DraftKings co-founder Matt Kalish launches Hardscope, a full-stack creator economy platform

DraftKings. He's also a board member of FaZe Media and he's the founder of Hard Scope, which launches today. Let's bring [music] him in to the TBP and Ultradome. How are you doing, Matt? Great to thanks so much for taking the time.

Hey, guys. How's it going today?

It's going fantastic. Merry Christmas.

Good to see you.

Merry Christmas.

Uh please, for those who don't know you already, I'd love to kick off since this is the first time on your show with a little bit of your background. You have uh one of the more interesting backgrounds with DraftKings. H how do you tell the story in, you know, in just a few minutes? Well, I had a couple friends from some early corporate jobs in my career. You know, I came up through analytics technology and then over the years moved more into marketing and uh you know, I met some of uh you know, my two partners, Jason and Paul really at those jobs. You know, Jason at Capital One. We were early stage business analysts

and then uh went to a company called Vista Print. That's where we learned direct marketing and

you know we all had this entrepreneurial bug and we're really looking for the right opportunity to go and spin off and do something kind of in the startup world

which you know we had no experience doing but um

you know we we had that drive. So we looked at a million ideas and then DraftKings kind of stumbled along. um we just felt like there was a lot of people that like predicting things in sports but didn't really have a great way to do it. So

that was back in 2012. We launched the daily fantasy sports platform.

Um over the course of a few years grew that to over 10 million registered users and it became just kind of a big cultural phenomenon. And then uh come 2017 that's really when sports betting started opening up in the US. So, DraftKings was in a really great position to extend our product. Um, launched a sports betting platform first in the US uh outside of Nevada and uh became a market leader in that space and then over the years just kept developing out the product, went public in 2020 and you know, it's been a really amazing ride. I mean, a growth story that um you know, I'm really proud of.

Yeah. uh take me through I I'm sure there's a ton of questions that we can kick around around prediction markets and sports betting and what's going on there, but uh first take us through the launch today. Take us through hard scope. How are you positioning that?

Yeah, I had a 14-year uh run at DraftKings that,

you know, we've seen it all, the ups and downs, and you know, built a really amazing team over the years. I have, you know, the type of team at DraftKings where if I don't come to work for a week, things are amazing and fine. I'm telling you, like the caliber, the people, the leadership there, the team has been built out just so well. And

um, you know, I'm a builder at heart. I like starting things. I like participating in industries that are disruptive, you know, um that are in the middle of a lot of displacement change and a couple years back I worked with one of the original founders a phase to buy the company off the public market and bring it back private

and it's kind of a space that I'm just super intrigued by the massive amount of disruption in media moving from traditional forms into creatorled to community um this sort of decentralized media through social channels and uh I've also found it really intriguing how content discovery has changed so much like short form clipping and you know the Tik Tok the shorts that's how people are really finding content these days and phase is really one of the best in the world at that so just kind of jumping in

uh rebuilding the business side of that team and uh kind of relaunching and bringing FaZe back to number one in creator media. That was a you know initial focus and um I decided to leave DraftKings and transition out to do this full-time to launch Hearts Scope which is um kind of the platform that FaZe operates on. It's a talent and brand platform to access the creator economy at scale and it's a space I just think is tremendously underserved and a really massive market opportunity. So, um, you know, I felt like it was the right time for me to go all in on that and I'm really excited to be doing it.

So, what's the like like walk me through how to actually use the pro uh the product if you're a brand? Does it feel like just a autonomous marketplaces where brands are meeting creators? Are there

Yeah, I guess I guess a better question is like there's probably there's probably been

How much handholding is going on? There's there's been maybe hundreds of attempts at building these sort of like brand creator marketplaces. A lot of them uh haven't uh some have turned into great businesses. There's been um

well we were just talking

little to no like venture Friday Shopm is is is like sort of in the same space. Correct.

Yeah. Greater commerce tool but this is more advertising focus. Is that is that correct? What's special about hard loop is the the impossible part is building the actual valuable content assets that you know brands want to be a part of and reach the audience and that's what our team for talent does really well. It's a full stack operating platform like you literally don't need any other resources. We do it all inhouse production, socials, clipping, all the distribution side into commercialization like brand partnerships, e-commerce, uh access to capital and venture for initiatives and the reputation really of phase as the number one creator collective in the world is the proof. I mean that's a group that operates with this team on this capability set and so hard scope is really bringing that to new creator collectives in more verticals really high potential talent and platforming them to really make the most of you know the opportunity that they have which is really unprecedented like the level of power and control over um the content their community and how to commercialize it that talent have today It's um it's a totally new age really and some creators have built out great teams but most really have under represented teams in particularly the commercial side. You know like how do I take my great content and then maximize the opportunity as basically the CEO of a media business and special for talent.

I yeah I think I think I was a little bit confused. So you're effectively like a back office for personality personalities, content creators, whatever you want to call them, to help manage everything from ad ad sales to editing to clipping, content distribution, effectively social media management, like kind of uh am I saying that correctly?

