Sam digs into what other businesses could copy the Chess.com model — massive game with passionate community, subscription revenue, and no serious competitors. He explores sudoku (EasyBrain, acquired for $640M), poker, and crossword puzzle domains, and emails the guy who owns crosswordpuzzle.com just to ask why he isn’t doing more with it.
Speakers: Sam Parr (co-host), Shaan Puri (co-host)
The Chess.com Recap [00:00:00]
Sam: So we talked about Chess.com last episode, and I tweeted about it because even more people loved that tweet. That tweet had tons of engagement. It was good. And the summary is that we actually underestimated it — so Chess.com gets around 200 million monthly uniques, they have 60 million registered users, traffic has grown significantly. If I had to guess, they do at least $100 million in recurring subscription revenue, potentially worth a billion dollars. Super fascinating company.
Shaan: We were trying to hype it and we actually were under-hyping it, even though we were trying to hype it. And by the way, the guy who started it — he’s an ex-Stanford guy, or the guys who own it, there are two Stanford guys, which is cool. They didn’t go the same track probably as 95% of their classmates, and they’re going to outperform 99% of them just by doing something really simple that the world wanted.
What’s the Next Chess.com? [00:01:30]
Sam: I started thinking about this because you brought it up. Cool topic, cool bit, really cool business. It really fits what we call the New Zealand type of business — that phrase Andrew Wilkinson coined — which is it’s this independent thing, it has a cult following, it’s profitable, it’s simple, nobody competes with it. It’s like New Zealand: nobody’s going to war with Chess.com.
The biggest competitor, I think it’s called Lichess or something like that, it’s basically like an open-source free alternative. It’s doing extremely well, but people kind of prefer Chess.com.
So I started thinking, what’s the next Chess.com? What are the others? Is there a whole slew of these? And that’s where we didn’t go last time.
Shaan: That’s a really hard question. I’ve been thinking about it too. I only came up with dominoes. I looked into solitaire websites — a lot of them crush. But that’s a hard question.
Sam: So I spent ten or fifteen minutes on it, and that was enough to tell me something very interesting. The first one that came to mind — here are the characteristics you need: you need a game played by tens of millions if not hundreds of millions of people, that is not owned by a brand.
Chess works. Checkers also works, but the problem with checkers is it’s so simple that there’s not as much depth to it, therefore not as much money made and passion around the sport.
Sudoku was the second one that came to mind. So I went to sudoku.com and it’s just like Chess.com — you go to sudoku.com and there’s already a sudoku board waiting for you with the clock going. You don’t need to download, you don’t need to sign up, you don’t need to do anything. Just play. I love that.
EasyBrain: The Sudoku Empire [00:03:30]
Sam: Then I scrolled down a little bit and saw an advertisement for a mobile sudoku app. So I clicked it, thinking I bet this app crushes.
The company behind it is called EasyBrain. Their sudoku app has 50 million downloads on Google Play alone — forget iPhone, that’s just Android. Probably 100 million lifetime downloads total. The website itself gets 10 to 20 million visitors a month. So they’re getting basically free traffic to their mobile apps, where they’re able to monetize.
EasyBrain makes these apps — they’ve had over 750 million downloads lifetime of all their little simple number game apps, starting with sudoku, then a remix of sudoku, then another number game, and they just cross-promote them within each other. I bet this company is crushing it.
They’re based in Cyprus. Any time a company is based in Cyprus, it’s like… it turns out these guys are actually from Belarus, they’re from that area, but they’re based in Cyprus. So I just Googled it real quick —
Shaan: Did you know they were acquired?
Sam: No, I did not know this. Okay. So I have their revenues, their profit, their user numbers, all of it. Can I guess?
Shaan: Yeah, go ahead.
Sam: Okay. So here’s my guess. Revenue: $400 million a year. Profit: $90 million a year. Acquired for: $852 million. And daily active users across all their games: 25 million.
Shaan: You didn’t do horrible. So EasyBrain was acquired this most recent February. They were acquired for $640 million in stock and up to $120 million of additional consideration if they hit targets. So about $760 million total. Their revenue in 2020 was $210 million — so you were off there by half, you guessed $400 million. Their profit was $70 million — you guessed $90 million, pretty good. 750 million lifetime installs across all their games. 15 live games. 12 million daily active users — you guessed 25 million.
Sam: Not bad. What a company.
Poker.com and Crossword Puzzles [00:06:00]
Sam: So that was the first one I thought of. And by the way, I think there are other versions of that — go look at sudokuonline.com, all the things people are going to Google search. If you can get the top-level domain for those, that’s really interesting.
Then I started looking at some others. Poker.com — I went to poker.com and it’s just like a crappy affiliate site. There’s no game, you can’t play. It’s just like reviews: here’s a place to play poker, here’s where you go, because they get big kickbacks for sending a player to PokerStars or wherever they deposit. Horrible website.
Dude, you could do so much more with this. If somebody had a good mobile poker app, I would pay ungodly amounts of money for poker.com. I think that’s a real opportunity.
Then there’s crosswordpuzzle.com and crossword.com. Go to these — they don’t even render, there’s like fonts on the screen. What’s going on here? Because crossword is the other game that’s like sudoku, like chess, that people play religiously. We talked about how much the New York Times makes off their mini crossword — $90 million in subscription revenue from crossword puzzles alone. So I’m very surprised these sites are not being leveraged.
Emailing the Guy Who Owns Crosswordpuzzle.com [00:08:00]
Sam: So I go to crosswordpuzzle.com and it says, “Please email suggestions to dkw999@yahoo.com.” At the very bottom it says, “This domain is not for sale. Please do not inquire about purchasing it. All emails from anonymous or unknown companies asking me a price will be ignored. Sorry. Last updated July 2007.”
So I emailed this guy. I was like, “Hey, saw your website. I think it’s awesome that you’re not trying to sell this, but I’m curious — why aren’t you trying to do more with it? What’s your vision? Why do you believe it should stay this way?”
Shaan: I love that. Just super curious.
Sam: We’ll see if he replies.
Shaan: The New Zealand business thing — nobody’s going to war with Chess.com, and this guy’s version of that is: nobody’s even going to buy my domain. He’s just holding it. Like a digital hermit sitting on a gold mine.