Message from Nevada to Daily Fantasy Sports – B*tch Better Have My Money

Just yesterday I posted about what it is like operating a startup in the currently unregulated industry of daily fantasy sports[1], and in that post I said that we had “ ..the fear that it could all be shut off faster than a light switch – and that was the feeling we had last week.” Turns out it was too soon to let go of that fear.

And just like that, the lights on daily fantasy sports went out in the state of Nevada.

Yesterday, the Nevada Gaming Control Board ruled that daily fantasy sports is gambling and that all daily fantasy sports websites must cease operating within the state. Basically, the ruling is a legal version of the song “Bitch Better Have My Money” directed at the daily fantasy sports industry from the Nevada casino industry. While people in Iowa, Wisconsin, Arizona, Louisiana and Montana already can’t play daily fantasy sports due to state law, the Nevada ruling is getting a lot of headlines and causing a reasonable level of concern on both the industry and state side because Nevada is the epicenter of gambling in the United States.[2]

With the ruling, Nevada is requiring daily fantasy sports companies to acquire a gaming license – the issue there is that daily fantasy sports doesn’t consider itself gambling – as laid out in the Unlawful Internet Gaming Enforcement Act – it is considered a game of skill. So if the companies want to keep operating in Nevada, they have to agree daily fantasy sports is gambling, but if they do that, they become illegal in the rest of the U.S. and contradict the carve out that makes them legal.

So daily fantasy sports is in a catch 22, damned if they don’t, really damned if they do. And this ruling has put more pressure on other states to act – because the only thing Nevada can identify better than gambling is strippers – and states don’t want to be caught with their proverbial pants down.

In the mean time, the federal government has the FBI and Justice Department looking into whether daily fantasy sports is legal under the carve out – the issue here is that the federal government works at a glacial pace, so it could be 6 months to a year before they rule on the matter. In addition to the executive looking at the legality, the hill has now turned more attention to daily fantasy with Senator Robert Menendez (D-NJ) and Rep. Frank Pallone (D-NJ) wanting a hearing. This is no surprise, given that Rep. Pallone has wanted to get daily fantasy sports in front of the House Energy and Commerce Committee for a while now.

The question now is, how does the daily fantasy sports industry stop the lights going out in the remaining states? The answer is something that is obvious and what DraftKings and FanDuel should have focused before they decided to spend over $100 million on advertising since the beginning of August – lobby the hell out of state governments.

State governments are the key to keeping this going.

In one of my previous positions, I was appointed by Governor Bill Richardson (D-NM) as the legislative liaison for the New Mexico Human Services Department – I was basically a lobbyist for the New Mexico Human Services Department on behalf of the governor. In my three years there, I worked the NM state legislature on all human services related issues, including working to successfully pass a piece of health reform legislation before the Affordable Care Act had passed in 2010.

Based on my experience, I can tell you state representatives and senators are impressionable if given the right information and motivation. Right now the information they have is the information that is in the news; the information of cheating allegations, data breaches, and Nevada ruling daily fantasy sports is gambling. Given that information, daily fantasy sports is in political hell.

What needs to happen is easy, and DraftKings and FanDuel should understand this better than anyone, information + money = best chances for success. This is how I play daily fantasy sports, and this is how they need to frame their legislative framework.[3]

One of the fundamental rules of startups is to gain traction and do it as fast as possible, so I understand where DraftKings and FanDuel are coming from, but instead of pumping hundreds of millions of dollars into advertising – which has worked, last week daily fantasy sports saw it’s best week ever – they should actually save themselves some money on ads[4] and put it towards their government relations.

And that’s the thing; government isn’t an issue until it is one. What makes this ridiculous is that this type of situation was inevitable given the lack of action by DraftKings and FanDuel who operate in an already murky legal space. The inaction has put the industry in a vulnerable position, and the only thing in politics that is more influential than power – which FanDuel and DraftKings are lacking right now – is money, which is something they have a lot of and is something they should use.

In addition to money, DraftKings and FanDuel should leverage the power and relationships of their investors. If an NBA team like the Bucks can convince the Wisconsin state government to approve $250 million in public funding for a new arena, I think the NBA can use that type of influence to help out FanDuel or the Kraft Group can influence the Massachusetts State Assembly to help out DraftKings.

And I say this, the tipping point on banning daily fantasy sports hasn’t happened yet, but to stave off that point, DraftKings and FanDuel need to ramp up their government relations at the state level ASAP and agree to reasonable regulations – including some type of tax because that’s what the state ultimately wants – just ask Nevada.

And the Feds? Don’t worry about them. If they see the states taking action, it will buy them time to then look at the issue and talk about it in hindsight and might even lead to fast tracking legalized sports betting nationwide – something that many people would like to see.

So lets hope the lights don’t go completely out, and DraftKings and FanDuel figure out what the tech, guns, alcohol, health care, agriculture and every other large market industry has figured out – government relations matter.

 

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[1] I’m a cofounder of huddlehive, a daily fantasy sports information management platform. Check it out here: http://huddlehive.io

[2] Sorry Mississippi riverboats.

[3] And I get it, money in politics – the thing that makes the system broken. But until we have campaign finance reform where every candidate takes public financing, this is the system we operate in.

[4] People are very sick of them and they have actually contributed to the negative feelings towards daily fantasy sports, and people will continue to play because they like to, not because of annoying infomercials and commercials.

The Wild West of Daily Fantasy Sports – Founding a Startup in an Unregulated Industry

A year and a half ago, I was talking to one of my now cofounders (Brandon) about doing something together. We had spoken about this a lot, and threw a bunch of ideas around, but ultimately agreed that we needed to do something we were passionate about. So we disregarded what we had thrown out before and started to talk about what we always talk about, sports.

Both he and I are very passionate about sports, he is a Lakers fan (booo!), I am a Celtics fan (17 banners!), we co-manage a fantasy football league together, and were in two other leagues together. That got us thinking, is there something that we could do together in the sports field, and that’s when we started to talk about a new format for fantasy sports – daily fantasy sports. I’ve written about daily fantasy sports before and you can see some of my previous entries listed in this footnote[1] but what made us think to look at daily fantasy sports was the fact that the market is still very new – FanDuel, the veteran of the daily fantasy sports world was only founded in 2009, and DraftKings in 2012 – and that it was perfect for innovation and new ideas.

So we liked the idea of going into this industry, and Brandon spoke to our other now cofounder (Mando) about what we were thinking and we started to discuss the problems we face as a casual daily fantasy sports user. The crosscutting problem for all three of us was around data management.

In daily fantasy sports there is a lot of data floating around – first all the athlete statistics, and then there is data on your entry type (specific type of contest like league, multiplier or guaranteed prize pool), entry size (from 1 – 500K people), and entry fee (from $0.25 – $1,500). And the problem we were having was keeping track of our own data, how much money we spent, how well athletes were performing and what game types we were over playing. Realizing this, we decided to build a company focused on helping daily fantasy sports players manage their data and the result has been huddlehive – a daily fantasy sports management platform that combines a user’s transaction history from DraftKings and FanDuel and a user’s lineup data to provide personalized insights on a user’s financial health, playing behavior and athlete performance. We are currently in private beta, have about 100 beta testers[2] and are working to improve and build the platform. And when working in a startup, the question is always – what’s next, what can I do to get more users, what can I do to gain traction?

