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Chess.com: Bootstrapping a Community to $50M/Year

How Erik Allebest turned his passion for Chess into a social phenomenon

Chess.com is the world’s leading chess community. It started in 2007 and currently makes over $50M/year. Completely bootstrapped.

But as I researched this story, a few things stood out to me:

  • Live Chess, the core feature, took over 5 months to release. By then, the site had nearly 100,000 members already. (we’ll go into how in a bit)

  • The importance of Chess.com domain

  • 80% of their users came in the last 4 years

  • The effect of Twitch and Netflix’s Queens Gambit

  • Erik Allebest turned down offers from Palantir, FB, Mint, etc in 2007 to pursue his dreams

Here’s the story 👇

How Chess.com started

In 2005, Erik Allebest was admitted to Stanford Business School and obsessed with chess. He’d practice new strategies in his free time and even ran a chess tutoring and wholesale e-commerce chess business.

He noticed two things:

  1. Social networking was becoming popular with Facebook, Myspace, and other online communities. Live Chess sites were good at this time but Erik saw an opportunity to provide a social community for chess lovers.

  2. Early browsers like Internet Explorer or Firefox would automatically redirect you to Chess.com if you just type “chess”. Fortunately, the company that owned the domain was going through bankruptcy and he was able to acquire the domain for $55,000 (which he obtained by selling his other businesses)

But Erik’s first intention wasn’t even to let people play Chess against each other. It started off as an online community where people could post links (think Reddit-esque) and watch video tutorials on how to play certain openings.

Within a few months, the strong domain and popular press coverage from places like TechCrunch and BBC helped Chess.com reach 50,000+ users.

It turns out people wanted one place to learn about chess, talk about chess, and even play chess. Live Chess was the most requested feature and Erik launched this 6 months after the initial beta.

Scaling to millions of users

Chess.com had a very strong advantage with its domain name and invested a lot in chess content, which naturally drove a lot of traffic from curious chess players.

Early on, they realized that the ads-business model wasn’t going to be profitable enough. Instead, they focused on creating video tutorials and lessons.

Part of this included creating software to easily teach Chess openings. Specifically, you would be able to draw arrows and visuals to help explain moves.

One of the earliest pioneers of this was a Master level chess player Jerry, of ChessNetwork, who has been making chess videos on YouTube since 2007 and breaks down the most popular openings, famous games of people like Bobby Fischer, Magnus Carlsen, and overall chess theory.

Within 3 years of launch, Chess.com reached 1,000,000 users, and they easily crossed 10 million users by 2014.

But in the last 4 years, Chess.com has gone from 25 million users to nearly 100 million users.

Twitch, Pandemic, and Queen’s Gambit

Worldwide interest in chess surged during the Covid pandemic and peaked when Netflix released its hit show Queen’s Gambit, which ranked #1 in over 92 countries and had over 62 million people watching in the first 28 days.

But how do you take advantage of this global interest? Erik and his team knew early on they needed to get influencers or “Chess.com Ambassadors”

They reached out to the biggest name in online Chess at the time, Hikaru Nakamura, and convinced him to start playing and streaming exclusively on Chess.com.

Erik noticed a few miles away was a young girl at Stanford University named Alexandra Botez who met with her in person to begin teaching and live-streaming Chess to help appeal to female audiences.

Eventually, the biggest names in both the Chess and Twitch worlds began using Chess.com as the de facto online playing platform.

They began hosting amateur chess tournaments for streamers such as PogChamps which would have some of the biggest names like xQcOW, Ludwig, and Yassuo while receiving coaching and commentary from Botez and Nakamaru.

These events even received praise from Magnus Carlsen for bringing even more interest to Chess!

At its peak, Twitch users watched over 20 million hours of Chess in a month, surpassing games like Fortnite, League of Legends, and Valorant.

Today, Chess.com has over 100 million users, receives 280 million monthly visits, and generates between 50 million to 100 million in annual revenue.

Thanks for reading, and I hope this helped you or you found it interesting! If you want to give some feedback, you can either respond to the poll or reply to this email.

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