‘We’re Building a Product in a Hot Market’: How Betty Labs CEO Built a Clubhouse for Sports Fans (Exclusive)

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

‘We’re Building a Product in a Hot Market’: How Betty Labs CEO Built a Clubhouse for Sports Fans (Exclusive)
Photo by Joshua Hoehne on Unsplash

Things are moving rapidly these days in startupland, particularly in the suddenly crowded red-hot audio space.

Just six months ago, Betty Labs pivoted for a third time – from sports gambling to live audio – and the third time proved to be the charm, as Spotify announced Tuesday it was buying the Los Angeles company for an undisclosed sum.


Betty Labs' Locker Room app is often likened to a sports version of Clubhouse, the much-hyped live audio app that has hosted conversations with the likes of Elon Musk and Bill Gates. But Betty Labs co-founder and CEO, Howard Akumiah, says he actually first saw the appeal of audio conversations after he realized users were more interested in talking to each other than wagering on games.

"The major thing we learned building products around sports betting is that the most important thing you can do for sports fans is facilitate communication between them," Akumiah told dot.LA in a wide-ranging interview before the sale was announced.

Still, he does not deny Clubhouse, which recently raised new funding led by Andreeson Horowitz at an eye-popping $1 billion valuation, has been helpful.

"We're building a product in a hot market," Akumiah said.

He admits people being cooped up inside all day unable to go to sports bars — much less games themselves — has also been beneficial, but he does not think Locker Room's appeal will diminish when life returns to normal.

"People want to talk regardless of whether it is pandemic or post pandemic," Akumiah said. "I think that will continue to be true."

Akumiah started Betty Labs in San Francisco in 2018, when he was still a product manager at Pinterest, as a way to make sports wagering more accessible to a wider audience, hence the name Betty Labs.

"Betty was a personified sportsbook," Akumiah said. "The idea was that you could text this number and Betty would text you back to make bets that were related to what was happening in the game that you were watching live."

Akumiah, who was the one texting people back, soon started getting more action than he could handle.

"I went from hacking this fun thing during the NBA playoffs to basically being an illegal bookie with 500 people on my book," Akumiah remembers. "So I quit my job, shut the product down and I raised a little bit of money to start exploring what was possible."

Akumiah moved to Los Angeles and began hiring.

\u200bBetty Labs co-founder and CEO Howard Akumiah

Betty Labs co-founder and CEO Howard Akumiah

"I moved to L.A. to get closer to the people who would ultimately use the products that we built," Akumiah said. "When I was talking to people about what I was wanting to build in San Francisco, I was met with a lot of confusion."

Betty Labs launched an app called Sideline in 2019, which offered live in-game predictions for sports betting. The predictions aspect did not take off but the social features did.

"People were coming to the Sideline app to talk to other fans about games that they were watching on television," Akumiah said. "If we wanted to take it to the next level, we needed to add audio because we needed to create a medium that is endemic to sports like sports talk radio and podcasting," Akumiah said.

The company raised a $9.3 million seed round last October, with backing from Precursor Ventures, Chapter One Ventures, Maveron, Amazon Alexa Fund, Lightspeed Venture Partners, MaC Venture Capital, and M13. NBA stars Kevin Durant, Andre Iguodala, Baron Davis also participated in the round.

The same month, Betty Labs released Locker Room so users could talk to each before, during or after games. And in this case, talking is what users really wanted to do, a throwback to a time before online chatting, texting or e-mailing.

"I think of the growth in audio not from the consumption side, but actually from the creation side," Akumiah said. "The average person is realizing that they don't have to prepare any materials. They don't have to convert their thoughts to type. They don't have to create a video. They can just begin speaking what's on their mind."

It's not just fans talking to each other. Andre Iguodala and Indiana Pacers center Myles Turner have hosted live Q&As. Mark Stein, the well-sourced New York Times NBA writer, signed a deal with Locker Room last month.

"Instead of doing a podcast, he's going to do regular rooms on Locker Room where answers people's questions about the league and shares his insights," Akumiah said.

Spotify's acquisition is not only a large shift for Betty Labs, but also for the Swedish audio giant. It's Spotify's first major foray into live audio. Interestingly, the company said it plans to soon expand Locker Room well beyond sports to offer conversations focused on music and cultural programming.

"Creators and fans have been asking for live formats on Spotify, and we're excited that soon, we'll make them available to hundreds of millions of listeners and millions of creators on our platform," Gustav Söderström, Spotify's Chief Research & Development Officer said in a statement.

Akumiah added this is an email Tuesday: "Joining Spotify unlocks the ability to grow quickly and deliver that same platform and experience to other communities of passionate fans, whether they want to talk about music, culture or sports."

Spotify is not alone trying to take on Clubhouse. Twitter recently launched a live audio feature, Spaces, and Facebook is reportedly at work on a similar function.

