E242 - Roger Ehrenberg from Eberg Capital

Oh my God, you're starting to get under my skin right now. I probably need to change yourself. You're the one that started this. I don't really talk about betting in business, but we're talking about, you know, Northwestern versus Michigan's all day long, my friend. The Business of Betting Podcast is presented by Optimo. The number one CRN marketing solution for the eye gaming industry. Four out of the top five US operators personalized player experiences with Optimo. Learn more about Optimo by requesting a demo at Optimo.com/businessofbetting. And if you like what you see, you will get your first month free. What is up everybody? I am Jason Trost, the host of the Business of Betting Podcast. I am joined today with Roger Ehrenberg, who wears many hats. Way back when he started in Wall Street, after that he went to he founded IA Ventures, which which became a very famous and successful VC fund. That has a lots of big names like Wies and Trade Desk and you know, lots of names that people have heard. Data Dog, I think it's another one. Recently he's founded Ebert Capital, which is going all in on sports. Welcome to the pod Roger. Thank you Jason. By the way, I just have to say I didn't know that your last name was pronounced Trost. I always thought it was Trost. So this was very clarifying. Okay, well it's you're not the first person that does that and I try to get back in the world. Anytime I meet somebody called Frost, I make sure I pronounce it Frost just to try to balance everything. That seems very like you. Sure. When you look at the word, it does kind of look like Frost, but then you think of most host boast. You know, there's a lot of long-aw words in the dictionary. Why not Trost? And that would all make sense. I get it. Thank you for that clarification. With your long list of accomplishments, you also have the dubious distinction of going to the second best school in the Big 10. So congratulations to that. Oh, oh, oh, other little brother. It's quite all right. Very happy to welcome you into the Big 10 conference where we happen to be the waiting of steam all time, not just in the conference, but we'll let that go. There was a saying at Northwestern, I don't know if it ever made out. It's a little bit embarrassing, but it kind of rings in my my ear all the time. No, no, it's okay. You'll be working for us someday. I don't know if you guys have something similar like that of Michigan or not, but it's a very snobby way to try to taunt the competition. We do. We tend to chant that at Michigan State. So you guys are you're having a good year. I mean, I think you started like Michigan basketball has been quite crappy. I want to say the last few years. I mean, the football obviously has been crushing it, but basketball has been kind of underperforming for a long time, I would say, like because you had that great team in the 90s or the knots. What's that team that like everybody went to the NBA when they were freshmen? You're you're talking about like the Chris Weber era. Those guys in the early 90s. Sure. Yeah. Well, that was Chris and Juwan Howard and Jalen Rose and Jimmy King. Yeah. So, but now, dude, we should have won the national championship in 2013 with Trey Burke when there was that yes, Valor call when he had the clean block on the Louisville player and then they ended up making two free throws and winning the game. So no, we've been in and then we were in San Antonio in 2018 when we lost to Bill and Oval, we made it to the final game again. So your memory of Michigan basketball is actually quite poor. I think you've got recency bias because we were eating 24 last year on her, Juwan when, you know, got off to a hot start, but I think it was, you know, physical issues. I think it was just a little bit challenging, but now with Dusty May, who has brought kind of new vitality, new energy. He's still through. He's a great, great person or 22 and seven and we're, you know, number two in the big 10. So I could not be more elated with our bounce back. It is an impressive season. And I think you're sitting at number one or two right now in the standing. So two Michigan states one, but it's were up there. Best of luck at the tournament. And I'm sure you guys will do it every year. I turn into a big 10 fan in the tournament. So I'll be reading for you guys even though, you know, when it's regular season, I have to hate you, but when it's postseason, I root for you guys. I'm well, I'm reading for you in the national fencing championships. I, hey, hey, hey, hey, golf, golf, number one in the cross, number one in field hockey. We got some national champion like lacrosse went on like, I think we won nine national championships or something the last 15 or 20 years. Like we're, yeah, like lacrosse and field hockey were, we're up there with like the number ones. We have, you know, it's not just fencing. Okay. I thought or maybe it was epic. No, I always, I thought that John Hopkins was the lacrosse powerhouse in Maryland, but no, I'm sure you say that believe me. And Luke Donald, of course, he was the North Western guy and, you know, you know, we got some okay, guys. You got some deep cuts there, Jason. I'll have to take comfort in the fact that, you know, we get $60 million or probably more now for just being in the big 10 that kind of goes to our bottom line. You're welcome. Pretty remarkable. Oh my god. You're starting to get under my skin right now. I probably need to change. I don't really want to talk about betting and business, but we're talking about, you know, Northwestern versus Michigan. All