But last week the question changed and it changed because of things that were out of our control. Last week news broke of allegations of insider trading and a data breach at DraftKings. No one knows the full extent of the breach and what ultimately happened. We wrote about it from the perspective of a startup in daily fantasy sports, but I am writing this from the perspective of a startup in an unregulated field.

And that’s the deal, daily fantasy sports is currently unregulated by the government. It is legal because there is a carve out for fantasy sports in the Unlawful Internet Gaming Enforcement Act but there are a number of states, like California who are trying to put regulations in place. What made the allegations such a big deal is the fact that the industry is self-regulated – it comes together and regulates through the Fantasy Sports Trade Association.

Being in the position of a startup cofounder, startups are already a risky business – we are trying to do things either that 1. No one has ever done before or 2. Better than the current practice; either way we are faced with institutional barriers. But what makes being in the daily fantasy sports industry interesting and also terrifying is that many of those institutional barriers don’t exist yet, because daily fantasy sports is just too new. But the flip side of the barrier free environment is the fear that it could all be shut off faster than a light switch – and that was the feeling we had last week.

So last week we were all very interested in what was going on and the reactions the public was going to have to these allegations. And it got us talking and asking each other, given the allegations are you going to stop playing daily fantasy – and the quick answer was – while I’m upset with how things have been handled, there is still no way I am going to stop. There is good reason for this, the data breach and insider trading allegations hurt the reputation of DraftKings and the integrity of daily fantasy sports, but the data that an employee may or may not have gotten doesn’t give him enough of a statistical advantage over the entire field to make a difference. You may say, “But I heard he won $350,000 on a tournament and that DraftKings employees had won a total of $6 million.” True, I heard that too, but do we know how much in entry fees that player had to put up to win that much? Daily fantasy sports isn’t about your winnings, it’s about your profit – what is your return on investment? And let me be clear, I am not condoning what happened by any means, but I am just providing some clarity to the situation that blew up bigger than the Hindenburg.

The big question coming into this week was, did the allegations hurt DraftKings and FanDuel, did they lose users? Not so surprising, the answer is no – at least it looks that way on the surface. In fact, DraftKings and FanDuel saw an increase in entry fees by 4% – 5% as compared to the previous week, hitting an all-time high. There are some lingering questions, one which Mando asked Brandon and I last night on our podcast[3], are the increased entry fees from professional players who tried to maximize their advantage or from new users? Something we don’t know but probably something the boards of each company are looking at.

Just like that, from one week to another, daily fantasy sports looked like it was deader than Ned Stark (Not spoiler alert, GoT has been out since 1996) to being more alive than Arya Stark. But does this mean that we can let our guard down? Can we expect self-regulation to continue? The answer to both is no.

After these allegations the federal government is looking at daily fantasy sports harder than the Eye of Sauron was looking for the ring that ruled them all[4].

And that is where there is a difference in a startup that is operating in an already regulated industry vs. an unregulated industry. While we have a duty to ourselves as startup founders to produce the best product available for our users, we also have an interest in looking at the larger industry and contributing for the greater good because of the many unknowns due to the unregulated and still very nascent industry we operate in.

The way I see it is my cofounders and I are fighting everyday to keep the lights on in our startup, but since we operate in an unregulated industry, we are also fighting to keep the industry lights on – because if either go out, we are dead in the water.

So what does this mean? Steer clear of unregulated industries? NO, not at all, just know what you are getting into before you wade into those uncharted waters. Even more important than in other areas, get real friendly with people in the community – because while you may be competitors at some level, you still have a lot of common interest. And the fact that we are pushing and helping to define the boundaries of a $2 billion dollar industry while building a company, is probably one of the most exciting things I have been a part of.

And if you think regulated industries are any safer or easier to navigate, you aren’t completely correct. One quick example, I was working on standing up a beer delivery service in Texas. Basically, a user places an order for beer via the web, and it’s processed and delivered. To do this in the state of Texas you need a retail license to sell alcohol; with that there are 3 possible types of licenses, 1. Beer only 2. Beer and Wine 3. Liquor Store. With the different types of licenses, there are requirements and restrictions. For instance, with a liquor store permit, to get it you have to operate in a building that is free standing, has a front and rear entrance and as an ADA compliant bathroom and operate in limited hours (12PM – 9PM). Those requirements don’t really mesh with the model we were going for, the biggest red flag being a building. Why do we need a free standing building if we are a delivery only service? The model was built around using underutilized spaces around the city, like storage closets or empty offices. The other pitfalls where around regulations that are currently in place. In the state of Texas you can’t deliver wine with a retail license. I wasn’t given a why – just a no. So wine is out. We ended up getting a beer only license. With that license is a whole slew of regulations and definitions that are ridiculous.

For instance, did you know the definition of beer was changed in 2012 to be defined as any alcoholic beverage with 4% alcohol or less. Who the fuck drinks beer with 4% alcohol or less? Bud Light, Coors, Miller Light – all have an alcohol content of 4.2%! This leads to the question – “What is Bud Light and every other beer considered?” – glad you asked – it’s considered an ale, which requires a different type of alcohol license and a whole new set of requirements.

The point of all this is that the world of a regulated industry isn’t all unicorns and piles of money. In fact, the example above is just another reason we need innovation in government and why government needs to look at their regulations and update them for the technology that is out pacing them (most of federal government is on IE 10).

And at this point, I welcome the risk involved with an unregulated industry – it at least gives us the opportunity to develop regulations – which are inevitable in the daily fantasy sports industry – that suit us.

[1] https://entrepeneurialjourney.wordpress.com/2015/10/06/what-do-martha-stewart-and-draftkings-have-in-common-turns-out-lots/, https://entrepeneurialjourney.wordpress.com/2015/09/18/why-bloomberg-businessweek-is-wrong-and-shark-infested-waters-are-safe-anyone-can-win-at-daily-fantasy-sports/, https://entrepeneurialjourney.wordpress.com/2015/09/03/i-think-my-water-just-broke-were-having-a-closed-beta/

[2] Sign up here: http://huddlehive.io!

[3] Really excited about our podcast. The link is to our first episode. We are going to cover daily fantasy sports from a non-pro prospective (someone that doesn’t play with hundreds of thousands of dollars, but hundreds). We talk about tools to use, strategy and player data.

[4] Yes, I just made a Game of Thrones and a Lord of the Rings reference back to back.

What do Martha Stewart and DraftKings have in common? Turns out lots.

The following was originally posted on huddlehive’s blog. 

Back in the summer of 2002 I first started to play poker at a weekly game at a friend’s house. It was a real friendly thing but we did play for money. It was my first true interaction with poker and being among friends I assumed everything was on the up and up. That summer I lost $400 at that poker game and chalked it up to being new to the game. It was only a few years later that I found out that the host dealt from the bottom of the deck when dealing to himself – so he was cheating and gave himself an advantage – which left a bad taste in my mouth to the point that I only started playing poker again this year with a couple of friends.

