I’ll be honest with you, I had never heard of the daily fantasy sports site Draftpot until today. While that’s a little embarrassing, it turns out that most other people hadn’t heard of it either – until now. Coincidentally, the same day I heard about Draftpot was the same day I read an article about its founding on Forbes.com. It is a tale that founder Joey Levy hopes will parallel that of Bill Gates.
Bill Gates is legendary for many reasons, but one big one is that he provides kids instant rebuttal material when their parents get upset with them for not keeping up with their schoolwork. “But I don’t need school! Bill Gates dropped out of Harvard and now he’s one of the richest people in the world!”
As a parent, I say CURSE YOU, BILL GATES! But hey, it worked for him. Joey Levy isn’t remotely close to Gates’ end-game, but he and his buddies have started out similarly. As Darren Heitner tells it on Forbes.com, Levy finished up his sophomore year at Columbia University in May; two of his friends just completed their junior years there, as well. The three have since dropped out, opting to focus all their attention on Draftpot, hoping to climb in the ranks to compete with the big boys.
First Outside Investors
Early this year, Levy took to Reddit to solicit opinions on the new DFS he and his friends had just created, writing:
I am a college student and some of my classmates and I just finished building an alpha version of our daily fantasy sports website (currently hosting fantasy basketball contests).
We launched the site yesterday and paid out $54. Not too many users right now so the odds are high that you can win a decent amount of money (we plan on paying out $368 tonight). I’d love to hear what you all think of it!
People tried it out and gave the Draftpot crew feedback, good and bad. Eventually, through the Reddit thread, Draftpot gained its first investor. From there, the Levy and his partners got more aggressive in seeking out investors; they recently raised $2.2 million to fund the site’s growth. One such investor was the Dorm Room Fund, which is a student-run firm that invests in student-run companies, backed by First Round Capital, .
One advantage Draftpot has right now is that it has not had to invest much in development, as the co-founders are the ones who have built the site. Of course, if the business grows, so might staffing costs, but for now, Draftpot is able to stay lean.
All DFS sites have their own look and feel and Draftpot is certainly no exception. The contest lobby could use some work, as the contests are tiled, rather than being presented in list format, which makes it a bit hard to navigate. Then again, maybe it’s just that lists are the norm and are what we’re used to. The contests themselves seem easy to enter and lineup construction is straight-forward. One quirk, and I would have to think this was done purposely, is that many of the player photos are of them being caught making a goofy face. Draftpot has got the Manning Face locked down.
Right now, it appears that Draftpot’s calling card and big differentiator is that most of its contests do not use a salary cap. In these “Fan Mode” games, players simply try to construct the best team, picking anybody they want. Want to load up with Aaron Rodgers, Odell Beckham, DeMarco Murray, Eddie Lacy, and Gronk? Go for it. Draftpot does still have the traditional salary cap mode, as well.
Levy knows that even though the DFS market is young, it is going to be hard to battle it out with DraftKings and FanDuel. “We are going in with the assumption that there will be five-to-six major players in the space,” Levy told Forbes. ”It may be impossible for us to overtake FanDuel and DraftKings. If we finish third, fourth or fifth, we will be very happy with the outcome.”
The site is doing alright so far. In August, Draftpot had 5,000 users and paid out $120,000 in prizes. With NFL football starting this week, management is likely gearing up for a whole new flood of customers. Don’t expect millions of dollars in guarantees like on the two top sites, but Draftpot already has over $200,000 in guaranteed prize pools for the first week of the NFL, including a $100,000 and a $50,000 guarantee for $10 and $20 entry fees, respectively.