right. All day long, my friend. So you had a much longer career than I did in Wall Street, but I cut my teeth as a trader. And one of the things that my boss beat into me when I said trader is that price is everything. And one of the things I kind of wanted to talk to you about is, I think you're more known as a seed investor than a later stage investor. There's kind of two broad themes that I'm kind of curious to get your take on it. One view of seed investing is it's about picking the right founders, right company, you know, whether you do that by having a hypothesis about the industry or you really dig the founders versus, and this is kind of like, I don't know, for lack of a better word, like a Warren Buffett approach to seed investing. Like it's really about the price. And I think a lot of times when people talk about venture investing, the price gets lost in the equation, you know, in sports betting, I often say that at the right price, you should always bet at the right price. And the same thing is true for, I think, stock trading, you know, it's the lot of people often think about should I buy IBM, should I not buy IBM, you should always buy IBM at a price of X and you should always not buy IBM and the price of Y. When you are picking your picks, how much of it is a function and you've had incredible success with some of these picks, how much of it is a function of like right founder, right time, right business hypothesis, and how much of it is a game of pricing and then the multiple ends up working out because you got the right price. It's a great area for inquiry. I think you're missing one massive vector and that's the temporal aspect and that's what you're holding for it because certainly in the stock trading, if you're doing higher frequency than price and correctness, everything because you're not giving a thesis along period of time to play out, it is much more algorithmic and event based venture capital is not right now you can say venture capital in very late stage right more grope series CD pre IPO is more like that where the kind of cone of outcomes is much narrower the return profile is flyer and the time to realization is expected to be much shorter what I tend to do is literally the exact opposite which is very very very early in a company's life pre market product market fit almost often pre revenue where it is the synthesis of founder and price and this willingness to tolerate immense volatility immense pain over a longer period of time such that if you're right the piece just plays out you get the compounding value and eventually you get a realization but eventually could be 15 years not 30 seconds not three years so in that way price matters but you could argue it matters somewhat less because of the compounding but that said if you're investing in a business that really should be at a 5 million post and you're investing at a 10 million post well you're going to have the ownership and so price matters at all times but it really comes down to always always founder and do you have a big enough bag roll and a long enough holding period to let those these these play in and let me just say it matches investing but in life that is not a naturally human characteristic we want reinforcement quickly the land gratification much less the land gratification while increasing pain along the way is extremely hard and not hardwired into us it's like a lured behavior and so it's really hard which I think is why you know somebody like me can come into a new realm like sports investing because my background is you know as you said Wall Street but then Murt Frodo tech investing into sports it's because just aren't there would just start that many people like me in sports and media investing whereas now not when I started but now there are way more people like me into that does that make sense yeah it does it does make sense in terms of you were talking about recency bias when I was looking at the Michigan basketball team like I don't know how many unicorns you've seed invested but like off the top of my head three or four is there is there more than four well there's four public and then we have more private well I would say that's probably like as good of a world. record as most investors have to kind of get that many. And would you, if you were like looking back at your career from outside, do you think you have a survivorship bias in the sense that you got lucky? And if you take a large enough distribution of investors, one is going to get eight unicorns in their seed portfolio, or do you think that you've locked on to something that other investors haven't figured out? I think that my observed record over values, my skill, for sure. Or I should say, it's unclear that they're-- look, when I started IA in late 2009, coming out of the global financial crisis, when micro VCs were barely a thing, when I probably, the single smartest thing aside from actually putting a stake in their crown and saying I'm in business, was this notion of observing that big data was a megatrand, and something that eventually was just going to be-- you would even need to call it big data, it's just everything. That was insightful, and that was helpful. And me building brand, building awareness, building deal flow, building credibility, my timing could not have been better. Deploying capital in those 2010, 11, 12, 13 ventages, I think we'll see as being some of the greatest companies of all time were kind of in the five, in the three to five years plus minus that 2010 pivot point. So lucky or smart, the timing was great. And so I'm not going to sit here and say, I