The David Weisburd Podcast: Episode E112 - Jake Paul: How to Build a Multi-Billion Startup

Host: David Weisburd
Guest: Jake Paul, Joey Levy (Co-Founder of Better)
Podcast Description: The 10X Capital Podcast interviews the world's leading institutional investors and influential figures in finance and business. Previous guests include The Ford Foundation, Northwestern University Endowment, CalPERS, Stepstone, and other top limited partners.

Introduction

In episode E112 of The David Weisburd Podcast, host David Weisburd sits down with Jake Paul and Joey Levy, the co-founders of Better, a burgeoning sports gaming company. The conversation delves into Jake Paul's ambitious journey from boxing to building a multi-billion-dollar startup, the strategic vision behind Better, and the personal motivations driving their success.

Jake Paul's Ambition and Drive

David opens the discussion by probing what fuels Jake Paul's relentless ambition. Jake articulates a profound commitment to personal growth and achievement:

"Challenges excite me, seeing what I can accomplish and how far I can push my own self. Becoming a world champion in the sport of boxing is my goal." (00:02)

Jake emphasizes the importance of self-belief, extreme dedication, and surrounding himself with top-tier talent. He reflects on his rapid ascent in boxing, attributing his success to unwavering focus and the ability to disrupt the status quo.

Vision for Building a Billion-Dollar Company

Transitioning from sports to entrepreneurship, David questions Jake's motivation to venture into the sports betting industry despite his existing success in boxing. Jake responds with a clear vision:

"Probably one of the hardest things to do in the world is to create a billion-dollar company. So it's one of my goals just to say that I was able to do it." (00:21)

Jake's ambition extends beyond personal wealth; he aspires to revolutionize the sports gaming landscape by creating a user-friendly platform that appeals to a broad audience, contrasting with the complex interfaces of existing competitors.

The Role of Psychedelics in Success

David touches upon the intriguing topic of psychedelics and their influence on billionaire success stories. Jake confirms their impact on his personal and professional growth:

"100%. No question about it. I think you have to understand yourself and go inwards and work inwards and emotional intelligence and all of these things before you can like, really master everything." (06:30)

Jake credits psychedelics with enhancing his emotional intelligence, fostering community understanding, and sparking innovative ideas, drawing parallels to how Steve Jobs reportedly conceived the iPod.

Marketing Genius and Personal Branding

David praises Jake's exceptional marketing prowess, noting his seamless transition across platforms like Vine, Instagram, and TikTok. He probes whether Jake's controversial persona is a deliberate marketing strategy. Jake acknowledges this approach:

"People like drama, they like controversy. They like the things that are different." (08:01)

Jake explains that embracing a "villain" persona was a strategic move to gain visibility and align with the confrontational nature of boxing. This calculated controversy has significantly boosted his brand recognition and marketing efficiency.

Founding Better: Partnership with Joey Levy

The conversation shifts to Joey Levy, co-founder of Better, who elaborates on his decision to partner equally with Jake:

"I wanted to have equal amounts of equity unless there's some level of extenuating circumstances where that doesn't make sense." (09:55)

Joey underscores the importance of aligned incentives, ensuring both founders are equally invested in the company's success. This partnership is built on mutual ambition, complementary skill sets, and a shared vision of transforming the sports gaming industry.

Company Culture and Commitment

Jake discusses the deep commitment he and Joey have towards Better, symbolized by their tattoos:

"This is people's lives within the company. It's my life, it's Joey's life." (15:38)

Their dedication extends beyond business operations, fostering a culture where the company's mission is ingrained in every employee. This intense focus is pivotal in navigating the complexities of the gaming industry, including licensing and regulatory challenges.

Better's Unique Approach to Sports Gaming

Joey elaborates on why Better is necessary in the crowded sports gaming market:

"FanDuel and DraftKings don't have a brand awareness problem, but there's about a 95% incremental TAM opportunity because of product." (16:36)

Better aims to capture the untapped market of casual sports fans by offering intuitive and engaging gaming experiences. Their flagship product, Better Picks, launched in September 2023, has quickly become one of the fastest-growing offerings in the U.S. sports gaming industry.

