Thirty Minute Mentors Podcast Transcript: Interview with FanDuel Co-Founder Tom Griffiths

I recently interviewed Tom Griffiths on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:

Adam: I am excited to have an entrepreneur who not only co-founded a billion dollar company that disrupted an entire industry, one of the most popular industries in America and an industry that I personally loved as a kid. I'm sure many of our listeners very actively engaged in Tom Griffiths pioneered the daily fantasy sports category as co-founder and chief product officer of FanDuel. Literally working with his partners to transform an idea into $1 billion business with more than 6 million active users. More recently, Tom co founded Hone, an innovative leadership development platform where he serves as the CEO. Tom, thank you for joining us. Thrilled to have you on. First question for you is a really important one. How often do your friends ask you for gambling advice?

Tom: It's a great question, right? I think it's funny because you know, we're all so passionate about building FanDuel as a business where you often didn't get time to do the research that we would need to actually be really good and competitive at the game, you know? Whereas we were spending, well, our waking hours kind of building the platform and building the team. It turns out that when we played with friends, we were actually the worst when it came to. Not that often, I guess is the short answer. That's funny.

Adam: So go, if you can go all the way back to those early days as the co-founder of FanDuel, how did it come about? How did FanDuel get started? Where did the idea come from? Really take us back to the very beginning.

Yeah, absolutely. So we were in the UK. It was a group of us, five founders. We were hung up in a kind of small, almost like a tiny office or classroom at the university of Edinburgh in Scotland where it's cold and dark and rainy and tend to spend a lot of time indoors programming computers or you're trying to come up with the next biggest startup ideas and kind of get the hell out of there. I left my PhD because I was just so excited about the world of startups and what was possible with, you know, the skill set there I had from a kind of computer science background to build something that of people would use and I thought that's all it took to start an internet company. It was kind of enthusiasm, the ability to program, like a big idea that I had to be a reality.

By the time the things rolled around to FanDuel, we were on our third idea first to really not having worked out. And so I wouldn't say we were desperate, but we were kind of desperate trying to think of something that would work because you know, I've done this good students and I dropped out to build an internet company and we needed something that would work. And so finally it was actually a pivot from an earlier idea, which was a site where folks would predict the outcomes of new stories. And what we'd seen there was that there was a ton of engagement around predicting sports, but it wasn't so much engagement around predicting other things that we really wanted people to be predicting on new stories like politics and world news and entertainment. So we figured why not double down on sports, focus the product on that and a way to monetize, which led us to kind of fantasy sports by work and actually, you know, got started with FanDuel as a short form fantasy sports site and that way. So rather than it be kind of like an inspiration in the middle of the night, it was really quite a exploratory iterative process to get to a sports site.

Adam: When did you realize that you had it? What was that aha moment?

Tom: That's a great question. There are a couple of other thing you know, given that we'd kind of been wandering in the wilderness and a little bit and looking for this impactful idea that we could come up with and tried a few things that hadn't really landed. The earliest signs that we had that people loved it were when we were prototyping the idea I write in the first few weeks, so we would build different game formats actually before writing a line of code and we put it into a Google spreadsheet and we advertised it on Craigslist and we have people send us money on a paper. So we're really taking a super lean approach to testing concepts. And when people were sending us money without even a website being there to, to run this new game format and we come up with it really felt like we were on to something.

Of course we'd call them up and ask them what they thought. They wanted us to make it forever increasing price points. So we were like, okay, this is definitely something here. So that was a kind of a super exciting early proof point. I guess on the other side of the coin you mentioned a buzzword that as an entrepreneur has to be top of mind, which is pivot. When did you realize that you had to pivot and what is your advice to, this is a two part question. Part one is when did you realize that you had to pivot? And part two is what is your advice for listeners who are entrepreneurs as to when they should start thinking about the right time to pivot in their businesses? Yeah, great questions. I think for us with Hubdoc, we were seeing engagement. So you know, engagement metrics were good.

