Greg Kajewski & James Seils join Ryan Knuppel on episode 129 of the Knup Sports Show. These two are the co-founders of BettorEdge and discuss their new social media meets betting marketplace concept that is growing rapidly in the US.
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Show notes from BettorEdge Interview
Ryan Knuppel:
All right. Welcome everybody to episode 129 of the Knup Sports Show. Man, we are at 129 episodes already. That’s crazy. Super excited for today’s show. Today, I am joined by a couple of special guests from BettorEdge. I have Greg Kajewski and I have James Seils with us.
Ryan Knuppel:
James, are you with me? Greg, are you with me? Good to see you guys.
James Seils:
Yeah. Good to see you.
Greg Kajewski:
Good to see you as well.
James Seils:
Excited to be on.
Ryan Knuppel:
Absolutely! How are you guys doing? You guys hanging in there? Life treating you well up there in Minneapolis, Minnesota?
Greg Kajewski:
Yeah, absolutely. So James and I both had kids this last year, so we’ve been busy with raising kids during kind of last year of chaotic-ness. And it’s been a good distraction as we build a business and get into it. So, it’s been exciting.
Ryan Knuppel:
I hear you. Kids are always at distraction, right? They’re supposed to be a good distraction. Sometimes they’re bad distraction, but who knows? They are, at least, a distraction.
Ryan Knuppel:
Hey, I’m super excited to jump in and hear a little bit about what you guys have going on with BettorEdge, But first I want to hear a little bit of background about you guys in general.
Ryan Knuppel:
So James, why don’t you first tell me a little bit about yourself and I guess, how you got into the sports betting industry?
James Seils:
Yeah, sure. So, I could probably cover even Greg a little bit here. So we have a pretty unique path to get into sports betting. We’re both accountants. We went to school for accounting at two different schools in Iowa. We met at our first job, which was PWC, a public accounting firm. Started on the first day, same job, same salary. We went down to Dallas together for training and became really close. And really since then, we’ve always had this entrepreneurial bug where we wanted to start our own thing, but we never really had the right idea, which made us end up staying in careers for almost a decade. So, Greg left and joined a startup at the time, a financial planning startup, while I stayed for almost nine years doing IT risk and compliance and then gradually moving into more modern IT scaling solutions, like automated solutions, data analytics solutions, specifically within the retail and financial services industry.
James Seils:
But we’ve always been, at least I can speak for myself, just a massive sports fan. So we love playing sports, watching sports. And so, obviously when you watch sports and you actually have a little bit at stake on the side from a betting standpoint or DFS, it just adds to the excitement of the game. And so from getting into the industry, we definitely started as consumers. And then I started taking what I was learning on my job, which was really scalable data solutions, machine learning, some of those cool things, taking it into my passion, which was sports betting. So building models, trying to get better at sports betting. And then we did a bunch of games with my college friends around fantasy-type stuff that we created, and spreadsheets and all of that. So I started taking those spreadsheets, moving them into web apps and mobile apps and subscribing to data providers or scraping data.
James Seils:
And then eventually one of the data providers actually reached out to me and asked to join an innovation challenge. And so then I had this idea of the initial BettorEdge, which was really just an exchange. And I went to Greg and said, “Hey, I think this could be our ticket back into this entrepreneurial mindset,” and pitched it to Greg. He changed it a lot, made it a lot better. We went and actually pitched it at the innovation challenge, and won. And I remember we left and if you know Minneapolis, it’s a big brewery scene. So a lot of beer. So we, we went to a brewery right after and we decided right then and there, I can remember the table, “Are we going to actually do something with this? Or we’re just going to say, ‘This was a cool idea,’ whatnot?” And so right then and there we decided, “Yes, we’re going to make it a company.”
James Seils:
We went off for the next year and a half, nights and weekends during our real job building the building blocks of the company, the legal docs, getting all of our ducks in a row. And then I was building the MVP of the product up until October when I officially joined full-time in 2020, and just pushing and launching a product here in 2021. So that’s really how I got back in the business. I know Greg, when he ventured off of PWC, he did quite a lot of stuff on the business side that was really helpful. And I’ll let him talk about that.
Ryan Knuppel:
Man, that’s awesome. Thanks for sharing all that, James. That’s an amazing kind of grassroots start, right? That’s pretty cool to hear. So Greg, yeah. Anything to expand? Anything to say from your side of things?
