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Mar 29, 2016 · 22m · top-founders

How to Bet On Poker Players and Make Money with Scott Hansbury of YouStake EP 206

Scott Hansbury · 10m spoken Nathan Latka · 8m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of "The Top," host Nathan Latka interviews veteran tech entrepreneur Scott Hansbury to discuss his past $400 million corporate exit and the business model, metrics, and growth strategy behind his poker staking platform, YouStake.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 46.1% of the talking time here. How this is scored →

Nathan as informed peer 4.8 Guest teaching 2.8 Guest disagreement 1.2 Nathan pushing back 3.2
05100:0010:0020:001:17–5:58 · Nathan as informed peer 6/10 Scott Hansbury on Transitioning from Corporate Tech to Startups Nathan probes into Scott's past exit with High Ground Systems, calculating top-line revenue multiples (25x-30x) and asking sharp questions about bidding wars and mezzanine funding.5:58–8:37 · Nathan as informed peer 4/10 The Conception, Value Proposition, and Legality of YouStake Scott explains the YouStake marketplace concept and gently corrects Nathan's comparison to daily fantasy sports like FanDuel, detailing the legal mechanics of person-to-person staking.8:37–15:38 · Nathan as informed peer 8/10 YouStake Funding Rounds, Platform Fee Structure, and Traction Numbers Nathan challenges Scott's use of valuation terminology on convertible notes and aggressively drills down into the metrics until calculating YouStake's exact gross platform revenue of $70k.15:38–18:05 · Nathan as informed peer 4/10 Marketing Funnels, Operator Partnerships, and Series A Objectives Nathan clarifies whether Scott's 20% month-over-month growth target refers to user volume or revenue, and Scott lays out their marketing channels and Series A targets.18:08–21:55 · Nathan as informed peer 2/10 Mid-Show Contest Reminder and HostGator Sponsor Message Segment consists of sponsor messages and the standard Famous Five rapid-fire closing questions with no real friction.1:17–5:58 · Guest teaching 2/10 Scott Hansbury on Transitioning from Corporate Tech to Startups Nathan probes into Scott's past exit with High Ground Systems, calculating top-line revenue multiples (25x-30x) and asking sharp questions about bidding wars and mezzanine funding.5:58–8:37 · Guest teaching 4/10 The Conception, Value Proposition, and Legality of YouStake Scott explains the YouStake marketplace concept and gently corrects Nathan's comparison to daily fantasy sports like FanDuel, detailing the legal mechanics of person-to-person staking.8:37–15:38 · Guest teaching 5/10 YouStake Funding Rounds, Platform Fee Structure, and Traction Numbers Nathan challenges Scott's use of valuation terminology on convertible notes and aggressively drills down into the metrics until calculating YouStake's exact gross platform revenue of $70k.15:38–18:05 · Guest teaching 2/10 Marketing Funnels, Operator Partnerships, and Series A Objectives Nathan clarifies whether Scott's 20% month-over-month growth target refers to user volume or revenue, and Scott lays out their marketing channels and Series A targets.18:08–21:55 · Guest teaching 1/10 Mid-Show Contest Reminder and HostGator Sponsor Message Segment consists of sponsor messages and the standard Famous Five rapid-fire