This story came to mind when I saw the coverage of the DraftKings data breach and insider trading allegations – lots of new users are going to think that they lost because they were cheated and now want nothing to do with daily fantasy sports. So that brings me to Martha Stewart.

In 2004 Martha Stewart went to jail for crimes related to insider trading. For those who don’t know, insider trading is “the illegal practice of trading on the stock exchange to one’s own advantage through having access to confidential information.”

Much like how the stock market works, fantasy sports are based off information, and that information helps players make informed decisions and those decisions can lead to profit or loss. It has recently been reported by Forbes contributor Darren Heitner that DraftKings (currently worth $1 billion) published information concerning the breakdown of players selected in a “Millionnaire Maker” contest with a prize pool of more than $1 million. The issue is that many of the players listed on the percentage owned page were playing in real games that had yet to begin – resulting in DraftKings’ users being able to adjust their lineups based on that data.^[1]

So this in itself is a big deal. Basically, before a big money competition started, a bunch of data that shouldn’t have been published was. By having that additional info, players can adjust their lineups to play less played players, which may increase the chances of winning – thus giving them an unfair competitive advantage.

While the data leak is ridiculous, should never of happened, and hurts the integrity of the game, the bigger story is the fact that it has been reported that an employee of DraftKings who had access to this percentage of played data, has played on a competitor’s platform – in this case FanDuel – and ended up winning $350,000.

Whether or not this employee did use the data to gain a competitive advantage has yet to be determined, but the optics of the situation look bad. With DraftKings and FanDuel spending over $100 million in advertising since August to get new users, the last thing they want daily fantasy sports to look like is rigged or like the house has an advantage (like in gambling).

This is the heart of the matter. Currently fantasy sports are considered legal under the Unlawful Internet Gaming Enforcement Act where it is considered a game of skill. There are three points that make it a game of skill versus gambling, but for this argument, the most important one is number two, which states:

2. All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.
   

Knowledge, skill and statistical results – these are the variables that determine if a player wins or looses based on his/her own decisions. A recent article by Bloomberg Business discussed the fact that new users don’t have a chance against professional/shark players. But the only reason new users don’t have a chance is because they don’t have the knowledge or data the sharks do. Non-sharks have the ability to get this knowledge and data, but it just requires work to do so – unlike with the data that was leaked – which is confidential and not available to the public prior to the start of a competition.

And what makes this data breach and insider-trading allegation even more ridiculous is the fact that both DraftKings and FanDuel make it difficult for users to easily access the publicly available data. Data like points scored by a player, a user’s previous lineup entry, and even scores for NFL defenses (something FanDuel doesn’t post) are often in single data cells that are difficult to use and combine.

This area of daily fantasy sports is ripe for innovation. In fact, right now companies are being built on this concept. Our company, huddlehive, is built on publicly available data, so are companies like Swish Analytics and FantasyLabs. Our goal is to help daily fantasy players get the most information they can in the best and most reliable way possible. Basically, we want to shrink the advantage sharks have by making everyone sharks.

If DraftKings and FanDuel wanted to show they care about the integrity of daily fantasy sports and their willingness to push the nascent boundaries of the industry, they would make this data more accessible through application programming interfaces (APIs) or CSV files; they would make it easier for users and companies using this data to find it. Ultimately, it is in the interest of DraftKings and FanDuel to support companies like huddlehive, Swish Analytics and FantasyLabs because our existence provides the proof that distinguishes fantasy sports as a game of skill rather than gambling.

But what happens if all this data is available but there are super sharks – players that have information that isn’t publicly available; information that is only available to employees of DraftKings or FanDuel? How do you kill a super shark and how do you stop super sharks from destroying the fantasy sports industry?

Good question – but I think the question that needs to be asked is who the hell is regulating fantasy sports, and more specifically daily fantasy sports? This is the important question that often gets passed over. The short answer is that the industry is regulating itself and has been referred as the “wild west”.

Self-regulation is a great concept, but in reality is unsustainable and the way DraftKings, FanDuel and RotoGrinders have handled this situation has been atrocious and demonstrates why it doesn’t work. Draftkings and FanDuel are like a $2 billion toddler who is potty training and has just pooped it’s pants – the kid is refusing to admit there is poop in his diaper and is looking at his buddy RotoGrinders saying “Hey you smell something, no? Me either, lets go make some more money eat some cookies.”[2]

First, DraftKings and FanDuel released a joint statement^[3], which is a non-apology for the data breach and a total glossing over of the allegations of insider like trading. Getting the hint that it wasn’t good enough, DraftKings, FanDuel and the Fantasy Sports Trade Association released a statement last night, and DraftKings released another statement by themselves this morning.[4] The gist of it is, based on internal investigations, DraftKings haven’t found any proof to the allegations of insider trading, and for now, DraftKings and FanDuel employees are prohibited from participating in online fantasy sports contests for money.

Problem solved right? Hardly.

This fiasco is a major shot at the integrity of both companies and the industry. With each company valued at $1 billion, and major investments from MLB, NBA, NHL, Comcast, 21^st Century Fox, Kraft Group, they have failed to handle this situation in a reasonable way to reassure the estimated 1.45 million daily fantasy sports users out there that everything is on the up and up. The internal investigation by DraftKings can essentially be equated to an exercise in masturbation – of course they found nothing wrong, it’s in their best interest to find nothing wrong! How can you restore your credibility after being called a cheater if you are the only one saying, “We didn’t cheat.”

And by denying and relying on internal investigations, DraftKings is going to get the attention of Congress. Congress was already looking at daily fantasy sports because of all the massive spending on advertising, but it wasn’t for the reason you would think. Rep. Frank Pallone is from New Jersey and New Jersey has been lobbying to legalize sports gambling in the state. Pallone wants to look at the legality of daily fantasy but also push for legalizing sports gambling nationwide. In general, I would think the hearings would have been more informative and friendly. Now with the current situation, DraftKings CEO Jason Robins and FanDuel CEO Nigel Eccles should get ready to be subpoenaed and paraded in front of Congress. They should also get ready for backlash from the states – with states like California already looking to regulate.

Let me be clear, the industry needs regulation. It needs regulation to give users reassurance that the industry is being monitored by an independent 3^rd party and is on the up and up, and it is government that should put those regulations in place, but regulations should not be politicized and haphazardly put together as a response to this current controversy – which is the vulnerable position DraftKings has put the industry in.

Lastly, I want to state that the thing that makes our platform, huddlehive, work is that we combine public data with personal data (both lineup and transaction data) to give people insights on their financial health, playing behavior and athlete performance. In that, users upload their own data – and given the worry about data breaches and employees using data to gain a competitive advantage over the greater field, I can tell you that we at huddlehive do not access our users’ data, nor will we access that data without a user’s consent (the only real reason for us to do this is to help a user upload their transaction history).

In this very nascent industry, it’s time to make some changes.

1. Make public data more accessible via APIs and CSVs;
2. Support innovation from companies like huddlehive, Swish Analytics and FantasyLabs; and
3. Work with federal and state government to come up with some reasonable regulations.

