Firy Inc. (SKLZ) Earnings Call Transcript & Summary

Thanks, everyone, for joining our next fireside chat here at the UBS TMT conference. It's my pleasure to welcome Andrew Paradise, the CEO of Skillz. Andrew and I are going to have a chat on a whole range of topics with respect to the business. [Operator Instructions] I'll try to filter through those and work them in when appropriate in the conversation over the next 35 minutes or so. So Andrew, first, thanks for agreeing to do it, and welcome to your first UBS Global TMT conference.

Awesome. Thanks for having me, Eric. Glad to be here.

So for those who don't know the company, maybe just take a step back. I'd love to sort of set the table, give your perspective. What is the company trying to solve for? What's the big opportunity you see in front of you and the team? And how should investors think about how that's going to evolve in the next couple of years?

Sure. I just wanted to clarify, a couple of people from my company said they -- their sound is working but video is not. Not sure if you could see me.

I could see you fine.

Okay, great. Great. Well...

And I think Carly's monitoring it as well from the public view. So I think if we have a problem, she'll jump in.

Okay, that sounds great. Well, by background, so Skillz, I think the question is, what is Skillz? Skillz is a B2B2C technology platform that's powering now more than 2 billion tournaments a year and enables game developers to monetize through competition. Our platform is democratizing gaming by really leveling the playing field. We're a big believer that e-sports is for everyone. And our goal is to make it so that every developer can build these sports for their games for every concern. We enable developers of literally all sizes from the smallest obvious up to mid and larger businesses to build e-sports on our platform. Our platform enables them to monetize -- the developer to monetize their art, enables the player to engage in fair fun and meaningful competition. More broadly, when we think about our role and what we plan to build over the next 100 years, our vision is to centralize and build the competition layer of [indiscernible]

Great. I just wanted to unmute myself there to eliminate background noise. It's great. That's a great way to set the table. So what -- maybe dig down in some of those themes. I'll want to peel back the layer a little bit. When you think about competition and you think about what you see in the market in terms of people wanting to play with each other, wanting to compete against each other broadly with respect to mobile gaming, how do you see that evolve? What do you think you've unlocked here in terms of an opportunity? And how do you sort of chase after it in terms of aligning where you want the platform to go?

We've built a business that's really hard to replicate. When you think about the technology stack to basically extract multiplayer competition from every video game. When you talk about a multiplayer video game, what you're really talking about is a client server computer model, right, in terms of networking. We are the server and all the API layer for every game built on Skillz. We've had some pretty significant would-be entrants since the market. At one point, Sony entered. They shut down in 2017. We've had 30-plus venture-backed startups enter and try to build the technology. I think the reality of it is when you're talking about a monetization technology, you can't really enter the market against us by buying customers. And that's what we've seen historically, where these companies, they enter, they offer minimum guarantees to the content makers. There are multiple reasons this doesn't work. One is it's a hit-and-run industry, so most of the content is going to fail. Video gaming, that is very much the nature of the video gaming. Beyond even just the failure rate in the underlying businesses, I think buying your way into a market with a monetization technology that is inferior, it creates a gap between what Skillz can generate for -- off of a consumer for a developer and what a competing technology can generate. We're actually really excited when Amazon announced entering the market in 2018. I think when Amazon enters the market, it shows the size and importance of that market. It really demonstrates -- it's also helped us demonstrate the -- both the depth of the moat around our business and the caliber of the business that we built. Amazon actually shut down that business unit. And I think the reason is the moat around this business, the real secret sauce is how do you ensure trust in a system where you have to get your average consumer to transact hundreds of times to actually break even. And trust is -- it's an [indiscernible] concept. It's not a single feature, but we do boil it down to certain facets of the system and areas that we built, particularly around cheating and fraud. If you look at that area of our business, we have 58 patents pending or issued, protecting and building out the data science technologies to really stop cheating and fraud in the ecosystem. When we launched, we were actually seeing -- in 2013, we're seeing 10% of all transaction volume per day as cheating or fraud. Fast forward to today, managing that down and making the ecosystem work, it's very much predicated on this business where we're seeing literally -- so our automated systems speak [indiscernible] of how many attacks we're seeing. The ones that still have to have manual review, we're seeing about 200 a day in terms of attacks. Novelty in terms of attacks, we see on a monthly basis. But it's really a business where on the cheating and fraud aspect, you're describing more or less building an antivirus shield for the video game industry. And I think McAfee really showed well the strength of first mover in that type of technology.