Greg Kajewski:
Yeah. I mean, I think James and I have always kind of tossed around ideas where we say, “Hey, this could be an amazing product or amazing idea.” And James builds a prototype. We look at it and say, “Hey, this was good, but so-and-so is doing this, et cetera.” And I think, being at a startup that we were able to take public for quite a few years, it gave me the ability to showcase: How do you build a business around this? And then we’re able to take the learnings from that and apply them to BettorEdge in the sports space. So we’re excited about where we’re at, getting a lot of traction. And obviously I think we have a fun future ahead as we kind of bring in community, bring in partnerships in a lot of different areas to really take this to the next level. Should be exciting.
Ryan Knuppel:
Cool. Very cool. So yeah, let’s dive right in to BettorEdge. And some of the audience that’s watching or listening may still be asking, they’re probably going out and checking out right now, what BettorEdge is. But why don’t you give some of the audience that may not know, just give us the 1000-foot view of BettorEdge and what it is?
Greg Kajewski:
Yeah, definitely. So at its core, it’s an online social marketplace. And that’s a really interesting way to put it because think of a social platform where you may go out and you find information. You may go to Twitter, you may go to Instagram, you may go to podcasts. It’s a very community-based way to get information. When people think about sports betting they think about the next part of it. They think about: Where do you place that transaction? Do you go out to a DFS site? Do you go out to an operator, et cetera? And then after you do that transaction, how do you learn from that information? Do you look to put it into a tracking tool? Do you have to put it into Excel? Do you model the data, et cetera?
Greg Kajewski:
And I think what BettorEdge is is that online social marketplace, gives us the opportunity to bring all of those pieces and components together so that you can interact with sports fans. You can talk about, “Do I think so-and-so team’s going to win today or lose today?” And you can get the opinions of others, but then place the transaction right there at no commission. So individuals can actually bet into a marketplace without having any fees that you typically see on a lot of other platforms as well.
Ryan Knuppel:
That’s really cool. Yeah. And I mean, putting all that together, we all know social media is so powerful and it’s the future that we’re… I mean, we’re already in it, but it’s just going to continue to grow. So I’m assuming, putting that with the sports betting and in the marketplace and all that together is quite the challenge for you guys. Maybe you could expand a little bit on, I guess, where you’re at currently and maybe some of the challenges you guys have had to get to where you’re at currently.
Greg Kajewski:
Yeah. I think if you look at our first focus, it was really getting the marketplace there, our marketplace functionality, making sure that you have a great experience in no-commission betting. And then on top of that, we’ve continued to enhance our social platform. So we’ve brought in UX experts to really help us take it from MVP to the next level. So you can go in there, you can place gifs, you can comment, you can tag positions, you can do all kinds of really cool things that you’d expect.
Greg Kajewski:
So we’re continually maturing stuff as well. So if you look at the next phase would be our competition. So you can actually go out and compete with your old group of college friends, or compete with coworkers, the same kind of way that you do in a fantasy league in the NFL or during March madness, you can do that year round via our competition. So where we’re at is we’re constantly kind of innovating, making it more user-friendly, adding new features, taking feedback. I think a big part of our social platform is the community that we have and making sure that our users are very active, involved, as part of helping us build a better product and a better platform.
Ryan Knuppel:
If you look at you guys’ website and some of the marketing, you make it very clear that you’re not a sports book. This is different than a sports book. Explain to the audience, this is still a legal form of sports betting at its core, though, correct? Maybe James, you can explain to me a little bit about that. You’re not a sports book, but it is legal in the US? Is that correct?
Greg Kajewski:
Yeah, for sure. When you think of your traditional sports book, right? You go and you give them 10 bucks. They’re handling the risks. They’re keeping sides. They’re trying to figure out which side is going to be in the money. Let’s open up the other side, changed the price. They’re owning all of that price movement. They’re owning the line movement, everything, all while actually taking a fee from the transaction. So you give them 10 bucks, even in an even money bet you’re not going to get 10 bucks back. You’re going to get $9.1o or whatever the line is, right? They take that sort of middle fee. We operate much like a stock market. So if you like the Cardinals tonight and say, they’re playing the Astros or something. You go and you put out there an order. Just like if you wanted to buy Apple stock for a thousand bucks, you’d go and you’d place out the order for, “I want to buy apple for a thousand.” You would say, “I want to buy the Cardinals at even money. So minus 100.”