And lets hope not too many users have a bad taste in their mouth and are still willing to play.

 

 

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^[1] http://www.forbes.com/sites/darrenheitner/2015/10/05/fanduel-and-draftkings-have-some-explaining-to-do/

[2] The story originally broke because of a post on RotoGrinders, yet RotoGrinders moderators worked hard to censor and remove all posts on the topic. For a company that states they are the “heart of the daily fantasy community”, they are doing a fantastic job of censoring the community and protecting their own self-interests (they get revenue from ad and referrals from DraftKings and FanDuel).

^[3] Darren has the statement here: http://www.forbes.com/sites/darrenheitner/2015/10/05/fanduel-and-draftkings-have-some-explaining-to-do/

[4] http://playbook.draftkings.com/uncategorized/draftkings-statement-10615/

Why Bloomberg Businessweek is Wrong and Shark Infested Waters are Safe – Anyone Can Win at Daily Fantasy Sports

Pick your sport.

Pick your players.

Pick up your cash.

We have all seen the ads for DraftKings claiming that it is as easy as 1, 2, 3 to win at daily fantasy sports, in fact, it has gotten to the point where the DraftKings ads are running in my dreams between events – but that’s what $81 million in ad spending since August 1^st gets you. FanDuel has spent somewhat less – only $20 million, which regulates them to advertising only when I am awake.

The point of all this advertising is to get more people to play daily fantasy sports, but once you decide to give into the pressure after being berated for weeks,[1] in the same way your mom use to yell at you to clean your room, what can you expect?

According to a recent Bloomberg Businessweek article you can expect to lose.

The article claims that there are too many professional, a.k.a. sharks, out there that are too knowledgeable and skilled to allow you to even get near the big prizes. The article focuses on Saahil Sud, a professional daily fantasy player who has made more than $2 million playing daily fantasy sports. It also describes how he spends 8 to 10 hours scraping data and building predictive models and generating lineups.

This led me to have a conversation with a friend asking what makes Sud different from us – aside from his $2 million in winnings – and we came up with a couple thoughts.

1. He has a ton of data in a format that is digestible and allows him to make good decisions.
2. He has some good luck – fantasy sports is 75% data and 25% luck – never discount luck. [2]
3. He has volume. In the article, it claims that Sud plays 1,000 NFL lineups per week. Just by volume alone, he has to get some right.[3]

But with all of this in mind, the question is still; can we win – even if we don’t have the volume play like someone like Sud? I say yes. I have seen other players, most recently this week, who have spent $65 on entries and walked away with $35,000. Volume helps, but isn’t the deciding factor.

So if volume isn’t the deciding factor what is it? Data. It all comes down to the data. Finding players that will give you the most value. Understanding the game types, sizes and entry fees that are best for you. These are the data elements that lead to success in daily fantasy sports.

So the problem non-professional players[4] face is that they aren’t seeing the full data picture and are making decisions based only on pieces of the puzzle and not the full picture. But not everyone is a programmer or data scientist, so extracting this data is either not doable or too time consuming because you are regulated to an excel spreadsheet.

That made us think – what if we could give daily fantasy sports players a platform that would digest your daily fantasy sports data, combine it with other data and put it in a format that gave you that full picture you need to make those winning decisions? A platform that not only helps you manage your financial health but tells you your strengths and weaknesses based on your own behavior, tells you which player you are getting the most out of and who you overvalue and overplay.

That’s why we built huddlehive – to give everyone the same advantages that the pros have. The picture at the right is a screenshot of the NFL Insights we just launched after week 1 of the NFL season.

To that Bloomberg article – I say bullshit. Anyone can win at daily fantasy sports – it’s a game of skill that is determined by data driven decisions and a little bit of luck.

What new players need is what any new player needs – the right tools. You can’t expect to hit a homerun on your first at bat if you don’t have a bat – huddlehive is your bat for daily fantasy sports.

We are currently conducting a private beta test. If you would like to participate and get the full data picture, sign up at http://huddlehive.io.

 

 

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[1] As I write this there is a FanDuel ad running on Pandora.

[2] Luck is the only reason you know who David Tyree is.

[3] At that volume, my dog would probably walk away with a couple grand.

[4] or losing professional players.

I think my water just broke – we’re having a closed beta

This must be what it feels like when a pregnant woman’s water breaks – anticipation and the feeling of how great your child will be, but also the deep buried fear that your baby isn’t going to be the best and that you are going to totally screw him/her up.[1] I’m currently feeling that way, not because I am having a child, but because my cofounders and I are launching the first product from our company huddlehive in closed beta.

Closed beta means that not everyone gets a look at the baby, just a select group. And unlike your friends, we don’t want lies about how perfect he/she is – we want the brutal truth. That’s the nature of releasing a product in beta – the product isn’t perfect and we know that, but are striving to get as much feedback from potential users as possible to improve.

The product we are releasing is a daily fantasy sports management platform, which is like Mint.com + Moneyball for daily fantasy sports.

Daily fantasy sports is a new format for fantasy sports developed in 2009 – it gives users flexibility in how they play (game type, duration, volume, roster, etc.), for instance, a user isn’t tied to the same team all season but drafts a new one, not only every week (if playing football) but for every entry they play. If you watch any sports, you’ve likely seen the ads for DraftKings and FanDuel – those are the two largest daily fantasy sports companies.

The platform we built is designed to give players a competitive advantage by helping them manage, identify and understand their playing behavior and athlete, contest and financial trends by combining individual user financial and roster data and aggregate athlete cost and performance data.  Simply put, the platform uses an individual player’s exportable data from FanDuel and Draft Kings and other statistical data and visualizes it so users can make data-driven decisions by identifying and managing their financial health, playing behaviors and strategy.

We have been working on this concept for nearly nine months, and are extremely excited to be to this point, but we know that this is only the beginning and to get to the next level we need the help of potential users and their feedback.

We are looking for beta testers to participate in a three-week closed beta test of huddlehive’s daily fantasy sports management platform. We want testers who have played daily fantasy sports in some capacity – you don’t have to be an expert, but please be familiar with it.

What to expect when participating:

• Exclusive first look.
• Three weeks of use of the daily fantasy sports management platform through week two of the NFL regular season.
• Up to four surveys asking for feedback.
• Opt-in 10-minute feedback interview.

If you are interested in participating, please use this link and sign up.

Like I said, we are extremely excited to be at this point, but understand that we have only begun to scale the mountain and we need your help to get to the summit. Apply to participate in the closed beta now.

[1] I don’t have children nor am I a woman, so this is solely based off what I have learned from 90’s sitcoms.

Health Care Unicorns Prove Health Care Industry is Finally Accepting Startups

I read an article this morning that ZocDoc had joined the unicorn herd and it got me thinking, is the healthcare industry finally embracing innovation from startups?