was so brilliant to have found all these companies and seated at the just right ones. Certainly there's some degree of skill in that, and I do think that I have made good investments across ventages with different environments. But that all said, do I consider myself to be one of the best seed investors of all time? No, and I don't know who is and who would have the hubris to put it like that and actually feel it because of the impact of luck, of right time, right market conditions, right founders, right decision to invest in those factors, and the mere fact that you've seen that you saw those deals in the first place, which I think is why, honestly, Jason, the strategy that I've been running now for, I mean, arguably even since I was an angel because I even let deals as an angel for now 20 years, right, since I left Wall Street, is very scary to most people because I tend to run a very concentrated portfolio and willing to lose a lot of money on a single position on the belief that one of those many other concentrated positions I have will ultimately be very successful to the extent that it will pay for all of those losses plus many multiples on aggregate capital. That's a game that is very uncomfortable to most people. Is that sort of how it worked? I don't know how many investments you've made over the years, but do you have that kind of one in 10 pays for the other nine out of 10? Is that kind of distribution for your portfolio? Not in terms of grand slam zero, and obviously there's more of a continuum, but certainly the top, probably 10% ish have been wild successes ranging from generational successes to just very, very successful. So true venture scale returns for those individual positions, like return the fund kind of investments. Then you've got this next bunch, which is, we'll call it, Meh, which is something from, you know, a little over return of capital to some fraction of original capital being returned. So money back, not great, let's call it 30%. And then the balance is in capital terms. And that's the other thing Jason is that because the numbers are skewed because of the level of conviction, it's like I will double and triple down in those companies I perceive to be winners. Generally, I don't screw it up, but I absolutely do. And so there are times I win multiple checks and the companies ultimately don't make it. And those hurt and those skew the kind of the deployment figures because when you have these big chunky losses, right, then it's going to make on a capital basis, like 60% look like they're really bad. When in fact, I cut most losers off more quickly than that, but it is those big multi round mistakes that are the hardest to recover from. So I completely agree with you, you want to pick a founder with grit because shit hits the fan probably even for successful companies over and over and over again. And you know, you kind of need that grit to kind of get through all of it and to survive, to be honest. I remember the founder of Deliveroo used to be a buddy, he went to Northwestern and Deliver is like just the base in the UK and it's pretty big in Europe. I don't think it exists in the US. I know Deliveroo delivers a European unicorn. It's one of the most successful. You know, we are in the Northwestern alumni of London and he was a hedge fund guy and he came to me one day, he's like, we got launched, he's like, hey, I want to do a startup. And I'm thinking like you're a hedge fund guy, you used to be a banker, like what the hell do you know about doing startups? And you know, obviously a very smart guy, but hey, I didn't think he had the kind of technical chops to be able to put together a BDC consumer business. And B.I. thought he was a little bit soft being like a hedge fund guy. Like to me, hedge funds are like, you know, giant fees. Like you don't have to do very much. It's about, it's a game convincing rich people to give you money and you make your 2% and if you do well, you get 20%. Anyway, like I was thinking, I had no money at the time so I didn't even have a chance to invest. And he also didn't offer me a chance to invest. So it wasn't like I passed, but if he asked me to invest, I would have passed because I didn't think he had what it took. And Will Schew is probably one of the hardest working, grittiest founders of Europe of our generation. And you know, he's still the CEO, he's still grinding it out, trying to make Deliveroo better and better and better. So like, what's your secret sauce to figure out if a founder has it or not? I mean, I've never sat on the investor table, but like with Will Schew, I would have completely, I would have completely passed on that investment opportunity and he's probably one of the top, I don't know, 10 grittiest founders of Europe of this generation. - I mean, that is obviously the single hardest thing that I do or any, particularly early stage investor does is try and figure out, yeah, this PowerPoint looks great. Persons obviously smart and credential, but do they have it? Right where it's to be, there are a couple of things. One is, it can't be an academic exercise. There are so many smart people with so many ideas. I have not personally been involved with a company where a founder has said, ah, I think there's white space here. I'm going to build a company and have that company be wildly successful. That's never been the founder persona I've seen be successful. The founder persona I've seen be successful is somebody who's really smart obviously, priestly driven and like maybe you had a bias in labeling hedge fund managers as not being crazily driven, I've known