I think what we were struggling with was the growth economics of the business. So the fact that it was a free game and that we need for user acquisition. And of course that's challenging. The best of times what we were really seeking was some kind of viral loop that would allow us to bring in music as it low or free cost. And that wasn't happening. And so I felt like even though we had this kind of gratification engine that we built, there wasn't a clear path to growth and having exhausted a few creative ideas there, you know, partnerships and promotions and viral tuning wasn't going to work. So it was time to like look at what were the bright spots within our data. Where was the kind of white hot center activity that matched with the kind of growth strategy. And for us that was sports because we knew we could monetize that within a fantasy sports framework.

So I would say, you know, the more general point of like when is the right time to pay? That is a hard one because you don't want to be too prone to pivoting. You need perseverance. One of our investors at home, Michael daring says it best when he says, you know, when you encounter an obstacle, need to figure out whether that wall is made of paper or made a six foot concrete. So you can't, you can't just turn around right away. You've got to punch your way through it for awhile. But you know, you've got to use your judgment when this, you know, you've tried to be creative ideas, there's diminishing returns on whatever strategy might be around product or word and it's time to try something new. I would say that, you know, it was never a blind pivot for us. So we turn 90 degrees left one day and forget everything that we did before we actually run the two sites in parallel.

I think we're really up to 12 months where we were testing FanDuel to see that it was going to work out before really jumping over. And I think you know our CEO Nigel kind of lettuce right there, which was as soon as we saw the signs we're working you, let's burn the boats and really go for it. Cause you don't want to kind of be in two camps. But I think the turning point for us was when we'd seen that family who had made more revenue in the first month than we had in the first 18 months, we knew that I was going to be much more promising avenue for us.

Adam: Can you talk about, from your experience running fan duel, how entrepreneurs can scale their business? How do you go from an idea that's proven, there's some traction to the kind of success that you've been able to enjoy?

Tom: I think there are a few elements to that question. I think you've got to find that growth engine that drives the growth of the business and then you've got to be able to keep up with that operationally as you grow the team and continue to execute well and then figure out what your second and third acts are going to be. For us and for many companies, and rightly so, you know, the driving engine of growth for us was strong unit economics. So we knew exactly how to acquire users, how much we would need to spend to do that and how we would make, how quickly we could make that acquisition cost back then recycle that. So if anyone watched sports in 2015 or 16 you know, they would have seen carpet bombing with FanDuel and DraftKings ads. And that's the kind of unfortunate outcome of hyper analytical marketing, knowing exactly how to acquire users, because even though make people's eyes bleed by the end of the football season and we were still really profitable and kind of growing users that way.

And you know, we found our marketing channels, we were, we knew exactly how much it cost to acquire someone. We were scaling not as aggressively as we could. So that was kind of the engine for driving the business. And then the second part I would say is how do you keep up with that? And I think, you know, as an entrepreneur, as a leader, you really go through several different growth stages or acts as a business. And as a leader to figure out what I was doing at this stage is not what I need to be focused on at the next stage. So you know, early stages it's really about all hands on deck to figure out this product market fit and what's the growth engine going to be. And then it's scaling the team, codifying, you know, what does it mean to be on your culture? What does it mean for the ways that we kind of want to work together? What are the kinds of people that we want to bring into the organization and how are we going to construct a team structure that placed everybody's strengths today but also scales for tomorrow? So they'll wanna just like operational management and company building because behind that gross driver,

Adam: Who are the kinds of people that you want to bring into a successful organization? What are the skills that are the features or the characteristics that are most important to Bennett be to building a winning organizational culture in your view?

Tom: I think this is a great question. I think my viewpoint on this has changed over the years. I think I used to put a lot more emphasis on skills and experience in the early days and over the years I've realized that what's really important is rural ability both to kind of be a smart problem solver and get things done coupled with where I can have values and mindset to want to be part of the company and the story that you're building. If you've got those things in place, then you know for most roles you can trade off a little bit on the experience and resume side because things change so quickly in a growing company that the folks who can learn and adapt the fastest with the most commitment and the most passion for what you're doing or the people that you want in the boat with you as opposed to folks that are perhaps more experience but less kind of committed to the coolers and less adaptable over time.