Yeah. I mean, the the landscape is laden with middlemen. Let's just say like the LA ecosystem is unbelievably brutal. There's middlemen for everything and we're trying to provide really a full stack solution where you don't need all of this noise to run a really successful business. You need a great business partner, a great team and we've proven that with the operations of Faze Clan and how that's come back into, you know, prominence as the number one creator collective. I mean, you're talking about a group that had the top seven accounts on Twitch last month that's growing in an unprecedented rate and people thought it was dead two years ago. So, like we came in, relaunched the brand and totally turned that around and that is the proof, you know, that's the proof of concept really that I think is attracting so much interest from other talent in other verticals. And um, you know, you had asked about the brand side, that's more my background. You know, I was a large media buyer at DraftKings. We have, you know, as you've probably seen a lot of advertising out there in the world, probably bought every channel you can think of. And the one channel that's hard for everyone is creator direct partnerships.

Yep.

Nobody does this well. And unless you are a pure play specialist where your number one marketing strategy is through creator, you probably are doing this not so well right now. and traditional agencies who try to tack on things like YouTube buying or other, you know, creator products tend to not do that very well at all. So, um, we're seeing a lot of opportunity on the brand front to be almost like a new kind of agency of record, right? where we can focus just on creator direct partnership help kind of bifurcate that channel out from a lot of people just lump it in with audio or other other kind of traditional definitions of channels. Um the opportunity is really breaking out creator direct into its own lane and maybe it's 2 or 3% of media mix today but the landscape is changing. This channel might be 20 30% of people's media mix in the future. I think Unilever said it's over half of their media mix in the next year they're planning. So like a lot of companies are seeing like we are just not reaching Gen Z audiences that are diverse under 30 are just not watching traditional media and this is the way to reach them.

Yeah.

Yeah. Makes makes a lot of sense. How how are you uh how are you like financing hard scope? Do you have outside investors? Was it

uh am I hearing it correctly? it was you effectively took phase private and is it the same entity or I'm curious how uh like how you're planning to scale is this something that you want to just operate profitably uh indefinitely or or is this you know something that uh you would one one day want to you know take public again?

Yeah, look I mean I've been funding it. I led the acquisition initially and the biggest reason was it was a kind of a mess. I mean the public company of phase was in really rough shape and it needed a lot of work and putting in the two years to really rebuild the entire operation and also to relaunch the brand of phase have that you know in such a great place today that was the upfront investment I viewed as getting the ball rolling kind of building the initial momentum and uh I didn't think it made a lot of sense to you know involve a ton of people in that I thought it was something we had to prove as a team here. So there's no noise in the company. There's no outside you know in investors funding. I do think in this next stage now that we've launched as we scale up there's a lot of interest I have and the team has in certain strategic partners. So I think in including people that can be helpful to us. Um absolutely. I mean that's something that we're going to be looking to do in the next year.

Makes sense. Um little bit of a connection issue by the way. Sorry. Sorry if there's a lag. Uh have to ask you about your kind of personal views on the state of both uh traditional sports books, online sports books, gambling platforms as well as prediction markets. Uh it's absolutely uh bloodbath on the timeline right now. Uh everybody involved seems to hate each other. Both the even the even the investors on every side of it. uh and uh it's an absolutely wild time right now. Uh how how do you think this kind of category evolves over the next 12 to 24 months?

I mean I love it. It's this is one of the most competitive spaces in the world, right? Like you had mentioned with with the creator economy, it's very competitive. All these different companies doing this or that. Like great. I love that. Like there is nothing better than having a super vibrant competitive marketplace for products, having to compete and win for customer engagement for loyalty. Um there's always some curveball in in gaming, in gambling, in sports betting, whatever. Something new every year, some new competitor, some new kind of product variant. And uh I think the exchange like how fast that's kind of come in since the election and evolved into a sports product. Um you know it's it's a fascinating thing and uh I think it'll be very competitive. You know DraftKings obviously announced they're launching an exchange. Um pretty much everybody I think in the sports betting space has some plan here. And then there's the cowshi poly market, you know, that uh rivalry. And um we just look forward to competing. You know, I feel like DraftKings has proven world-class technology team. We deliver leading products. We have the best customer satisfaction in the market. We pride oursel on that. So, um competition's our favorite. It's like something that drives us.

That makes sense. Uh what what percentage of uh content targeting men online do you think is entirely dependent on either gaming uh ad revenue? It feels like there's huge swasts of the internet that uh honestly like wouldn't really exist or creators who uh I'm I'm curious if you have any kind of internal estimates even

like creator media. Oh yeah, it just feels like I I can think of a lot of

soccer was on the show talking about like he he was saying like there's a bubble in sports podcasting specifically because of all the sponsorships that come from uh sports books. It's actually made it's made a lot of people in the creator economy be able to go full-time because they've been able to have

I just think a lot a lot of creators where you look at their business and you're like okay

90% of your revenue

uh is from uh you know either yeah some type of you know online casinos or sports books etc.

Yeah.