both. I've known managers were as crazily driven as me or you or any tech founder. And then I've known those that were more dial it in, not really PMs, but certainly people in the infrastructure side of hedge funds. So trying to discern the true level of drive is critical. Now to me that stems from mission and how important this company and having this idea be successful is to the found. So if you, your friend, former classmate, whatever, hedge fund guy starts this company because he's like, Jesus, you know, he's delivery company suck. They're never on time. They always group the order totally unreliable. And he's like, you know what? This is BS. Like I'm going to solve my own problem. And in the process, if this, I think this is a pretty generalized problem and if I'm right, that I'm going to build a big company, that is a much more successful persona in my mind. Very, very similar to Christo Carmen and Tavit him, right, guess it was, where they literally started a company because they wanted to exchange sterling in Euro and then they went to do it and they're like, the fees are what? They couldn't believe it. Money changers, high street bags, whatever it was and they're like, this can't be. And they started a company. Race and then, you know, Jeff Greentrade, Dast, Olivier, Pamel, Alexey Luck-Walkett, Dated Dog. They all at that same thing where they really were about solving a problem, actually bugged the shit out of them personally. So I think that I'm looking for that. I'm looking for somebody who has not just a clinical understanding of a problem, but they feel the problem, they've experienced the problem and they are just like white pot to solve the problem. And then the question as well, from a VC, and now stepping out the other side from a VC perspective, does that, is that problem pervasive? Is it a big enough problem that if you're successful solving it, you can actually build a venture scale company. Because you know what? There are lots of problems that are small problems that are important, but small. And in the circumstances, all it buys a pounder to take as little capital as possible to keep the exit bars low as possible, to build a great company and either cash flow it or sell it for tens of millions and have a life changing outcome. And that's great, right? Like you don't always need to build a company that Roger Arobert is going to be excited to invest in. And I try and give that very, very real feedback. So that's one thing, is connectivity to the problem. Cash flow is a very important thing. And so, we've now established the problem. Then another thing that kind of is an add-on. if somebody who feels passionately about a problem, unless you're assuming for the moment that I believe this problem is large enough to warrant a venture back company, then it's well, can the person actually do it? So then it's well, I tend to look for and what, 'cause this exact question, Jason, is something that my partner's at IA and I talked about all the time for a decade. This is it, right? If you can crack this code, then you've cracked the code of early stage investing. So of course, we didn't crack it, but I think we made some progress. But this notion of has somebody done something exceptional in their life, has nothing to do with the exact problem that they're trying to solve and with a pitching me on. But have they demonstrated, again, the passion, the grit and the willingness to put for extreme effort and had that be successful? So it could be something like they built a room guitar and started playing guitar and playing bars in New York City. But just something like has nothing to do with anything they do that they just loved it and just did it and were awesome at it. Or I mean, there are infinite examples of how you can display excellence, but it's just unrelated to the idea. It could be related to the idea, most of them is not it. It's more of a mindset of if I set my mind to something, I can be exception. Yeah, I mean, using delivers, an example, your first point, there was Jesse, Jesse has been around since I've been in London and it was always kind of like a shitty low rent kind of like, there's no prestige to it, but you had this sort of, you know, if you wanted a pizza or kind of a curry or whatever, just eat was around. So I thought, "A, it already exists," and it kind of sucks. And B, like how much money are you really going to make delivering food? In terms of the grit of the founder, I like the idea that you're looking for some crazy risk that somebody is taking because like, well, if you check the box, like there's personal motivation, they want to solve this problem, I get that. But like this idea of like when shit hits the fan, what happens? Because a lot of people like will freeze, a lot of people will panic, some people will commit fraud, and you know, a very few will sort of stand there, take the bullets and like march forward. And it's kind of like, I don't, to quote a UK expression, separating the wheat from the chaff. Like this question, maybe that's enough to tease it out, but it feels like such a fundamental issue and like how do you do a psych about, you know, when you're investing into a founder, because essentially it is kind of a form of a psychological evaluation. - 100% is a psychological evaluation. But it's also to adjacent that you can't have perfect data and information. It's like the famous adage, like you don't know what a fighter has gotten till they've been punched in the face. Right, you'd like until you've actually faced crisis and stress of that magnitude, you don't really know how someone's