So you referenced some of the folks that have entered or tried to enter the market and leave. Maybe just give a sense of what is the competitive landscape right now to investors. Like who do you think are competing against or who do you think you might find yourself competing with in the years ahead?

So there's always a buy versus build in multi-player competition. I think we've seen some vertically integrated and built-out businesses like Riot's League of Legends. In terms of e-sports, the reality of it is they're raising $500 million and building out a multi-hundred-person team just for video broadcast alone. That's really not a possibility for those game makers, right? That's probably not how the world is going to develop in terms of buy versus build. So we've seen limited build in terms of what's possible, but it certainly shows the potential for e-sports and for multiplayer competition. In terms of buy, really, Skillz is the biggest and most meaningful game in town. There are -- as I said, there are 30-plus companies that raised venture capital, some upwards of $50 million. My understanding is we're -- in terms of scale, we're 100x the size of those businesses. So I think there are other would-be entrants. My last company, I was the -- so I'm a serial inventor turned entrepreneur turned business builder. My last company, I invented mobile self-checkout. They're the standard for mobile payments to the retail space. And I'll just tell you the story of that. That business, when we're really humming in 2011, we had 700 companies enter and to compete against us in the space of a year, so 2 a day and 2 venture-backed companies a day. And I think the story I tell you about Skillz is I learned a lot from that business. I decided to venture again after having a successful exit as a director at Intuit and I left Intuit after -- when Skillz was about 1 year old to build out Skillz. And the data moats that we built around this business are very real and significant. And we continue to be able to use this system at continuous scale to demonstrate that.

Great. Obviously, this has been a strange year with a global pandemic, and the gaming industry has been impacted by this year a lot in a lot of different ways. What have you seen in terms of your own business, your own platform of what impacts have come with the pandemic over the last 8, 9 months? And maybe just give us your world view of how gaming habits and gaming engagement and gaming monetization might continue to evolve on the other side of this in the years ahead.

Yes. Well, look, COVID-19 has affected probably every business on the planet in one way or another. We've been resilient during COVID. We grew 35% quarter-over-quarter in Q2. I think the reality of it is everyone needs digital entertainment now more than ever when sheltered in place. I don't know if you've watched through all of your Netflix yet. I sadly have, although I found a new series more recently that someone turned me on to called The Queen's Gambit that I'd recommend. But...

Very good show. Already been consumed in the Sheridan household.

I have followed this. The great thing about video games is replayability, right, and the ability to consume what might be a simple piece of content when you put in this incredibly powerful multi-player competition system, it really breathes a whole new life into the content. And so I talk about this. I've talked about this when we won the Inc. 5000's the #1 revenue growth company in 2017. I talked about playing Bubble Shooter 10,000 times. And Bubble Shooter without Skillz probably would not have gotten the entry to play that many times, but the reality of it is the competition, what you're really selling is fresh competitors to the consumer. And it's been a business that is really -- it evergreens the content. Even though we've -- we grew so rapidly in Q2 in COVID, the reality of our business is we've been growing at 2 to 3x annually every year for several years now. When we think about the path ahead and where this leads, it's a business where we still haven't had a top 10 game yet on the platform in terms of App Store. I can't express how excited I am for that moment and I know it will happen. We've seen successfully bigger hits building on the platform as the company has evolved. I think going public for us, it's a huge milestone because it helps the developer community also know that they can invest safely in Skillz. If you think about it, the developers are really our biggest investors. They put their entire business and livelihood on the line, and they don't actually get equity offset. So it's an incredible thing when we think about the next year ahead and when the first potential top 10 game will be on platform. Having said that, we actually don't project any new games. We only -- when we think about the forecast and how we're thinking about '21 and '22, we're really just looking at existing games in existing geographies, using existing distribution channels. So it's a really exciting time for the company. I think the next year ahead will be really [indiscernible]

