Show #145 – Jesse Wachtel of Huddle Talks iGaming B2B Software Solutions

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Ryan Knuppel:

(silence). Hey welcome everybody, welcome to the Knup Sports Show, I’m your host Ryan Knuppel here with you each and every time. I’m excited you’re going to spend a few minutes with us today and learn a little bit about iGaming, sports betting, everything going on in this industry. As you know, we always bring on special guests in the industry. We like to talk to co-founders, founders, startups, anybody in this awesome industry that we consider iGaming. And today is no other than Jesse Wachtel, who’s going to be with us here in just a moment. I’m going to bring him on, he’s going to talk all about Huddle and his journey to get there with Huddle, so super excited about that.

Ryan Knuppel:

I wanted to say right away, if you’re watching this live and you have questions for Jesse or myself as we go through this, please I encourage you to ask those questions. We’ll put them up live, we’ll address the questions as they come up, so we’ll definitely encourage that as we move on here. All right, without further ado, I’m going to bring Jesse on with me. Jesse, are you with me?

Jesse Wachtel:

Yes, I’m with you. How are you?

Ryan Knuppel:

I’m great today, Jesse. How are you?

Jesse Wachtel:

I’m doing great, thanks for having me.

Ryan Knuppel:

Good. Yeah. Jesse, I know you’re down in Miami, I’m here in Orlando. How are things treating you down in Miami, Florida these days?

Jesse Wachtel:

It’s a sunny warm day. As a former New Yorker, this is the time of year you get to brag to all your friends, so I can’t complain.

Ryan Knuppel:

Oh, it really is, it really is. Well cool. Well, without further ado, I want to hear a little bit about yourself. I want to hear where you came from, your journey through the work world that kind of led you to where you are today with Huddle. So give us a little bit about yourself, Jesse.

Jesse Wachtel:

So I have an entrepreneurial background, started a number of business, B2B SaaS companies. First company started when I was in college was in the voicemail transcription space building sort of the tool we’re all used to now on our phone of reading your voicemail, avoiding having to ever call into your voicemail box ever again, that was my first product. And then moved on to transportation ticketing and really anything that was sort of what felt like future state 15 years ago is now something we’re all very used to, but then was living in New York, had also been investing in a lot different tech and met a group of guys who were working for a company based in New York called SimpleBet, they had sort of a vision for what Huddle is now becoming, and really just sort of had never started a company themselves and wanted to understand what it would be like to raise money.

Jesse Wachtel:

How do you do it? Where do you get organized? How do you make your first hires and sort of the whole sort of building a business from the ground up standpoint? And so as we had built a friendship and I was a passionate sports fan, had invested in sports betting space, I really sort of bought into their vision for what they wanted to build, which we can get more into. And the four of us went and tried to raise some capital, and November of last year closed on our $3 million seed round and got going.

Ryan Knuppel:

Wow, what a journey got you to where you are today, and I’m sure it wasn’t easy getting there. Yeah. But I mean, let’s dive right into Huddle because I want to talk a lot about what it is and I want the audience to really understand what you guys are doing in Huddle. So give us a thousand foot view of Huddle and kind of what it is and what it’s there to attack. What purpose is it serving?

Jesse Wachtel:

Yeah. So just from the macro standpoint, obviously in the sports betting world, the growth of it from a sort of a handle or just a overall betting activity is skyrocketing, especially as [inaudible 00:04:08] got repealed and the US market is expanding and state-by-state COVID accelerated the regulatory environment. And as a result, we see all these companies generating a lot of handle and losing a lot of money. And so Huddle sort of is focused on creating operational efficiencies and efficiencies in markets and doing that through algorithm development and scalable architecture. So we saw an industry where as B2B software platforms expand their costs are going up in parallel. And it’s because most of the technology in the space is considered legacy, and therefore it wasn’t necessarily built in the cloud era, it wasn’t built in the world of high frequency trading.

Jesse Wachtel:

And so Huddle’s first two products it’s building or has built is an odds feed, so basically intelligent pricing. And it’s doing that without… Just based on taking market data, we’ve broken every element of a match into many components and much smarter people than me are building mathematical models to determine what the appropriate prices would be for those matches, both prematch and in-play. And then the product we’ll be rolling out next year will be MTS or a managed trading service where we’re basically going to be taking all the betting activity from our clients and then basically bringing that logic and that data into our models to create risk adjusted pricing.

Ryan Knuppel:

Mm-hmm (affirmative), interesting. Let’s talk a little bit about your clients. So who is your typical client? I mean, are we talking the operators and the sports books here? Who are your typical clients?