gonna react. So unless you're going around looking for people that have been in those very specific situations, well, you're cutting down the investment universe by 99% most people don't have jobs and lives that rise to that level of founder stress when you're running out of money, you don't feel like you have demonstrated product market fit, nobody's taking your call, what do you do? Right, that is something that you kind of need to learn on the fly. And I guess what I'm, what I'm saying is, I'm looking for the building blocks that would indicate that somebody would have resilience. Getting to this, getting this excellence, flying, I'm somehow analogizing or doing the inference of resilience from persistent and growing. Well, you seem to have your finger on the pulse because it's working for you. So if I ever become an investor, I will try to think of his questions as people, but so far my strike rate or my pass rates pretty high and my hit rate zero, I think so far, not that I've done any investing. All right, pivoting to sports. So you're in a sports now. To set this up is sports like your new data science, is that kind of your hypothesis? Like big data, you know, was the theme, I would argue like mobile was another big theme, you know, from 2009 era, you know, mobile was just starting to explode. It's like, it sports your new big data mobile thesis and you're like, I'm all in on this. I would say it's more entertain broadly. So I think that in a world that is increasingly pull rise and in people's lives that are feeling increasingly isolated that there's a higher and higher need for affiliation, excitement and community and I feel like the intersection of live sports, gaming, and media and social, bring all of these elements together. So I am betting on this convergence play of the need for people to feel joy, excitement and affiliation in a world that is seemingly tried, pull them out of print. To do the bear case and the bull case, though I think are exactly right, the bull case. Like what we're missing in society is this idea of third spaces. Like my wife, she's studying to get a master's in psychology right now and she kind of told me about this concept of third spaces and it really clicked for me. I love going to malls but not shopping. I never went to churches, the kid and malls and sports were kind of my third spaces. They were places to go to be around other people but not have a goal in mind. And today I still love just walking around malls. It's the suburban, little suburban boy in me. But though the bull case for sports, I think you are absolutely right. I would also add, you know, when we were kids, you had these cultural moments where everybody came together usually around TV, whether it's like the Super Bowl or whether it's the Oscars night or whether it's like the episode of Full House or you know, all in the family, you know, these cultural moments where the country came together and people would participate and everybody had a similar reference. And I think those things are becoming fewer and far between sports or one of the main areas that still kind of exist where people have those water cooler moments where everybody stops what they're doing and watching. And you know, it's one of the few ways we, few things that like live really matters. Like watching it after the fact is loses it and everybody is stopping to do something together. The bear case and I'm curious to get your thoughts on this is that people's attention span is going to zero. I'm a big sauna guy. I love going to the sauna. And there was a guy that came in the sauna the other day which is like, this is where I relax. This is where I don't do anything. Somebody not only brought their phone in but they had TikTok on the sauna. And you just see somebody like mindlessly scrolling on TikTok and it's just like the way that TikTok has rotted the brains of 500 million people is pretty depressing. But anyway, the brains are rotted. People's attention span is like in milliseconds now. Maybe people are playing less sports. I don't know the stats on that but maybe people are playing fewer sports in general because they can game or it's easier to be disconnected from society. And when we were kids, like NFL was huge and when we were kids baseball was the main sport and then at some point it switched over to American football. But anyway, these sort of, I would say that the kids these days don't really sit down and watch an American football game for four hours or they might be watching the highlights but they're kind of disconnected from it. So I'm kind of get, you know, I'm completely on board with your bowl case. What do you think about the bear case about society getting more fragmented and thus the sports stroke entertainment landscape being less meaningful? - I agree with you, obviously, about the attention span issue and the decrease in patients to sit and watch entire events unless it's live because live is doing great. So let's take in stadium adivant and the same thing goes for our concerts and all like that stuff is booming like it never has been. So live in person, I think is indisputable, that's kicking ass. Live on a screen, that's a different story. Now that's also part of my thesis, which is the fragmentation of media and the fact that it's not only that viewership is being more atomized and shugged up into segments, but it's also where the segments are being distributed is increasingly broad. So it used to be that if you wanted to launch a sport, then you needed a network deal and there were rice fees and production fees and that's just what happened. You