How Chess.com Founder Built A $150 Million ARR Empire With Zero VC Funding | Erik Allebest | Neon

How a 1,500-Year-Old Game Became an Online Sensation

It began in ancient India during the Gupta dynasty — a game called Chaturanga — designed to teach war strategies.

Over the centuries, this brainy pastime evolved and moved across continents.

Cut to today and chess isn’t just surviving—it’s thriving.

The internet didn’t just bring it online; it turned chess into a global sensation.

Anyone, anywhere, can now dive into the world of pawns, queens, and checkmates with just a screen.

The chess market hit $2.2 billion in 2023 and is expected to grow to $3 billion by 2032. The main reason is online chess platforms.

And the company that is leading this is Chess.com, a company that’s made a 1,500-year-old game feel brand new.

With 150 million members and $100M+ in revenue, they’ve shown how strategy isn’t just for the board—it’s for business too.

So, how did they pull this off?

It started as a simple idea in 2005—a hub for chess enthusiasts to connect, chat, and share their love for the game.

Erik Allebest and Jay Severson, two college buddies with a shared passion for strategy, had just purchased the domain Chess.com for $55,000.

Initially, it was a forum, but then the demand for online play began to soar.

Erik and Jay rolled up their sleeves and built the technology themselves.

In 2007, they launched the first subscription-based version of Chess.com.

Within a few years, the platform began to gain members and marked its place as the go-to site for chess lovers.

In 2023, it hosted the first-ever Champions Chess Tour, offering a record-breaking $2 million prize pool.

The site also secured broadcasting rights for the World Chess Championship, further cementing its dominance in the chess world.

Last year alone, 12.5 billion games were played on Chess.com—an astonishing 35 million games per day.

With a combination of smart strategy, community focus, and a little help from pop culture, Chess.com has turned a centuries-old game into a thriving global empire.

In this episode of the NEON Show, Erik Allebest, co-founder of Chess.com, discusses his journey from a chess enthusiast to creating the world's largest online chess platform. He talks about his entrepreneurial start, the hurdles in building a sustainable business, and key moments in Chess.com’s success, including lawsuits, early VC rejections, a $600 million valuation, and scaling during the pandemic. The episode offers insights into leadership, resilience, and the lasting appeal of chess online.

Timestamp
00:00 - Trailer
01:27 - Introduction
03:33 - Family influence on Erik’s entrepreneurial mindset
06:27 - Falling in love with chess at 18 through books
08:52 - Selling an e-commerce business to fund chess.com
10:27 - Founding challenges and initial growth struggles
15:17 - Why conventional careers didn’t suit Erik
19:57 - Settling lawsuits, including the vodka-based case
23:17 - Persevering despite doubts about the chess market
24:22 - General Atlantic’s investment in chess.com
27:37 - Key insights learned from investor partnerships
31:23 - Shifting from entrepreneur to CEO
34:51 - Erik’s passion for creating products
38:45 - How media boosted chess’s popularity globally
45:50 - The downsides of rapid monetization
48:20 - Managing chess.com’s pandemic-driven growth
51:33 - Erik’s focus on sustainability and future growth
57:27 - India’s cultural impact on global chess
01:00:51 - Erik’s views on digital security risks
01:05:07 - Why employees stay for passion, not just pay
01:08:53 - Erik’s belief in chess’s continued global growth
01:10:27 - Embracing errors as learning opportunities


Hi, I am your host Siddhartha! I have been an entrepreneur from 2012-2017 building two products AddoDoc and Babygogo. After selling my company to SHEROES, I and my partner Nansi decided to start up again. But we felt unequipped in our skillset in 2018 to build a large company. We had known 0-1 journeys from our startups but lacked the experience of building 1-10 journeys.

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This video is for informational purposes only. The views expressed are those of the individuals quoted and do not constitute professional advice