Couple things, first, startups that are valued at $1 Billion or more, which there are roughly 87 of them out there – are known as the unicorn herd. TechCrunch did a great analysis around the unicorn phenomena, and since then there have been new companies to join, like DraftKings and ZocDoc. The reason these companies are dubbed unicorns is because it is suppose to be a fluke to see one. Reid Hoffman, founder of LinkedIn said, “Indeed, if the unicorn is by definition the rarest creature in the universe, how can there be a herd of them? “ Good question, Hoffman later stated, “A herd of unicorns is a natural consequence of the new world we inhabit.” What Hoffman is referring to is a world where everything is connected – and which is totally true, but not every industry is as accommodating to a connected world – healthcare being one of the less accommodating. But with the emergence of both ZocDoc and earlier this year, Oscar as unicorns, is this an indication that the health care industry has turned the corner in the connected world?

To understand that question, it is important to look at what factors contribute to an unaccommodating environment for startups in health care.

1. Privacy – Privacy is one of the biggest hot button issues when you discuss health care – and for good reason, people have a right to privacy, that’s why we have HIPAA. But when do the regulations around privacy impede innovation – this is a tough issue and something that is constantly being worked on, just ask the Centers for Medicare and Medicaid. And even within federal government there are factions of more privacy advocates vs less privacy. The clearest example I saw was between a group who focused on substance abuse and were advocating for no data sharing, while on the other side was a group of health care payers wanting data – so they knew what they were paying for. For those advocating for more privacy – good luck, at this point privacy is an illusion, if 30 gigs of Ashley Madison data can get hacked and exposed – just be reserved to the fact that your locally hosted electronic health record is a sitting duck.

2. Regulations – The government regulates – that’s their role. But regulations are dated, and even with the implementation of the Affordable Care Act, that resulted in a ton of new and updated regulations, there are still areas in government where technology surpasses regulation.

3. Stigma – Health care is a deeply personal topic – it gets back to that privacy thing. But 30 years ago HIV/AIDS was rarely talked about and was considered a death sentence, 50 years ago cancer was referred to as the “C-word”. The point being, the way we talk about things change over time – part of this is due to innovative solutions – like the advances in pharmaceuticals, hardware and technique – but it gets us into a chicken and the egg scenario. What needs to come first, innovation or the public’s acceptance to address something?

But back to the bigger question – has health care turned the corner in a connected world? Being an optimist, I want to say yes. I say yes because of the amount of growth and investment this sector has seen in the last few years. And when I talk about growth, I don’t mean another fucking electronic health record – which there are lots of – now only if they would talk to each other. I mean new companies that are taking on real problems, like Oscar (one of the unicorns) or Stride Health that is changing the health insurance experience. I also mean legit investment and backing from real players in the startup world like Founders Fund, Redpoint and Y Combinator, who in there most recent class has accepted and invested in 12 health care companies that cover both software and hardware – 3 years ago this wasn’t the case.

I remember 3 years ago and reviewing applications for the Health Datapalooza (giant tech and health care conference) and seeing a ton of apps that where consumer focused on managing your own health – which is fine but doesn’t really address the big problems in health care – like where do I find a good provider, why is my insurance so fucking complicated that I need a translator, and is there a way to reduce the cost of medical equipment.

So while there are only two health care unicorns in the herd, that is a huge step forward for the health care industry and it finally looks as though startups are breaking through and changing the way we all experience health – and it’s about damn time.

 

 

How Technology is Transforming Dating from Russian Roulette to a Drone Strike and Potentially Turning Us All into Douches in the Process

Last night I was out with some friends for a bar crawl/scavenger hunt and had an experience that caused me to think about how people interact when it comes down to the initial interaction between two people in dating.

When it comes to approaching someone you are interested in, lets say at a bar, alcohol is looked at as the social lubricant – it gives you the little extra boost of confidence to take the first step towards that person and on the other side of the interaction, the alcohol may make what that other person is saying seem less stupid. But with the proliferation of dating websites and apps, has technology usurped alcohol as the social lubricant for dating? And, while applications like Tinder, OK Cupid and Plenty of Fish are designed to help people find that other person, are they instead limiting interaction because instead of essentially saying “fuck it” and going for any random person, technology has transformed dating into online shopping of people?

This is a question I asked myself after last night because I was caught in the middle of a full court press. Lets set up situation. Again, I was out on a bar crawl/scavenger hunt with a team of eight people in downtown El Paso.

As part of this event, we moved from bar to bar. By the second bar, one of our teammates had seen two guys, lets call them Brick (after Brick Tamland) and Kale (guy was ridiculously hipster) she knew and started talking to them – coincidentally they were on one of the other teams.

Eventually, we got to the fourth bar with our team and a couple other teams. By midnight, all of my team had left, except for my female teammate, Brick and Kale. Brick left our table to go talk to a table that had three women sitting at it. He didn’t previously know them but after a bunch of shots, walked over there. While Brick was busy, Kale started to put the full court press on my friend – and full disclosure I don’t know the intricacies of their friendship or relationship, so anything I say is solely based on my interaction and observations of last night. As Kale engaged with my friend, he highlighted personal accomplishments – like that he only drinks liquor and had already drank a lot but it doesn’t effect him, that he isn’t afraid of flying and that he is an attorney and other things to boost his psudomasculine persona. So while this was happening, Brick was loosing some ground with his interaction because another guy went to their table and shifted the attention and dynamic to focus on him.

With this happening, Brick got up and pretended to go to the bathroom by doing a lap around the bar and eventually coming back to our table. From there, my friend, Kale and I started to ask him what happened. Brick let us know that he had gotten the woman’s number and was satisfied and said he would text her later. We all thought he was full of it, and proceeded to make fun of him to the point of him finally walking back, but this time with my friend. That left me at the table with Kale.

We got to know each other a little bit more, friendly guy but to be frank, douchey. Let me pause for a second to describe what Kale looks like – and while there are many things in life that are more important than looks, there is no question that looks play a huge role in how a person is perceived and at the most basic level contributes to the determination of attractiveness. Kale is a short guy, 5’7 “, skinny jeans, white Henley with top three buttons undone, heavy stubble and a mohawk – basic hipster template. Kale and I then discuss life experiences, small talk, etc. Eventually, Brick comes back to the table, then my friend comes back and we decide to go to the next bar. But before leaving, Kale preforms a feat of strength by drinking 2 ½ beers/cider to demonstrate his masculinity.

From there, the four of us proceed to walk to the last bar of the night. As we are walking, we are discussing how Brick and Kale know each other (through work) and Kale continues to say, “I only met this guy six weeks ago, so don’t judge me by him.” Then Kale does something that I can only equate to a shirtless selfie, and says, “I’m the coolest, I’m an attorney with a mohawk.” At that moment, I wasn’t sure to laugh or swaddle him in a blanket and tell him that everything will be all right[1]. We eventually make it to the last bar, but not without saying goodbye to Brick.

Now it’s just the three of us, and Kale continues to build himself up and put a full court press on my friend. The night then ends – but it makes me ask.

Could all of this been avoided if my friend had been using a dating app? In an app, it’s likely that Kale would have had pictures of himself with his mohawk in court, in a bathtub drinking liquor and looking smart. Also, details about where he has lived, his job, and how much he can drink would be in his profile description. From there, it’s just as easy as a left swipe.

So while technology is helping people cut through the superficial layers of a person more quickly and casts a wider net for connection, it is also contributing in limiting interactions between people.

