. You’ll learn more at FullScale.io. Well, I think it’s been great talking today about this. Again, this is Ross Fruin with GridRival. I always ask people on the way out, do you have any other final tips for other entrepreneurs out there? It can be about literally anything.
Ross Fruin 40:44
Oh, geez. You know, I think there are so many things that come to mind. But I think like the one thing that thinking about specifically in GridRival, that I’ve seen over and over again, in both my business and others, is I think sometimes, you know, founders just need a level of credit and staying power, there’s just a lot of things that are gonna not go your way. But more things that won’t go your way will go your way. And there’s been a lot of times in this business where the outcomes didn’t look very promising. But you have to be confident in your vision and your mission and your audience and the problem that you’re solving, when those times come to be able to stick with it and be able to look forward and kind of just know that the challenges are temporary. So I think resilience is a really, really important attribute of a new great, of any great founder.
Matt Watson 41:41
My favorite word for that is tenacity.
Ross Fruin 41:43
Yeah, for sure.
Matt Watson 41:45
That’s one of my favorite words to describe it.
Ross Fruin 41:47
Matt Watson 41:48
All right. Well, thank you so much for being on the show today.
Ross Fruin 41:51
Yeah, it’s my pleasure. Thanks for having me.
Matt Watson 41:52