Adam: What are some of the things that you learned early on in your career? Could be hard skills, could be important, life lessons that have really shaped who you are today as a leader, as an entrepreneur and just as a person.

Tom: I think a theme that's come out a few times to me is, you know when you graduate in school, you know you're taught that your job is to have the right answer and the way that you progress to the top is to be the person always knowing what to do or what you know, what the right answer is. I think that often early in your career perhaps that's what you think you're meant to be doing. You're meant to be the person with all the answers and if you're not them, you know there's some insecurity around that and you want to cover it up or you pretend that you do know. I think true next level leadership is recognizing that you are not the expert in every area and really what you should be doing is surrounding yourself with people that can do things better than you can and have the self-confidence to align that team around the goal and where you're going and you have the people skills to bring that team together and achieve that outcome and not be the one necessarily knowing all the answers. I think that also flows into first seeking to listen and understand the folks that you're working with rather than trying to be the one telling them what to do. Cause you know that's the way that you get leverage out of people. So I think there's been a constant theme from you leaning back rather than leaning forward and looking to others for the answers. Providing and group setting the direction as opposed to trying to be a straight a student that knows all the right things to do.

I love that Tom. I mean, I couldn't agree more and I couldn't say it better myself. You and I are both very, very passionate about the subject of leadership. We both spent a lot of time personally and professionally thinking about it, working on it. Tell our listeners about hone why you started it, what it's about, what you're focused on.

So I mean, as we've been talking about, I completely agree, you know, think a lot about leadership and management and the Fangio growth experience growing it from five of us tonight, kind of re called a classroom environment in Scotland to your 500 folks across seven different offices in a few short years really was, you know, a baptism of fire for me, learning leadership and management on the job. And what I saw was that both in myself and my ability to kind of get up that learning curve and for a dozens and dozens of managers across a couple of continents, it was hard to find the right learning experiences for us that really fit the way that we work today. A lot of leadership training is either let's fly everybody to a single location and sit in a classroom for a couple of days while our inboxes fill up. And you know what I'm thinking about what's for dinner.

And then I'm left on my own to go back to my desk and be this great leader. Now that I've had this experience, which isn't great and the super inconvenient, expensive, or you know, there's a bunch of prerecorded videos online, whether that's LinkedIn learning or Skillshare, Skillsoft where I can watch a video about how to be a great leader. And it really, that's only part of learning experience, but it's convenient. It's scalable. You can use it on your own time. And so what we saw as a gap in the market was how can we take the best of both worlds where we have live interactive training and the transformational experiences that you can create that and couple that with the scalability of e-learning so that you can scale it to a global team and measure its effectiveness. And so that's what hone is.

I left FanDuel after 10 years and with that company really to pursue your passion in education and leadership to create this next generation platform that lets organizations scale live leadership in just 60 minute zoom by sessions to their global employee population so that we can create more access for people everywhere to great leadership training. Tom, what can anyone do to become a better leader? There's three components that stand out when you look at various breakdowns of leadership. I think there's the first one is setting a vision of if leadership is working with people to make a vision, a reality festival. You've got to have the vision. You got to know where you're going. The second is you've got to have the capability so that people trust that you know what you're doing and will follow you because you know you're going to get them three to four.

I still know how to get up the mountain. And then the third is that you've got to really connect with the people that you're asking to come with you so that they feel like you've got the mission or the team's interests at or above your own interests so that they feel really cared for. And I would summarize those three things in the words of Jim [inaudible], who was a four star general, the United States Marine Corps, where you posit it down beautifully into the three CS of competence, caring and conviction. So conviction around vision, competence, and the caring for the team. If that's what leadership is, I guess, how do you get people there? What we teach at home is that really your behaviors are a function of your mindsets. And sir, if you can get the right mindset, a leadership mindset, and that you know, you understand those three components, you believe that you know there's a leader inside you, there's not one form of leadership. The most effective leader that you can be is going to be the one that's authentic to who you are. And so think through how you can manifest those three CS and you know, that is the right mindset to then think through. You know, what the downstream behaviors might be. You know, we can go into what you actually have to do as a leader. But I think it does start with knowing what leadership is and having the mindset that you can get there.

