Founder of sports-betting startup Vigtory, which he sold to FuboTV for about $40M at age 23.
Ratner dropped out of college, built a sports betting platform, and sold it to FuboTV for about $40 million at age 23 before it even launched.
“Yeah, it was $40 million.”
Ratner mapped how legalized US sports betting would evolve, concluded the winners would be media/casino brands needing tech, and rebuilt the overseas betting stack natively to sell or rev-share to them rather than competing as a consumer app.
“And to date, all the technology had been built overseas because it's been around for 50 years, but it was like built in the early 2000s where you had like these desktop applications to place a bet. And then to get to mobile, they just like compressed it into a mobile experience. They didn't like rebuild it. Didn't rebuild it native iOS, it didn't have any good API functionality to have ticketing and merchandising and these other things. So I said, what if we just, what if I just rebuilt all that and then called these big companies and said, hey, uh, don't white label this garbage from Sweden”
Sam Ratner's filter for picking businesses: if anyone can easily enter, long-term value is inherently zero. Find the piece of an opportunity that's such a headache or so capital-intensive that nobody wants to touch it, then go there.
“what I learned is there's no value. It can't scale that well, that large. And I was just always interested in like, how big can I make something? And I had that itch to do that. So then I thought, well, if it's easy, there can't be any value in it. If anyone could just get into it, well then there's inherently zero value long-term, like big, if you want to build billion-dollar businesses.”
Steal thisBefore entering a market, ask which piece is so painful or capital-intensive that everyone avoids it, and build exactly that.
Rather than sell stock and trigger a taxable event to fund a new investment, Ratner keeps his money in index funds and takes a line of credit against the portfolio. If the bet fails he just waits for the market to recover the loan.
“Or you take a line of credit against your portfolio, say in the index fund like the SPY, And if I need a million, I'll take a line of credit. They keep a million too as collateral, and then I get to take my million-dollar shot anyways. And if it doesn't work out, all I got to do is wait. And in 8 years, I'll have the money back because the stock would have doubled anyways”
Steal thisPark your liquidity in an index fund and borrow against it for new bets, so you avoid the taxable event and keep the upside.
Bored after his exit, Ratner spent hours cold-calling junkyards and clicking through 190+ pages of marine violation tickets to track down a vanished casino riverboat, finally finding it via a $22,000 vessel moving-violation filing.
“So I went to the site and I sat there for an hour and I just clicked through hundreds of pages of tickets, but you don't even see the pictures of anything. It's just the entity name or the person's name. And so I'm looking for like a random entity, like some kind of sign. And on like 194, page 190-something, I see like CFFB, whatever it is, LLC. It's like an acronym. And I kind of go past it. And then like I thought to myself, I was like, Catfish Bend Riverboat Casino. I go, that kind of fits. And I clicked it. Boom. Big vessel moving violation, $22,000 ticket from the company that bought it at auction.”
On a vending business where 90% of costs were Coke/Pepsi goods, Ratner's edge was buying the company, letting the multi-year supplier contracts lapse, and replacing name brands with store brands bought for a fraction, since captive workers had no alternative and didn't care.
“my thought was, when I looked at the line item, the biggest line item, 90% of it was the cost of goods from Coke and Pepsi. I go, how can I just not sell that? Because I can buy a store brand Twinkie in wholesale for 10 times less than I have to buy Twinkie for. And so I just read all the contracts”
Steal thisIn a captive-location vending route, drop the branded-supplier contract and substitute store brands to crush your biggest cost line.
On a vending business where 90% of costs were Coke/Pepsi goods, Ratner's edge was buying the company, letting the multi-year supplier contracts lapse, and replacing name brands with store brands bought for a fraction, since captive workers had no alternative and didn't care.
“my thought was, when I looked at the line item, the biggest line item, 90% of it was the cost of goods from Coke and Pepsi. I go, how can I just not sell that? Because I can buy a store brand Twinkie in wholesale for 10 times less than I have to buy Twinkie for. And so I just read all the contracts”
Steal thisIn a captive-location vending route, drop the branded-supplier contract and substitute store brands to crush your biggest cost line.
