What's the Startup?!

Ewagers Founder Noah Fulk on How to Pivot, Adapt, and Build a Scalable Startup

• Sprocket • Season 2 • Episode 7

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What does it take to pivot your way to success? In this episode, we sit down with Noah, founder of Ewagers, to hear how he turned his passion for gaming into a groundbreaking esports platform. From overcoming the challenges of a failing B2C model to finding scalability with a B2B2C approach, Noah shares his journey of adapting, learning, and building a sustainable business.

As a past winner of Sprocket’s Next 50K Pitch Competition, Noah also talks about how the experience sharpened his pitch, connected him with valuable mentors, and helped him refine his strategy. Whether you’re an early-stage founder or scaling your business, this episode is packed with actionable advice on testing ideas, leveraging partnerships, and staying flexible.

Tune in for insights, lessons, and a roadmap to turn challenges into opportunities!

Learn more about Ewagers: https://ewagers.co/ 

Explore the Next50K Competition: sprocketpaducah.com/next50k 

Check out Sprocket: sprocketpaducah.com

Thank you for tuning in to this episode of the Sprocket Podcast! If you’re ready to dive into the world of startups and innovation, visit us online at Sprocket WKY to learn more about our mission and how we support entrepreneurs like you.

Ready to check out the space? Book a tour with Tiffany, our Community Coordinator!

Got a business idea? Apply for a mentorship session with one of our experienced mentors!

Stay connected and join our growing community on Instagram for the latest updates, inspiration, and behind-the-scenes looks at what’s happening at Sprocket.

Let’s turn your ideas into reality—together!

Sprocket is proud to be supported by Team Kentucky, the Commonwealth's Cabinet for Economic Development. Learn more about their initiatives and resources at ced.ky.gov.

Kaylan:

Thank you so much for taking some time out of your day to chat with us, Noah. First, tell us a little bit about yourself and about e wagers, how you got started as an entrepreneur.

Noah:

Yeah, for sure. I guess really for me, I'd always been fascinated by larger companies and just really how they operate. Truthfully, when I was 13 For my birthday, I wanted a brokerage account. So that's not really in reach for 13 year olds. I would say birthday wish, but that was mine. And that whole summer I'd been mowing yards, saving up money. And when I turned 13, my. With the money I saved, my grandfather and father matched that, and then I got my brokerage account. Was able to do some trading, learn about companies, how they work look at all the jargon I didn't understand and try to, understand it, and, then fast forward nearly 10 years or so I ended up starting my first company called zaps. It was a consumer electronics company. I did that probably around the age of 19 or so. And I would call it a semi success. Company was profitable ended up scaling really quickly, which ultimately killed the company And then fast forward again around the age of 23 or so e wagers, which is an online skill based wagering and tournament infrastructure was conceptually born and I had been a gamer since about the age of four and was always very passionate about gaming. So I knew with E wagers, I wanted to take everything I had learned the good, the bad, the ugly, and apply that to E wagers. And I knew this is something I would like to do long term and enjoy doing long term just because it was such a passion of mine, which was gaming.

Kaylan:

So for those listening or watching, they may not know, but you were a previous winner of our next 50k competition. So I'd love to ask you about how that experience impacted your journey and what you took away from it.

Noah:

Yeah. The first 50k pitch competition was excellent. Very well thought out, very well done. Ultimately benefited me and my company as a whole dramatically. One, we formulated our best pitch. Strictly for that, competition. And then we were able to take that and make multiple derivatives of it and increase it and make it better. But the competition itself connected us with other founders who had great ideas. And really having that networking was huge for us, bouncing ideas off 1 founder to another. And in thinking of things that were more outside of the box scenarios really helped us again, make pivots and make things work in that time efficient manner. As I mentioned before for example even when we were marketing early on, I spoke with a founder actually through the first 50k competition because we were still early on the B2C model and we're like, Oh, yeah, we're going to do this marketing campaign. He's just, he's yeah, Run five or six at the same time. He's and just run up for 24 hours. Don't have to be a week. Doesn't have to be a month. Just see which one performs the best after 24 hours. And then the one, the bottom two performers just allocate that money into the top performers and just keep doing that over and over again. And if, stuff like that, I hadn't. Thought about I probably should have. But again, it's just these simple connections that were made through the competition itself really helped us as a company. And it was great to see what everybody else was doing and the concepts and ideas that were being implemented by other founders. And then also access to, local institutional resources Key horse capital Invested, obviously the sprocket location is great. Getting connected with other local founders, entrepreneurs, local businesses. Again, one of the best things you can do as a founder is just reach out to others, listen to what they have to say. Even if you're not in the same sector same, niche, just listen to what they have to say, because a lot of these other founders are going through the same struggles as you. And they may know somebody who knows somebody who. Can again change your business. You just never know. So definitely be networking and listening as much as you can.