don't need that anymore, right? You can stream on YouTube and Twitch and you can start building a massive audience if you have the right people, the right influencers and the right product to get the interest. So which is what informs our interest in emerging sports because you don't need the NFL or the NBA to have a very, very successful business, especially if you're aggregating it with other fragmented businesses and providing this product that provides 24, 7, 365 viewership because then that's like the rise of shoulder content around these big monolithic leagues globally. So there's a lot of white space there. I also think in a big one element that you didn't touch on is that gaming is actually highly social and something that people do with friends. They can be sitting in the same room watching Red Zone, they can be sitting on their own living rooms but they're texting and they're betting and they're riding along and they're tracking these things on social. So this notion of rotted brains and ADD does not change the fact that even though absent these tools, there is a trend towards more isolation in your Right, I think you sports is a big challenge. We actually do a bunch of stuff in you sports because just as a mission, there needs to be more opportunities for kids to play sport, boys and girls. But I think that with the rise of more entertainment oriented gaming applications, with the rise of emerging sports, the rise of 24/7 365 bedability, that it mitigates some of this negative trend that you are properly identified in kind of the fragmentation of attention. In your live analysis, and I'm not up to speed on the stats, like our millennials and Gen Zers going to life sporting events in the same proportion that Gen X and boomers have gone, or is the people that are going to Gen X those in the boomers to the life sport? And there's a potential for a generational die out for that market. So I don't have the statistics at my fair, I have to say, I'm not going to have the statistics and what I can tell you because the MLB is the one that I'm most familiar with, because I am worthy of a team, is that the stadium demographic is getting younger and that the rule changes that were put forth two years ago is having a big effect, because literally games are now two hours in change instead of three and a half hours, and just that the pacing of it is just much more exciting and faster. For baseball, which had been in this inextra bowl decline, both from aggregate viewership, but also an aging demographic has really tilted. And so again, I wouldn't declare a victory, but I do think that baseball was a great example of how rule changes and response to changing preferences has brought the younger cohort back into the bowl. Yeah, that was a pretty good rule change. Does somebody that spent a lot of my youth watching baseball, they can't get pretty slow those games? I believe you've invested in the Marlins real salt lake, which is an MLS team and an Alpine Formula One team. What's your, like, I get the hypothesis about new sports coming online, you know, the Barista entry and the distribution side is big of deal. What's your hypothesis around, I guess, more tier one traditional sports? So different, each of those sports deserves their own analysis. So Alpine and Formula One were at large. That's a combination of, I think, the incredible leadership of Liberty and putting more NBA-type cost caps to try and level the playing field. Obviously, you know, Draft2S Survive was an inflection point for global interest in F1. Obviously, it's been massive in Europe for, you know, since day one, but now really, every continent has breezy F1 fanatics. And certainly the market in the US has absolutely exploded. I think, you know, there's going to be a new right steel. So just, I think the exposure of such an interesting sport on a global basis, making it more accessible. That's a accessible live, but very accessible on different platforms. Now it's betterable, and Ashley, our company, all sports data is the one helping make F1 edible. So I just think there are all of these mega-friends around F1's expansion, you know, and 11 team being added to the grid that's going to be an American back team. So I could not, I was trying to get on the grid for two years before I finally did with Alpine. And so I think that sport just is such incredible room to run and that because of the demographic of F1 viewership, the value of advertising of brand sponsorship is so high that we're just giving that kind of LBMH audience and expanding it is just, there's not a sport like it. Then, you know, MLB, MLB is a little more complicated because I invested at a time when the sport was obviously in the doldrums. I kind of invested early in COVID when the Marlins were looking for some additional capital. And I was banking on, there were being rule changes that would make the game more exciting to the younger cohort. And then eventually the MLB would figure out how to reduce the average age of live attendees and increase viewership and that's happening. So there was kind of this thematic belief that MLB was trading it low and that would be able to be better as it adapted to today's trends. But I also had to say the MLB investment was also heavily passion oriented because we're a huge baseball family and it was the opportunity because that was our first franchise investment. Like that was dizzying to me. Like it was so unreal to actually be a franchise owner. I never in a million years thought that I would be in a position to be a minority owner of big four sports franchise. So when that