A Lake of the Ozarks water taxi operator told Ratner each of his three boats earned about $400,000 a summer, roughly $1.2 million a year, charging $250 for a 90-second ride run via a dispatcher tracking caller IP and boat GPS.
“Oh, like, like Every boat made him like about $400 grand a summer. He had 3 of them, so he was doing like $1.2 million.”
Ratner pitches consolidating water taxi operators across America's 10-12 great lake towns into a national brand. Water is the one vertical Uber and Lyft don't cover, and execs told him they'd buy it if it existed but won't build it.
“what if I can blow this up to 10 or 15 boats on Lake of the Ozarks and then go to Orange Beach, Alabama, and then go and then start going around America and building up the water taxi business? Baton Rouge, Louisiana. You need to get from Tiger Stadium to Fred's Bar, whatever it is. And then water is the only vertical that Uber doesn't have and Lyft doesn't have.”
Steal thisConsolidate seasonal lake-town water taxi operators under one brand and sell the rolled-up network to a rideshare giant.
Ratner pitches consolidating water taxi operators across America's 10-12 great lake towns into a national brand. Water is the one vertical Uber and Lyft don't cover, and execs told him they'd buy it if it existed but won't build it.
“what if I can blow this up to 10 or 15 boats on Lake of the Ozarks and then go to Orange Beach, Alabama, and then go and then start going around America and building up the water taxi business? Baton Rouge, Louisiana. You need to get from Tiger Stadium to Fred's Bar, whatever it is. And then water is the only vertical that Uber doesn't have and Lyft doesn't have.”
Steal thisConsolidate seasonal lake-town water taxi operators under one brand and sell the rolled-up network to a rideshare giant.
A DTC cowboy boot CMO told Ratner they pay ~$4 for the keyword 'cowboy boots' but half the searchers are third graders needing a photo for a poster, so half the spend is wasted. This vertical-search insight seeded his shopping startup Showroom.
“she was like, yeah, we waste like 50 cents of every dollar we spend on Google.. And I was like, whoa, whoa, whoa, hold on a second. Excuse me. I like stop the meeting. That's the craziest thing I've ever heard. I go, why is that? And she said, because we pay about $4 to own the word cowboy boots. And half the time someone looks up cowboy boots, it's a third grader looking up cowboy boots for their third grade presentation.”
Ratner argues social/entertainment apps must constantly chase engagement, but if a transaction is inherent in the experience (like shopping or Airbnb), monetization is built in and users don't mind fees on things they were already buying.
“I think the value is, can you build a big consumer business that inherent in the journey is a transaction and your product is a 100 times better shopping experience than what they had before? So I always just lean on Focus on the consumer, forget everything else. If the consumer wants it, everything else is noise.”
Ratner's rule: anyone who truly wanted in (investor or hire) decided within minutes and never needed convincing twice. He treats a pitch as informing, not persuading; if he has to sell it again, they didn't want it, so he moves on.
“In my opinion, raising capital is an informative process, not a persuasive one. Within 5 minutes of us getting on the call today, I think we all, we had some preconceived notions of what we thought of each other. And then within 5 minutes, I'd say you'd have a 90% cemented view of what you think of the person.”
Steal thisPitch once, inform fully, and move on; if an investor needs a second sell, they were never a real yes.
Ratner argues the potential you perceive in someone is rarely realized; it's a mirror of what you would do in their position, not what they want to do. Take people at face value for what they are today.
“the potential. I don't know who it was, but the potential you see in others is rarely realized. It's simply a mirror of what you would do if you were them.”
Ratner's mental model: the biggest hidden opportunities live in odd, niche ecosystems nobody has heard of. The tell is when he's never heard of a category but finds a single unknown merchant with 800K followers doing $5M a year.
“the value's in the duck calls. The value is in the things that no one knows about that are very odd, that have these niche ecosystems of communities. And the people who love duck calls, trust me, they love duck calls. They'll pay $1,000 for a duck call.”
Steal thisHunt for obsessive niche communities outsiders dismiss; when one unknown merchant there is doing millions, the whole category is undervalued.