Feb 21, 2023

Founder Spotlight: Sleeper

For many sports fans, there’s so much more to game day than the action on the field. There’s anticipation, speculation, and the shared experience of victory or defeat. Recognizing how deeply involved viewers can be with their favorite teams and players, Sleeper co-founder and CEO Nan Wang has created a better fantasy league.

With 2 million daily active users, it is one of — if not the — fastest organically growing sports apps in the United States.

Rushing the field

CBS launched the first online fantasy football competition in 1997. Since then, a number of players — including sports authorities like ESPN, Yahoo!, and the NFL — have gotten into the game as well.

Never drafted a team? Here’s how it works. Before the start of a season, you meet up with a group of like-minded people — either virtually or at your favorite watering hole — and take turns “drafting” players for your fantasy team. The goal is to build a deep bench of high performers who are likely to see a lot of action during the season.

Once the season opens, you’ll track your players in each game. If you’re playing fantasy football, you earn points for player stats like passing yards, passing touchdowns, rushing yards, rushing touchdowns, sacks, interceptions, et cetera. At the end of the season, the team with the most wins takes the season. Some people play for bragging rights. Sometimes there’s a pot involved. Either way, it’s all about the numbers … and maybe a little trash talk along the way.

The facilitation of said trash talk has been a major differentiator for Sleeper.

“A lot of these first-generation platforms were primarily web-based, and primarily transactional. So you'd go on to the websites and you set up your lineups, you’d do your research,” Wang said. “But all of the primary motivations for why people played fantasy in the first place, which is to hang out with their friends, happened elsewhere. It happened on people's text message threads, in email chains, and on social media. And so when we started Sleeper, we wanted to build a sports product that was social at its core.”

To that end, a mobile-friendly interface was especially important. This allows users not only to track the latest updates while they’re on the go — real-time news alerts are a big feature for Sleeper — but also makes it easier to check in with friends and let them know who’s the top dog.

“A lot of our emphasis was really around ‘How do we make things easier to navigate on a smaller device? How do we embed more content and more social features in a way where it's not so cumbersome? And how do we modernize and refresh that user experience so it doesn't feel like it was from the ‘70s or from the ‘80s,’ ” Wang said.

But while Sleeper was designing its product around a smaller screen, it also was building for a wider audience. Many products made for die-hard fans are so narrowly focused on a certain type of experience that they’re alienating to more casual observers — and that’s a huge missed opportunity when you consider that the sports market touches more than 2 billion people.

One oft-neglected segment of the population? Women. The face of fandom has shifted in recent years, with women now accounting for 46% of the NFL fanbase. Meanwhile, women’s sports also boast the most rapidly growing TV audiences. Sleeper’s social factor — as well as a gender neutral color palette, contextual videos, and self-help guides — have gone a long way toward making this group feel welcome. Today, about 30% of Sleeper’s subscribers are women. For other apps, only 10% of users are female.

Bringing in cash … and a few MVPs

In 2017, Sleeper closed a $2 million seed round led by Birchmere Ventures with participation from Expa. At the time, Wang was pitching a platform that combined live play-by-plays, real-time scores, and league chat — all within a single app. To show investors that there was a value-add to this model versus using a competitor’s platform and chatting in GroupMe or WhatsApp, Wang went big on the importance of news and alerts.

“We seeded our initial audience by delivering news really fast, and we curated it,” Wang said. “People would rush in, read the news, and then enjoy it with tens of thousands of people. And the metric that really resonated at the seed stage with Birchmere and Expa was that the engagement and retention on the platform was word-class.”

By world-class, Wang means Sleeper was seeing a 50% retention rate on every app download. Meanwhile, the company was able to expand with zero ad spend thanks to enthusiastic users spreading the word to their friends.

“Every time somebody creates a fantasy league, they invite 11 other people to join them,” Wang said. “So we started with retention and engagement, then we added viral organic growth and the company’s been taking off since then.”

Sleeper went on to raise a $5.3 million Series A led by General Catalyst in August 2019. Then in May 2020, the company raised a $20 million Series B led by a16z along with Twitch CEO Kevin Lin and sports luminaries Kevin Durant, Klay Thompson, Baron Davis, and JuJu Smith-Schuster.

A pandemic-era pivot scores big

The COVID-19 pandemic might have taken arena sports off the table for a time, but that didn’t stop Sleeper. To keep users engaged — and during lockdown, everyone was seeking some extra engagement — Sleeper added esports to the mix.

It helped that many on the Sleeper team are avid gamers themselves. Before the pandemic, Sleeper’s San Mateo office had a LAN center for staff to play “League of Legends” instead of hitting up happy hours. This enthusiasm helped the team integrate this offering in a way that made sense.

“It wasn’t us chasing a phantom idea. It came from a deep knowledge of a space from people who watched and played these games, using first principles to design and architect a new game format,” Wang said.

Shortly after Sleeper announced its e-sports addition on Reddit, LCS — the North American League for Riot Games, maker of megahits like “League of Legends” and “Valorant” — took note and asked Sleeper to become the official platform for its League of Legends Championship Series.

“We’ve had a long-standing partnership with them since then, and they’ve been great partners for us,” Wang said. “We’re continuing to look at different esports models as well.”

The successful integration of esports didn’t just keep the company afloat during a challenging time. It also provided a roadmap for adding more sports in the future.

“What we ended up figuring out is because we designed our platform similar to Slack or Discord — where you can have isolated channels and basically isolated UI/UX — you can create a platform that distributes multiple games, leveraging the same kind of backend data infrastructure while providing users with a customized and more personalized experience in each one of those verticals,” Wang said.

And this ability to support multiple verticals has kicked off promising international growth. Wang said that the app’s first product was NFL football, which drew a high concentration of U.S.-based users along with a smaller number from the U.K. and Brazil. The addition of basketball and esports broadened the appeal to Europe, Vietnam, and Korea. Sleeper’s global appeal could spread with the addition of soccer, which Wang said is on tap for later this year.

Advice for other founders to up their game

There’s a lot to learn from Sleeper’s success, exemplified by their ability to add 1 million daily active users throughout the course of 2022 with virtually no ad spend.

First, Wang and his team demonstrated incredible resilience to get to where they are today. He noted it was quite difficult finding the first round of funding, and then COVID-19 happened, leading to an uncertain future since their entire business at the time had been predicated on live sports.

Next, Sleeper was fortunate to attract an all-star team that has taken the company far. They’re competing in a multi-billion dollar industry with a team of 50, with many ideas originating through grassroots innovation of individual team members.

Lastly, Wang and his team have been laser-focused on product quality, always listening to their consumers. You can shell out for SEO strategy and marketing, but word-of-mouth is one of the biggest boons to a burgeoning brand. Sleeper has been around for 8 years, and the product is second-in-class to none.

Learn more about Sleeper here.

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