What I mean by this is that with the use of dating applications, we have transformed that initial interaction from Russian roulette (Brick’s experience) – when you aren’t really sure what you are getting – to more of a drone strike – calculated, targeted and driven by data.

And this is where the risk of missing an opportunity you never knew you had arises, when your biases and preferences are over-catered to. For instance, while I may have a “type” of woman I am attracted to (petite, brunette or blonde, long hair, nice smile), when using an application I can be very specific, like no women with attached earlobes (just an example, I don’t actually care). But it is this specificity that can create barriers and limit interaction.

And while applications give users the benefit of cutting through the most superficial information, it does nothing to reassure someone of the credibility of that other person. Granted, there are certain signs that give a user an indication about another person, for instance, a picture with a dog signals that the person isn’t a total monster or a shirtless picture tells the user they are looking at a tool.

What’s missing is that warm introduction – a reference from someone that you know or knows someone you know – that vouches for your credibility. While not exactly a warm introduction, the fact that my friend went over to the table with Brick was a signal to the other woman. Tinder does include a Common Connection section, but this is driven by your Facebook friends, and many of us have so many friends we don’t remember who some of those people are. You could argue that by only dating people that are connected to you social circle is limiting, but in reality, it isn’t as limiting as you think – just look at your 2^nd and 3^rd level connections on Linkedin and it will give you a good idea about how wide your social circle really is.

Back to the original question, at this point, yes, I do think technology is the new social lubricant – it’s easier to text someone than talk to them face to face. But the fact that I can swipe through 50 women in an 30 minutes like I am online shopping for a shirt can reprogram how a person views and values people as more of an object than a person. And this is nothing new, it’s been perpetuated by the bro culture over time, but technology is acting as the catalyst for quicker propagation of this culture.

Technology could have saved those three women and my friend from the douchebaggery of Brick and Kale, but it isn’t a douchebag catchall and could actually contribute to turning themselves into douches. One thing is clear; technology is at least getting rid of that awkward drunk interaction but in the process, is creating more complex cultural issues.

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[1] At this point you may think I am being a little too harsh and likely have a bias because I rather be the person dating my friend, on this – you’ve got me. But in full disclosure, I deleted the worst stuff to keep it above board as much as possible.

The Conflict Between Government and Startups

The interaction between government and startups is tricky, with conflict arising due to where each sits on the innovation spectrum – with government being more cautious and startups pushing the opposite. I was thinking about this because of my own experiences and the recent experiences by Airbnb in San Francisco and Uber in France.

What’s important to know is that government is built like my 1994 Jeep Wrangler – it’s built for the long haul but needs regular maintenance to keep working correctly or else it stalls out and just becomes a massive headache.

What government does that effects most startups is that it regulates. Whether it is regulating zoning, labor, access to data, or commerce, the relationship between startups and government is a balancing act between maintaining current structures and making changes for the sake of innovation and progress.

The issues Airbnb and Uber are addressing are unique; their experiences with government are not (well maybe Uber is an exception due to the riots). While working at the U.S. Department of Health and Human Services’ IDEA Lab, we had startups come to us to request access to new data, the development of new Medicare codes that would allow their products to be reimbursable, and change in privacy policies. While not all the requests from startups where fulfilled, a lot changed and is still changing. But while the behemoth that is federal government can make changes at a macro level, it is often local governments that make an impact at the micro level – which is what Airbnb is facing in San Francisco and what I have been facing in El Paso.

One of the ventures I have been working on is the online ordering and home delivery of beer, aptly named BeerRun. The idea being, you are home from a long day of work, or watching a football game and don’t want to leave the house to pick up more beer – all you have to do is grab your phone, go to our website, place your order and wait for you beer to be delivered.

While not a revolutionary idea, this is an issue that the Texas Alcohol Beverage Commission (TABC) (state government) and the City of El Paso (local government) have not dealt with before. So a little background. In order to sell and transport alcohol products in the state of Texas you have to have a couple of licenses – which you have to apply for and pay for. Not a big deal, just some paperwork.

When I first started this process, I met with TABC staff that helped me with paperwork, answered questions and even brought in their regulations person to help answer complex questions. While El Paso currently doesn’t’ have online beer ordering and delivery, the business model still fits in the current regulation structure, but not perfectly. For instance, part of our model is that we are taking advantage of underutilized space around the city but in order to sell liquor and wine, the building you are using has to have an ADA compliant bathroom and a front and rear entrance – this is impossible if you are building alcohol caches around the city using empty offices or storage spaces – this caused us to change our scope of products being sold. Due to current regulations, we had to change the way we operate.

After the initial meeting with TABC staff, I had to get approval from the City of El Paso on our location. Texas law states that if you sell alcohol, you can’t be within 300 feet of a school, public hospital, church or commercial daycare, but there is flexibility in that local government can grant an exception to this rule.

In working with the El Paso Zoning Department, I explained what the business model for BeerRun looks like. From there, I was told that since my space was within 300 feet of a commercial daycare I would have to appeal to the El Paso City Council, and my first course of action is to reach out to the city councilor whose district the building sits in – so I did just that. I spoke to staffers of Rep. Cortney Niland and we discussed my case.

From there, I knew that in order to get my appeal through; I had to get the votes. So I spoke to some people, got some background on each of the councilors and set up my meetings.

One thing I did prior to meeting with councilors was to look up the actual statute that was in question. This is really important and helpful because I can’t tell you how many times, while at the federal or state level that I have been told I can’t do something because it was in statute – at least 70% of the time the people who tell you this are wrong.

And while the people who told me my application was denied because of Texas statute where correct, there was also some grey area in the law specifically around commercial daycares. With commercial daycares there is an exception that if the daycare and the business selling alcohol are on different levels of a building, it is permissible. Which illustrates the intent of the law – that the government doesn’t want children exposed to alcohol, alcohol sales, or the less than virtuous customers those establishments can attract – so I had my argument. We are still upholding the intent of the law due to our business model.

With that, I went and met with enough councilors to get my vote count to a majority and met with Rep. Niland’s staff again to get my appeal scheduled for a Council vote.

While I was successful in getting my appeal through (6 -1 vote), the regulation in place doesn’t even take into account online sales of alcohol – something that needs to be looked at and changed. And you may say, why change it; it worked out fine for you? True, it did, but it also took me more than a month to get my appeal through – a month that could have been used for operating the actual business. In addition to me, what about startups in Texas that are in cities that don’t have an appeal process and that have local governments that only see issues like this as black and white? They wouldn’t be able to operate under their business model, which defeats the purpose of the startup and stifles innovation and economic growth in that city.

Lastly, I want to point out the maneuvering I had to go through in working with both state and local governments. Government isn’t clear, there are bureaucratic hurdles that normal people often get tripped up on and while my background in government helped me along the way, the government staff at TABC, the City of El Paso Zoning Department, and City Council Staff were of the most help. While government statutes may be in place and conflict with innovation at times, it is the staff who act as bureaucratic sherpas to help us maneuver and find success.