Kaylan:

I'd love to learn more about how you moved from idea stage to action. It sounds like you've had, always had this entrepreneurial drive, but what pushed you to take that first leap with e wagers? How'd you know this was the time to move forward on this next idea?

Noah:

Yeah, it's a good question. I would say I've never been one to go the traditional route, so to speak. I don't know. There's nothing wrong with that. It just wasn't necessarily for me. And when, I'd seen the success that Zaps had and created that excitement and almost that dopamine release, I was like, Oh I want to, take that and chase that again, but apply it for e wagers and, again, taking the bad and the ugly from the previous startup again, going into e wagers, I was like, I'm going to be, sole owner or at least majority shareholder for as long as I can be the sole decision maker. And again, That is still the case to this day, and we've been able to scale and grow and pivot and change as needed. And again, it's great to be able to expedite things and do things on the fly because I don't have to answer to anyone. For me, after things that kind of fizzle that was apps, it was like. There's no reason to really wait. Truthfully, I think the lap time was maybe a couple months or so. And then I was like, I had some money from that startup. And I was like, do I keep trying to get more or do I just cut my losses and then take it and apply it to this and ended up just cutting the losses and started on e wagers. Yeah.

Kaylan:

There you go. So you mentioned that you've had to pivot and you've grown and evolved over time. So in terms of your business model specifically, how has that evolved since you started e wagers? Can you walk us through that journey of adaptation and evolution?

Noah:

Oh, yes. It is always evolving. Yes. Never ending evolution in terms of that. From I would say the pricing structure, business structure, that's always changing. Internal workings are always changing. Obviously, as a startup, you're raising funds. Your pitch deck is always changing. You always think, oh, this is the last one. And that's just never the case. And I would say it's a good thing that it's always changing, right? If you're not changing, I would say you may not necessarily be failing because that's not the case. Maybe things are working and there's no need to change. But in most cases, there's trial and error that's required in order to succeed. And so when you find those errors, you have to change, right? You have to pivot. You have to make out a tip. Adaptations and evolve to make things work. E wagers, for example, when we were conceptually born early stage, we're like, e wagers is going to be B to C. We're going to market directly to consumers. We're going to make e wagers the, draft kings of peer to peer wagering for e sports, had all these grand ideas and thoughts and quickly found out that, the business model we have works at scale, but it's heavily dependent on organic growth to make it actually a working business. Example of this would be like, if we're doing B2C, again, we're acquiring the users, we're marketing to them Is the example like if it costs a let's just say 10 to acquire a user? In our case, it was actually higher than that. It was costing us like 12. 42 to acquire a single user, but let's just stick with the 10 for simple math. But if it's 10 to acquire a single user, and the e wagers business model day one was like, we'll take a 5 percent service fees on completed wagers and tournaments. So if you're taking a 5 percent service fee and it costs you 10 to acquire that user. You have to make that one user wager or join at least 200 worth of wagers and tournaments, and that's just to break even. And that's just your marketing costs, right? That doesn't include administrative payroll, et cetera. That's just that. So very early on, we discovered, this business model will not work unless you just have a ton of, sharks that are just wagering a ton or two. You can acquire users somewhat organically, which we discovered was also very difficult. With. That being said, we discovered that it made far more sense to us to, say, partner with existing games, existing publishers, and even businesses that have an established user base who aren't doing anything with real money wagering or tournaments. And then we would come in and offer that infrastructure, offer that service, and then do a rev share with them. And the benefit to that model is there's no user acquisition costs on our end. Again, the growth is quote unquote Organic, so to speak. We're not paying for marketing. We're not paying for user acquisition. We can generate users. We can scale without having to pay for them, making that service fee model much more profitable.

