Entrepreneurs Make Lemonade

Nearly a year ago, Revolution invested in DraftKings — a leader in the online daily fantasy sports industry — and I joined the board of this new and exciting company. I’ve been on dozens of boards over the years, but it’s hard to recall one that has generated more inquiries and interest than DraftKings. Whether it’s questions about the product or its regulatory implications, fellow investors, founders, and the media are clearly following DraftKing’s every move. And that curiosity only escalated with the proposed DraftKings and Fan Duel merger. Finally, it seemed that after months of speculation, the rival companies would join forces to capitalize on existing synergies. But it was not to be. After months of waiting, and literally managing the business with one foot on the gas and one on the brake, the merger unraveled due to antitrust concerns. CEO Jason Robins and his team at DraftKings were forced to change course.

A curveball like this can be hard for young companies to weather, so it was with some trepidation that I walked into last week’s board meeting in NYC. I feared that we would possibly face a tired and worn-down team critical of the government’s decision. A team focused on what didn’t go right in the past versus one focused on paving a new path for the future. Instead, the meeting started with each of DraftKing’s key team members describing what the next several years look like for the company — strategy, products, and marketing. Not one time during the five-and-a-half-hour session did the team mention the word “merger” or “FanDuel.” It wasn’t some kind of intentional avoidance, it is just no longer the company’s focus. Full stop.

So, what is DraftKings going to do now that the merger is off? They are going to innovate. Tirelessly. They are going to offer compelling new games like the recently released MLB Arcade product. They are going to unlock the next 10 million+ users by creating games that are more social and closely connected to more sports like European soccer and the WNBA. And they are going to offer content programming to supplement games and enrich fans’ experience on the site. DraftKings will do all of that across more geographies with thoughtful and fair consumer-protection technology and policies. In short, they are going to continue building the great business they always envisioned.

At Revolution, we often are asked how we evaluate great entrepreneurs. How do we know when a founder has the potential to take a good idea and turn it into a high growth business? This post-merger board meeting at DraftKings provides the perfect example. Not a single team member complained about wasted time, wasted resources or an arbitrary decision by the government. Instead, Jason rallied his great team and refocused their priorities. The world often throws entrepreneurs a lot of lemons and no doubt DraftKings has acquired its fair share over the last year. But after last week’s meeting, I’m excited for the next 12–24 months of lemonade.