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Matt Kalish On DraftKings NFT Digital Collectibles Ecosystem, Plus: Tens of Millions In Capital Raises For Animoca, Fanatics/Candy Digital, Parallel NFT Card Game, And More...
NFT offers a fascinating new opportunity for those who want to make money out of their hobbies and passions. For an entrepreneur who loves sports technology and analytics, Matt Kalish found gold by monetizing his passions and is now doing so in the NFT digital collectibles ecosystem. Joining Jeff Kelley, Eathan Janney, and Josh Kriger, he explains his role in achieving the $20 billion valuation of DraftKings, making it one of the world’s leading daily fantasy sports betting platforms today. This session, Matt talks about cutting edge topics like the impact of new sports betting laws and regulations on their ventures. He also imparts his insights about the future of NFT collectibles, particularly with trading cards. For this episode’s hot topics, they discuss Anicoma driving digital property rights via NFTs and gaming, Candy Digital’s plan to pivot outside of sports merchandising, and Parallel NFT Card Game’s rise to a $500 million valuation.
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Matt Kalish On DraftKings NFT Digital Collectibles Ecosystem, Plus: Tens of Millions In Capital Raises For Animoca, Fanatics/Candy Digital, Parallel NFT Card Game, And More…
Here’s what’s in store in this episode. Find out how our guest combined a few of his favorite things and co-build a $20 billion business.
Find out about three companies that are part of the latest capital raises in this booming NFT industry.
Also, learn how you can join our own NFT drop so you can grow with us as we branch out to fill the sky with you in this wonderful world of NFT. All this and more on this fresh episode. Enjoy.
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This episode features Matt Kalish, the Cofounder and President of DraftKings and co-host of the Props & Drops Podcast with none other than Gary Vee. Hailing from Lowell, Mass, Matt is a lifelong gamer and avid collector who has been a competitive player of fantasy sports, poker, sports betting and strategy games throughout his life. As an entrepreneur with a passion for sports, technology and analytics, Matt has been integral in building DraftKings to its $20 billion valuations and making it one of the world’s leading daily fantasy sports, sports betting, and iGaming platforms. Matt, welcome to Edge of NFT.
Digital Collectibles: The people doing sports betting or playing blackjack are the same ones attracted to casino games.
Gentlemen, how are you?
It’s great to see you.
It’s great to be with you.
The question is, how’s Gary feeling about the Jets?
It’s hard to say but the text message exchange that we had during the game didn’t last long. He wasn’t in the mood to talk.
We want to chat with you about your journey. Let’s take it back a little bit. How did your entrepreneurial journey begin? How did that develop into DraftKings?
Entrepreneurial-wise, I started pretty late. I was about 30 when DraftKings got my attention on nights and weekends. Leading up to that, I was in Corporate America. I did four different jobs in Corporate America. I started by graduating from college. I have an Engineering degree, Computer Science. My first job was more engineering. By job three, I had moved into business analytics at Capital One, which was probably the favorite corporate job I’ve ever had.
What I liked about analytics was it reminded me a lot of poker. I was a huge poker player. There was a lot about the math, the incomplete information, game theory or whatever. All through college and after college, I used to talk to all my friends about poker hands. We had our chat rooms and stuff. We’re going through situations and talking about the numbers and stuff.
When I got involved in analytics in Corporate America, I thought it was similar. You’re going through incomplete info. You’re trying to structure it to provide consultation to marketers or whatever. I did that job for about three years and that’s where I met Jason Robins who’s the CEO of DraftKings. He was somebody that I worked closely with at that job. Eventually, we both ended up leaving to go to a company called Vistaprint.
I got a business card from Vistaprint before.
I always say that the product was not why we went there. It’s not the most exciting product. What was great was what we were able to do there from our job’s standpoint. We both moved into marketing. I was doing CRM, Customer Retention Marketing. Jason started doing a lot of their reach advertising like TV, radio, the stuff on taxi cabs that you see or whatever. I saw that even the Celtics had the Vistaprint logo if you’ve noticed that.
He started all of those channels. We had decent-sized marketing budgets and we were moving from analysts where you’re making recommendations but you’re not pulling the trigger on things to being on the front line. We’re running marketing channels. We’re accountable for the performance and the results. During that time, we had the same hobbies. We were playing poker, fantasy company softball league together, and all of that.