There's a couple of things in there that I wanted to go deeper on. But let's just stick with the user side for 1 more minute because obviously, you're seeing the levels of engagement and monetization you're seeing. How does that inform your user acquisition strategy? Let's stay on that side of the platform you're trying to build over the medium to long term. How have some of those acquisition strategies evolved? How do you see them evolving? Where are some of the areas where you were able to mine with the highest degree of success to continue to grow player engagement and just grow player numbers?

Yes. So we really have -- so well, first of all, I would say we should talk both about developer acquisition and consumer acquisition because it's a B2B2C. On the developer side, we actually today have 0 people working in developer marketing. We will expand that. So it has been a story of organic growth. We have about 30,000 developers on the platform that are building content out for millions of consumers. On the consumer side, the #1 form of user acquisition is organic. Inside paid acquisition, there are really 2 strategies. One is developers running their own marketing. More and more developers do that and they run their own marketing into these games and acquire off of typically digital ad networks, ranging from Facebook to ironSource to Vungle, to name a few, Fiverr, it's publicly -- another publicly traded ad network. Actually, 200 acquisition channels on the digital side. So -- and then we have a smaller effort that -- where Skillz runs a publishing program. We publish about 10 titles at any given time. And what we do is we use the data off of the network to understand which games have exceptionally high retention and engagement but have low audience. And so we'll approach developers. We use this data-driven approach, basically sort the thousands of projects that are being built on the platform. We sort them by retention engagement and then we outreach the developers where we think there might be a promotional opportunity. We'll run a test budget against that, very small spend, call it $5,000. See and verify what we saw from the data science off of the team. If that holds, we'll then begin to scale up. And we do this in exchange for an improved revenue share with the developer. On this part of our business, you see a similar setup to what you might have at a traditional publisher, more of a -- is a 70% revenue share, still 30% to the developer.

Yes. And I wanted to stick with that for a minute because, and it's funny you mentioned Fiverr. I actually just -- I just interviewed Micha and Ofer from that company right before this. So sticking with the developer side because I think this is where there's some interesting momentum as we go out and talk to game developers. It seems like you are increasingly viewed as a place that's very developer-friendly, that people want to align themselves with. Talk a little bit about how you can continue that momentum on the developer side. You talked a little bit about how data science informs some of your partnership and your go-to-market strategy. I want to understand how you sort of balance bringing the right developers in, making sure they're getting monetized in a way that creates a flywheel effect on the developer side going forward.

Sure. So first of all, Skillz for the game maker, it's -- Skillz is an open platform for everyone. It's a self-service platform. So we actually -- there's -- Q4 last year, we had a 7-year-old sign up build a game in Unity and launch the most sophisticated multi-player competition system in the world. If a 7-year-old can do it, Eric, I guarantee you can. You're going to probably say it's a genius 7-year-old. I'm going to counter and say, it's still a 7-year-old. Look, Skillz, what if -- probably you're on mute, Eric.

I was going to say I'm begging on my 13.5-year-old to carry the next decade of...

[indiscernible] the next year as your 13-year-old becomes 15.

Right, exactly.