Kaylan:

So customer feedback is key. Did any specific feedback or market trends push you to pivot on pricing? Were there any moments where you had to rethink that approach based on what you were hearing from customers or seeing in the market?

Noah:

Not necessarily customers, so to speak, but the market for sure. When we were early on, we were looking at competitors. There were different B to C operators on there still are not profitable. I might add. But, the market. They were doing similar stuff, focusing on their own niches, and there was a very large competitor in the space, actually publicly traded called Skills. They went public via a SPAC merger, market cap value of close to 15 billion crazy large company. They're an indirect competitor to us, so they build their own games. They're B2C, but they'll build their own games or buy their games that are existing, make them skill based, and then facilitate real money tournaments for those games. So again, skills publicly traded, super big. Was once valued at 15 billion from a market cap standpoint skills is now only worth about 100 million from a market cap standpoint. So over 14 billion dollars lost and skills currently loses 30 million dollars a quarter from marketing and user acquisition costs. So again. Early on, it was apparent from other competitors, but if the largest player in the space, which is a B2C model, same thing, acquire users, they take a service fee. But if the biggest player in the space isn't making money, it's very unlikely e wagers is, or any of are. Competitors, direct competitors who are B2C are as well, it's just not likely. So for us, it was really looking at competitors and some of the big players in the space versus that customer feedback, so to speak. Not to say we haven't received customer feedback. It's just for us, the more eyeopening thing was, this initial business model will not work and we know it won't work because the biggest player in the space isn't making money and they've been around for years.

Kaylan:

So learning what you did from your competitors, how did you make sure that your pricing model stood out?

Noah:

Yeah, for sure. For us, we were looking at it, the numbers, everything can add up on the Excel, you can make them add up right. And the biggest, Thing we realized is like when we take away this acquisition cost, this UA cost that as you scale and grow, which if you're going to scale and grow your acquisition cost up to scale and grow, you have to do more marketing, more ad spend. You have to acquire new users to scale. We realized like, if that price is significantly reduced, or if it's not there. This business model will work and it works incredibly well. And so again, for us, it was like, what are all the competitors doing? What are indirect and direct competitors doing that, maybe nobody else has considered. And we realized everybody's. Building a brand, they're building the business, they're doing marketing campaigns themselves, they're doing ad outreach, they're acquiring these users, they are a B2C model and we realize there's nobody looking at it from the infrastructure standpoint, saying look, we've built. A compliant regulatory approved platform. We have peer to peer wagers. We have automations in place. We have tournaments. We have all these great components that these games don't have or that these businesses don't have. And it's all around the real money piece. Why don't we just reach out to these existing games and these existing businesses and again, offer our services to them and then do a rev share basis? Because. Then we're monetizing on an existing audience. We solve the user acquisition piece and we're bringing a new revenue stream and monetization and retention piece to these businesses that they currently don't offer.

Kaylan:

So when you were testing different pricing models, how did you go about measuring what works? Were there any specific data points or metrics that you were watching to decide whether to keep or change or like switch gears?

Noah:

Really, it was just a simple market analysis, seeing what competitors were doing. And again, that's what led us on that first model, right? We were like, oh, like skills and some of these others are doing it. And this was early days. We're like, B2C model. There's all these B2C companies yeah. If they're doing it, it should work for us. Like we have, we're offering, more tournament options, more wagering options, like everything we're doing is better than the competitors. And if they're doing B2C, like it obviously works, but come to find out the B2C didn't work These competitors had just raised tens of millions of dollars, and they were very quickly burning through it and skills, for example, publicly traded. So they have access to institutional debt market. So they can continue to burn and burn money, which they continue to do today. Very quickly, yeah, we found out that, just looking at the competitors itself. Wasn't enough, right? We actually had to go in and test ourselves, which we did. We were like, B to C, let's do it. Ransom ad campaigns, sponsored streamers who just came for a living. And we were, averaging around that, that 1250 cost. And we were like, okay, this is just not scalable by any means, or it became very apparent okay, I want 100, 000 users on the platform at 1250 a pop. That's, 1. 25 million just in UA. And it's okay this doesn't work. So again, it just by that simple trial and error, we found out the B2C business model is incredibly difficult, right? We're not saying it's impossible not to say B2C isn't the way to go. It's just user acquisition costs and marketing costs are going to be, the biggest enemy in that business model. And so you really have to figure out a way to, again, go viral, scale organically, or have some form of, massive organic success to then, make that B2C model work.

