His sports betting app went from $0 to $10M ARR in a year—& to $150M ARR in 4. Here's how he did it. | Jon Robin, Founder of Dabble

Jon started a sports betting app 4 years ago-- now he does $150M in revenue and $1B in betting volume. AND he's profitable. In his first year alone , he did $10 million in revenue.

He took a year to build the app and as soon as he launched it, it took off. He did $10M in revenue in his first year.

Honestly, it sounds too easy. But the reason it worked is because, as he shares on the episode, he'd spent 7 years in research mode. He'd spent years building a marketing agency in the sports betting space. He not only understand the market, the customers and the product, he'd also built a distribution machine and knew exactly how to get in front of users.

Here's how it happened.

Why you should listen
- Why distribution is the difference between success and failure
- How spending a long time in research mode can make go-to-market much faster
- Why simple product difference can lead to huge differences in outcomes

Keywords
sports betting, Dabble, entrepreneurship, product-market fit, startup journey, social betting, technology, marketing, revenue growth, challenges

Timestamps

(00:00:00) Intro
(00:01:49) Getting Into Sports Betting
(00:04:22) Before Dabble
(00:08:08) Starting Dabble & First Steps
(00:10:55) The Initial Vision
(00:17:55) How Sports Betting Works
(00:24:26) Nearly Going Bankrupt
(00:27:53) Building the App
(00:31:23) Launching
(00:35:47) Revenue Timeline
(00:38:28) Finding Product Market Fit
(00:41:48) One Piece of Advice

Chapters

• 1:49 Getting Into Sports Betting
• 4:22 Before Dabble
• 8:08 Starting Dabble & First Steps
• 10:55 The Initial Vision
• 17:55 How Sports Betting Works
• 24:26 Nearly Going Bankrupt
• 27:53 Building the App
• 31:23 Launching
• 35:47 Revenue Timeline
• 38:28 Finding Product Market Fit
• 41:48 One Piece of Advice

Transcript

Pablo Srugo (00:00):

Jon has an absolutely amazing story. He started a sports betting app like four years ago, and without raising much money, like he's raised, you know, $20 million or so, he's grown it to $150 million in revenue in just four years. And actually he took a year to build the product. so really like three years after launch. In his first year alone, he did $10 million in revenue. And I'm talking revenue, I'm not talking like betting volume. He's actually, this year is gonna, he's gonna do over a billion dollars worth of bets on his app. And when I was talking to him, we were going back and forth. He actually said something interesting. He said that the reason that things worked out so well is because he spent so much time in research mode. We've spoken a lot about research mode in the past, and this is an excellent example of the way it really plays out, because from the outside looking in, it looks like it might look like things were really easy.

Pablo Srugo (00:47):

Like he just launched an app and it just blew up. The reality is he'd spent seven years before that in the sports betting space and a few years building a distribution machine. That meant that the second that he launched this app, there was an audience waiting for it. Think back to the last, few months, the last few years as you've been running the startup, how many different founders have helped you out? The reality is, founders help each other out. That's just who founders are. They pay it forward. So help a founder out, take literally five seconds, take your phone outta your pocket and hit five stars. Jon, welcome to the show.

Jon Robin (01:20):

Thanks Pablo. Thanks for having me.

Pablo Srugo (01:22):

Dude, so you built like a $150 million a year business in sports betting in four years, which is pretty mind blowing, like on its own. I mean, in any space, going from zero to 150 million in four years is just wild. But sports betting, I think I find particularly-, maybe it's just me, but there's just something fascinating, something kind of crazy about, you know, the whole thing. So I guess maybe let's start with that. Like how do you even get into building something in sports betting in the first place? 

Jon Robin (01:48):

Yeah,for sure. It's certainly wild space. For me, it was back when I first turned 18. So in Australia, you can start sports betting when you're 18. And pretty much most people open betting accounts on the 18th birthday. 

Pablo Srugo (2:05)

And what was your sport? Australian Rules is our biggest betting sport. Down under for sure. But I was more of a soccer fan growing up

Pablo Srugo (2:15) 

Soccer fan? okay cool

Jon Robin2:16) 

Yeah, I mean, that was my first exposure to it. And then I ended up studying accounting at university and sort of sports betting on the side. 

Pablo Srugo (02:26):

When was this, by the way? What year?

Jon Robin (02:28):

It was in 2013 that I started university. And yeah, it really started being a consumer of sports betting products. I didn't work on the business side until really? 2020 when we founded Dabble. A bit of time in between on my side hustle that was brought together, the consumer side of sports betting with some social media pages and websites.

Pablo Srugo (02:53):

How'd you do? I remember, man, I remember in, actually in university, I guess it would've been a little earlier, like I was there, ‘09  to 2013. I remember people talking about, about sports betting specifically, like soccer, sports betting. I remember one particular guy telling me like, oh dude, it's so easy, blah, blah. I'm always a skeptic. So I'm like, I, I don't know. <Laugh>, how did you do? Like do you, do you make money as a consumer in the sports betting world?