It was at Vistaprint that we met Paul who turned out to be our third partner. All of us wanted to do something entrepreneurial. It wasn’t until 2011 where we came up with the idea for DraftKings, which initially was like, “What if you could do drafts every day and if the leagues were over the same day?” We tried to tap into a lot of what we liked about poker, which you can play when you want. There’s no ongoing commitment. It’s a game that’s not easily mastered or not easily felt.
What we saw in that was it was a combination of everything we thought we were good at and we liked doing. It was all of our hobbies combined. That’s what the product is. The things we thought we were good at were analytics and direct marketing so we’re like, “We can build a product, attract and retain customers probably if the product is attractive.” We started working on it thinking it was in all of our sweet spots and that we could do it successfully.
That’s incredible. You hang out with Gary Vee who talks about hustle a lot. I’m sure there’s a lot of hard work that went into all this. There are a lot of people who want to start a business who are jealous of that story. It’s like, “We want to get entrepreneurial. We put together all the things we love and now we have a $20 billion company.” That’s pretty incredible. I’m happy for you that despite all the trials and tribulations that I’m sure you’ve been through, you have something that you have a passion for. That’s exciting.
There’s nothing like bringing together the things you’re passionate about and doing what you love. One of those elements is the daily fantasy sports side of it. You got sports betting that took off with the changes in laws, regulations and whatnot. One of the questions we had is how does that tie into gaming and NFTs?
It’s evolved over time where I’ve been focused. DraftKings has been fortunate in the sense that Jason, Paul and I have been involved from day one. Even now, we are heavily running the operation. I have a team of over 1,000 people at DraftKings. I do all of our marketing, product operations, promotions and everything. Similarly, Paul has a team of 1,000-plus people with product development, engineering or whatever.
Jason is our CEO. Now that we’re public, he’ll go out and do the quarterly earnings or whatever. He’s doing fundraising and whatever we need. The three of us are still heavily involved operationally. Our focus has changed over time in the sense that many years ago, there wasn’t a lot that you could do in online gaming in the US. If you think back years ago if you’re watching a sports game, what were you doing to make that interesting but not much.
Maybe you’re on an illegal offshore sportsbook or you had a bookie. My dad was a cop. He was a corrections officer who worked in a prison. He would bring home parlay card sheets or the pools from his work that he pulled out of the prison. He would do squares during the Super Bowl. I remember the March Madness brackets but that’s all that there was.
Daily Fantasy was popping up in 2011, 2012, when we launched. That was one of the top ways in the course of a couple of years that people were getting skin in the game on sports. People like me and probably all of us who don’t want to sit and watch a game want to predict things and want to play somehow. We followed where that attention was going from that audience and sports betting was a massive focus. Once that started opening up in 2017, we put tons of attention there.
The NFT and crypto communities have very distinct vibes that are extremely positive. Click To Tweet
The same people who are doing sports betting are the same people you see who are playing blackjack. Other casino games are highly attractive and relevant to that same audience. Now we’re seeing collectibles, especially since COVID. Starting with physical sports cards. It started to ramp up in Q3 and Q4 of 2020. Prices started going crazy. People were zeroed in.
The first time that I noticed digital collectibles showing up was Top Shots in February 2020, roughly. I know what was going on before that but that was when it hit my radar. Enough people were paying attention at that point. It’s probably in the tens to maybe a hundred thousand people jumping in trying to get packs and things like that.
That’s the first time that my attention started going there. All of it was this general idea of DraftKings serving a certain type of consumer. We call it skin in the game sports fan. It’s the person that doesn’t sit on their couch and watch the Patriots. They want to predict and play. They’re playing fantasy. They’re making sports bets. They’re doing whatever they can to get skin in the game. That’s the customer that we’ve been trying to serve. Wherever that attention is going is where my attention goes.
It’s such a distinctive group of folks too. You highlighted it and you guys are plugged into this group of people. You can see that it’s that same group over and over again doing these things and making it interesting. It’s cool.
I’ve always found it easy too because that is my personality type and what I do for fun anyway. Being myself has generally brought me to the right places at the right times. Maybe a little slow in some cases. In some cases, maybe a little earlier but I do like all of these projects. I like all the products that I’m working on and that I’m marketing. I use them personally so it’s always been a little bit natural to follow the attention of our customers.
