Building a $200M Bootstrapped Chess Empire with Chess.com CEO Erik Allebest

COVID happened, Queen's Gambit happened, some news cycles happened, and we're like, oh, this might just be a flash in the pan, like treadmills and sourdough bread. But then in 2023, we had another crazy wave where all these kids started playing in schools because of short form content and the mittens bot and the cheating scandal. And we just spiked again. And then when we came down again, we were so much higher and we maintained this baseline.

How do you think about, like, how to design a rating system for poker?

We're bringing the chess playbook, which is like, how good are you really? Not just can you buy the most chips or can you use a bot or can you steal the most money? Whatever it is, we've all played those games where you're playing for M and M's and someone's just, like, all in all the time and they just rebuy more M and M's. As people get used to, like, wait. I actually care about my poker rating. People are gonna care about it as much as money because it's a reflection of, like, the value and their skill as a player. I think this is gonna be quite an interesting innovation for for poker.

Listeners. Welcome back to No Priors. Today, I'm here with Eric Alabest, who bought the chess.com domain out of bankruptcy auction in 2005 for $55 when almost every investor told him it was an uninvestable niche passion project. Two decades later, he's built the dominant chess platform with more than 250,000,000 members, 200,000,000 a year in revenue and a mission to get a billion people to play chess. It's a game that's more popular than ever, despite computers outclassing humans at it for the last thirty years. We talk about what AI means for games, the future of chess.com, how to build a ra

Thank you so much for having me.

So I'd love to just make sure our listeners have a little bit of the backstory of chess.com and how you built this business. But could you paint a little bit of a picture of just, you know, usage and both the company and the user base and product today first?

Yeah, sure. We are we are much larger than I ever thought we would be. So it's kind of wild to say these numbers for me. We're about 10,000,000 daily active users, about 40 or 50,000,000 monthly active users. It's always a little slower in the summertime as people are, you know, in the, in the Northern Hemisphere out and about. We have more than two fifty million registered members and more revenue than I thought we would end up with as a chess company. A little, I think this year we'll do a little over 200,000,000, which is frankly, again, surprising. We have about six fifty people on our tea

Amazing. And you took a, I guess, somewhat unconventional startup path or founder CEO path to get here. I'm certainly think of you as founder. What how did you end up owning the business?

Well, we didn't start by owning a business. We just started by owning a domain name that we got from a bankruptcy auction in 2005. Someone else owned the domain name. They were building chess software, but they, you know, couldn't pay their, their debts and, and the money they'd raised a little bit of money to try to do that, and ended up with a failed business. And so, a friend and I bought the chess.com domain name for $56,000 and we were going to build a chess community. We wanted to be like MySpace and build a chess community where people could kind of come and, and and express themselves