Jon Robin (03:13):

Oh, no. As a better, I was awful. There was no way I was making money. The one way that anyone can make money on sports betting is through the promotions, like the signup offers and the ongoing, like, you know, boosted odds, boosted prices or deposit matches. So if you're, if you're very disciplined and you're willing to grind it out for really not that large an amount of the money over time, you can certainly make a bit of side hustle from it. But longer term, beating the book is incredibly difficult. Only really only a few.

Pablo Srugo (03:50):

That's what it sounds like to me. I don't know if you've read Nate Silver's, you know, the 538 guy's new book, but he talks about sports vetting quite a bit and he talks about how, you know, he can make he make money or like his friends that can make money and all this stuff. I don't know, man. I mean, he's having a hard time calling election, so I don't know if he could, if he could forecast the game, 

Jon Robin (04:06):

not impossible for sure, but very, very difficult.

Pablo Srugo (04:11):

So, yeah. So maybe walk me through that, like, 'cause before you start Dabble, you had this sports betting company, you had a different company that you were running. Like what, what were, what were you working on? What were you doing?

Jon Robin (04:21):

Yeah, so when I was 18 I moved down from Aubrey, a small country town in Australia. I grew up in Melbourne, big city, to study at university. Started studying accounting and marketing when I was 19. So in my second year of university, I'd started playing around with setting up some Facebook pages and basically giving out tips on sports betting as, as we've discussed earlier I probably shouldn't have been giving out tips because I ended up not that good. But when I was giving out tips, I then learned about the world of affiliate marketing because if you're talking about sports and you're talking about tips or, picks on upcoming games, then it's pretty natural question who you're putting that bet on with. And I learned that you could partner with the betting companies and that they would pay you a commission if you brought your audience to them or referred the customer. It's like a CPA and trailing commission model.

Pablo Srugo (05:17):

And this is what, like, you're writing blogs, trying to rank them on Google? and then, and then you're like, oh, if you wanna place it ,go to DraftKings or go to whatever. is that more or less what you're doing or something else?

Jon Robin (05:26):

It was mostly social media. It was mostly Facebook and it was in the era where you could get organic traction on Facebook. Like you'd just post stuff and it would come into people's newsfeeds if other people liked it. Crazy concept now for Facebook in particular, maybe you're seeing some of that on like TikTok maybe still, but yeah, back-

Pablo Srugo (05:46):

Linkedin. Linkedin. It is still happening on LinkedIn. And you get organic. Yeah, yeah. But, I get the Facebook thing is definitely gone. <Laugh>.

Jon Robin (05:52):

Yeah. So yeah, I was just posting on Facebook really back in 20 20 14. 

Pablo Srugo (05:59):

Yeah. Like what are you posting on Facebook?

Jon Robin (06:00):

Yeah, there were essentially write-ups of, of how I saw a game or a series of games playing out. Like I'd be making predictions for this Saturday slate of English Premier League games and who I thought was gonna win and maybe how much by, and ultimately they would form into the, into betting picks.

Pablo Srugo (06:19):

And you had like what, a link? like, oh, if you wanna place bets, like go here.

Jon Robin (06:23):

Yeah, exactly. Right.

Pablo Srugo (06:24):

And did you promote these or was it purely organic?

Jon Robin (06:27):

So 2014, when I'm sort of 19 years old doing this in university, I really started out just doing it for fun, then found a business opportunity after about a year, maybe nine months. Then I was just doing it organically. It was really, it was really a side hustle through my accounting studies and then job that I started when I was maybe like 22. And it was really not until I was 23, 24 I quit the accounting job, went full time on this side hustle. And I was at that point that we started trying to scale it, which included, you know, promoting paid ads on Facebook and trying to build out some websites and getting a bit more professional about it. And, and that ultimately became the business that I mentioned that sort of proceeded Dabble from 28 for the couple of years prior to founding Dabble.

Pablo Srugo (07:24):

How big, yeah, like, so before you decide to kind of go in on Dabble in like 2020 or so, how big does this, does this kind of affiliate business get?

Jon Robin (07:34):

Yeah, so my brother quit his job as well in 2018 and between 2018 and 2020 running this business. So we're full-time on this and we hired a couple of staff that's probably doing a couple million dollars of revenue a year. And yeah, we were making some, some good money. It was completely bootstrapped you know, no, no funding to this point. So yeah, I don't know, maybe making a couple hundred thousand dollars a year from that.

Pablo Srugo (08:03):

So you're doing really well. What, what makes you decide to start Dabble?