Adam: How did you get to this point? What were some of the downs that you were able to turn into ups?

Tom: Absolutely. I mean, one period comes to mind very clearly as he asked that. I mean, I know it wasn't the early days of fan Joel, you know, that was kind of a time of creation and excitement about what we could build the darkest days, I would say on that January in late 2015 2016 once we thought we'd made it, created this billion dollar company, you know, all our hard work for the previous eight years was kind of being validated and you know, we thought we were there. And then the, you know, the, a few events led to the, the industry hitting this kind of downward spiral very publicly with kind of front page, New York times investigations, FBI scrutiny really because of the fact that we had created a money-based game around real life sports that was a fantasy sports game. But because of the short timescales kind of invited that scrutiny once we got to that scale.

And so that really decimated our business and our morale. As you know, the investigations came and the, you know, the regulatory environment changed and you know, for a period there state by state, day by day there were, you know, half our market got shut down. And because of attorneys general already kind of decided to pause our operations and investigators a bit more. So you know, we've come through the other side stronger now and if FanDuel's a thriving business in the new kind of legal environment that actually has changed as a result of the fight back that we mounted to the kind of misplaced kind of regulatory scrutiny or legal challenges. But you can imagine as an entrepreneur that's kind of traveled from that kind of small time Scotland in big time, New York over a period of eight years of hard graft to have your kind of vision decimated and repaired weeks was just emotionally destroying. And so, you know, there, there were a ton of lessons that I learned in those times for sure.

Adam: Do you mind diving into some of those lessons?

Tom: Yeah, I think the one that comes to the most was, it was a quote from Tony Robbins, which says that leaders have to see things how they are, but not worse than they are. And I think when you've got a company of people that you're, most of whom have joined in the last six months thinking they were on a rocket ship and you know, suddenly we're the opposite of our heads. Go down on and say as leaders, you know, you've really got to not paint a land of milk and honey and pretend that things are great, but actually not also indulgently the downward spiral and the negativity that can kind of occur. There's a concept called the Stockdale paradox after prisoner of war in the Vietnam war and it shows that, I mean his lesson was that the folks in the concentration camps were the ones that didn't make it, were certainly the ones that gave up, but also the ones that had false hope. You really had to balance ultimate belief that you'll get through this with the reality that it's really hard right now. And so I think we have to tow a fine line there as leaders to make sure that people knew that we recognize the severity of the situation but weren't going to see it as overly negative and reassure people we were going to get through, which we did.

Adam: Can you talk about the importance of mental health as a leader and how you prioritize it and what kind of exercises others can do to build just a winning mindset?

Tom: I think it's absolutely crucial and like I said before, hone in, you know, our teaching starts with this idea that mindset leads to behaviors, behaviors lead to results. And if you're not seeing the results that you want, and oftentimes people go to the behaviors but really need to go deeper and go back to that, the mindsets. And so having a healthy mind and then cultivating that over your entire career will return volumes. In terms of the behaviors and results that you get. I would say that, you know, as you go up the organization as a leader and as your organization grows underneath you, the smallest things get amplified as they cascade down the organization. So I can remember having to learn to be really careful what I said about our product because you know, three layers down, people are going to receive that as Thomas absolutely said that the spine was going to be blue when I might've said, Hey, are there any other colors that we might want to look at? And so that goes for your demeanor as well. You know, if people see you walking around with a frown on your face or kind of a hunched shoulders, then they're going to pick up on that and amplify it. So I think maintaining your own emotions in check and your mindset's in check will have the effect in the opposite direction, which is you can set an example and be a role model for everybody. It's take out a positive mindset, productive kind of approach to work.

Adam: Can you talk about the people you surround yourself with and specifically using FanDuel as a case study, that founding team of fan duel, why it was so successful and the complimentary pieces and what listeners can learn from it?