Well, look, Skillz is -- it's game-centric monetization. Legacy monetization techniques, they really weren't built for games. They're created for other media formats and they're reported over gaming. When you think about something like in-game advertising, interruption advertising in the middle of an immersive experience. It's one of the reasons I invented this technology. It just -- as a lifelong gamer and someone who had a program originally by hacking video games as a kid, it broke my heart to see these types of monetization becoming mainstream. And I think the reason the monetization is so important is it affects the art that's being built, right? And I wanted to see art -- the art in this category move back to its roots towards competitive gaming. I think many do. Eric, for all the people who competed in our Analyst Day tournament, I think they appreciate the nature of pure meaningful competition. When we look at how the market is changing, the reality of it is the developers have a higher cost per install today than they've ever had before. The CPI, or cost per install, for a U.S. iOS install, we actually talk about this often. In the last 5 years, it's gone up 20x. So if you're not making 20x as much money, your margins have been squeezed. And the reality is revenue per install has not gone up 20x in the last 5 years. It's awesome that there are now 10 million developers building content worldwide because of technologies like Unity and Unreal and other open-source game engines. But the reality is, with so much content being released, it's only natural that discovery is becoming harder and harder, that monetization is becoming more important than ever. If you think about the industry for the developer, for the small to medium-sized business developer prior to Skillz, you have to own 100% of the failures. And if you do get hit, the hit can only scale up to double-digit million revenue before you have to sell it to one of the bigger companies that actually has the live operations and scalable technologies to actually build out and extract the revenue from the game. So when you think about what we're doing when we talk about the self-service platform, it's not just that it's easy to integrate, that it's delivering massive levels of functionality that these developers potentially couldn't even build on their own, but it's delivering a disruptive threat because these smaller developers now have a live ops engine that rivals the best companies in the mobile publishing space, whether it's Zynga or others. And I think the -- fundamentally, we're changing the equation with Skillz. We're making it so the developer makes the content. We run the business for them and it allows them to focus on what they do best, which is to make great games.

Are there any -- this came in to me over e-mail from an investor. Are there any big asks or unlock or thing you're trying to solve for on the developer side that either would sustain momentum or maybe even accelerate momentum of you being a place where developers increasingly want to partner?

Yes. Well, I think if you -- that investor asked me 5 years ago, when are you going to get a bigger game? I would have told him, soon. I think it's a successively building function where the size of the network versus the caliber of the game, it's very related. So as the network gets bigger and bigger, the better and better content is coming online. If you think about in the last 18 months, there's a company that wasn't on our platform called Big Run. And Big Run is actually it's -- it was 5 industry veterans from Lucas, Warner Bros, Zynga. They quit. They have 100 years combined gaming -- game-building experience across their founding team. And they raised seed and then Series A venture capital to build exclusively on the Skillz platform. Fast forward today, they're a top 5 revenue generator on the platform. They didn't exist 18 months ago. I'll give you another facet. We -- this is publicly unknown but we have Tetris in soft launch on the platform. Now Tetris is not part of our forecast going into '21 or '22. Having said that, you might be able to see the Tetris lamp in the background here. Tetris, I would argue, is one of the most iconic branded video games of all time. If I was actually to tell you from the classical video game world, the top 2 games that I would be excited about on the platform, Tetris should definitely be 1 of the top 2. And just if you tried Tetris and you can download Tetris Clash, you'll see that the porting of the controls from the console experience across to the mobile experience, you have a very similar experience. With Skillz, you can imagine that soon you may see something like that Battle Tetris on the platform. So it's -- to that investor, what I'd say is it's a process. We're building upwards to bigger and bigger games over time. I think that's going to continue until you're seeing top 10 games launching on Skillz with a pretty incredible level of frequency. The reality of it is when you look at the video game market, the last decade has been defined by the long tail. And what I mean by that is 8 of the top 10 games in the last 10 years came from no names. And then people turned around, they're like, "Why don't you have Candy Crushes like guys before" They had Candy Crush, you never heard its name before. We can go through each of these games. No one had ever heard of this little company in South Korea called Bluehole before they launched a new game called PUBG. Next thing you know, they launched PUBG. And while Bobby Kotick is telling everyone that Overwatch is going to be the next big e-sport, out of nowhere comes this new genre called battle royale, and the whole industry is left scrambling to catch up. Some better than others. You see, of course, Epic launching Fortnite, and we all know the aftermath of that story. But the reality is like the inspiration for battle royale came from PUBG and it came from a game from Unity. And if you go over to Asia, by the way, PUBG is the #1 game. PUBG Mobile, I mean, you go on that, you go on the subway in China and every person pretty much in the subway car is playing PUBG Mobile.