Greg Kajewski:
Somewhere else, someone in the world wants the Astros, they want them at minus 100 as well. Or maybe they want them even cheaper. And so we handle just the price matching and the algorithms to actually determine: Is it cheaper? How much can fulfill for us to still stay even? So we never actually take a single dime of that transaction. We never hold risk. We don’t do any of that. All of the risk is held by the consumers on our platform and we don’t take any fees from the actual transactions themselves. And so this is actually, and we talked about the challenges a little bit and… Well, we feel our biggest differentiator in the industry, and where we have innovated the most, is not necessarily new bet types or new products or anything like that. There’s always been social media sites. There’s DFS. You can now make a competition around literally anything in DFS, right? It’s not around the bet types, it’s none of that.
Greg Kajewski:
Where we feel we are innovating is on the business model and revenue models. And when I always relate it to my job back in the day was, you look at the financial services industry, and we look at: 10 years ago, if you wanted to buy and sell a stock, it operated very much like buying and selling a sports bet because you went to Schwab or wherever your online broker was and they literally said, “Okay, you can buy that but we are going to charge you $8 commission.” Well then companies like Robinhood came out and they built on a lean tech stack. They were able to be more scalable on a smaller dollar. So they decided, “Well, let’s take that commission out,” really originally as a user acquisition strategy. But now they can make money in different ways.
Greg Kajewski:
And if you buy and sell stock today, you never see that fee. And they’ve really changed the industry. So that’s really been our goal and what our differentiator is. I think one of the challenges that we have today is: There’s still a difference between that fee in sports betting, and what that fee was when you’re buying and selling a stock. And that is: Sports betting has been brilliant about hiding it. So if you’re a new sports bettor, we look at the US market, right? You’re coming on, all you see is -110, -110. You don’t know that there is a fee built into there unless you were actually educated on it or take the time to really understand it.
Greg Kajewski:
And it gets even worse when you look at some of the more progressive sports books that are kicking macro influencers out there, that are pushing these huge parlay bets, right? They’re saying, “Bet 10 to win 200.” Well, what we’re seeing now is those fees and holds are more like 20%, but they’re brilliantly marketed.
Greg Kajewski:
And so our biggest challenge is we need to educate people that this fee is actually killing their bottom lines. And it’s all going to the lines of the operators and people that are kicking out the lines. And so on our platform, we don’t set lines. We don’t do any of that. All of the lines are moved by the market. So if you like the Cardinals at a certain price, you set it out there. Someone likes the Astros at a different price. If they’re not going to match up, they sit out there and you create sort of this bid-ask spread just like in a stock market. And eventually when they match, then they’ll trade and the market moves just like that. And we don’t take that fee. So you see the bottom line go back to the consumer, versus into the operator’s pocket.
Ryan Knuppel:
Really smart. Really awesome. And I don’t think anybody’s backing the Cardinals right now. Just as an FYI. I’m a Cardinals fan and nobody’s backing the Cardinals right now. So it’s been a disaster of a season so far.
Greg Kajewski:
As Twins fans who were selected to win the AL Central and now aren’t even going to win 60 games.
Ryan Knuppel:
You can relate. You can relate to the pain, the pain. But anyway, so back to it. So tell me a little bit about the numbers that you guys are seeing. I mean, number of users, where are you at in terms of growth? I mean, is BettorEdge getting used? I’m assuming it is. Just give us a little, I guess, humble brag about where you guys are at and where you guys stand currently with the platform.
James Seils:
Yeah. I can take that. So we started marketing right before the Super Bowl this year. We saw a massive spike of sign-ups. We really specifically focused in our backyard here in Minnesota. So really our strategy has been: Let’s win our backyard, let’s grow nationally, and eventually scale globally. And so we’ve really only focused on our backyard, and we’ve grown to a really big base here in Minnesota. We are just now starting to leak out into other states, and we want to target the Midwest because as an exchange, you’re most successful when you have a lot of volume on individual events. And so if we get the Vikings playing the Bears, we want Chicago people on, we want Minnesota people on, because that means you’re going to have a successful event right there.
James Seils:
And so that’s been our strategy. And, right now from a digital marketing standpoint, it’s really a lot of AB testing for an eventual big push prior to football season. But yeah, we are definitely getting used. You come on, your orders will be fulfilled. You’re going to be able to bet just like you would normally want to. But yeah, that’s really where we’re at and where we’re going here in the future.