Jon Robin (08:07):

It was 2020. It was the middle of the first Covid Lockdowns, our world in lockdown. One of our biggest clients. So we're still working as an affiliate marketing company here. And one of the biggest betting companies that we were sending our customers to and getting paid these commissions or, or CPA payments, they shut down during Covid or they got absorbed. It was two companies merged and the company we were working with no longer existed. So we had a pivot decision halfway through Covid lockdown. So my brother just had a baby as well. So yeah, it sounded like a great time to go all in on you know, parlaying our prior business into trying to build a betting app and take on these bookies that we'd previously been sending customers to.

Pablo Srugo (08:57):

Was it partially- your affiliate revenue took a hit during this time?so you kind of had more time to maybe start something new?

Jon Robin (09:04):

Yeah, we were forced to really like the combination of sports shutting down for a while and just this biggest client yeah, we, we had to make a move one way or another was either we're gonna get out of this sports betting landscape altogether and try something else, or yeah, double down and, and go all in on, on building our own product.

Pablo Srugo (09:23):

So what's your first step?

Jon Robin (09:25):

First step? I mean, my background's accounting. My brother's background is, you know, he'd been running a business prior to that, but really as a GM on the, on the business side. And we knew the product that we wanted. We had this vision for, for a socialized sports betting experience. 'cause that's the ecosystem we'd been living in for the last few years. We had no idea how to build it. So the first step is calling someone who'd done a bit of work with Scott and asking him he'd been a CTO at a, a bookmaker previously wasn't currently, but had previously Our first step was to call him and say, we want to do this thing. He'd previously thought that we might end up here. So it was kind of like a bit of us coming back to him and saying, yeah, I think you were right.

Jon Robin (10:17):

Like we should go and build our own app. But obviously we have no idea where to start, so we're gonna need you to come with us. And you know, he was in a, he was in a well paying job in the middle of a covid lockdown and he was like, that's, this is a crazy time to do it. I don't think I can <laugh>. But over a series of a couple of conversations, we yeah, somehow managed to get him across the line and yeah, he's still still leading our tech team today, four and a half years later.

Pablo Srugo (10:47):

What was it, like, what vision did you have? Like what does it mean when you say, you know, social betting app? Like what were some of the key things that you imagined building?

Jon Robin (10:54):

So sports betting, historically sports betting, is a very transactional experience. You find something you want to bet on, you go up to, you know, if you go back to the pre-internet days, you'd go up to a, a bookmaker at a, at a horse racing track in Australia and you'd give them $5 and you'd say, I wanna have $5 on this horse to win. And they'd give you a ticket. And if the bet won, you'd take your ticket back to the bookmaker and cash it out. And if the bet lost, you'd throw your ticket in the bin. And a lot of that experience has carried itself through to the sports betting apps that you see today. And it still feels like you're just, it's you as the better playing against the house and it feels like you're getting your virtual ticket. And if you bet wins, you go back to collect it and if it loses, you'd throw your phone in the bin.

Jon Robin (11:51):

And it didn't feel like sports betting had made it into the 2010s or the 2020s with a modernized version of what this user experience could be. So for us, that looks like bringing the best of social media. So when you download, Dabble and, and create an account, it feels just as much like you're signing up to Twitter as it does signing up to fans, your DraftKings, you create a profile, people can follow you, they can search for your profile on the app, you can follow other people. You can set it to private or public if you don't want to automatically have people able to see your bets, like you can hide them, but it also means that you can copy other people's bets. 'cause you'll see them in your feed if you are following them and you can comment on them. So it feels like this hybrid of still, if you wanna go and place a bet, the, the, the old way, you can still create your own bet, but if you want to follow someone else's or see what other people are betting on or talking about you can do that as well. So really bringing together the best parts of the traditional wage range experience. But then with what we were seeing in modern social media at that time,

Pablo Srugo (12:58):

I mean, you were early to this 'cause like there is a wave even outside of sport betting, like in stock picking, right? Of people sharing their portfolios and what they're buying, what stocks they're buying and then that kind of social aspect you know, kind of merging with, with finance where people just like to follow other people's trades and stuff like that. So I guess you're doing the same thing, but in sports betting.

Jon Robin (13:20):

Yeah, for sure. And eToro were definitely one of the apps that we were looking at in 2020 when we were building this. 'cause they'd already done it in sort of casual stock trading. And yeah, they, I think they even used maybe some of the same software, one of the same vendors that we ended up using. So they were absolutely one that we were looking at. But it's also, you look in most other industries and sectors and most of them have been socialized in some way or another. Like whether it's an exercise with like Strava or MapMyRun or, you know, pretty much any IP experience that we're having these days is some form of community or socialization. 