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How To Startup: Part 5 - Minimum Viable Product

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Minimum Viable Product
Image by Master1305/ Shutterstock

When thinking about tech giants like Facebook, Amazon or Google, it’s hard to imagine their weak and humble beginnings. When going from nothing to something, the founders of these companies all had similar startup journeys - they started with a minimum viable product or MVP. In the same way you can’t build a house without laying the foundation, you can’t create a successful product without building an MVP.

The Purpose of MVP

One of the biggest reasons startups fail is because founders design their initial product based on assumptions. As an entrepreneur, you don’t want to put an enormous amount of time, effort and money into a product the market may not even want.

Quibi - yes, that Quibi - is an excellent example of this. After spending upwards of $63 million, Quibi never quite found its footing among TikTok, YouTube and its many streaming competitors. The company never ran an MVP or any experimental public beta to test what kind of content and features resonated well with audiences, and simply built a product that nobody wanted or needed. After raising $1.75 billion in venture capital, the company shut down less than a year after its initial launch. This is why starting with an MVP is so important.

How To Build An MVP

By definition, a minimum viable product is a product with enough features to attract early-adopter customers and validate a product idea early in the development cycle. It allows founders to collect the maximum amount of user feedback with the least amount of effort. When building an MVP, you’ll want to keep the following things in mind:

- Answer the right question. It’s important to determine what your central hypothesis is. When Airbnb’s founders wanted to see if they had a viable idea, they didn’t rent out space or buy new beds. They simply tested the question “Will strangers pay to stay in my apartment?” by providing a free lodging experience in their living room with the promise of networking with like-minded people.

- Decide which metrics matter. Identify what will define the success of your product. Common MVP metrics include churn rate, customer acquisition cost, average revenue per user and lifetime value of a customer. However, the data collected should include both qualitative and quantitative insights about how your product is used and what customers actually think about it.

- Actively measure what you are testing. It is important to continuously test, measure and learn until the product is finalized.

- Build internally if possible. It’s easier to meet internal needs and challenges first. For example, the original Twitter prototype was designed for internal users at (the now closed) Odeo as a way to send messages to other employees and view them on a group level. After initial internal testing and positive feedback, Twitter launched publicly in 2006.

- Do things that don’t scale. In this early stage, you have nothing to lose. Create a great experience for initial users and cater to their needs. Put in the extra amount of effort while you continue to build confidence. Talk with every user and every customer, and do things that would never scale once the company gets bigger. For example, Yelp’s founder Jeremy Stoppelman famously went to every bar in San Francisco to pitch them on Yelp in the early days.

Not Great But Good Enough

When launching Zillow in 2006, we had to decide how good is good enough to launch. The first version of the product had Zestimates on 40 million homes with about a 12% margin of error. When launching, we knew that the Zestimates weren’t going to be entirely accurate and mainly just wanted to see how Americans would react to being able to publicly view valuations and information about homes.

We actually held up the Zillow launch by about two months to avoid angry and upset consumers. We spent this time building out an extra feature called My Estimate that allowed users to modify the estimates of their home with information Zillow didn’t have, such as for things like remodeling or significant changes to square footage. We were worried people might not be happy if the estimate was incorrect and they couldn’t do anything about it, which is why we held off. It was a difficult decision to push back the launch, but worth it in the long run. When striking this balance between our MVP and V1, we knew it didn’t have to be great but just good enough to entice users. Now, 15 years later, Zillow has upwards of 100 million homes with about a 3% margin of error, and the product is much more fully evolved.

Key Takeaway

The key takeaway here is that MVP allows organizations to start small, and slowly build up to the best version of their product. When starting Hotwire, we started by just selling airline tickets from a few carriers. Later we expanded to include more airlines, additional flight options, and eventually hotels, rental cars and cruises. But the early MVP was as stripped down as possible. See below for Hotwire’s beta site in 2000. About as bare-bones as it gets.

Image from HotwireAn MVP of Hotwire sold airline tickets from just a few carriers.Image from Hotwire

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At VidCon, Investors Are Still ‘Betting Big’ on the Creator Economy

Kristin Snyder

Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

Vidcon 2022
Photo by Kristin Snyder

The creator economy is the bedrock of this week’s VidCon convention, which is drawing creators, companies, investors and fans alike to Anaheim to discuss the rapidly growing realm of digital content and entertainment.

To discuss how investors, in particular, are viewing the booming creator landscape, Thursday’s “Betting Big on the Creator Economy” panel featured the likes of MaC Venture Capital partner Zhenni Liu, Investcorp managing director Anand Radhakrishnan, Team8 Fintech managing partner Yuval Tal and Paladin co-founder and CEO James Creech.

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Netflix Lays Off Another 300 People

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Netflix Lays Off Another 300 People
Photo by DCL "650" on Unsplash

Netflix has imposed its second round of layoffs in less than a month, cutting another 300 people from its staff.

“Today we sadly let go of around 300 employees,” a Netflix spokesperson confirmed to dot.LA. “While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.”

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