Greg Kajewski:
And I think I’m a bit more of a numbers guy. So if you jump onto our platform, the cool part of our social feed is you can see, every minute, every two minutes, et cetera, you can see who’s posting, what it is they have. So you can see that activity transparently out there as well, which I think is really cool.
Greg Kajewski:
And then one of the big pieces that you have of kind of what we have from a gross standpoint, I think like a lot of other gaming platforms, if we’re gearing up for a huge NFL season. Coming off of this last year, everyone’s eager, excited to get going. But I’m super passionate about giving back to the community. And so we partnered about six months ago, or actually four months ago, with Chad Greenway and the Greenway Foundation, and anybody who comes onto our platform, you place a transaction, you see right away, you saved 5%, you save six, whatever it is based off of current prices, you have the option to donate that back to charity. And that goes to children’s hospitals throughout the Midwest.
Greg Kajewski:
So we were just out there last week and we have surpassed $1000 of people who are willing to donate. I think that’s a huge credit to the strength of community that we are starting to build. And as we double down with NFL, Chad having a background with the Vikings, et cetera, I’m excited to see where that goes and to see that skyrocket come NFL season.
Ryan Knuppel:
Very cool. Very good. Always good to hear when businesses like yourself are giving back as well. I love to hear that. So props to you guys for doing that and to continue to do that as you guys grow. That’s a good thing. So, awesome. Awesome. Hey, one question I had, and it’s a little bit back to the legal side of things. So us in the United States, we’re so focused on this whole, “Oh, I’m in this state and I can and can’t place a bet in this state.” Right? I live in Florida. It’s not legal in Florida. Are you guys under those same rules as that as well? Or are you guys truly exempt from that? Educate us on that a little bit.
Greg Kajewski:
Yeah. I can take that. And I think, James went deep in the difference of our platform versus some of those operators out there. And I think when you really boil it down, what I love the most is our incentives align to the consumer. You’re coming on placing orders out there with other consumers. We connect you directly without a fee. So we’re really a social platform connecting two users, and we want to ensure that you have the best outcome. When you look at other sports operators, they actually have an incentive for you to lose. They’re taking fees, they’re taking all these things, et cetera.
Greg Kajewski:
And when the consumer loses, they win. And I think that is a huge difference in the way that the laws are. And because we can look at this and say, “Hey, we’re just connecting two individuals, and $10 in is $10 out,” it’s a very different business model at the end of the day. So we’ve had, a lot of different kind of experts in the space look at this, and I think a lot of people get really excited about that and say, “Wow, that’s a very innovative model to be able to bring entertainment and gaming to marketplace.”
James Seils:
Yeah. And to answer your question, we did that year and a half without having a product. And a lot of that time was filled with making sure we had our ducks in a row from a legal standpoint. So we hired a pretty national law firm. We spent almost a year going state by state figuring out which states we can operate in, which we can’t. And those are all documented in our legal opinions. And so you went through our website and on our website, you can see which states were operating in from a real money standpoint.
Ryan Knuppel:
Cool. Very cool. Thank you. Really appreciate that. That’s awesome. So where are you guys headed? What’s next? I mean, you’re always innovating obviously as a new startup and things always changing. What’s next for you guys? Where are you heading?
Greg Kajewski:
Yeah, I think there’s three things I’m pretty excited about. And I think the first is partnerships. So we launched a partnership program about two weeks ago and we have around eight to 10 partners showing up that are excited to really help us build a strong community, and obviously some more coming in the pipeline as well. So we’ll continue to innovate and build a strong community alongside of our partners and find ways to get them really engaged in the platform, showing how they can five their opinion, give content, and give a lot of cool things in that space. So partnerships is a huge one.
Greg Kajewski:
Second, you’re going to see more innovation across social, integrating that into the different marketplaces, integrating that into partner pages and things like that is going to be really exciting as that continues to grow and mature.