happened, it really was an inflation point for me just personally. So there's a certain degree of non economic benefit that I get from that particular investment. And then MLS and also let's be clear, it's not just real salt life, it's also the Utah Royals. So NWSL team, that was a $2 million embedded option that Ryan Smith and David Blitzer had when they first bought control of the team. That was a big part of my thesis was the rise of the NWSL and that that $2 million option was going to be worth a lot more. That is probably 50X the value that it was today. And then since I invested, they had the Apple to an $1 million right steel. So just my belief that US soccer was going to be a growing market and something that was in its early days of development. So I just kind of felt like, hey, I was buying right from a thematic standpoint, but I also believe deeply in the Salt Lake market. Like that is a very, very passionate sports market. And you have a long history with the millers in that market and then Ryan Smith going all in on the jazz. And now with the hockey team, the millers they're trying to bring a baseball team. So and then it's very young, very smart demographic in Salt Lake City, lots of tech, lots of young people, lots of Adorsey's 40 people. So I kind of feel like that's just a tremendous market for soccer. Yeah. So I think in terms of getting into sports, I, yes, I think each of these are attractive individual investments. But I think another point, Jason, being a franchise owner and the network that that has helped me develop has directly benefited my venture investing activities. And there's just kind of like a reflexive relationship where one benefits the other, the insights that I'm getting from all the deal flow on the venture side, help me think about how to help these companies, these teams. So anyway, I think it all kind of works together, which I think is why you see a lot of people like what a David Blitz here is doing. He's doing it on a grander scale than me. I'm probably doing more venture than he is. He's much larger in franchises and I, but thematically we're doing similar things. Yeah, it sounds fascinating to be honest. In terms of the theme of this podcast, sports betting, where does a sports betting fit in? Do you do you as kind of like a way to monetize all this passion? And it's kind of it's in the mix, or do you think of sports betting kind of on its own? Like it's interesting in and of itself, or do you think of it as like the monetization vehicle for a lot of this passion that gets put into sports? So I think it's more than just the monetization of the passion. Jason, I think what I said earlier about kind of how it fits into this mega trend and the way that I think about betting is really about social. And yes, obviously, if you run a good sports betting business, you can make money and if you have a good enough product and good enough media to acquire customers that are reasonable enough, and have an attractive LTV to crack, then great. But to me, it's a part of this puzzle where how do you best achieve stickiness and maximum engagement while being social and to me gaming is the glue that stitches these things together? And you can see it on Twitter, you can see it across TikTok, just this notion of like riding along with friends, riding along with influencers, the rise of micro betting, and the ability to be in it, you know, in a way that is very different than future spats. I think it's all sports viewership, gaming, social, it's all become mushed together. So to me, it's like without it, you're missing this thing that's happened forever. It's not like sports betting is new, but on sports when I was a kid, everybody did. It was like not unusual. You just did it in small units with friends, and it was like peer to peer as opposed to betting with the sexual book or you know, betting in a large and more liquid marketplace. But all it's doing is adding structure, flexibility, and additional options to something that's been going on forever. Adidas and just from the standpoint of company builders and what I think is a pretty unsettled environment is just to really try and detach from the macro chaos and just to focus on building future customer and ensuring that you have a large enough bag roll to play a multi-tourne game. Just like the environment is uncertain. The fundraising environment is confusing in sports and gaming. It's been up definitely, you know, for all but the largest companies, a tough environment. So I think just kind of maintaining a measure of perspective. And I would say I literally was having this conversation. My thesis and the listens of this podcast will know about sports betting is I kind of view it more. akin to like a financial market. And in terms of your social point, you know, when I used to trade stocks five years ago, like stock trading has always been incredibly social. And now, you know, I used CNBC as like the version of the social network that all the traders plugged into. Like we left it on the TV all the time and it was a way to kind of like connect to other humans about the trading patterns and trading momentum and all that kind of stuff is inherently social. But the thing that kind of gets in my crawl about sports betting is it's like a very inefficient backwards horrible technology applied to what's essentially underlying the I want to bet with my friends and have a little bit of fun is it's a financial market and it's not really treated like that. And I totally buy your social thesis and I think trading on stocks is inherently social as well. It's not just sports