Down to Business: Poker Training (Part 1)
One of the most common requests I got from readers when I asked for directional feedback in my end-of-2023 newsletter video was more thoughts on business.
I’m confident enough in my poker game to tell you how you might want to adjust your poker game, but I don’t want to tell you how to run a business. Instead, I’ll share how I’ve done it and what I’ve learned.
I’ve launched multiple businesses, each presenting different challenges. I want to start with the simplest and most successful among them: Run It Once Training.
Over a few newsletters, I’ll share my thinking behind the decisions we’ve made over these past 11 years, and I’ll discuss what worked and what didn’t, and why I think that is.
Just as there are life and business lessons hidden within poker lessons, there are poker and life lessons hidden within business learnings. So, even if you don’t intend to run or work for a business, I hope you’ll take something away.
“Make the Product You Want to Buy”
This somewhat common entrepreneurial philosophy is the one that led to the inception of Run It Once Training. In some ways, it led us to make good decisions. In others, it led us astray.
Newer players don’t realize how saturated the market was when we began building Run It Once. It was packed.
Cardrunners, DeucesCracked, and LeggoPoker were big businesses, and there were countless others competing as well.
Normally, this would be a deterrent to entering a market, but we felt that the products weren’t up to the level of quality and professionalism that we wanted as customers.
I’d seen a lot of videos with advice I felt was bad (along with good videos, of course). We didn’t want that.
Most sites also released videos haphazardly, more or less whenever they were ready. Some weeks, you’d get six videos. In other weeks, you’d get two.
Our Mission
I don’t believe we advertised this publicly, but internally, our mission statement was clear:
If poker training were an airplane, Run It Once would be the first-class cabin.
We’d release videos consistently. Two videos a day, every single day. Two to four times as much as our competitors.
We’d have a staff of full-time designers and developers so that our website would be unique and beautiful.
We would sign the very best pros. We made this the key part of our mission - hunting down the best talent.
We were excellent at researching and discovering top players at all stakes, then internet-sleuthing to figure out how to contact them. On more than one occasion, a player asked us, “How the hell did you find me?”
Pricing
Prices were much lower back in 2012 when we launched. You’d pay around $30/month for access to training videos, which was set (I believe) by Cardrunners many years prior when they entered the market, then copied by others.
Cardrunners launched at a time when almost all sites capped their games at $10/$20 NL or lower. By the time we built RIO, $500/$1k was available online.
The knowledge and skill possessed by top players had gotten more valuable, and the prices hadn’t changed to reflect that.
To put out 14 videos a week with the aim of having the highest caliber lineup of pros, our expenses would be higher than our competitors, and we’d need to charge more to keep up.
We decided on $100/mo.
(We all felt that this was actually underpriced for what we were offering, but we shared a fear that the sticker shock would draw too much backlash if we went to $200 or $300/mo given the industry standard.)
Our theory was this:
If the consensus amongst poker players was that Run It Once was clearly the best, and the debate was about whether the price was too high, we would do well.
As an insurance policy, we also offered an Essential membership, where the videos included were capped at lower stakes, for only $10/month.
The purpose of this was two-fold:
Generate a lot of leads, make them better at poker and win more, and eventually have them upgrade to Elite.
If we got backlash on price, to be able to point to also offering a killer product for cheaper than the rest of the market.
When we finally launched, we were pleased to find nearly nobody complaining about the price… although this meant we certainly went too low.
Success: Luck and Skill
I firmly believe our product-focused vision and strategic differentiation (more, better, pricier), worked beautifully.
But, we also ran hot.
Around the time we launched, several of our competitors' biggest-name pros left poker altogether in the wake of Black Friday.
I know that at least some of those pros were compensated with company equity, meaning they couldn’t be replaced for no cost.
Within our first year, we became the industry leader, and we accomplished this with no marketing.
A great accomplishment? Certainly.
A wise strategy? Not exactly.
Our First Failure: Bad Assumptions
Remember the part about building a product for ourselves?
There are some cons to that.
We built poker training that was designed for professionals. Even our $10 Essential membership was designed to teach low-stakes pros.
While our Elite membership soared, Essential was essentially a failure. We had the same number of users at $10/month as we did at $100/mo. It was only 10% of our revenue, and more importantly, it didn’t reach as wide a base as we wanted to bring in and eventually convert to Elite subscribers.
In hindsight, the reason for this is obvious:
Our Essential membership targeted almost the same demographic as our Elite membership, which was already well worth the cost for most of that demo.
If you weren’t a very serious poker player, our Essential videos were still too advanced for you. With poker terminology as detailed as it is at high levels, it may as well have been Greek to relative beginners.
By building a product for ourselves (pros), we neglected the needs of non-pros, which are the overwhelming majority of poker players.
There were two key assumptions we made that were entirely wrong:
Nearly all people who’d pay $100/mo for poker training would be pros, and
They will learn about us through the poker community’s word-of-mouth
We viewed buying poker training strictly as a career investment.
If you play $2/$5 NLHE, we felt it was reasonable to expect to make an extra buy-in per month by being a RIO member. Investing $100 to make $500 is clearly well worth it.
In hindsight, being a RIO member would reduce loss rates of recreational players (assuming they could understand the content) by likely more than that, but we just didn’t put ourselves in the mindset of non-pros.
So, we only targeted pros, and we didn’t market.
And, unfortunately for us, quickly becoming the industry leader made us believe we’d gotten it right!
Competition: Marketing
It wasn’t until the next wave of competitors popped up years later that it became apparent we’d missed something.
New competitors spent much more time, energy, and money on marketing, and they often targeted the amateur players that we neglected.
I won’t mince words: They absolutely crushed us from a marketing perspective.
Now, fortunately, this didn’t hurt us too badly, because we still had a great product, and we had only ever reached the serious poker community anyway.
But new businesses came in and captured the other areas of the market that we were essentially blind to, and started competing in the area we had monopolized.
We didn’t begin losing business (subscribers churning) noticeably faster, but we were gaining fewer new subscribers, which caused membership numbers to begin slipping.
(I don’t know the numbers of our competitors, but my educated guess is that we fell out of the #1 spot before reclaiming it years later.)
It was a wake-up call, but one we weren’t equipped to answer at the time.
Next Up
I hope you found this first part interesting, enjoyable, and hopefully actionable for some of you!
Next up, I’ll go into some of our learnings as we navigated through the changing environment that is online poker training. We’ll talk about the introduction of solvers and solver-based tools and the impact that has had on the training market, and we’ll see what else I’ve screwed up!
I’m eager for feedback, even more than usual, since this strayed outside of the typical email. You all get to shape this with me, so please let me know what you want more and less of!