When you talk about mobile, this came in down below in a couple of different ways and I've gotten a couple of e-mails as well. When you think about anything with mobile, there's a lot of nuance around the relationships with Apple and Google, the iOS and Android ecosystems and distribution models. Maybe talk about the way in which the company operates within some of the existing mobile ecosystem that's out there. And one question I think everybody in gaming is getting right now is with Apple's looming change from a privacy perspective, how do you think, if at all, IDFA might impact your business going forward?

Sure. So I would say, starting with IDFA. IDFA is definitely neutral to positive for our platform. If you think about Skillz, the technology and what we're doing, it's in a -- more or less say, functional arbitrage against the market. So if the cost per install goes up, it is relative to the change in the marketplace for all of the mobile gaming companies. So we rise or fall with the tide. The upcoming version of iOS, I'd say, is expected to reduce the amount of data available and the overall tracking for the industry, which will only get harder for developers to acquire users into specific games. Having said that, 45-plus percent of our players play and pay in multiple titles. So we have an incredible level of cross-game play inside the network. But we're a platform of thousands of games in a broad demographics, so targeting isn't as critical for our business model, right? It won't hurt our user acquisition efforts nearly as much as any of the individual games. I actually think there's potential upside for us because IDFA, it poses a risk to game makers that are monetizing through ads. And if you think about Skillz, Skillz is sort of the third leg of the stool. If they're -- if you think about the role prior to Skillz for the free to play game maker, they can monetize through ads or through in-app purchasing. Now there's Skillz. If you hurt the ad monetization schema, you're, in some way, strengthening the other 2, right? The fact is, I would say, competition consistently delivers a better experience for the consumer. And we see that in terms of kind of every different metric we can cut. If you talk about number of payers per 1,000, your typical IAP game, it monetizes 2% of audience. Typical Skillz game, your average Skillz game monetizes 10% of audience. Maybe your best IAP game might be 7% to 10% of audience. Your best Skillz game right now is 35% of audience per day. If you talk about -- so that's people wanting -- choosing to pay, right? And in the Skillz world, and I know you tried the platform, is you choose to pay every time. What we've done is we've taught and shown people that they would prefer to pay every time they play. And our consumers are literally now 7-plus years on platform playing and paying every day. We've trained them to do. That's incredible. You see the cohort 7 years out still paying every day, still growing. The [indiscernible] continues to grow in every cohort. And it's because it's fundamentally a better experience. Another way that consumers express that, the Net Promoter Score in the video game industry sadly is 0, is the average Net Promoter Score. Skillz' Net Promoter Score, it averages 45 a month. And now you probably -- you may think that's good. I personally aspire to do better.

Everything in life is relative and absolute. So...

I want to get to 60. 60's your top 10 products every year. It's -- we're not far. We have months where we average -- where we're hitting over 50 in Net Promoter. I'm dying to get to 60. We're going to keep building and keep improving the platform and the consumer experience. And for anyone who is watching right now who hasn't tried, it's so easy. You just pull out your phone, open Safari, type in skillz.com, will redirect you to a list of content that you can try. Just try it out and I think it's one of these experiences where when you describe a real innovation in media, you can't appreciate for what it is without seeing it. One way I'd like to describe it is like the difference between standard def and high def. It's subtle but it's very real. And I think once you try high def, you just can't go back. I don't know if you watch in standard def. I certainly am watching The Queen's Gambit in high def.