Yeah. It's such a valuable category that you know going back to hard scope and expanding beyond just Faze Clan which is a sort of

mass market super mainstream media business you know going into verticals like sports really aggressively you know sports food like the content verticals that have a lot of really attractive partnerships is that's kind of the whole purpose here is to represent the creator economy across all of the verticals at scale for brands. And in sports, you can build out entire content properties and [snorts] invest in them knowing that it's going to be supported through some kind of deal, some kind of partnership. It's one of the sure things. So

yeah,

I feel like as a company that builds assets, that makes content from scratch, puts together creator collectives from scratch and scales them, like um we can invent these things knowing that the sports landscape it's so vibrant that there's going to be deals there. like the idea [clears throat] of betting on food. [laughter] You said that you're working on food channels and I think that uh like that that's one area of the creator economy that has not been financialized yet and that feels like fertile ground to me. Uh obviously business

don't threaten me with a good time.

Exactly. Exactly. I don't know. I don't know exactly how it would work. It's like I'm going to bake this cake. We're going to do a blind taste test. Whoever likes this more, they win. But uh I'm sure there will be an attempt at at at financializing baking channels in the future. Uh the great British bake off. I mean there's probably a prediction market on.

Will I burn the cookies or not?

Will you burn the cookies or not? That's a good question. I don't know. Anyway, thank you so much for coming on the show. This is a lot of fun. Congratulations on launch and uh we will talk to you soon. Have a great rest of your day and merry Christmas.

Hey, thanks for having me. Merry Christmas and you know love to come on again in a year and give you some updates on all the great stuff we're up to.

That' be fantastic.

That'd be great. anytime you have hot takes too on uh anything gaming or prediction markets related. I know it's a little tough since you're still on the DraftKings board. You got to keep that in mind. But uh but we appreciate the insight and uh congrats to the team on the launch.

Thanks so much.

All right, guys.

We'll talk to you soon.

Cheers.

Goodbye.

And uh let me tell you about public.com investing for those who take it seriously. They got multiasset investing. They're trusted by millions. Public.com. Uh, in a groundbreaking endeavor, the University of Utah Athletics is entering into what could be a $500 million equity partnership with Oatro Capital, featuring the creation and shared ownership of a for-profit entity to operate athletics. Sources tell Yahoo Sports. So, college football is going to the big leagues. They're going to the private equity leagues. Private equity is now going to own your local college football team. Oh, people absolutely hate this.

The problem. I I know. I hate it, too. Because here's what Why are they stopping with college football? Please. High school football,

lower school, little league,

preschool,

preschool. Let's financialize that. Let's get Let's roll them up. We actually, this is happening. We talked about the We talked about the uh the hockey rinks that have been sold to private equity rolled up and then you can't film your own children without paying for the the

Somebody out there that really hates private equity just yesterday was saying, you know, private equity has come for everything, but at least you can still go to a college football game.

I don't know.

Uh and and uh again, so how do we think they're going to you know, so uh sounds like they effectively sold for half a billion dollars. They just sold. You remember it was Chicago I think sold all their streets or their parking meters sovereign back in the day it was like for like 75 years you got to get the you got to get the money you got to get the deal right

yeah so so they they they basically buy a college team

you can say that it's some more sophisticated structure than that but effectively that's what happened

uh they'll have to immediately put draft kings or prediction market logos all over the helmet [laughter] and all all over the jersey. So that's that's probably that's probably uh that's probably like a $50 million uh new new revenue line that the college could never do.

Yeah.

Uh what else? They could

So the current mascot for the University of Utah is Swoop, a rail a red tailed hawk.

That's pretty cool.

They could change it to drafty [laughter]

drafting off the draft. Okay, so another thing they could they could increase if you want season tickets to the game and you're a student,

they could of course they're going to jack up the prices. They're probably going to make it like $20,000 a year.

Let me steal, man. You're being too negative here.

$20,000 a year and they're going to offer the private equity firm can bring a private credit partner into the mix and and help finance the season tickets. So, you don't just graduate with student debt, you actually graduate with uh game day debt that will stay with you for decades.

It's ridiculous. I mean, there there are so many reasonable ways to monetize a football team over, you know, the entire life of of of ownership for this firm.

Sell the windshield. They could sell.

Yes. Yes. It's very funny to sell everything, but uh I mean, there is something that actually could be very good for academics at this school because if you have $500 million in cash, you can go and build a new library, a new science lab. You can go build like actual academic buildings. Yes. You don't really need to and you don't need to worry about like, okay, we got this donor. Somebody went to the University of Utah. They hit it big. They're a billionaire. They want to donate $500 million, but you know what? They just like football, so they're going to build us a new stadium. And you're like, but wait, wasn't the point of this whole thing uh you know, unrestricted gifts? Wasn't it wasn't the point academics? And uh and that might not that might be less of an issue now. So they might be able to fund more great academic uh activities and endeavors with this money. So I I don't know. It's very funny to make fun of. It's very funny to to riff on, but there are some there are some potentially really good uh really good outcomes that could