Pablo Srugo (14:07):

Yeah, that's true. I mean there's gotta be a reason, there's gotta be a reason for it. And I think Strava did it really well where it's about, there's a community piece, but there's like a com competition piece, you know, with, with your friends or whatever and it just makes running or cycling more fun. So here it was really like the following, you know, kind of get inspired about bets, follow people that you, you either know or like, you know, look up to or whatever it is. And so then you can kind of track what they're doing questions on- so okay, this is the vision. You're talking to your CTO friend, you know, finally you, you get him on board. What, what does it take, like if you built a normal app, I mean you gotta build whatever, like, you know, you gotta build software, UIs, whatever, and then you launch on the store and you get to go like, in this case what, because it's sports betting, is there legal or regulatory, regulatory pieces you need, obviously you need to partner with like bookmakers to get the odds. Like what are the, what are the infrastructure layers that you need beyond just the normal, you know, building an app park?

Jon Robin (15:03):

Yeah, I'd say there's, there's two things that make building a sports betting app really time consuming and expensive. The first is absolutely the legal and regulatory side. Like you can't publish an app into the app store unless you have met the local requirements in that region and in Australia that requirement is to have a bookmaker's license. And that license process took nine months and it's a, it's a whole bunch of prob background checks as well as some financial due diligence to your license as a bookmaker in Australia.

Pablo Srugo (15:41):

Is it expensive?

Jon Robin (15:41):

maybe $250,000 start to finish, including legal fees

Pablo Srugo (15:46):

And you just took that on? Or did you raise some money to do that?

Jon Robin (15:49):

Yeah, back in May, 2020, we were funding this, my brother and I, so the early cost of the license and the tech build and you know, the legal fees when you're engaging lawyers to help you with that license application process, by the end of the license application, like nine months later, we had to put up a bank guarantee and by that point we'd raised funding. So a bit of both. But yeah, we funded the initial costs there. And yeah, the other part to the, to the build as well as the reg regulatory challenges in actually publishing your app is the sports bookmaking platform that underpins the bets. Like actually accepting and resulting the bets and particularly the risk management because you know, as soon as you launch this thing, you are gonna get hundreds if not thousands of people that are probably like me when I was 18 or 19 trying to find new apps that dunno what they're doing yet and haven't figured out their promotional management or haven't figured out their odds and maybe they're putting up some wrong prices. So that's a battle that you've gotta be ready for before you go live.

Pablo Srugo (16:58):

I think that's the, one of the most fascinating pieces of-, we'll get into launching and, and getting customers, which is always interesting. But I think when it comes to sports betting, the most fascinating piece for me is everything around getting the right- like take a game, right? Like any game, like whatever, you know, whether it's let's say soccer game, you know, Argentina's playing Brazil, like just really simple, okay? And you've gotta figure out what the odds, what the payouts are. And then you've gotta like balance obviously the inflows as inflows come in. Maybe you have to adjust those odds to make sure that you like, have enough money on both sides. I, I mean I only know intuitively how it might work. I don't actually know at all how it works. So like, I'm curious, how do you, how do you set that up and are you doing that or do you just, are you more like the marketing and the UI and you're working with like odds makers that just give you those numbers and, and somehow take on the risk themselves? Like how does it all play out?

Jon Robin (17:55):

Yeah, every, every betting operator would take a slightly different approach. There are a few data providers that would be providing their data, which you turn data into probabilities, like expected outcomes and probabilities are just the inverse of odds. So there'd be a few big data providers and a couple of them public companies like genius and Sports Radar, just, they're just a couple of examples that would be integrated with a lot of betting companies around the world. And then there's a whole long list of midsize and, and smaller data providers as well that might specialize in, say, providing data on Australian rules football, which is a relatively small sport on the global stage, but a really important sport in the Australian market. So Dabble’s integrated with, by now we integrated maybe like six or seven data providers that give us data on different sports around the world and service our different apps.

Jon Robin (18:57):

'Cause It is a different app that we run in Australia compared to the US and actually a different product as well. And then once you've got the data coming in, you, you set the, you set the prices and as you say, you follow the money. If there's a lot of money coming for certain players or certain match outcomes, then you will move the prices. A lot of the time we, a smaller operator like Dabble, would be looking at what the market is doing as well as what our own customers are doing. Like we might not just move because Pablo, you've come and put a bigger bet on Argentina, but if Pinnacle who are one of the, the biggest sharpest book makers in the world, if they're getting a lot of money on Argentina, then we're probably gonna move the price on how do you,

Pablo Srugo (19:43):

 so like at scale, today I get it, like it's kind of not as hard. You have more data, you have more volume, you have more liquidity, you have more people to react, you've got a balance sheet. Like there's just a lot of things you can do to just make things work. But like, go back to the beginning when you are gonna launch and you're gonna take like your first handful of bets. like just maybe simplify that for me, right? Like what data are you getting? How, how can you build confidence in your own odds and what risk are you taking at the end of the day? Like how do you minimize risk so that you don't have, 'cause at the end of the day, like odds are odds. I mean, you know, any game can get lopsided and all of a sudden like, you know, something that was 90% supposed to happen, you get the 10% and now like you've got all these payouts you gotta manage, like how do you set things up? So none of these things are existential for you in those early days?