While new ideas and businesses continue to emerge, government will have to go back and refine how it regulates. It has to continue to swallow its fear of change and push for the modernization of operations and regulations. And at the federal level it will take time and can be equated to turning an aircraft carrier, but at the local level, think of it like turning a speedboat, it’s quick and nimble, the change can happen now.

If we want to see innovation flourish, we need local governments to take the lead and look at and update outdated regulations and statutes to create a modern infrastructure where startups can easily operate. To put it simply, it’s time to update the spark plugs and fuel injectors on this 1994 Jeep Wrangler.

 

 

So What’s Your Startup Called?

Naming – either the company you are starting or the product you are developing is one of the most difficult and frustrating tasks early on in development. And while a name won’t make your company or product successful over night, it is one of the important early stage actions you can take as a company.

Right now we are in the middle of naming our startup – the overall company, not just a product we are offering. While we go through this exercise, a lot of different questions have come up. Questions like:

• How important is a .com?
• Does the name have to mean something?
• Should we just make up a word?
• What is the right length of a name?
• How much time should we dedicate to this?
• Can we change it later if we hate it?
• Is the purchasing of URL extensions some type of cartel-managed process?

Below is a picture of our white board with words for inspiration and a list of possible names that we have been throwing around. And while what is on the board is a chaotic list of phrases and possible names, at this point, one thing is clear – we still don’t have a name.

I’ve been through this process before and it never gets any easier. In 2012, while still with the U.S. Department of Health and Human Services (HHS), I was working with the CTO team to rebrand the Chief Technology Office into something that fit what we actually did. That something eventually became the HHS IDEA Lab, with IDEA being an acronym (we worked in government, of course it was going to be an acronym).

But prior to settling on that name we had gone through a handful of names and hours of brainstorming and more white board sessions than I care to remember, including potential names like HHS Ventures, HHS Foundry, HHS Innovation Lab – all of which didn’t fit. It was only until myself and a colleague sat down with Greg Downing, Executive Director for Innovation at HHS, that HHS IDEA Lab came about. Greg just looked at us and threw the name at us – just like that (A side note, Greg is possibly one of the most intelligent and unassumingly creative people I have ever met and has a track record of hitting home-runs, think the rate of Barry Bonds without the need of PEDs).

But it was at that moment that I realized, while the whiteboard sessions and brainstorming led up to that point, sometimes it’s just a quick flash and all of a sudden you have a name.

So that leads me back to my current situation. I have gone to bed every night thinking about this and hoping that I am going to wake up in the middle of the night with a jolt of inspiration – sadly, that still hasn’t happened. Since plan A hasn’t worked, on to plan B. I’m going to create that flash.

Think about this, Google, Venmo, Monky, Baidu, Jugnoo used to mean absolutely nothing until they became part of our everyday vernacular due to their presence in the marketplace. So the first step in creating that flash for a good name is tools and inspiration. From our whiteboard, you can see we have been too conventional – name something that possibly has context to what our product is – possibly counterintuitive when naming a startup. If you want random words try fakeword.com.

Ok, the made up word hasn’t produced anything great yet. How about purposely misspelling a word or combining two words to create a new one, like Face + Book = Facebook. Ok, looking at the whiteboard, how about Clipboard + Dashboard. Damn that just gives me clipboard, dashboard or boardboard. Ok, how misspelling something – Huddle to Huddl. We actually like this but the URL extension we want plus social media accounts aren’t available. A great tool for checking domain availability is InstantDomainSearch.com .

At this point in the name creation process I do have a couple insights:

1. Something short is desirable, because even if you make it up, something short is easy to remember.
2. With the advancement of SEO and the release of new top-level domains (TLDs), a .com isn’t essential – especially if you really like the name.
3. While there are new TLDs, make sure the social media accounts are available before you settle on the name.
4. Continue to hope for a jolt of inspiration.

Lean Startup and the Waves it Can Make

Quick Update

But first, it’s been a while since I have blogged, so a quick update – I have been working with two friends on developing a tool that will help people who play daily fantasy sports make better data-driven decisions. The world of daily fantasy sports is starting to explode with companies like FanDuel and Draftkings receiving upwards of $200 million dollars in investment from venture capital firms, major corporations like Disney and professional sports leagues like Major League Baseball and the National Basketball Association. Our thought is, don’t compete directly with these companies – because we will lose – but provide companion services that users would find helpful. Think of it this way, Apple is worth over $700 billion dollars, driven mainly by the iPhone, but the smartphone accessory market is worth $21 billion dollars – we want to be in the daily fantasy sports accessory market.

Lean Startup

In our development process, we have been utilizing elements of lean startup methodology. Lean startup is a way to build products that employ a build-measure-learn feedback loop[1]. A critical component of lean startup methodology is customer interviews – with the idea being – how do you know you are actually building a product people want or even addressing the right problem without talking to them. And that’s where user interviews come in. Talk to your potential users, get their feedback, act on that feedback and go back out to them with a better product – and that’s where we are right now, conducting user interviews on our low-res mockups.

But in order to do customer interviews, you have to first know where your potential users could be – which sounds easier than it actually is. I did a good amount of research and narrowed things down to a number of very active forums, a handful of daily fantasy bloggers who have discussed tools in the past, targeted paid digital advertising and my own Twitter feed. Initially, everything seemed normal, I posted on the Daily Fantasy Sports subreddit and got two responses, tweeted and got some feedback, purchased a Facebook Ad that has had a considerable amounts of clicks and then posted on two RotoGrinders forums. RotoGrinders is a fantasy sports website that gives users advice when playing, which includes information from “experts” but also forums for community members to discuss strategy, tools, experience, etc.

This is where it gets interesting

On May 20^th I posted on the RotoGrinders forum tilted “Bankroll Forum” explaining that we were developing a new tool and were looking for feedback from potential users to help the development of our tool and offered a $10 Amazon gift card to anyone who completes the interview. After I posted, a notification at the top of the page said something along the lines of “my topic is in moderation and will be posted shortly” – which seems standard. Days pass and I go back on Thursday to see if my topic had been posted, which it hadn’t. I didn’t receive a message stating that it wasn’t posted, hadn’t received an email notifying me why and noticed that the button that allows me to post had disappeared without reason – so I thought maybe it was something on my end. So I created a new account on Friday and wanted to test it.

First thing I noticed was that my button that allows me to post is back. So I posted again on a different forum titled “Tools Forum” but this time in a topic called “Tools, Spreadsheets, and Extensions Forum Description”. Again, my message was right on topic discussing our tool, like other users had, but instead of just using one-way communication, I asked for feedback.   Then 30 minutes later I received a tweet from user @steviepfl who works for RotoGrinders stating, “”It would be really nice if you stop spamming the RG forums.” That’s where the conversation picks up below.

Conversation with RotoGrinders Reps

Leanstartup Customer Interview Search Gone Bad with RotoGrinders

1.   @stevietpfl
   @WorkSteven would be really nice if you stop spamming the RG forums.

