Andrew Paradise
“…Skillz is a B2B, B2C technology platform that powers more than 2 billion tournaments per year. We enable game developers to monetize through competition. The platform broadly, it democratizes gaming by leveling the playing field, for access to being able to build esports. We had this belief nine years ago that esports are for everyone, and our goal is to make it as fair and as accessible as possible to all constituents, starting with the game developers. So we enable developers of all sizes to monetize their art while players are engaging in fair, fun and meaningful competition.
When you think about the broader path ahead, we really view that we’re building out the competition layer of the internet. The business today, it’s a transaction based revenue model. We’ve charged an entry fee into paid competitions on the platform. The average entry fee on the system, it’s about $3 per player per tournament. So, we generate about $0.90 of revenue on an average competition. So that equates to roughly a 15% take rate.
The key is that we do this literally hundreds of times per second, plus going on thousands now. And we do it using a lot of automation and technology. As you can imagine we have, I think our last public number is a little bit over 500 headcount, and 2 billion tournaments obviously it’s highly automated….
Q – Jason Bazinet, Citi
That’s great. So you mentioned you started Skillz about nine years ago. From that sort of starting point from to where we are today, what would you say has gotten better? And what has been more challenging than you expected when you first started this journey?
Andrew Paradise
Well, we certainly believe the mobile gaming market well. We believe mobile would be really big, and that gaming, interactive content at the time, there are 800 million smartphones and devices, when we started the business. And almost 60% of the usage was mobile gaming, in terms of how the devices were being used. That number has actually stayed relatively constant assets scaled to 5 billion devices and tablets.
So I’d say, it’s awesome to see that come to fruition. It is more powerful than we would have imagined, than I would have imagined. And the new projected number now as we’re sitting here in 2021, is that by 2025, there’ll be 10 billion smartphones and tablets. So more devices than people on the planet.
I’d also say the performance of our platform versus in-game advertising, we’ve never had to pivot because the rate of monetization from our platform versus this kind of next alternative of advertising, it’s such a stronger way to monetize.
And then, I’d say in terms of going well the level of talent and people, who have been attracted to the mission, and how mission driven they really are to see Skillz deliver the future of digital competition. It’s almost the same thing on the other side of the coin, if you think about challenges, we’re 500 people going on 1000. One of the biggest challenges, I think, for any important tech company now is to hire and onboard the best talent in the world. It is definitely a fight for talent.
And at the rate our business has been growing, which is 2 to 4x in revenue each year, it’s an increasingly large challenge to hire and retain the best talent. We definitely saw this play out last year, where we underinvested in our revenue organization. And it resulted in us playing a bit of catch up this year on user acquisition prices for the last several months.
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