The road from idea to acquisition often takes unexpected twists and turns. Betty Labs’ Howard Akumiah knows this as well as anyone.
When his live audio platform for sports conversations, Locker Room, was acquired by Spotify last March, it was the culmination of a tumultuous three-year journey.
As a young entrepreneur, Howard has grappled with tough questions. What do you do when growth is good-not-great?? How do you know when to pivot? What do you do if co-founders disagree about vision? When things are going well and an acquirer comes along, should you accept an M&A offer or keep growing?
At our Leading Lights event last month, I spoke with Howard about the lessons he’s learned and the hard calls he’s needed to make to ensure his company’s success.
Me: How did you come up with the idea for Betty Labs?
Howard: It started in 2018, when I was working at Pinterest and the Supreme Court overturned PASPA, opening the floodgates for legal sports betting across America. As a fan, I knew someone would build something exciting and innovative around sports betting, and I wanted to be that person.
I started working on a side project called Betty. It sent you a text while you were watching a game containing a bet about that game, which you could accept or reject. I gave it to five friends during the 2018 NBA playoffs, and by the end of the playoffs I had hundreds of people wanting to get onto the platform. That’s when I decided to leave Pinterest and, together with a friend and co-founder, focus on it full time.
After six months of working on Betty, we realized that growth would be stalled until each state legalized sports books. So we pivoted to Sideline, which used the same mechanics as Betty but offered people multiple choice quizzes during each game, with cash prizes for the winners. It was like HQ Trivia, only for live sports. And that ended up taking us deep down the path of what fans want from their sports watching experience.
But then you pivoted again. How did you get from Sideline to Locker Room?
That was one of the hardest decisions I’ve had to make as a founder. Sideline was actually doing well. It was growing month over month, with tons of passionate fans playing the app and winning money. But our growth curve wasn’t exponential, and I realized it would take a long time for us to achieve escape velocity. So in January 2020 we stepped back and took a hard look at what was and wasn’t working.
We saw that the vast majority of people on the platform were using the live chat feature to talk to other fans during the game. We realized that this is the behavior sports fans do the most, more than wagering or even watching. We decided to become the de facto place for fans to communicate during a live game. That became the vision for Locker Room.
And then the pandemic hit. How did that impact Betty Labs?
About 4 week after we began building Locker Room, Rudy Gobert of the Utah Jazz contracted COVID and the entire NBA shut down. Every other sport followed. There were no longer any games we could run Sideline on. But without any games to watch, people were talking about sports more than ever. We knew if we got Locker Room out quickly, it would be the perfect place for those conversations to happen. So we did. That gave us a ton of early momentum. There was a period of about six weeks where we doubled in size every three days. The more people who were on the platform, the better the conversations became.
Can you share some of the growth strategies you used?
I used to think growth should always be completely organic, and that if you build a social product correctly it will just grow overnight. That was wrong. So we formed strategic partnerships with big sports podcast networks like SB Nation and Blue Wire, as well as with journalists like the New York Times’ NBA correspondent, Mark Stein. This all brought new users to our platform, who quickly grew engaged, and the network effect of our community kicked in. The biggest shift was deciding to use our capital and resources as a growth lever, to spend money putting exclusive content on our platform and make it a more desirable place for fans to go. Once they started to come, it just kept snowballing.
Why did you ultimately decide to sell the company to Spotify?
I’m a very competitive person. I knew we’d built a great product, but we were always seen as being a niche community product, and it began to grate on me. I really wanted to win the space and become the premiere tool in live audio. Partnering with Spotify gave us the best chance to become the number one company in the space. Obviously, a lot of factors go into making sure an M&A deal is the right one. But from a first-principles perspective, I just wanted to win.
Winners gonna win. Learn more about Howard and his amazing story by following him on Twitter https://twitter.com/howardakumiah
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