   Fri, May 22 2015 17:29:26

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2.   @WorkSteven
   @stevietpfl not spamming, looking for legit feedback from #DFS players for tool dev. It’s #leanstartup methodology  http://tcrn.ch/1JHECHm 

   Fri, May 22 2015 17:38:28

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3.   @WorkSteven
   @rrt7573 @stevietpfl I never received a notification to stop or that my post was not approved, so I created a new account to post (1/2)

   Fri, May 22 2015 18:00:24

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4.   @WorkSteven
   @rrt7573 @stevietpfl (2/2) on another forum that was relevant to the topic, both bankroll & tools.

   Fri, May 22 2015 18:01:02

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5.   @rrt7573
   @stevietpfl @WorkSteven Creating new accounts daily posting the same thing after being asked not to is the definition of spamming.

   Fri, May 22 2015 17:57:08

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6.   @WorkSteven
   @rrt7573 @stevietpfl (1/2) on the tools forum, people are sharing the different tools they use – which is what I was doing but going a step

   Fri, May 22 2015 18:09:02

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7.   @WorkSteven
   .@rrt7573 .@stevietpfl (2/2) further in asking for feedback. This is best practice when developing new software & tools. #leanstartup

   Fri, May 22 2015 18:11:17

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8.   @WorkSteven
   .@rrt7573 .@stevietpfl I would assume guys who have a passion for #dfs would want better tools than that excel bullshit on @RotoGrinders

   Fri, May 22 2015 18:12:56

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9.   @CruzinToVictry
   @WorkSteven @rrt7573 @stevietpfl @RotoGrinders Business 101: Networking and making good first impressions. Batting a thousand so far!

   Fri, May 22 2015 18:15:12

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10.   @WorkSteven
    .@CruzinToVictry .@rrt7573 .@stevietpfl .@RotoGrinders Tell your employees to work on their poor customer service. #dfs #leanstartup

    Fri, May 22 2015 18:17:05

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11.   @WorkSteven
    .@CruzinToVictry .@rrt7573 .@stevietpfl .@RotoGrinders (1/2) Again, I wasn’t spamming, just looking for legit feedback from #DFS players for

    Fri, May 22 2015 18:20:08

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12.   @WorkSteven
    .@CruzinToVictry .@rrt7573 .@stevietpfl .@RotoGrinders (2/2) tool dev. It’s #leanstartup methodology  http://tcrn.ch/1JHECHm  @ericries

    Fri, May 22 2015 18:20:47

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13.  
    @CruzinToVictry

    @WorkSteven @rrt7573 @stevietpfl @RotoGrinders @ericries Methodology aside, we have site policies for a reason. (1 of 2)

    Fri, May 22 2015 18:24:27

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14.   @CruzinToVictry
    @WorkSteven @rrt7573 @stevietpfl @RotoGrinders @ericries Feel free to email moderation@rotogrinders.com and discuss with them there. (2of2)

    Fri, May 22 2015 18:25:01

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15.  @WorkSteven
    .@CruzinToVictry .@rrt7573 .@stevietpfl .@RotoGrinders (1/2) Thanks for the info. Some feedback for you: please post pic.twitter.com/C4NnlUx2rJ

    Fri, May 22 2015 18:35:50

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16.   @WorkSteven
    .@CruzinToVictry .@rrt7573 .@stevietpfl .(2/2) those more prominently on the site & notifications for when something is taken down

    Fri, May 22 2015 18:37:31

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17.   @stevietpfl
    @WorkSteven @CruzinToVictry @rrt7573 or just be smart enough to realize you were banned for spamming and not make another account.

    Fri, May 22 2015 18:40:20

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18.   @WorkSteven
    .@stevietpfl .@CruzinToVictry .@rrt7573 Wow, great customer service .@RotoGrinders! Good #entrepreneurs don’t insult their customers #lean

    Fri, May 22 2015 18:43:05

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19.   @stevietpfl
    @WorkSteven @CruzinToVictry @rrt7573 @RotoGrinders good members don’t get banned and spam. Pretty good customer service keeping spam out

    Fri, May 22 2015 18:47:43

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20.   @rrt7573
    @stevietpfl @WorkSteven @CruzinToVictry @RotoGrinders Stevie, I will send you a $10 Amazon gift card to stop replying to this guy.

    Fri, May 22 2015 18:49:03

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21.   @stevietpfl
    @rrt7573 @WorkSteven @CruzinToVictry @RotoGrinders can I make a couple accounts and get more than 1?

    Fri, May 22 2015 18:49:47

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22.   @rrt7573
    @CruzinToVictry @stevietpfl @WorkSteven @RotoGrinders @CruzinToVictry is right. Feel free to create a new account tomorrow and try again.

    Fri, May 22 2015 18:54:01

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23.   @DFSviz
    @rrt7573 @CruzinToVictry @stevietpfl @WorkSteven @RotoGrinders guys, he read the Four Hour Work Week – have to cram in all spam in 1 hour

    Fri, May 22 2015 18:56:37

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24.   @bowens1984
    @WorkSteven @rrt7573 @stevietpfl is this guy for real? He created another account to post and didnt think there was anything wrong?

    Fri, May 22 2015 18:56:51

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25.  @B_DeVault
    @stevietpfl @rrt7573 @WorkSteven @CruzinToVictry @RotoGrinders I’m just here so I don’t get fined.

    Fri, May 22 2015 20:31:13

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26.   @RotoGrinders
    @B_DeVault You’re still getting fined.

    Fri, May 22 2015 21:59:56

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The biggest takeaways for me are:

1. People still don’t get it. The idea of feedback and change scare people into a visceral fury.
2. Company culture is reflective of your employees’ actions. From what I now know of RotoGrinders, based off my experience, I can tell you that:
   1. RotoGrinders doesn’t value customer service. I was all out assaulted on Twitter, even after I explained myself and offered feedback to RotoGrinders employees on how they can improve their platform to avoid situations like this in the future. They went so far as to infer that I was stupid (tweet #17).
   2. RotoGrinders has a brotastic culture. It was funny, I spoke to my other cofounders about what was going on and showed them the tweets and the response I got was, “Seems like a bunch of bros.” The fact that employees at RotoGrinders continued to pile on – so much so that the official RotoGrinders Twitter account commented on the thread – just validates the potential culture of the organization. And lets be honest, the white bro subculture isn’t adding value to anything.
3. Lean startup is the right path. I later had another conversation with someone else and told her what had happened and she responded, “Well sounds like they are threatened – must mean you are on the right path.” And while I didn’t get the feedback I wanted from potential users on the RotoGrinders Forum, I did get validation that we are doing something right.

While I assume other entrepreneurs and people who develop under Lean Startup Methodology have had similar situations, I was still very surprised at the reactions I got from employees working in an official company capacity. The founder of Zappos, Nick Swinmurn has said, “I’m not in the shoe business, but in the customer service business.” – and that philosophy has made them ridiculously successful. It’s a quote that RotoGrinders and all companies should take to heart.

Customer interviews are valuable, and that value grossly outweighs the hassle or backlash from others, which is why we will not stop what we are doing. Lean Startup is a proven methodology that results in better products for consumers and better business practices for companies.

So as we continue to interview, iterate and develop, I leave RotoGrinders with a message even they can understand. Come at me bro, because we are coming for you.

[1] http://theleanstartup.com/principles