betting. But what do you think about that hypothesis that it's a financial market? It deserves financial-esque technology and the industry is pretty behind. I think that's driven my investing in sports betting as much as the social. I mean, literally my biggest wins in my career on Wall Street in TechVadShir, TBD in sports is around this notion of markets want to be free and liquid. And you know, that's what the trade desk was. Right? That's like when I was running large quantitative trading groups on the street. And that honestly, you know, the company wage a rire which is trying to create a liquid secondary market and bets, right? To make cash out fair. 1000%. We will get to what you said. And that does, and part of the reason why I love talking to you is we have that similar ethos. That is below the covers. That yes, that should be and will ultimately be the way things are. And right now you have an oligopoly with the couple largest players collecting oligopoly rents. And it will break. It always does. Whether by regulation or competitive pressures, it will happen. So a thousand times, yes, I agree with thesis. Full stop. You work with a lot of founders. What like the world's getting turned upside down, you know, I'm obviously very anti-Trump as listeners of this podcast will know. But you know, whether you like him or hate him and I hate him. I don't hate him so wrong word. I strongly disagree with the way he treats people in the country. Like him or not, he's injected a lot of chaos into the world. Whether it's rearranging the world or two peace alliance or tariffs or common decency or fairness or truth. What was your advice to founders be like how to steer through the storm? So to speak. Yeah, it's super, super hard. And I remember a small version of this when I first started my institutional venture career, you know, when the kind of a tea party raised power in 2010, it is so important just to play your game and block out the noise and something I said at the very beginning, Jason, when you and I were talking about like the elements of being a successful investor and I added that kind of temporal element to it, just need to remember that you're building a company that's going to extend for beyond the current administration. And you need to build a strong enough foundation that can withstand the kind of macro variability that you have no control of. So like the notion of control the controllables, which means focus on your customer, focus on having enough resource to not hit the wall and to be ready to make fast adjustments to protect the business and to keep running if financial resources get tight. But I would say another big part of it is having friends and colleagues that you can talk to because living in your own head and spending and having these fears and not either writing and getting them out, speaking to a friend about it, there needs to be an outlet. I literally was talking to a close friend yesterday who's a founder who's having some tough times like the businesses had some big wins, but like this is a bad week. And I was encouraging him like tell me more, tell me more. And it was cathartic for him. Again, I didn't you would you would also mention about your wife studying the B.S. Ecologist. I married to a clinical psychologist. This notion of not living in your head and being able to communicate with others and receive some just support and understanding even if no one's going to have an answer, there's no answer. The answer is it's going to be okay. You need to control it, but understand that your concerns and anxieties are normal. One of the things I do to manage that and I couldn't agree more is I'm in a group called YPO and actually a lot of founders are not in YPO and if you're a founder listening to this, I recommend you checking it out. If you're a business of a certain size, you can qualify for it, but there's this confidential, will you have a member of YPO? I wasn't, I was always too old. There's a peer group that meets once a month and for three or four hours and basically you talk about this stuff and it was so helpful during COVID when everything was shutting down. Life's in my case, life's sports shut down. It's spun back up, but you know, so many businesses were disruptive and having a group of CEOs that you can talk about this stuff with. And as well as like personal issues, like it's not just business issues that the founders need to deal with. It's how do I take care of my kids better and how do I be a better spouse and why am I such an asshole all the time and you know, it's important to talk about these things with people and yeah, my wife is very good at getting me to think about these things where I jump into computer nerd mode pretty easily. I need to be pulled out and be human for a little bit. Before I let you go, we have a tradition on the show. What do you want to be when you grow up? I think I'm pretty much doing what I want to do when I grow up. I guess the way I want people to perceive me is to somebody who massive positive it. That's really great. Well, thanks very much for stopping by Roger and sharing your thoughts on sports and investing. Thanks, Jason. This has been great. Cheers. The Business of Betting podcast is presented by Optimov, the number one CRM marketing solution for the eye gaming industry. Four out of the top five US operators, personalized player experiences with Optimov, the number one CRM marketing solution for the eye gaming industry. Learn more about Optimov by requesting a demo at Optimov.com/businessofbetting. And if you like what you see, you will get your first month free.