57: Erik Allebest - From 0 to 150 million ARR - The Chess.com story
May 12, 2024
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Erik Allebest shares the Chess.com success story, from 0 to 150 million ARR. They discuss making chess accessible to all, the challenges of scaling, importance of passion in hiring, and balancing CEO responsibilities. Chess.com aims to engage users beyond the chess community, focusing on growth for the game's sake.
Chess.com expanded user base by making chess inclusive to all, not just pros.
Hiring passionate individuals who align with the company's mission is crucial for success.
Balancing management and product involvement is key for CEOs in large-scale companies.
Deep dives
Changing the Perception of Chess Players
Chess.com aimed to broaden the definition of chess players beyond the traditional stereotype of old white men in suits. They wanted to make chess accessible to people of all genders, ages, races, and intellectual capacities. This shift in perception led to a significant increase in the user base and a more inclusive community centered around chess.
Enhancing the Chess.com Platform
Chess.com's CEO described the platform as a place where players of all levels around the world can not only play games but also access comprehensive learning tools, community features, and extensive coverage of the chess world. The platform emphasized user engagement and community-driven growth, focusing on providing a variety of engaging activities beyond just playing chess.
Scaling and Adapting During Peak Times
During peak periods like the rise in interest due to 'The Queen's Gambit' series, Chess.com focused on scaling their platform to accommodate the influx of users. While the core product remained the same, the team worked on improving server capacity and adapting to meet the changing needs and behaviors of different user cohorts.
Transition Towards Revenue Growth
As Chess.com's user base continued to grow, the company recognized the importance of revenue growth to further their mission. The focus shifted towards understanding user behavior, optimizing user retention, and leveraging data-driven insights to drive engagement and increase revenue. Initiatives included improving user onboarding, identifying churn patterns, and exploring ways to monetize the platform effectively.
Challenges of Scaling a Startup
Scaling a startup poses significant challenges in terms of infrastructure and operations. The episode discusses instances where unexpected issues like website downtime due to missed bills and technical mishaps create operational hurdles. The need for constant vigilance at scale is highlighted through anecdotes of resolving critical incidents, like website crashes while team outings, underscoring the complexities faced when managing rapid growth.
Navigating Leadership and Management in Growing Companies
The conversation delves into the nuances of leadership and management within expanding organizations. The emphasis is on separating management from leadership roles to foster growth and innovation effectively. By prioritizing impact and passion over titles and career advancement, the focus shifts towards engaging with the core problems and driving meaningful change within the company. The importance of maintaining a strong team culture, transparent communication, and aligning with the mission emerges as vital aspects of sustainable company growth.
Chess.com has grown from being a simple chess service to a thriving 150 million ARR business. The company has focused on making chess accessible to everyone through services around a product that hasn’t changed in centuries.
We touch on the challenges of scaling a company and the role of titles and leadership in an organization and how many times Erik wanted to give up in the process.
Erik talks about the need for passion and love for the product, and the importance of hiring people who align with the company's mission.
Takeaways
Chess.com has expanded its user base beyond the chess community by making chess accessible to everyone instead of just pros.
Titles should not be the focus, and it's more important to hire people who are passionate and aligned with the company's mission more than anything else
Finding a balance between managing the company and staying involved in the product is key for being a CEO at a scale of 500 people and more.
Sound Bites
"Anyone can have a relationship with chess. It doesn't have to be old white guys in suits. It can be all genders, all ages, all races, all countries, all intellectual capacities. Chess is for everyone."
"Chess.com could not only serve the community, but we could grow the game and change the definition of who identifies as a chess player."
"Our next phase as a company is to be an engagement-focused business and drive revenue to invest in building the game and driving cooler media."
"Making money is just the fuel for the mission"
Chapters
15:39 Expanding the Chess Community
30:08 The Role of Growth Teams in Retention and Value Creation
37:03 Understanding User Cohorts and Behavior Tracking
39:21 Driving Revenue Growth Through Churn Analysis
41:29 The Role of Revenue in the Company's Mission
45:02 Using Metrics to Drive Product Improvement
54:04 The Challenges of CEO Responsibilities
01:02:32 Separating Leadership and Management Roles
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