Jon Robin (20:35):

Yeah, for sure. On the, on the integration that we'd be running with these data providers, it would be, would be tapped into an API and it would be completely automated that, that our prices that we're offering the customer would change as soon as they on their end have, have updated a data point that they're providing. And, and that may be an actual price in itself or it might be a probability that we're turning into a price, but they're the ones that are, that are setting the live price. And we're just taking it when we're launching back in 2021. So there’s very little manually done on our side. So there's a lot of reliance on that, on those providers too, for them to be providing accurate prices. If you fast forward to today, we're doing a bit more in-house and if you look at someone like a Pinnacle or BET 365, they're probably doing a lot in-house.

Jon Robin (21:28):

But yeah, in 2021 we're heavily reliant on external vendors and we're hoping that they're getting their prices right. And ultimately a lot of these contracts do end up being revenue share based. So they're, they're aligned to, to get their prices right. And there's also the margin built in like the house has an edge, so you don't need to be slightly wrong to be exposed, you need to be fairly wrong to be exposed. Like you need to be more wrong than the margin, the hedge that you put in there. But to your point, when you're only got a small number of customers, you are naturally gonna be more exposed to unfavorable outcomes. 

Pablo Srugo (22:08):

I mean, that's what I'm trying to get at. Like, and I just wanna know if this is correct, if you again take, I don't know, Argentina playing like Canada, you know what I mean, where it's like laws are gonna be crazy lopsided 'cause there's just no way, there's no way Canada wins. But when you launch and you don't have a lot of liquidity, are you taking on that risk and is it like, I would think existential?in the weird case that that day Canada wins one nothing and this was you know, heavy, heavy bats, whatever, like, you know what I mean? And now you've got like, is that, is that a real thing or are you protected against that somehow?

Jon Robin (22:41):

It definitely is. It definitely is a real thing. I'll touch on two things. The first thing is staking and limiting the amounts that people can actually bet. So especially early days, but really even today, like Daab was a recreational betting product. We've designed to be be attractive to the type of customer that wants to place a $5 and $10 and $20 bet. But when we're launching we weren't letting people come in and bet $5,000 at a time, $10,000 at a time. So the book was only building up a slow, slowly to that point of exposure, which certainly helps manage it. And then the second thing that I'll touch on is that the volume of sports events on a daily basis, and especially in horse racing or greyhound racing, which are popular in Australia, the volume per day, the amount of things that you can bet on, like it's not just Argentina to win. You can bet on messi to score, you can bet on how much they're gonna win by. You can bet on how many goals there are gonna be. You're gonna can bet on how many corners there are gonna be yellow cards, tacklers, completed passes. So the diversification that comes through just the sheer depth of things that you can bet on.

Pablo Srugo (23:50):

We have tens of thousands of people who have followed the show. Are you one of those people? You wanna be a part of the group? You wanna be a part of those tens of thousands of followers. So hit the follow button.

 I see. And you're making a margin on all those things. So like one outlier event, you've got other things that are gonna make up for it. Yeah,

Jon Robin (24:07):

Absolutely. there'd be thousands of single events that are being bet on every single day, even when you're first launching a book. But, but absolutely you need to get a point to a point of scale as quickly as you can that you, your book is completely diversified and you're not having these outlier skewed days. I do have a story on that front though, where it can get wrong when you're trying to bring together social media with sports betting. And that's where we had on one of our relatively early big horse racing days, the Spring Carnival in Australia runs from September to November and we'd launched in August, so it was, it was maybe October and we'd, we'd got our first couple of thousand customers on the app and there was this popular bet that was landing in everyone's feeds and, and everyone kept copying it.

Jon Robin (24:58):

And it was seven legs. The odds were 300. So if you put down 10, you win 3000. And we had 1500 people copy this bet. So they're not, they're not, you know, seeing these seven things and thinking like, what's the chance of all them happening? Do I like 'em all? They're just sitting there being like, oh, this big account has put this, this parlay on and it's, it's gonna win me 1500 bucks. So I put $5 down, one, I'm gonna jump on the back of it and they can see a thousand people are already on it. So 1500 copies price is $300. That means the chance of this thing coming off is like 0.1%, incredibly unlikely. But if it cuts off,, it's not good. 'cause So many people are on this really unlikely outcome.