Greg Kajewski:
And then I think the last place we’re headed is, in-play betting is a huge, huge thing that people talk about with sports gaming space. And if you look at our product and what we have out there from, a PGA standpoint is a great example of that. So Thursday to Sunday during a tournament, there’s tons of people out there placing orders, and people are picking up orders around is Bryson DeChambeau getting an over under five on X hole, et cetera. So to be able to help connect users across that type of mentality and see them do that in-game and in-play has been a really true testament of how we’re really solving an additional challenge as well as our users are making the choices around pricing. They’re taking out some of the challenges you have around making sure that different operations have the right price and bringing that back to the user to take control over as well. So I foresee the future of that space being really hot to watch and excited to kind of see where that goes in the next six to 12 months.
James Seils:
Yeah. And I’ll just double down on that. We were just at a conference where they talked about this in-play betting, for example, has always been this buzz word and everyone wants it and it’s going to be the next thing. But the biggest problem operators have, because they take a risk and they take sides and they hold the money, that they are responsible for the prices that are put out on there. So if you want to do a: Is Nelson Cruz going to hit a home run in a second at bat here while he’s up? You need to price that. If you price it wrong, you’re going to take a bath. We don’t need a pricing engine. If we get 30,000 Twins fans in the stadium, and we get 10,000 people putting their prices out, the markets should be efficient enough to where the pricing takes care of itself. And so it’s one of the beautiful things about an exchange. Obviously you need the volume, but that’s really what we’re doubling down on from a product standpoint.
Ryan Knuppel:
I love it. Yeah. I absolutely love the model. And I think there’s definitely a need for it in this space. And I think you guys portrayed it very clear to the audience of what you guys are up to and what you’re doing. So I always ask this, something I like to ask. I know you guys are busy and we need to get going here. But I always ask this because I think it’s important. You never know who’s watching, or who’s listening to this. Is there anything we didn’t cover? Anything you may want to ask of the audience? I know you mentioned earlier, Greg, that partnerships is something you’re looking to form and looking to do. Anything else, or expanding on that maybe somebody listening can help with. What do you guys need help with that maybe somebody listening could give you guys some assistance with?
Greg Kajewski:
Yeah, definitely. I think the partnerships is key. I mean, our partnerships with charities, we’re going to continue to innovate in that space, bring more people on board. So if you’re out there, you want to work with cool technologies and innovation, it’s a huge space that I have passion in, and we’re always willing to talk to different companies and figure out how we can bring a better product to consumers.
James Seils:
Yeah. And for me, we’re really doing it with you. I mean, we want the education branch to actually get this problem out there so people and consumers understand when they’re placing a parlay, that’s not likely a good financial decision. And we’re big into responsible gaming. We’re big into corporate responsibility that Greg’s mentioned. So our whole social, what we want it to be is an education campaign of: Let’s make money. Let’s not worry about the one person who put in 10 bucks and won 1000. Let’s get our consumers educated, smart, so we create an efficient market and we put more money back in their pockets versus the operators.
Ryan Knuppel:
Amazing. Awesome. Well, James, Greg, I mean, it’s been a pleasure to meet you guys, sit down and talk with you guys. And you mentioned the word conference earlier. That really excites me because I think real conferences are coming back, live conferences are coming back. So hopefully in the near future, I can sit down with you two over lunch and meet you face to face. I’m looking forward to that day.
Greg Kajewski:
Definitely. Thank you for having us on, and shoutout to Fantasy Sports Gaming Association. If anybody’s listening, it’s a [inaudible 00:23:22].
Ryan Knuppel:
Awesome. Well, cool. Well, thank you guys. Any last words from the audience before we, before we get out of here?
Greg Kajewski:
Appreciate you having us on.
James Seils:
Yeah, come join BettorEdge. You can find us at bettoredge.com. We’re on Twitter. We’re on Instagram. We’re on all the social sites. So follow us along and see how we do on our journey.
Ryan Knuppel:
You beat me to it. I was going to put those up here at the very end.
James Seils:
Oh perfect.
Ryan Knuppel:
Make sure you head out to bettoredge.com. Follow them on Twitter @BettorEdge. Also we’ll post all of this in our show notes on our page. So make sure you can find the links and all of that there so you don’t have to scramble and find those. But hey, two of the guys in the business, James and Greg, thank you so much for being here. Until next time everybody stay safe. Have a great one. We’ll talk to you all soon. Thanks guys.
James Seils:
Thank you.
Greg Kajewski:
Thanks man.
Relevant BettorEdge Links
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Learn more about BettorEdge at bettoredge.com
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Follow BettorEdge on Twitter @BettorEdge
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Contact Ryan Knuppel
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