Tom: Yeah, absolutely. Like I said, we were five founders of Fangio, which is a lot. There was Nigel Eccles who is the CEO, myself as a head of product and lastly Eccles as a head of marketing. Rob Jones had a design and then Christopher's had a technology and so from a job title perspective and a skill set perspective, as you can tell, it was quite a good mix. Like we had the right combination of skill sets and the founding team that helped us get quite far actually just just the five of us. What really bound us together though and I think made us successful is less about the skill sets. And as I said early on it was about that the way that we solve problems together, the fact that we didn't give up even in the face of that original pivot and then some of the growth challenges with Angela in the first few years and then ultimately in a kind of a crisis period and a kind of legal legal challenge period.

We just didn't give up. And whenever there was I guess trouble in the team or the company more broadly, it would always be the founders who had come back together and support each other to go back out there and solve the problem and keep the team moving forward and focus on, you know, positive outcome. So I think more than anything else, just that comradery, that tenacity, that shared purpose to work together to create something that I'd really been forged at the early stage and continued for a decade. That was what made it such a special team set to be a funnel. Tom, I'm going to ask you some rapid fire questions in our remaining time. Let's do it. What was the FanDuel's relationship with draft Kings from the early days? Oh, we hated each other. I mean, that's the short answer. Tongue in cheek, because we actually got to know each other quite well through an ultimately able fated merger and where I spent 11 months in my life trying to bring it to our tribals together.

And then ultimately the FTC in its infinite wisdom decided that we shouldn't merge. We have to go back to being a tribals. But the group of folks at the trackings tracking's very similar to us and that they will know scrappy entrepreneurs that wanting nothing more than their company to succeed. And so I respect them for that. But you know, as gentleman competitors, we really were at odds with each other and every step of the way. And so there's a healthy competition.

Adam: How did you differentiate your product from DraftKings ? I mean, you were the chief product officer.

Tom: Yeah, I mean they were very similar products. I mean truth be told, I think where we focused as a differentiator was that out product was and is a very welcoming experience to more casual fans and DraftKings tended to capture more of the high-end shock like customers.

So we were proud of that. Best advice around differentiation, make it defensible. It can't just be fleeting in your mind or easy easily. Copyable I think that's one of the things that we suffered from in daily fantasy sports. It was kind of very tipped the time. So I read the seven powers book on how to create defensible, competitive advantage. What was your data analytics operations like? I'm actually pretty sophisticated. I mean there's a lot of data and we use it to create a better product experience and grow the business. So we had data analysis embedded on every team and a great infrastructure to help us do it. What should listeners learn about that analytics? How to tell a story around data and not just present a bunch numbers or boil the ocean. I think start with a hypothesis, then try and validate or invalidate that through your research as opposed to just browsing endlessly endless reams of data.

Adam: Easiest way to describe your relationship with state and federal regulators.

Tom: I can't speak to it more recently given I've been out of the business for a couple of years, but at that point, you know, we recognize that we needed to work together to find the right regulatory framework for our customers and for our industry as it grows. So it was pretty positive through all the work we did to get a relationship with the professional sports leagues. Again, very positive. I think that it was symbiotic. We needed them to be flourishing for our product and make sense. And in fact, you know, as they saw dynamics in that viewership, honestly in particularly daily fantasy as a way to drive further engagement with sports. And so they really appreciated what we did. And of course, you know, the NBA was a long term investor in FanDuel and so we were very close.

Adam: What's the future of sports gambling?

Tom: I think we're seeing slowly state by state legislation to allow it. I think in the land of the free people should be able to do that. And I think that with smart regulation and responsible products that it can be a great entertainment experience for more and more people. Best advice for entrepreneurs who are listening, who also want to build the next billion dollar business. I would say for me, I mean Fangio was a great experience. What I'm really enjoying with hone is that is as much a passion project as it is a multibillion dollar business. We hope one day and so it's cliché, but you know, find something that you're super passionate about and I can see yourself doing for the next 10 years because the chances of having a quick head are really low. This is a long term profession, best way to build a culture that fuels disruption.