Yes. No, I left standard def behind a long time ago. I wanted to get into a couple of things in terms of the business and some of the unit economics going forward. Where do you think take rates can go? So you have take rates at a level they are now. Obviously, you want to grow the platform to be as large as it can be over time. When I talk to folks trying to build platform companies, there inevitably is puts and takes from take rate. Higher rising economics as you offer more and more to participants in the platform, but -- and a desire to maybe lower take rates to bring people on as fast as possible. How do you think about the take rate evolution for a platform like Skillz?

So we think it will expand. And we have a modest increase in our forecast. We'll go from a 14% take rate to 20% over the next 2 years. The reality is we have data that supports a much more aggressive forecast than what we put out. We just -- we're, I think, as a culture, we're cautious. We are thoughtful. We like to have a lot of data around a particular endeavor before we'll forecast it. So the reason I see so much expansion in the take rate and why we think that way, if you think about this year, we're going to generate $1.6 billion in GMV. We'll pay out $1.2 billion in prize pools. So 75-plus percent of all of the money in the ecosystem is going out the door in prize pools. Having just 10% of that become brand-sponsored prizes on the platform would generate $120 million of incremental revenue, nearly all of which it drops straight to our bottom line. If you think about the level of leverage in our model, we actually first -- the way this happened, we -- one, we like to study our P&L and think about how to improve it over time and how we can innovate to improve. We saw the prize pool, you can call it opportunity. We saw it several years ago. And actually, our staff is constantly generating new ideas on how to build our business forward. We're running hundreds of experiments at any given time of the ecosystem. And we have a very meaningful threshold on experiments where we have to generate at least 15% gain in 1 of our core 4 metrics in order to launch an experiment. Those core 4 metrics are retention, engagement, monetization and virality. This particular experiment, and I'll get right back to take rate and why, the experiment was they wanted to run a charity video game competition. And you may say, "Oh, that doesn't sound like we can make any money on that. We might be donating away our profits." We thought about it. And we actually -- what we found from running this one experiment was we ran a charity video game competition, where instead of the entry fees funding into the business, they went to the nonprofit after a 22% take rate. And the prize pool, instead of it being a monetary prize, it was actually branded swag from the nonprofit. We scaled down in 2018. I'll give you kind of an example. Susan G. Komen was our headline partner in 2018. They ran 10 tournaments with us. The average tournament was $3 to enter, and you won a T-shirt with a pink ribbon on it. And that may sound crazy. We actually -- we beat their fundraising goals by 27%. We generated 25,000 new first-time donors for their nonprofit. And if you look at the demographic, actually, there's new younger first-time donors than they've ever had. In many ways, the way I think about this is, this is the future of the charity fundraiser. It is a mass purchase of [indiscernible] at home where a community can run a competition. Think of it as the new age walkathon, right, a incredible thing. And we're not only running at 22% take rate on this business, so it's generating a higher take rate for us over time. We're also seeing lower user acquisition costs because the nonprofits, they e-mail market and the social media market the competitions. So Komen ran 10 competitions in 2018. We went on from that actually, American Cancer Society inbounded us. That's a top 3 nonprofit globally -- or sorry, in the U.S. And they actually -- they run a video game charity competition every quarter. So far this year, just to give you an idea of the scale of the nonprofit piece alone in terms of brand-sponsored competitions, the World Wildlife Fund, that's the top 10 nonprofit globally, they ran a competition in January for the Australian wildfires. We've had causes during COVID ranging from children's hospitals to Red Cross blood drives to, more recently, the NAACP with Black Lives Matter movement. The reality is that everyone loves to compete and enabling these communities to run competitions to the platform is incredibly meaningful for both engaging their audience and getting these new first-time donors, which is really the equivalent of a new first-time payer for a for-profit brand. On the for-profit side, we've been averaging a 35% take rate on those competitions. And we've had individual examples that are -- so individual for-profit brand-sponsored competitions that are over 90% take rate. Let me describe a 90% and see if you would agree that you might play in it, because every time I say 90% take rate, people are like, "Oh, I would never play in that. Those economics are terrible." It's like it's not about -- first of all, it's not about the economics. It's about fair, fun and meaningful competition. It's not about changing people's lives with what they win. It's about making meaning how I play. For anyone in the audience who's ever played something like skins golf, it's the equivalent of that, right? It's like, why did 2 billionaires each put up $1 to play skins golf. It's not going to change their lives. It's really just about the meaning of win. So for-profit, 90%. We had a Tiffany's necklace competition going into Mother's Day weekend. And so this is a 3-hour competition on the Saturday, Mother's Day weekend. You can imagine for both men and women, different reasons why they would need ear cover on being able to play video games all day. And then the competition it was win it for you or win it for her. Now Eric, I don't know about you but I wish PUBG had that so I can play PUBG all the weekend and yet...