I can relate to that. That’s how this show started. Jeff and I have known each other for years and we met Eathan. This show is a manifestation of everything we enjoy talking about. It’s something we can do for years to come. I had a chance to listen to Props & Drops and it feels like a comfortable conversation. You and Gary are hanging out on the couch, having a beer, and talking about the games for the week. It’s a lot of fun. You guys are covering NFTs, collectibles, trading cards and so much more. What’s your vision for the podcast and how far do you see this world of NFT collectibles reaching?
Crypto and NFTs have such a crazy runway ahead. The thing with crypto, NFT, and the communities around it in general that I found so amazing is that the vibes of it are distinct and extremely positive. It’s nice to go on and make stuff. We’re doing this podcast or I’ll go on with Gary. You go on and you can shoot the crap. You can talk about what’s going on with the content and with the drops. If something I invest in doesn’t go well, it’s a funny joke. If it goes well, I’ll be the biggest genius in the world for one day. We can trade all these stories and talk.
There’s an underlying sense that the vibes are immaculate in this whole crypto and NFT space. Everybody, in general, is positive. There are a lot of different products or projects where I’ve gotten involved in the community. It can be all different sorts of dynamics. This one, in particular, I feel like a big part of why people want to be a part of these communities are like, “I want to get a Bored Ape or whatever.” It’s because you connect with the vibe of the community that’s in that ownership group. It’s limited and it’s something special but the quality and the dynamic of the community and the discussion are positive.
Over time, that will be a source of positive energy, a source of entertainment for many people. It’s almost like watching Twitch streams of people playing games or anything else that you do where there are these positive vibes. When I go on Twitter and I turn on the Twitter spaces, and I listen to Farokh or Dees or whatever. These guys go on for hours every single day, and it’s positive all the time. How could you not be attracted to that? That combination of what people already love about collectibles or what they already love about that speculation combined with the content, the positivity, and the community is special.
I couldn’t agree with you more. It sounds like we both feel that this industry has long legs and it’s going to be exciting. No one quite knows where it’s going but it’s going to go somewhere fun, special, and continue to breathe positive energy into the world.
In some of the projects too, you get the sense that they’re scratching the surface of what’s possible. There’s so much innovation and disruption to come on how this technology will be used and built. The first project I ever bought was a CryptoPunk, which is no utility. It’s an avatar. You buy it and you have it, then everyone makes jokes about how they can right-click your avatar and they own it. That’s all there is to it. Over time, you start seeing more projects come out and people are doing different things. People put royalties on them so that they’re generating revenue. They can reinvest into the project and build legit companies that have ongoing revenue against it.
They’re building these roadmaps that I’m going to make content. For example, we were talking about DeadHeads, Vee Friends, a bunch of SpacePoggers, a bunch of these projects that have ideas of making content, movies or whatever. Cool Cats or Kongz that do the yield. Sup Ducks are doing yield where you get tokens and you can spend them in a store that they make or whatever. You start to see more use out of the tech. Even still, what we’ve already seen is maybe 10% of what we will see over the next year as more and more engineers put their heads down and get to work.
Since you went there, I’ve got to mention the Gambling Apes. You got this little ape that co-owns a casino in Decentraland. How fun is that? I was attracted to that project as well. It keeps going and going. Every week there’s something new.
It’s Wild West in a way. It’s interesting. There’s a lot of Wild West project building out there. At the same time, the community governs itself well. It’s almost better than anything I’ve ever seen. People hold each other accountable for good conduct and maintain positive vibes. If anything gets out of check, then there are people that get it back in check. It’s a good self-governing, decentralized community.
That’s a lot of what we see in here talking to different projects and people in the space. I want to get a little bit to the marketplace that you built in partnership with Autograph. This is huge. What are some key elements of your platform roadmap? When is Josh going to get to toss a football with Tom Brady?
What DraftKings ultimately has as the rationale for doing anything here is an audience that is in the market buying lots of collectibles or whatnot. The foundation for us is we have a large platform that already has a lot of engagement whether it’s fantasy play or sports betting. We have millions of customers that are coming and playing those games.