closing questions with no real friction.1:17–5:58 · Guest disagreement 1/10 Scott Hansbury on Transitioning from Corporate Tech to Startups Nathan probes into Scott's past exit with High Ground Systems, calculating top-line revenue multiples (25x-30x) and asking sharp questions about bidding wars and mezzanine funding.5:58–8:37 · Guest disagreement 2/10 The Conception, Value Proposition, and Legality of YouStake Scott explains the YouStake marketplace concept and gently corrects Nathan's comparison to daily fantasy sports like FanDuel, detailing the legal mechanics of person-to-person staking.8:37–15:38 · Guest disagreement 2/10 YouStake Funding Rounds, Platform Fee Structure, and Traction Numbers Nathan challenges Scott's use of valuation terminology on convertible notes and aggressively drills down into the metrics until calculating YouStake's exact gross platform revenue of $70k.15:38–18:05 · Guest disagreement 1/10 Marketing Funnels, Operator Partnerships, and Series A Objectives Nathan clarifies whether Scott's 20% month-over-month growth target refers to user volume or revenue, and Scott lays out their marketing channels and Series A targets.18:08–21:55 · Guest disagreement 0/10 Mid-Show Contest Reminder and HostGator Sponsor Message Segment consists of sponsor messages and the standard Famous Five rapid-fire closing questions with no real friction.1:17–5:58 · Nathan pushing back 3/10 Scott Hansbury on Transitioning from Corporate Tech to Startups Nathan probes into Scott's past exit with High Ground Systems, calculating top-line revenue multiples (25x-30x) and asking sharp questions about bidding wars and mezzanine funding.5:58–8:37 · Nathan pushing back 3/10 The Conception, Value Proposition, and Legality of YouStake Scott explains the YouStake marketplace concept and gently corrects Nathan's comparison to daily fantasy sports like FanDuel, detailing the legal mechanics of person-to-person staking.8:37–15:38 · Nathan pushing back 7/10 YouStake Funding Rounds, Platform Fee Structure, and Traction Numbers Nathan challenges Scott's use of valuation terminology on convertible notes and aggressively drills down into the metrics until calculating YouStake's exact gross platform revenue of $70k.15:38–18:05 · Nathan pushing back 3/10 Marketing Funnels, Operator Partnerships, and Series A Objectives Nathan clarifies whether Scott's 20% month-over-month growth target refers to user volume or revenue, and Scott lays out their marketing channels and Series A targets.18:08–21:55 · Nathan pushing back 0/10 Mid-Show Contest Reminder and HostGator Sponsor Message Segment consists of sponsor messages and the standard Famous Five rapid-fire closing questions with no real friction.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 69.7% · guest 30.3%0:00 · Nathan 69.7% · guest 30.3%3:00 · Nathan 28.5% · guest 71.5%3:00 · Nathan 28.5% · guest 71.5%6:00 · Nathan 12.6% · guest 87.4%6:00 · Nathan 12.6% · guest 87.4%9:00 · Nathan 26.8% · guest 73.2%9:00 · Nathan 26.8% · guest 73.2%12:00 · Nathan 45.5% · guest 54.5%12:00 · Nathan 45.5% · guest 54.5%15:00 · Nathan 35.6% · guest 64.4%15:00 · Nathan 35.6% · guest 64.4%18:00 · Nathan 89.8% · guest 10.2%18:00 · Nathan 89.8% · guest 10.2%21:00 · Nathan 76.3% · guest 23.7%21:00 · Nathan 76.3% · guest 23.7%
Sharpest disagreement ▶ 7:24 Scott reframes the DFS comparison