Customer Acquisition Strategy and Media Integration

A significant portion of the discussion focuses on Better's innovative customer acquisition strategy, leveraging original content to reduce marketing costs:

"If we can have better brand awareness with original content, then we're going to be eons ahead of everyone else." (20:27)

By creating a robust media ecosystem that generates brand affinity, Better minimizes reliance on traditional, expensive marketing channels. This strategy not only lowers customer acquisition costs but also builds long-term loyalty and trust among users.

Financial Performance and Growth Projections

While maintaining confidentiality, Joey provides ballpark figures highlighting Better's impressive growth:

"We're possibly going to end the year at beyond 100 million revenue run rate." (25:04)

The company is on track to achieve a significant revenue milestone without needing additional capital, thanks to efficient customer acquisition and strong product-market fit.

Future Outlook and Scaling Potential

Joey and Jake discuss their ambitions to scale Better into a $10 billion, potentially $100 billion company. They believe the vast, untapped market offers exponential growth opportunities:

"The Robinhood of gambling will be significantly larger than Robinhood because there's an infinite amount of moments of sporting events to enable consumers to bet on." (27:51)

Their scalable business model, underpinned by foundational investments in technology and operations, positions Better for sustained growth and market dominance.

Personal Motivations and Shared Vision

Joey shares his personal journey and relentless drive to dominate the sports gaming category:

"My entire adult life has been spent in this category... the motivation is less financial now and more just about winning the category." (29:57)

Both founders are deeply committed to their mission, driven by a desire to innovate and lead rather than mere financial gain.

Conclusion

David Weisburd wraps up the episode by commending Jake and Joey for their visionary approach and unwavering dedication. He expresses eagerness to witness Better's continued ascent and anticipates their future successes.

"It's been an absolute honor and pleasure to talk to you guys." (31:43)

The episode highlights the synergy between Jake Paul's personal ambition and Joey Levy's strategic business acumen, painting a promising picture of Better's trajectory in the sports gaming industry.

Key Takeaways

• Ambition and Self-Belief: Jake Paul's drive stems from a deep-seated belief in his capabilities and a relentless pursuit of excellence.

• Strategic Marketing: Leveraging controversy and original content has enabled Better to achieve high brand affinity with lower marketing costs.

• Product Innovation: Better focuses on creating intuitive and engaging gaming experiences tailored for casual sports fans, addressing a significant market gap.

• Equitable Partnership: An equal equity split between founders ensures aligned incentives and a unified vision for the company's success.

• Scalability and Growth: With a robust customer acquisition strategy and scalable business model, Better is poised for substantial growth in the sports gaming market.

Notable Quotes with Timestamps:

• Jake Paul on challenges and self-belief: "[...] seeing what I can accomplish and how far I can push my own self. Becoming a world champion in the sport of boxing is my goal." (00:02)

• Jake Paul on creating a billion-dollar company: "Probably one of the hardest things to do in the world is to create a billion-dollar company. So it's one of my goals just to say that I was able to do it." (00:21)

• Jake Paul on psychedelics: "100%. No question about it." (06:30)

• Joey Levy on equal partnership: "I wanted to have equal amounts of equity unless there's some level of extenuating circumstances where that doesn't make sense." (09:55)

• Joey Levy on market opportunity: "FanDuel and DraftKings don't have a brand awareness problem, but there's about a 95% incremental TAM opportunity because of product." (16:36)

• Jake Paul on content strategy: "If we can have better brand awareness with original content, then we're going to be eons ahead of everyone else." (20:27)

• Joey Levy on scaling Better: "The Robinhood of gambling will be significantly larger than Robinhood because there's an infinite amount of moments of sporting events to enable consumers to bet on." (27:51)

Final Thoughts

This episode offers a deep dive into the mindsets and strategies of two ambitious entrepreneurs poised to disrupt the sports gaming industry. Jake Paul's unique blend of athletic discipline and marketing savvy, combined with Joey Levy's strategic business insights, positions Better as a formidable player with the potential to redefine sports gaming for millions of casual fans.