Innovation always when you're building culture that's leading by example. And so as the CEO or founder kind of questioning assumptions, pushing the team to do more and having a tolerance for failure, there's nothing that shuts down innovation more than a leader who shoots people down for trying something and failing. As soon as people see you do that in a clown lap and done experiments, you know, celebrate failure, celebrate innovation, and be the first to kind of question of course, what are the biggest misconceptions that people have about success? There's a point at which it feels like you have success. I think just the world we live in is there's always more to do, there's more to achieve, there's more impact to have. And so you know, we really, really dig into here from the most quote unquote successful people January, thinking about what's ahead other than, you know, they, they've made it.

So pick something that you like and enjoy the journey because there's never really an end. So what did you do along the way that others didn't do? I think when it comes to FanDuel, I, it was a few things. I mean, we really focused on what the customer wanted as opposed to what we wanted. Oftentimes it's easy to be in love with your own ideas. And so we were pretty ruthless about killing the stuff that didn't work. And then just like staying in the game. And it's easy to give up when you have to stare down the barrel of that fundraise that's going to take, you know, a 80 to a hundred investor pitches. Should I go and get that kind of corporate job and take it easy for a few years? We didn't because we didn't have another option. We just stayed in the game and that's, if you can stay in long enough then you'll find a way to make it successful.

Adam: What was the biggest risk you've ever taken in your career? And, and I'm just going to cut you off as you think about the answer and point out to listeners that all of the things that Tom spent duration of this episode talking about, he didn't consider big risks. So I thought that's, I think that's a really interesting point that most of us would say, wow, Tom took all these huge risks and he doesn't even consider any of those risks, but go ahead.

Tom: Yeah. Some people would call that deluded. I think, I mean it has to be the pivot to find Joel from Hubdoc I think because it was like third shot. I quit my PhD, I quit a previous company group at. We were pivoting from how we have to do an American sports company in an area that none of us had a ton of experience. It was pretty crazy. When you look back at, it was probably the biggest respite. Several years of hard work has paid off. How do you motivate yourself on days you don't feel motivated? I think again, as a leader, you come to work, people look at your emotional state and so you've got to show up for them and make sure that they see that every day. You're setting the standards for commitment and hard work. So it's not really an option to not do that. When you've got a team around you,

Adam: How important in your view, on a scale of one to 10, his ethics to leadership and why?

Tom: Absolutely. Easy. 10. I think I got to experience an industry in turmoil with Fangio. I think that really tests people's values and the ethics. I'm proud to say that the founding team always had the highest standard of ethics and always did the right thing. One of our core values was trust with this behavior associated behavior mean do the right thing even when no one's watching. And that allowed us to stand up to scrutiny when it came. And so I think the, when no one's watching part is, is the really important part of that. So it might not, it might feel like you can cut corners. Some days when you know it's not in full view, but it will come back to bite you if you do so do the right thing even when no one's

Adam: Single best piece of advice?

Tom: What can anyone and you actually, Tom, you don't need to limit it to one because I know you have a lot of value. How can any listener become more successful, period? I think the Tony Robbins ultimate success formula for whatever you think of that packaging is the one that stands out for me. Get really clear on what you want and where you want to be. Take huge action towards moving towards it. And then evaluate and reflect regularly to see how am I making the progress that I want to and if so double down, if not, take a different approach and just keep taking a different person so you ultimately get where you want to do. I think when you hear that it can sometimes feel a bit like, you know, I want a house, I want the money and want a car.

And as I've got older, I think for me my goals are more around the kind of person I want to be rather than the things I want to have. Like I want to be someone that people see as a great leader, someone that they want to work with, work for someone that's setting an example for how companies can have a positive impact on society rather than the kind of material goods that go with traditional pictures of success. That's just for me, but I think before the idea of getting clear and then moving and constantly reflecting it is the right way to go about it.

*Note that the transcript is not 100% accurate, as it was captured through an automated transcription service and lightly edited. For the interview in its most accurate form, please listen directly at www.thirtyminutementors.com.