An Englishman, an Irishman and an Australian walk into a bar. They bet on horse racing, their billiards game and their beer sculling contest. One of them wins all three bets. The winner doesn’t get paid. Why not?
No, this is not a pub joke, it’s the problem that Brisbane’s Jordan Oudejans set out to solve with his brother Damon and friend Nick Heaney in 2014, when Jordan saw his mates handshake betting on an AFL game but not paying up.
“There’s got to be a better way,” former Ladbrokes trader, Jordan, pondered.
However, there’s nothing about their journey over the last two years that has been a “sure thing” for the Brisbane trio. How do you create an app – which enables you to bet with your mates on anything and get paid, all on your mobile – when you don’t have a tech co-founder? You outsource to Estonia and send a team member to go live close to your developers in Tallinn, right?
Wrong. This was Puntaa’s first mistake, although they don’t regret the experience. Despite the team sinking $15,000 into an app that they would later trash and have rebuilt by Australian contractors at a greater cost, the Estonian app helped them secure their initial $120,000 angel investment and Damon still managed to smile as he recounted some fun times from his Baltic adventure.
Puntaa’s second setback was their rejection from payment gateway giant, PayPal. After months of negotiation and anxious waiting by the phone, they awoke one morning to the heart wrenching email that could have sealed their fate, had the lads not been so stubbornly determined to make their startup work. With no luck from Stripe, Braintree or other payment gateways, Puntaa built their own payment system. Take that, PayPal.
With a gaming license in hand, thanks to nine months of hard work with Australian regulators, it was time to court a caretaker for customer funds stored on the Puntaa platform. Therein lay another setback: the banks wouldn’t back them. Ultimately, it took fourteen rejections and a lot of beers to drown their sorrows before the team successfully secured their current banking partner.
By now, their cash reserves were sinking frighteningly low – even with all three founders living back with their parents to save money. It was time to raise funds. Not surprisingly, their venture capital path was also riddled with obstacles and setbacks. After fifty investor meetings over four months, things looked grim. Then, while visiting Riverside Bar in his Puntaa t-shirt, Damon got a serendipitous tap on the shoulder, and a reminder of the importance of branding. An investor the team had previously pitched to had recognised Damon and wanted to know how Puntaa was progressing. Courtesy of that chance re-meeting, the team now has $750,000 in play money.
“It has never been about the money,” emphasises Nick. “The money has just allowed us to build out an awesome team.”
“We’re still as poor as ever,” confesses Damon, who misses his overseas travel and frequent mates’ nights out. “Anyone who glorifies the startup rollercoaster probably hasn’t been on the long-haul ride yet.”
Yet even with money in the bank, building the team was not as straightforward as waving cash at the nearest hackathon. Nick says they were “jilted twice at the altar” before securing their three “very talented developers”.
“Get a signature on the dotted line as quickly as you can,” advises battle worn Nick.
“And understand that if you lose people due to exorbitant salary offers, they probably weren’t the best people for your startup anyway.”
Wins to date
As a startup founder, it’s hard to stay motivated without some wins along the way. Puntaa’s $750,000 and their acquisition of three developers were morale boosters for sure. Surviving a rigorous bootcamp-style selection process last September, to be accepted into muru-D’s inaugural Brisbane accelerator at River City Labs, was also “just what we needed, when we needed it,” says Nick.
“The accelerator program taught us to focus on the big picture and not to lose faith with every setback. You can have fifty people tell you no. But all you need is one person to say yes.”
Visiting the UK recently with Startup Catalyst, Nick brought the team back another win. He attended a gaming convention, which warned startups to stay away from the gaming space unless, like Puntaa, they had “all their ducks in a row” in terms of the intense legal and compliance requirements surrounding online betting and gaming licenses. Excited at the prospect of a head start, Nick met with regulatory lawyers in London who confirmed that Puntaa was positioned well for an expansion into the UK. The team plans to start that four-to-six month process later this year.
Finally, the win Puntaa is most excited about is this month’s release of version 2.0 of their app. In just two weeks, they saw their 7% average week-on-week growth skyrocket. Without revealing exact user figures, the team did disclose that their turnover in the past two weeks represents 140% of their turnover for the previous three months – thanks to their improved user interface, speed, and new social engagement platform. Puntaa 2.0 allows pot bets with large groups and feeds all bets into your social feed, for better banter and engagement.
In Damon’s words, “The beauty of 2.0 is that we’re now a hybrid social-betting platform. We’re not just competing for bets between mates. We’re competing for social attention with the likes of Facebook, Instagram and Snapchat. Our goal is to be one of those five apps a week that a customer spends 80% of their time on.”
In other words, these ambitious Brisbane mates are aiming to be the intersection between the $286 billion gambling industry and the multi-billion-dollar global social networking industry as well.
With these three resilient founders at the helm, I’d bet on that.