The First Pitch competition is always a highlight of SBC Summit North America and this year’s contest will be no exception. And nobody knows better what it takes to thrive in these pitch fests than the host, Jesse Learmonth.
SBC Americas spoke with The Betting Startups Podcast host to get his advice on how to succeed in the competition, why the startup space continues to remain so interesting to investors and where the industry is growing during this slow year of legislative expansion.
SBCA: You’ve emceed the First Pitch contest for a couple of years now. What is your best tip for competitors in the event?
Learmonth: I’ll actually offer two tips:
First, remember that pitching is storytelling. Think about framing your startup into a narrative that will intrigue the audience, including the judges. While you will be tempted to show off all of your amazing KPIs and metrics, don’t make the audience think too hard about your key messages.
Which leads to the second tip: memorize your pitch cold. Three minutes goes extremely fast, and there is no margin for error. Build your “pitch muscle memory” by rehearsing it at least 20 times, and avoid getting tripped up under the bright lights of the stage – it happens!
SBCA: M&A has been quiet on the gaming front lately. Where do you see the most activity happening and what areas do you think are ripe for start-ups to succeed?
Learmonth: It’s hard to ignore the continuing opportunities in the regtech space as operators and stakeholders look for greater operational efficiencies. More generally, it’s not a bad time to be a B2B startup as some operators are more aggressively tackling their roadmaps than prior years since PASPA’s repeal, and external integrations are now being prioritized (to the relief of many B2B startups!). As consolidation continues, I expect to see some of the key B2B companies get picked up as leading operators look at further vertical integration and ownership of their tech stacks.
SBCA: We are seeing a lot of start ups getting into alternative spaces like DFS+ and sweepstakes. What are investors considering when it comes to the legality and viability of these kinds of groups?
Learmonth: Ironically, it’s low barriers to entry created by the lack of regulation that has led to so much investment into categories like DFS+ and sweepstakes. But while that lack of regulation has spawned a number of startups, any potential future regulation will actually create a defensible moat for those that are able to comply and maintain unit economics. Investing is partly about taking risks, which includes accepting some level of regulatory uncertainty at times – which many DFS and sweepstakes investors clearly have embraced.
SBCA: What area of the industry, if any, is oversaturated with new companies?
Learmonth: The ‘“bet tracking app” category is quite well served at this point, so that alone can no longer be a core value proposition. It would also be difficult to launch a new microbetting offering at this point and expect to carve out a meaningful share of that market given the strength of those with a head start. DFS remains the most obvious category that feels saturated, yet there seems to be no shortage of well-funded new operators coming to market with new twists on the model – so that’s been a tougher one to reconcile.
SBCA: In your experience, how well does the rhetoric around innovation translate into actual support and investment for innovative startups? Do you believe investors are genuinely drawn to unexplored territories and higher-risk ventures, or do you think they prefer recycled ideas and refined versions of already successful projects?
Learmonth: There are different degrees of risk, and every investor has their own tolerance to it. But in general, investors in early-stage ventures seek to generate outsized returns on their investments, which inherently requires a risk-taking approach. To achieve the returns they seek, it’s simply not enough for a startup to do something incrementally better than the status quo; they must completely reimagine the way things are done, and have a plausible path to becoming a category leader in a large market. This requires investors to take a lot of risks on innovations that maybe don’t seem obvious to everyone else at first. Risk capital will always be available to unique and promising ideas!