Jon Robin (25:48):

And this sort of stuff was maybe happening in the background that we didn't really know about, but it had just never, it had never hit, it had never gone off. Anyway, the first five legs of this thing win, it's like, I think it's mostly horses, maybe a bit of like Australian rules. And we're sitting there on Saturday afternoon with 1500 people, five legs through this, this seven leg selection. And we're trying to do the maths 'cause the tools aren't great. Like we're only just launched, we're trying to figure out how much is gonna, how much is gonna go off if, if this thing wins and we finally get to the bottom of it and it's $3 million that it's gonna, oh my god business. If 1500 people win this 300 debt and there's like calls going around from our trading team to our CEO to, to us, and I think even to our investors at this point 'cause $3 million liability.

Jon Robin (26:45):

We look at a bank balance like $2 million in the bank <laugh>. So to your question on existential, this was like, this was really up there and, and you don't know how it's gonna play out. Like, you know, they might win the $3 million spread over the 1500 customers. They might keep playing and, and they might not withdraw 3 million, but it's a scary position to be in that we're exposed for 3 million and we don't have that much money in the bank. That one was pretty scary. Thankfully the sixth leg lost and the seventh leg actually won. But, yeah, we got outta jail.

Pablo Srugo (27:18):

God, see that's the thing. That's, that those are like the, the specific kind of staring kind of at the edge moments that, that, you know, you have when, when you're talking about handling money and, and bets that, you know, obviously normal consumer app just doesn't have to deal with worst case is like you have a lot of churn on one day, like that's your worst case. It's not like, oh my god, a $3 million payout tomorrow. Yeah,

Jon Robin (27:42):

Absolutely.

Pablo Srugo (27:43):

And how long, like how long did it take to, you know, from the time that you decide to do this in early, your mid 2020, like when do you launch, how long did it take to build the app?

Jon Robin (27:52):

Yeah, May, 2020, we started the build, we hired Scott or we hired our first developer. Scott had them come on board. We probably thought we were looking at, I mean there's a decision here in, in maybe June that's, that's the biggest decision that we're ever gonna make that we probably didn't realize at the time. And that's to build the platform in-house rather than using vendors. And this is the platform. So like the processing and paying out of bets and the player account management rather than using vendors or, or getting a white label off the shelf. Scott made that decision and you know, we were just sort of going along, we say we're like, I dunno, they sound pretty similar <laugh>. But it turns out it's a pretty big decision and we thought, like from Dave and I going into it, that it might take us three or four months to get like an MVP to market.

Jon Robin (28:49):

Scott was a bit more realistic, but still like on the, on the optimistic start and he was maybe closer to six it got to early 2021, like maybe March, 2021. So it's now nine months in. We still don't have a prototype <laugh>. Like we still don't have a working functional version of the app that we can share with potential investors. And we're trying to do a seed round and they're like, you're nine months in, you know, you're saying that you're gonna go to market in three months, but you don't have a prototype of the app <laugh>. It ultimately ended up, that conversation ended up getting pushed back sort of every, every month to the point that we're 12 months in, we did the round, maybe a bit less low valuation than we thought we would.

Pablo Srugo (29:35):

How much did you raise?

Jon Robin (29:37):

We raised 1.5 at about 7 million pre-money. Still pretty good pre-revenue all things considered. But, you know, we were pretty excited, especially with our backgrounds in the marketing side and, and this differentiated product. So we probably thought it was more, I guess that's- 

Pablo Srugo (29:53):

And what was taking, what, what was taking so long by the way, to, to build a product?

Jon Robin (29:57):

It mostly in the end came down to the requirements to get the license approved. So the license to, to run a bookmaker moved from conditional to, to fully approved. And it was the, the, the smallest things that you could possibly think of. Like, we need to provide a statement to our customers once a month. And that statement has to be in 24 hour time, not 12 hour time. And you know, the dollar symbol needs to be shown in this part of the statement, but it doesn't need to be shown in this part of the statement and you need to go to four decimal places in this. And just things like that we were going back and forth for, for quite a few months with the regulator. And we were also testing with family and friends as well and there were things that weren't working. Like it's a pretty complex app by this point with the front end. It's very social media heavy in the back end. It's got to accept and, and pay out these bets. Ended up being about 15 months, so July, July, 2021 from May, 2020.

Pablo Srugo (31:08):

And so, and walk me through, let's, let's go through some numbers like you, you launched in July, 2021. What's the reaction? Like, how many like downloads do you get? How much betting volume do you get? Like how, how quickly do things take off? 

Jon Robin (31:22):

Yeah, We had two weeks where we hadn't been approved by the app store yet, so we could take bets, but it was only a few that came through the test flat that you could actually get onto the app. And in those two weeks we, I mean it was really just like beta testing, like a closed beta and we're inviting people to, to bring their mates on board. And in that period we found a lot of bugs, tried to quickly fix 'em. You realize that once you're operational you lose the ability to build new features. So you go into sort of operational mode and at that point, you know, we're talking like 10 or 20 people betting on the app every day. And you may be taking a couple of thousand dollars worth of deposits every day and you've probably taken a few hundred bets and you're hoping that things work.

