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A sports startup CEO explains how he’s cutting costs and retooling his business to avoid layoffs

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A sports startup CEO explains how he’s cutting costs and retooling his business to avoid layoffs

This story is available exclusively on Business Insider Prime. Join BI Prime and start reading now. Yasin Abbak is the CEO of Fantasy Life, a sports startup cofounded by personality Matthew Berry that provides breaking-news alerts and sports information to gamblers and fantasy-sports players.The early-stage startup was in the middle of a series-A fundraising round…

A sports startup CEO explains how he’s cutting costs and retooling his business to avoid layoffs

This story is available exclusively on Business Insider Prime.
Join BI Prime and start reading now.

  • Yasin Abbak is the CEO of Fantasy Life, a sports startup cofounded by personality Matthew Berry that provides breaking-news alerts and sports information to gamblers and fantasy-sports players.
  • The early-stage startup was in the middle of a series-A fundraising round and preparing for product launches tied to basketball and baseball when the coronavirus pandemic hit and suspended most live sports.
  • Abbak, who landed his first finance job at JPMorgan Chase in 2009 as the US economy was in recovery, told Business Insider how operating as a frugal startup is helping keep his business afloat during the current crisis. 
  • The company was already lean, with no office space and seven employees, and is getting leaner by auditing its expenses.
  • Abbak said Fantasy Life has enough capital to make it through the fall football season, and is strategizing about how to extend that runway.
  • But Abbak also said he’s trying to avoid hasty decision-making that could undermine the company’s core business model and cost more money in the long run. 
  • Click here for more BI Prime stories.

Fantasy Life CEO Yasin Abbak graduated from college in 2009, shortly after the last global financial crisis. And he told Business Insider that building his career while the US economy was recovering helped prepare him to lead an early-stage startup during the crisis the world is facing today.

From his start at JPMorgan Chase and Morgan Stanley, as well as watching his father run a bread-and-pastry distribution business, Abbak learned the value of being frugal regardless of the circumstances, and to consider the long-term implications before making short-term decisions.

“They should be short-term adjustments, not long-term pivots,” Abbak said of how startups should be thinking right now.

Fantasy Life, cofounded by fantasy-sports personality Matthew Berry, runs an app that provides breaking-news alerts and information for gamblers and fantasy players. The company, founded in 2016, generates revenue by selling sponsorships around its breaking-news alerts, mainly during football season, from August to December.

The company was preparing to launch breaking-news offerings around basketball and baseball this year, and exploring potential revenue streams like affiliate relationships with sportsbooks, when the coronavirus pandemic shut down most live sports.

Fantasy Life tabled the product launches for the time being and focused on its existing product roadmap in preparation for the upcoming football season.

The company is trying to prove the early-stage startup’s business model without laying off employees or wasting the company’s resources.

“I tend to have a calm demeanor,” Abbak said. “But the reality is revenue projections are uncertain. We’re uncertain about the funding environment. We’re uncertain about whether sports are going to be a thing.”

But even before the crisis hit, Abbak was focused on running Fantasy Life efficiently, he said.

“As a startup, we act as if there’s a pandemic going on every single day,” Abbak said. “What you’re look for is finding that product market fit and doing it in the leanest way possible.”

Fantasy Life, for example, has never had an office space. Its seven full-time employees work remotely.

The team has adapted to Friday staff meetings via Google Hangouts or Zoom. Before the meeting, each employee shares in a Google document what they’re working on, what they’re going to work on, and any issues that arose. It keeps the meetings to a tight 15 minutes, Abbak said, including at least one fun, team-building topic like comparing favorite breakfast foods.

Recently, Fantasy Life’s leadership team also audited the company’s expenses, line item by line item, and trimmed unnecessary costs. He recommended other startups trying to extend their runways do the same.

If a sports-betting startup, as an example, is no longer advertising or marketing during the live sports limbo, it probably doesn’t need ad- or app-tracking services. Anything that doesn’t tie back directly to acquiring and retaining users, or monetizing the product, should probably be re-evaluated, he said.

“They should be treating their funding like college kids on a budget,” Abbak said. “You shouldn’t be spending where you can’t afford to spend.”

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Abbak said one resource Fantasy Life has not cut is its employees, and he’s prepared to cut his pay before laying anybody off. But he also intentionally kept the team small. He’s held off on hiring full-time for some functions, like designers to polish off the product, until it proves market viability. (He does have a list of people he wants to hire when the company completes its funding round.)

Fantasy Life had secured about 30% of its Series-A fundraising target when the pandemic hit, Abbak said. He said the company has enough capital to make it through the upcoming football season. Abbak hopes to start fundraising again in June.

He is still in talks with potential investors, sponsors, and sports-betting execs, but isn’t seeking commitments. For example, he’s been sharing his schedule (via Calendly), on LinkedIn, and inviting people in the industry to virtually meet with him. He said the invitation opened up connections with other sports-betting execs with whom he’s exchanging notes.

“It’s a fantastic time to leverage your network and learn from your network,” Abbak said. “That will make working with each other down the line a lot simpler, a lot easier, and probably a lot more effective.”

Fantasy Life is also avoiding making significant shifts to its business model based on the current climate, such as pivoting to esports, which doesn’t align as well as its business. Unless Ninja, the world’s most popular gamer, tweets that his thumb is hurt before a big competition, there aren’t many opportunities for breaking-news alerts, Abbak said.

Instead, the company is considering how to potentially adapt its existing technology and platform to more like-minded verticals, such as global sports or even politics.

“I dont want to take us too far way from core competency and I advise others against changing their core competency because they’re scared or nervous,” Abbak said. “I always consider the long-term consequences of short-term realities.”

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