Scott pushes back against Nathan's simplification of YouStake as 'FanDuel or DraftKings for poker', detailing how direct backer-to-player engagement fundamentally differs.

 Hardest push from Nathan ▶ 9:15 Nathan challenges valuation terminology

Nathan immediately halts Scott to point out that convertible notes do not have valuations, forcing him to clarify that he raised the valuation cap.

 Biggest teaching moment ▶ 12:08 Scott corrects Nathan on volume figures vs user count

Scott educates Nathan after Nathan confuses $2.8M and $1.4M in total staking dollar volume with counts of individual poker players and backers.

 Nathan holds their own ▶ 15:07 Nathan calculates exact net take rate revenue

Nathan breaks down the platform fees and merchant processing charges to pinpoint that YouStake has made exactly $70k from their $1.4M pledged.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Scott Hansbury on Transitioning from Corporate Tech to Startups 6213 Nathan probes into Scott's past exit with High Ground Systems, calculating top-line revenue multiples (25x-30x) and asking sharp questions about bidding wars and mezzanine funding.
The Conception, Value Proposition, and Legality of YouStake 4423 Scott explains the YouStake marketplace concept and gently corrects Nathan's comparison to daily fantasy sports like FanDuel, detailing the legal mechanics of person-to-person staking.
YouStake Funding Rounds, Platform Fee Structure, and Traction Numbers 8527 Nathan challenges Scott's use of valuation terminology on convertible notes and aggressively drills down into the metrics until calculating YouStake's exact gross platform revenue of $70k.
Marketing Funnels, Operator Partnerships, and Series A Objectives 4213 Nathan clarifies whether Scott's 20% month-over-month growth target refers to user volume or revenue, and Scott lays out their marketing channels and Series A targets.
Mid-Show Contest Reminder and HostGator Sponsor Message 2100 Segment consists of sponsor messages and the standard Famous Five rapid-fire closing questions with no real friction.

Statements from this episode (10)

Assertion Supported
Sun Microsystems Acquired HighGround Systems for $400 Million
“We ended up accepting an offer from Sun Microsystems for four hundred million.”
Scott Hansbury Mar 29, 2016 ▶ 3:49
Assertion Not checkable as stated
HighGround Systems Generated $15M Annual Revenue at Acquisition
“The revenue at that time was right around fifteen million. Annually.”
Scott Hansbury Mar 29, 2016 ▶ 4:04
Assertion Not publicly verifiable
HighGround Systems Raised Around $25M–$30M Prior to Exit
“Probably about 25 to thirty million.”
Scott Hansbury Mar 29, 2016 ▶ 4:13
Assertion Contradicted
YouStake Structures Poker Staking Legalities as Income Share Agreements
“Oh yeah, absolutely. It's what's called a person to person sponsorship or a income share agreement is, is really what the legal term is. There's actually IRS forms that you fill in when you do your taxes for it. So it's all been approved.”
Scott Hansbury Mar 29, 2016 ▶ 8:20
Disclosure
Hansbury: YouStake closed a $400,000 convertible note seed tranche
“In fact, we just closed our first tranche of 400 K.”
Scott Hansbury Mar 29, 2016 ▶ 8:54
Assertion Not checkable as stated
YouStake Processed $2.8M in Listings and $1.4M in Pledges Over Six Months
“So in the six months that we launched, we've had 2.8 million dollars in stakes put up on the site. So that's kind of the supply side. And then we've had 1.4 million pledges against those stakes.”
Scott Hansbury Mar 29, 2016 ▶ 11:15
Assertion Not checkable as stated
Hansbury: There are 100M poker fans globally, with 60M in the US
“There's actually a hundred million poker fans worldwide, sixty million of which is in the U.S., And of all those, one percent of that is actual players.”
Scott Hansbury Mar 29, 2016 ▶ 12:35
Assertion Not checkable as stated
Hansbury: YouStake has 2,700 users and roughly 250 highly active backers
“There's 2700 users right now, and out of that 2700 users, we've got about 250 of them that are pretty, you know, really active, multiple stakes on multiple people. And then we've got, you know, probably another 150 to 200 that are just, you know, casually here…”
Scott Hansbury Mar 29, 2016 ▶ 14:31
Disclosure
Hansbury: YouStake takes a 5% net fee on poker staking raises
“No, no, we're taking, we actually get five percent. There's eight percent added to the raise, but five percent goes to us. That's our fee. And the other 2.9% basically is, is the merchant fee that goes to the, you know, credit card and PayPal and those kinds o…”
Scott Hansbury Mar 29, 2016 ▶ 15:08
Assertion Not checkable as stated
Hansbury: YouStake is achieving over 20% month-over-month user growth
“In our six months that we've been in, in business it's really started to pick up and we're hitting those 20 plus percent month over month growth for adding new users.”
Scott Hansbury Mar 29, 2016 ▶ 16:12
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