Jon Robin (32:16):

You're hoping that the results payout correctly and, and that the app doesn't break. And for the most part it held up when we went live into the app store, that was, when the floodgates opened. we had no, no idea what was coming and we really had no idea how to know what was coming. 'cause None of us had done this before. And there really is a swarm of new activity. And when I say that maybe like a couple of thousand customers that they just wait for the, for the new betting apps to open because they see it as an opportunity, not only an opportunity to sign up and maybe get another like new welcome bonus, but an opportunity to potentially exploit a company that hasn't quite figured out all of their systems. So-

Pablo Srugo (33:03):

Did you do a big, like launch a big pr Like how did these 2000 even know you existed?

Jon Robin (33:08):

We leveraged the marketing company that I mentioned, that my brother and I had also started from 2018 to 2020. That business was still running independently. We'd stepped away obviously, and it still does run today independently. We had a commercial arrangement with them. It was a discount, it was a favorable commercial arrangement like below market rates. So we were leaning on them. They had an existing database that they would be telling about and that that's how we got most of the first couple thousand customers and that

Pablo Srugo (33:39):

So. they literally reached, like, they had emails basically of people that are into sports betting and they reached out? Yeah,

Jon Robin (33:45):

Well they posted on, on their social media pages. So they had followings of a few hundred thousand people. So they'd just find little cohorts because we'd sort of said to them like, we don't, don't flood us, we just wanna take them slowly. But then people start talking about it and they start telling them, make, there's a new app to try and, and there is this strong word of mouth. It's a double-edged sword. Like that's great, isn't it? That people are trying to get their friends to come and try out the app. But also if you're taking people's money and you're taking people's bets and you're not quite ready or that's not quite ready, it can be pretty scary as well. So it is, it's a blessing and a curse.

Pablo Srugo (34:20):

And so, and so what happens from there? Like you get, you get a few thousand, like at the end of ‘21. What, what kind of what kind of betting volume, what kind of revenues are you doing? 

Jon Robin (34:29):

So. we launched late July. The biggest time on the sporting calendar in Australia is September until November. It's both the spring race and Carnival, which is our big horse racing season, but it's also the Australian Rules Football and our National National Rugby League, which are our two biggest sports, the FL and NRL. it's their finals. It's their playoffs. So September is a really big month on the sporting calendar and it meant that, and by the way, we thought we'd be launching in March and building up slowly for six months to then be ready for this period. It turned out we had a couple of weeks to get ready, but it meant that we didn't really have too much choice about whether to be ready or not. And I think by the end of 2021, so say the first four full months of operating, we'd had probably 50,000 customers that had come and registered an account on the app. That doesn't necessarily mean they deposited and, and played with their own money, maybe 20 or 30,000 that, that were actually betting. But it all happened pretty quickly.

Pablo Srugo (35:39):

And so like, 'cause today you're at 150 top line revenue, right? So what did that, what did that look like? Like end of ‘21, ‘22, ‘23 and ‘24

Jon Robin (35:47):

Top line? I think our first full year, we ran like July to June financial year. So we pretty much had one full financial year from our launch in July. We reported about $10 million revenue top line. So revenue for us is the difference between the bets that we've taken and, and the payouts we've made from those bets. So if you're making $10 million revenue may be taking a hundred million dollars worth of bets paying out $90 million worth of winning bets. And the $10 million difference is your revenue. That was, that was 2020. That was FY 2021. Oh, FY 2022, sorry. July 21 to June 22. Our second year was about $30 million. Third full year we just completed was about $75 million.

Pablo Srugo (36:45):

And this year, 150. And you're doing how much? Like so for  150 you're probably doing what, like a billion and a half of betting volume?

Jon Robin (36:50):

Yeah, exactly. Yeah, to the run rate point. The 150 question the, the big spike in our revenue from, I guess from the 30 to the 75 last year was the launch into the US and from the 75 to the, we'll probably report, yeah, 150 to 175 in the year that we're currently in. That's the US launch. They're, they're different products. They're quite different. They are actually really different businesses, even different legal and regulatory frameworks. It's actually a daily fantasy sports app in the US. It's not a sports betting app. And they do have different customer metrics. So from a volume perspective, the margin is higher in the US so we're not quite taking the same turnover like transactional volume. But in rough numbers it's probably 1 billion or, or 1.2 billion in transactions. So bets and daily fantasy entries for the $150 million in revenue.