Jesse Wachtel:

Yeah. We just announced our first commercial relationship which is actually with another B2B called Sporting Group. And so in some cases in the B2B space we can accelerate some innovation in pricing for B2B providers who are focused on serving their clients and do a great job of that but maybe don’t have a deep quant team and want to leverage the work that we’re doing. But then obviously we also can work directly with an operator who wants to bring in our feed instead of maybe one of the other feed providers that are out there.

Ryan Knuppel:

Got you, interesting. So I’m sure this iGaming, sports betting, just world is just booming here in the United States, and I’m sure you guys are seeing so much interest in what you guys are doing. Tell us just about the interest level that you’re seeing across the board. I mean, are you guys seeing this interest spike like everyone else is seeing?

Jesse Wachtel:

Yeah. I mean, so obviously the dollars being thrown around in the industry are skyrocketing and we have developed relationships. I came from the investing world, so we’ve developed relationships with a lot of, sort of the venture groups that are touching this space. And there is a… Obviously, the world was very focused from the venture community on B2C, the fan duals, the draft kings of the world, and that market’s exploded. But I think both from a valuation perspective as well as sort of understanding that someone is going to help figure out how to make these companies more profitable at a some point, there’s now an attention that’s turning to B2B providers. As a smart person in the industry says, “If it’s the gold rush, they’re now investing in picks and shovels instead of being the minors.” So we see ourself as a picks and shovel provider, and there’s a lot of interest out there now for what we’re doing as well as lots of other great companies in the space.

Ryan Knuppel:

So let’s dive a little deeper into this odd speed, right? The product odd speed that you guys have. And just a little bit, so explain to me being kind of a novice in what you guys are doing, but creating an odd speed and an operator would use that odd speed internally to drive their sports book, or is that how that’s pretty much working? So you’re developing this third-party odd speed that is smarter than what maybe some others could develop. Is that correct?

Jesse Wachtel:

Yeah. So we’re basically taking the data feeds that everyone in the industry gets, both prematch and in-play and then we’re effectively running that through our algorithm to create what we believe is the best price. And obviously what we also can do because we’re using algorithms to develop it is, we can also break a match into many components. So we may be able to also create a lot of new betting markets that aren’t readily available. So, for example some feed providers may provide a match total, so an over, under for a NFL game, but we can break that down into quarters, we can break that down into certain minutes of a match or a game. So just sort of the potential of creating more markets as well as more efficient markets is what we’re trying to do, trying to achieve.

Ryan Knuppel:

That’s cool. So what’s the future look like? Where are you guys headed now? I mean, you obviously mentioned the next product coming next year, but what’s really the focus on for you guys? Is it now working with more and more clients and partners to really drive business there? Is that what’s next? Tell us what’s next for you guys.

Jesse Wachtel:

Yeah. So definitely commercial growth, which is now that we have a product we want everyone to use it, so that’s a no brainer. And then separately, the way we’re building our platform is that we’re very focused on the data layer of sports betting. So we are pulling in data from many sources. So we’ll continue to add additional data. I mentioned, for example, the betting activity of our clients. So we want to have a lot of data because what we believe is that we can make a better functioning system or platform or tools if we leverage that data. So because a lot of technology out there wasn’t built recently, data lives in silos, it’s not necessarily leveraged to its full capacity. And so what we’re trying to do is keep all that data in sort of the foundation of our business and then we can roll out other product over time, leveraging that data.

Ryan Knuppel:

Amazing. This is Jesse Wachtel of Huddle. Jesse, man, this is really interesting. I want to get a little off topic here for you because we both live in Florida and there was some news that was… I mean, I’ve been all excited over the last few weeks, “Oh, Florida’s moving forward, Florida’s moving forward with legalized sports betting,” telling all my friends and family around the area, “Hey, I can use Hard Rock sports book and I can bet and all of this,” and then this morning the bomb drops on me of, “Hey now, no, no, no, no, no, not going to happen right now.” What do you think of all this Florida madness in the legalized sports betting? I mean, is it over? Is it just the first round of back and forth so it’s going to happen with federal government and state government and all of that? But I know you have some thoughts on that, what are your thoughts?

Jesse Wachtel:

Yeah, it’s hard not to. I mean and the infomercials on TV are omni present.

Ryan Knuppel:

Exactly.

Jesse Wachtel:

Yeah. I mean, I believe that every state is going to regulate sports betting at some point in time. And so first of all, the tax dollars are hard to say no to, there’s the general belief that people are betting anyways so why not regulate it and let the state governments profit from it? Without getting too deep into politics, I think there was a bit of a rush to get something out there here in Florida without necessarily going through all of the hurdles that other states have gone through. And now they’re going to go back, clean it on. So my hope is that, I would guess by next season we’re legally betting and the kickoff for the NFL season next year we’ll be legally betting in the state of Florida, that’s my loose prediction.