I always thought one of the toughest things with any collectible was building and maintaining the attention of an audience. A lot of the projects I’ve gotten involved with are doing it through Discord. They’ll set up a Discord and push it through Twitter. Community managers do their thing on Discord, and it’s the center of the community.
To keep ongoing attention for weeks and months after the drop is difficult. Even some pretty good teams and good projects I’ve seen struggle with this. There are relatively few that I’ve successfully done for months and we don’t even know for years. We’ll see how many people on day 100 or 360 are still checking in on their Discord. We don’t even know because it’s too soon. It’s too new.
The idea of how fast that attention after the drop falls off is instantaneous. In the case of DraftKings, we already have the daily or weekly engagement. People come for football, basketball or whatever. It’s easy for them to also see what’s going on with their collections and see what drops are coming. The unfair advantage of DraftKings is having millions of people showing up who are already engaged.
From there, we have the exact type of customer showing up in the market. People who are heavy crypto adopters like sports card collectors and non-sport card collectors. Behind me aren’t even sports cards. This is Flesh and Blood, a fantasy, non-sports card game. I have boxes of these cards. Steve Aoki is into MetaZoo, which is a similar game. These are what the people in our audience are doing. They’re collecting sports cards. They’re trading them with their friends. They’re trading stocks. They’re doing all this stuff.
Digital Collectibles: A skin-in-the-game sports fan doesn’t just sit on their couch and what the game. They want to predict the game and make sports bets.
We have the perfect profile of customers as well to create a vibrant marketplace that has a lot going on. That’s what we do best. On the content side, Autograph, our partner that provides the NFT content, went out and did all of these deals with Tom Brady, Naomi Osaka, Simone Biles, Tony Hawk. They had all these IP rights deals for name, image likeness, marketing deals or whatever. That was the perfect first partner for us to go live with because they have such a great roster and good access to many of our favorite athletes.
They also did some deals outside of sports. For example, we’re doing a drop with Lionsgate about the movie Saw. They built an entire concept around that and we’re dropping it. They’re able to branch into movies, pop culture, sports or whatever. It’s a great partner. It’s not the only partner that we’ll work with but that was our inaugural partner to go out and get the ball rolling at the stage we’re at.
What our audience should expect is that this is going to be an area that we’re focused on. We’re probably in warm-ups. I feel like the game has hardly even started in terms of NFTs, marketplaces and stuff. As we get more and more content deals inked, as we build content in-house, as Autograph builds on their roadmap, it’ll get better and better over time.
Congrats on moving quickly. We run into people all the time. You had it where it was like, “This is perfect for us.” We meet all kinds of people who know that NFTs are perfect for what they’re doing. It’s also a struggle to find the right partners, make the right plan, and get things going quickly. Congrats on building that and getting it going as fast as you have.
It’s a balance of how fast to go and what’s an alpha product, beta product or whatever. If you get in-market, you see what the consumer sentiment is. You get feedback and you learn fast when you’re operating and it’s hard before you’re operating. We’ve always had a bias to get a viable product out there, then iterate and talk to the users. That’s how we looked at this one and it was the right decision.
It’s clear that there’s going to be a tremendous amount of innovation. Lots of different plays on the marketplace. You see Coinbase, Reddit or whoever. Every day, there’s an announcement from someone who feels like, “A play for us is going to be in the NFT marketplace.” It’s going to be vibrant. There’s going to be a lot going on in this space. The sooner that we could get in-market, start building relationships with our players, and start getting that association, we wanted to go as fast as we could. We have twenty jobs up on our site for the marketplace and the team is five people or something. We’re ramping fast.
You might get somebody from our audience.
No.
What are you going to do?
Yeah, what can you do?
I’m a big Laker guy. That’s huge.
He’s screaming for a SaaS product.
Especially in the world of NFTs, it’s so hard.
Metrics tracking.
I’m doing the job that I get paid for.
It sounds like a great time.
Fanatics NFT company now worth $1.5 BillionCandy Digital
That was a packed show.
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About Matt Kalish
Entrepreneur with a passion for sports, technology and analytics, currently the President of DraftKings, N.A. Co-founded DraftKings in 2012, which has become one of the world’s leading daily fantasy sports, sportsbetting and iGaming platforms and a preeminent sports entertainment company changing the way fans engage with sports.