Pablo Srugo (37:53):

Crazy. Well listen man, we'll stop it there. I mean, the net for me the punchline is like from three years or so, three and a half years after launch from zero to 150 million top line billion dollar in betting volume with, like you mentioned, 140 employees you were telling me earlier and effectively cash flow break even. So you just built a spectacular business in a very short amount of time. Let me end with the last two questions we always end on. Maybe the first question I think frankly is kind of obvious for you, but, but I'll ask it anyways, like, when did you know that you had true product market fit?

Jon Robin (38:27):

Yeah, for me, <Laugh>, I was thinking about this one before I came on and I was reflecting on your, the first step in your five steps to product market fear. well, the research phase for me, I would say I was in the research phase for seven years from from age 19 to, to age 26. When we launched Dabble, and there's a marker for sure in really that first two months. We had to either have product market fit or we would've been shutting down very quickly after a long buildup of 15 months to get live. That's the first sign. But for me, true product market fit can only really come in this space when the unit economics stack up and the customers and the lifetime value of the customer look like they're gonna be higher than the customer acquisition cost.

Jon Robin (39:23):

And I would say we truly found that about 12 months in that, that we could actually sit there and say that this product is resonating. There is a large audience that's gonna consume it, and it is going to, it does have the potential to turn into a real profitable business because this, this industry probably more than most can be really propped out by, by pouring money into marketing and pouring money into bonuses and generosity. 'cause You're dealing with people's money. If you're giving them money it's easy to, to prop up their revenue. So yeah, it was, it really took us 12 months I'd say, to get to that point that we could, that we could really show that that customers were actually sticking around. They wanted these experiences that we were giving. They wanted these features. And that was an exciting time for sure.

Pablo Srugo (40:14):

But  it's a good point on around the seven years of research because I think like the maybe naive way to look at it, and even maybe my reflexive first look at it was like, wow, like this is so, like he, he had a really easy, like, you know, you launch a product and you get thousands of people using it right away. I think that makes just about any founder jealous. And then obviously like the amount of growth you've had since then is just off the charts. But it's true. I mean you've been in sports betting for seven years and if you want to use the cliche term, like your unfair advantage was the fact that you would build a marketing engine for sports vetting. Like you had done that, you know, started off on the side, built it into a full a full business.

Pablo Srugo (40:52):

But that was like, I mean, that was something that it wasn't easy to build. It didn't just happen overnight. It was many years in the making. And, and so by the time you go out and launch a sports betting product, I think you have two things. Like one is a very clear understanding of what's missing in the sports betting market, what could be different. And that vision you mentioned around sports betting, social sports betting. And the second thing you had was distribution, which is like, that's the thing, like at the end of the day, distribution is- you know, product is something, it's hard to build a great product, don't get me wrong. But, you know, it's, it's a lot more common. The thing that most people miss is go-to-market, it's distribution, it's a way to get in front of customers and you had that. And so I think those are two things that took you a long time to build. And because you had them, when you did launch, things were just a lot easier than they would've been for, you know, a new founder that just happened to have a sports betting app idea and put it up on the app store. 

Jon Robin (41:48):

Yeah, that's exactly right. By the time we were ready to go live, you, you had to be ready to go live. And that's, whether that's this seven years of building a marketing engine or the 15 months of building the technology, you have to be ready. 'cause If you're not, then then you're running into a lot of trouble. But don't get me wrong, like August 2021, I was still texting every new customer that signed off, I was calling people that would leave a negative app store review. It was still, it was still a grind to try and prove it out to those early customers. But once it gets going yeah, it, it's sort of no looking back, you're on the rollercoaster.

Pablo Srugo (42:32):

And then last question, if you could go back maybe to that like 2020 when you were new to like the tech startup world with one piece of advice for yourself based on, you know, everything you've learned over the last four years, what might that be?

Jon Robin (42:48):

I think for me it all comes down to curiosity and problem solving. Like, I am relentless in finding an answer and figuring something out. I have an action bias by nature. I am much more of a doer than a planner and a talker. But that looks like, yeah, whether it's, you know, getting into the into the app and testing every, every single feature that we're building and, and every single iteration of what a user journey can have, or whether it's sitting in the, the marketing channels trying to figure out why our CPAs aren't where we expect them to be. Yeah, for me it's just, it's, it's that relentless and like undoing curiosity and, and will, will to solve problems. I just don't take no for an answer. I don't accept that something can't be done. And, it drives people crazy. <Laugh> for sure. But, ultimately, it gets you to the point that you wanna get to and, and, and hopefully putting good features in front of your customers. Perfect.

Pablo Srugo (44:01):

Well Jon it was great having you on the show, man.

Jon Robin (44:03):

Thanks Pablo I really appreciate your time and yeah, it was great to have a chat.

Pablo Srugo (44:07):

85% of people who listen to the show just started listening to it this year. You're probably one of those people. In fact, the odds are 85%, guess what, you need to go back 'cause there are over a hundred other episodes that you need to check out that are just as good if not better than this one. Don't miss out.