Ryan Knuppel:

Yeah, no, I agree with you. It is kind of funny how they jumped the gun, right? And just kind of really jumped in. And I think everybody was kind of surprised when Hard Rock released their online platform just kind of out of nowhere with really no, I don’t know, no warning that it was coming. Just, “Boom, here we are, you can sign up and bet, and wait, the federal government hasn’t necessarily approved this yet and all the above.” So interesting times for sure in Florida and other states.

Ryan Knuppel:

I mean, I am in agreement with you that I think we are going to see nearly every state at some point come on board with this. It’s just too big of an industry, there’s just too much that the state can benefit from, from doing it that they can’t really ignore. I think, especially as they see the success some of these states are having month over month over month with handle and maybe some of the bigger states here are watching and learning and making sure things are going and then they’ll adopt it later.

Jesse Wachtel:

Yeah. There’s one on that topic. I think part of it is that some stakeholders also realize that the way sports betting is being run in the many of these states, obviously the more mature states they’re starting to be profitable, but also in all these new markets these companies are losing lots of money. So one of the pushes that some of the sort of players that we are pushing for is that I can play Blackjack on my phone just the same way I can make a bet online, because obviously that’s been historically more profitable for the operators. And so I think some of it is that some of the operators want to make sure that if this relaunches that, that’s a part of it.

Ryan Knuppel:

Yeah, for sure. All right. Let’s get a little bit back on track. I know I only got a few more minutes with you here, I really appreciate your input and things, but let’s get a little bit back on track here with Huddle. So talk to the audience a little bit now. So I mean, some of our audience, iGaming professionals, investors in this space, people, real true business professionals in the iGaming space. So what do you guys need? What do you need help with? What are you guys looking for? What can our community help Huddle with as you guys move forward in your venture to grow?

Jesse Wachtel:

Yeah. I mean, just like any startup where we’re focused now is hiring really great people. And we’ve had success early on being able to find both talented people from outside the industry who could bring sort of a fresh perspective as well as some really talented people from within the industry. So always looking for talented people. Most of the roles we’re hiring are either engineers who are building the underlying technology and then quants who are sort of building the algorithms that power our tool. And then, yeah, we’re about to kick off, I’m heading to New York the week after Thanksgiving meeting with lots of investors. And so, now that our product is out in the market and we’re actively selling it, it’s the right time for us to go out to the market and raise our next round. So we’re going to be trying to close our series sometime in the first quarter of next year. And so yeah, if there’s people watching who are interested in potentially investing in Huddle, we’re all ears.

Ryan Knuppel:

Cool. I assume you’re talking about the SBC conference up in New Jersey that you’re heading to.

Jesse Wachtel:

Yes, I am. Yep. So-

Ryan Knuppel:

I will see you there, I can’t wait. I’ll make sure to say hello, I’ll make sure we make that happen. I’m only going to be there 30 hours, I’m doing a quick in, quick out just to make sure I be there because I really love what they’re doing with SBC and I love the events, but I’ll make sure to say hello to you.

Jesse Wachtel:

Yeah, will be there.

Ryan Knuppel:

All right, cool. All right. Well, this is Jesse Wachtel of Huddle. Any last words? Where can people find you? Where can they find out more about Huddle? Give us a little bit of that elevator pitch of where they can find out more or get a hold of you if they want to chat with you.

Jesse Wachtel:

Yeah. I mean, message me on LinkedIn, LinkedIn’s a great place. Also our website is huddle.tech, so .T-E-C-H. But my email, I don’t mind sharing either, is just Jesse, J-E-S-S-E@huddle.tech. So if anybody wants to get in touch, I hope they’ll reach out.

Ryan Knuppel:

Very cool, Jesse. I really appreciate your time. We’ll put all those links in the show notes that way you guys will write them all down. We’ll get them in the show notes, you can just click them after fact here, so no worries. So Jesse, really appreciate your insight. Good luck with everything you’re doing with Huddle. If there’s anything I can do [crosstalk 00:17:47] as you go through this, definitely reach out, all right?

Jesse Wachtel:

Great chatting with you.

Ryan Knuppel:

Take care, stay safe.

Jesse Wachtel:

Take care.

Ryan Knuppel:

All right, that was Jesse Wachtel of Huddle. Super excited to have him on, hopefully you guys learned a little bit about what they have going on, and if you can help Jesse in any way, I really encourage you reach out to him, check out Huddle over at huddle.tech, or reach out to Jesse on LinkedIn. All right, I’m Ryan Knuppel, that’s another episode of the Knup Sports Show, really excited that you joined us here today. If you ever have any questions, if you know anyone that wants to be on this show, talk iGaming, talk sports betting, talk sports business, I love this entire industry, so please reach out to me, ryan@knupsolutions.com or you can find me at Ryan Knuppel on LinkedIn. All right everybody, that’s all I got for you today. Take care, will talk to you soon, have a great day. Bye-bye.

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