ESPN for e-sports. Wants to compete again Twitch, Discord, DraftKings/ESPN, to become the one stop shop for all fanatic engagement. Pre-revenue, but has a strong team of founders and investors including founders of Blizzard, lead investor from Twitch’s Series A. Has only raised half a year of runway to date.
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The 6 Calacanis Characteristics (91 161 18)
|1. A startup that is based in SV||Yes: San Francisco, CA|
|2. Has at least 2 founders||Yes|
|3. Has product in the market||Yes: “Since launching 1 year ago our active user base has grown by 74.74% MoM on average to over 50,000 MAU with extremely limited marketing spend, and our registered users spend nearly 90 minutes on Juked when they come to the site.”|
|4. 6 months of continuous user growth or 6 months of revenue.||Yes: Pre-revenue, but strong user growth below.|
|5. Notable investors?||Yes: Blizzard co-founder, MyFitnessPal co-founders, 500 Startups, Stewart Alsop (Lead investor in Twitch’s Series A)|
|6. Post-funding, will have 18 months of runway||No: According to comments “3. Based on your current cash, I assume the burn rate is around $50,000/month. Do you anticipate it changing significantly.”, only raised $326k so far, so half a year of burn.|
The 7 Thiel Questions (ETMPDDS)
- The Engineering question:
- Ambiguous: I’m not a consumer of e-sports, so will tap network to see how they like this site.
- The Timing question:
- Good: E-sports definitely growing.
- The monopoly question:
- Good: ESPN for e-sports.
- The people question:
- Fine: Team seems good, as do investors. Notably, CEO was not on executive team at Twitch, he was more in auxiliary roles: Outreach Manager, Director of Content Marketing. That said, founder is up front about roles in LinkedIn, and one could make the argument that content is the core product in a media company.
- The distribution question:
- Fine: B2C.
- The durability question:
- Good: Media company building network of content providers, content consumers, strategic organizations to partner with.
- *What is the hopeful secret?:
- Twitch’s main business is in the streaming and tech side of the business, while Juked’s main business is in the content and editorial side. In addition, there are increasing returns to scale of having one platform to rule them all (Juked) versus the decentralized model (Twitch, Discord, Reddit, etc.)
What has to go right for the startup to return money on investment:
- Go Deep on Fanatics: Especially if the goal is to go fan-driven, the site needs to go on all the functions that fans want and better.
- E-Sports Continues to Grow At a Stunning Clip: a given, but particularly, it has to grow to the level that it starts eating into traditional sports/fandom market.
- Influencers/Premium Content: I could foresee Juked eventually needing to sign exclusive content deals with superstar teams, or hosting Juked exclusive content like after-match interviews and such. Also potentially collaborating with the big e-sports organizations.
What the Risks Are
- Disruption Fest: Who owns the primary gamer fanatic experience? Discord? Twitch? Steam?
- Market Size: If there are 50,000 MAU, and only 10% convert, that’s 5000 users paying $5-$10/mth. Even on the high end, that’s only $50k in MRR. Not a bad place to go, but how deep is this market going to go? Compare to YouTube RED.
- Not Enough Capital: No margin of error if wants to be “We are pre-revenue at this time but hope to launch our subscription model in Q1 2021.”
Muhan’s Bonus Notes
Really, really interesting company and space.
Piece on Dicord’s growth from the founders.
Lead investor from Twitch’s Series A getting into a debate with Mark Cuban.
Hello! I just sent bcc’ed you on email about an investment deal for an e-sports company one of my readers asked me about. I consider myself to be an amature on matters related to e-sports, and that’s why I’m emailing you.My email to my friends asking about their input.
If you’re curious, you’re one of three people I’m emailing, so I would not consider this a mass email 🙂 I’d tag you on LinkedIn, but also didn’t want to tag you in relation to e-sports depending on the impact it has on your professional brand.
From what you know of the Starcraft/Discord/e-sports world, have you heard of this company? Used their product? Are their founders recognizable to you? Thanks in advance, and feel free to give an overall update in addition to your experience in e-sports!
Nope haven’t heard of them. Friend who is professional esports commentator hasn’t either but recognizes a few DOTA faces there. I don’t see value in aggregating esports as a whole unless the prospect is to create demand for the esports industry as a whole.
To me and many others, the games aren’t fungible – like I would never watch DOTA, League of Legends, or Fortnite. I would only watch Starcraft games and not really interested in watching others. It seems nebulous to create demand for something people don’t know they want yet. The problem also is that people don’t watch esports for the game itself – it’s heavily dependent on the streamer or commentators themselves.
I guess very generously it could be the iPhone where people’s minds and habits are changed to it and re-educated to a whole new demand but I don’t think it’s as desirable.Friend A Feedback
Twitch (Amazon) and Youtube are fighting and spending millions to be the big player in this space, I wouldn’t touch it with a 10ft pole. On the other hand, I think betting platforms are a better bet.Friend B Feedback
in order for something like this to be successful, it needs to be integrated or at least partnered with an existing service i.e. twitch or discord. I don’t think it can succeed stand alone even w/ the most intense advertising campaign. draftkings also already has a huge market share. only way to beat them cleanly is probably convenience. the only platform that needs to be competed with is draftkings, beating twitch/discord is not possible in their respective fields is not possible with such a small effortbut if they can cooperate with twitch/discord for a convenience value proposition they may be able to do something.
they only need to be the esports betting centerand eat draftsking’s market shareand capture newcomer bettersthe easiest (and imo only practical way) to do thisis some semblance (at least partial) integration into the other aforementioned platformslike if twitch had an addon which allowed you to adjust your bets midgame (like some other site for sports betting)easy wini don’t know what kind of hoops you’d have to jump through to get that to happenbut if it didit would be enormousunfortunately i don’t see them doing very well otherwisethere’s no value proposition over draftkingsor rather there isbut draftkings will provide the same thingeventuallyFriend C Feedback
- Current Fundraised: $326k
- Valuation: ~$8.5MM
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