Oh, man. No, that's -- yes, that's the flywheel effect you see on the platform. We only have a few minutes left. I just wanted to tee up one bigger picture question we always get about growth companies. When you think about what you're trying to go after from a growth perspective, which you have to align all of your investments against it, what's the main message to the investment community about balancing growth versus profitability when you think about the next few years?

Sure. So we think about reinvesting strategically in the many vectors that are in front of us to grow the business. As a B2B2C technology platform, providing a go-to-market solution for the game developer industry, we don't have the burden of content. We do generate a 95% gross margin, and we see a path long term to very attractive EBITDA margins. The business model, it's a multi-tenant business model that's enabling us to scale at a very low cost. And I think the reality of it is just to give you a couple of the areas that we're investing in, so we're fully burdened with these investments without forecasting any of the revenue upside. Now let's just talk about international alone. So international, the mobile gaming market, 80% of it is outside of the United States. Today, 90% of our revenue generation is North America. So almost all of our revenue generation is domestic. Going international represents 4x the size of our existing markets. We've publicly announced we're entering into India now. India, we estimate is worth 50% of the U.S. market. So why are we entering India? Well, we see a massive market opportunity for this service there. And even beyond that, I think going to every one of the 180-plus jurisdictions globally that we think Skillz is a great fit for is a really good investment of capital. So if you look at our P&L over this year and next year, we have all of the losses associated with India. We have none of the revenue forecast from it. So it is on price upside to the future of the business. More broadly, look, something like brand-sponsored competition, we think it's very meaningful for the future of the business. Today, the take rate at 14%, and you see for-profit competitions running at 35%, and we're only forecasting going to a 20% take rate. There's a huge opportunity there. And I think it's everything from the McDonald's Monopoly contest to be run on our platform to you name it competitions. The reality of it is, today, the business is 2.7 million monthly active users in a 2.7 billion monthly active user market. So we have a long way to go and a lot to expand. It will be crazy of us not to want to invest aggressively against these growth opportunities, given that not only are we the inventor of the space, we have a systemic data advantage in data moat, and we have first mover. And so it's really just about like we've worked so hard to build this business to have this opportunity. To not invest in would really be a shame. And I think going public, the big piece of that is lowering the cost of capital to be able to increase investment in the business. And it's a rewarding and humbling moment to be at the milestone of going public because we look at it very much as the milestone. It's not anywhere near that in relation to this business. 2.7 million monthly actives. We have 1,000x the scale to capture. And so there's so much work to do. India alone is going to be a big endeavor in '21, and it's an amazing and humbling moment to have.

Great. Well, that was super clear. That's a great point to end on in a lot of ways. Andrew, I want to thank you for making yourself available to be part of the conference this year. Hopefully, next year, we're going to do this in person. I want to thank everyone for joining the webcast today. And Andrew, I want to wish you and the team happy holidays, and we're excited to see what happens with Skillz in 2021. So thanks again.

Thank you, Eric. Thanks, everyone.

Take care.