Kaylan:

What were some some other tough challenges that you faced while expander experimenting with your business model or pricing structure? And how did you continue to push through those?

Noah:

Yeah, I would say from a challenge standpoint, we didn't have, the pricing structure is, in my opinion, for us, at least relatively simple. It was like, okay, B2C doesn't work in our particular business. Again, we're offering wagering and tournaments that are real money. Always taking a service fee just makes sense. We looked at fast, but then sass is difficult. Especially for us. It's okay, are you are people really going to pay 399 or 499 to get access to these tournaments? Probably not. Like paying up front is a big turnout for people. So again for us. The service fee model makes sense. It's just a matter of now we're taking it like B2B to C again, removing that acquisition component. I would say a challenge we face that wasn't necessarily directly related to the pricing structure is just regulatory. There's a lot of different startups out there, whether that be in like biotech, pharma, real money wagering, whatever it may be. You just have to persevere on those for sure. I just. Keep your head down because for us, we spent 18 months just trying to allow for real money processing which the core concept is real money wagering. And if we can't even allow for somebody to place a deposit, the entire business was shot. It wouldn't we couldn't do anything. So we were really at the mercy of, going through these audits and regulatory hurdles, which was quite difficult. And multiple times. It was like, we crossed 1 bridge and there's another and, just want to call it quits. But, you just have to persevere and keep going. Other thing I would say is just don't get too deeply rooted into a single idea. I know for me, it was like, I really wanted to be to see a lot of the work. I 180 wages to be this brand wanted it to be this, the leading competitor in the space. And I would say that was a mistake of mine. That was a fail for sure, because we definitely put too much time and effort into trying to make it work when again, it just it won't work in my opinion. And so I would definitely say. Being early stage, it's way better to be reactive versus proactive, in my opinion, just because a lot of your preconceived notions or ideas, concepts, ideas, they're oftentimes wrong. And when you try to implement them you'll find that out, right? We were like, Oh, B2C will work. It'll be easy to make it go viral. We'll get some of the world's best streamers and gamers and they'll promote us and everybody will do it. And that's just not the case.

Kaylan:

So leaning into that for founders who are a couple or a couple of dozen steps behind you and they're trying to figure out their pricing model or their business model, what is your top piece of advice? Like what is something that they should focus on at that stage?

Noah:

Yeah, that's a great question. Truthfully, in my opinion, I would say don't spend too much time on a single idea or a single pricing structure or single anything. Companies fail for one reason, most companies anyway, and that's simply, they run out of money. It's really not difficult. You ask a business, Hey, why are you guys out of business? They didn't have money. That's, that's why they fail. So, you need. To have multiple concepts and, pricing strategies, if you can implement them simultaneously and again, be reactive to those data points like, okay, this one's generating X and revenue. This is generating Y and revenue, see which one's performing better and then allocate more time, effort, money, energy into that specific concept. You may not be able to do them at the same time, but if you can do it cause again. The biggest enemy or friend is going to be time for you. And it's really up to you as a founder to figure out, what side you want to be on. If you're spending all this time trying to create the perfect pricing strategy and you're just spending all this time getting like the perfect structure done versus actually implementing it to see if it works. Like why are you spending all this time? Formulating it, seeing how the excels look and all this just go do it and figure out if it works because you're gonna spend all this time making it look pretty and need nice and coming up with all these hypotheticals. And then you go out and do it. And you're like, yeah, this didn't even work. And all that time's wasted now. Again, to avoid that Look at competitors, look at film companies, look at successful companies, and then find something that works for you and really a time efficient manner, right? Because again, time can be your friend or it can be your enemy, and it's going to be up to the founder to really decide which it will be.

Kaylan:

Awesome. Noah, thank you so much.

Noah:

Yeah, for sure. Thanks again and appreciate you guys taking the time.