In this exclusive interview with Dominik Kofert, he reveals how he’s grown PokerStrategy.com into a robust and well-oiled machine with over 700 employees, 5.5 million member, content in 19 languages and 90 million page views a month with one– just one— website.
Watch the video and learn what advice the man behind PokerStrategy.com has for affiliates. We’ll give you a hint– building a quality, valuable product might just be your business’s most important foundation.
Learn more about how PokerStrategy.com has grown into the world’s largest poker community and strategy website in this exclusive interview.
About Dominik KofertDominik Kofert became interested in online poker during his studies of Mathematics and Philosophy at Oxford University from 2001 to 2005. As he became a successful poker player himself, he founded a poker discussion forum and began acting as an affiliate for various operators. In 2007 he moved to Gibraltar with the other co-founders to set up PokerStrategy.com. As the sole Director and CEO of the company, he has successfully built-up and grown the PokerStrategy.com Group.
Raw Transcript
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Warren: Hey, everyone. I’m Warren Jolly with CasinoAffiliatePrograms.com. I want to welcome you to today’s interview with Dominik Kofert, CEO of PokerStrategy.com. PokerStrategy is the world’s biggest poker community and strategy website with over 5.5 million members and thousands of educational videos and articles. PokerStrategy is also one of the top three poker affiliates in our industry and, for that reason, we’re very pleased to have Dominik with us today. In this exclusive interview, Dominik will share some insights on the tremendous success that PokerStrategy has seen, along with their future as a business in the poker vertical. Dominik, thanks so much for joining us. It’s really a pleasure to have you today.
Dominik: Hi. Nice to meet you.
Warren: To start things off, would you please take a minute or two and tell our audience a little bit about the history of PokerStrategy, as well your own personal background?
Dominik: My name Dominik. My personal background is very common. I went to a high school in Germany and did my graduation there. Then, I went to the UK to study mathematics and philosophy. There I got in touch with PokerWorld for the first time. I was very skeptical at first because gambling is something you were not supposed to do. I basically rather quickly started looking at poker from a very mathematical and strategic point of view. Once I had convinced myself that it’s actually a game that can be beaten, I started playing at while I was at university. That worked out quite well. I started with Micro Stakes and worked up very quickly.
I said to myself, “Hey, that’s something you could actually teach others.” That’s what I started doing just as a hobby, basically. A little later, I started earning a few affiliate banners and that worked really well. Then, in 2007, I decided to turn it into a proper business and professionalize. That was basically the foundation of PokerStrategy.com. That was almost five years ago. Since then, we have grown extremely well. We are now live in 19 languages and have done really well for ourselves. The core aspect of our website is the focus on the poker education, but also a strong focus on building a community of poker players, which has been a tremendous success for us.
Warren: Great. What year did you start out as a poker player?
Dominik: As a poker player? That was probably in 2004.
Warren: The first version of Poker Strategy launched in 2007?
Dominik: Well, no. There was a professional version. I did have a very ugly, small poker forum, which hosts at PokerStrategy. That was before that, which I basically started from my college dormitory. That really wasn’t what you could call a legitimate business, but rather just for fun with a couple hundred people there. It was quite ugly, actually. From a business point of view, it really took off in 2007.
Warren: What was the original idea when you turned the forum into PokerStrategy.com and decided to make it a business? What was the commercial idea behind that move?
Dominik: Well, the commercial idea was always the same. When I started it, I didn’t really intend it to become a business. I really just did it for fun. I thought as a university student, I could make $100 or $200 a month, which would be fine. I realized the first time that this might become a business when it just started growing and kept growing. Obviously, then I basically realized, “You can’t really keep up with that. There’s too much stuff going on, on the website. You need to hire people. You need to professionalize. You need to roll out that product to different languages and different markets. You need to get the proper infrastructure in place, and all these kinds of things.” It was a very gradual kind of evolution until at one point I realized it can’t really go on like that. It has to become professional, or I have to stop it, because it was taking too much of my time.
Warren: I think many affiliates can relate to this, but you went to school for mathematics, not business. How did you start the growth of the business? Did you hire a manager or did you just begin hiring people yourself? Could you just tell us a little bit about how you made that transition from a one-man affiliate to an actual business?
Dominik: It was very slow. Probably, if I had had some business background, I would have turned it into a business much quicker, instead of waiting for more than two years. Once the decision was made to turn it into the business, I had two co-founders. One was a very experienced business person. The other was actually a chess grandmaster, so he was more on the strategic and the content side. I did basically get outside help with turning it into a proper business because I didn’t have any business background or knowledge whatsoever. I was the typical university geek, I would say. Philosophy and mathematics was not exactly the most business-minded thing to study. If I could do anything different, I probably would have professionalized it much sooner. At that time, I just didn’t have the knowledge and the experience to do that. I got other people who were good at that involved at that stage, which was the right decision.
Warren: Do you believe it was the co-founders that really played the key role in that?
Dominik: I wouldn’t say the key role, because the key role of PokerStrategy is still the quality of its content and the quality of the education, the credibility of the product, building the community, and so on. All of that is not going to help you grow a business if you don’t have the business expertise. In a sense, it was key to the success of it, but so was the other stuff. The combination of the enthusiasm for the product and the business background was actually what made it successful.
Warren: How did you meet your co-founders?
Dominik: It was quite funny. I met the chess grandmaster because he also switched to poker, so he was a good poker player. The business person was basically a good friend of his. It was purely a coincidence, so to speak. We basically met online, and then we met up. Chance occurrence.
Warren: How does the non-business guy end up being the CEO?
Dominik: Well, I kind of turned into a business guy over the years. I was also always the front-facing person. In our forums, for example, I, myself, have more than 12,000 postings. I still am in daily touch with the community. In the early days, I did most of the poker coaching myself. I wrote lots of the strategy articles myself. Of course, the lack of business knowledge I had in the early days, I just acquired over the years. I guess that’s why.
Warren: Great. How many employees does the company currently have? Are there multiple offices or one office? Can you tell us about the corporate makeup of the business?
Dominik: We are based in Gibraltar. We have 160 full-time employees here. In addition to that, we have around 550 to 600 paid freelancers around the world, in all places, like China, Russia, South America, Germany, and the UK. Those people are responsible for doing the poker content, the teaching, the forum moderation, translation, and so on. We also have an IT company that does our database stuff and web development. They are based in Germany with about 70 people. In total, that makes 700 or so, of which 230 are full time and 550 to 600 are freelance. It’s quite a big operation, actually.
Warren: Wow. How do you find these freelancers? Without giving away any secrets, that’s a lot of freelancers, probably more than anyone else in the industry from an affiliate perspective. How do you find good quality freelancers to work with you?
Dominik: It’s hard and it took a lot of time. At the end of the day, it took us almost five years. Basically, we recruit from within our community. We have more than 5.5 million members and that’s how we recruit those freelancers. I would say it’s probably fair to say that out of our freelancers, maybe 90% were, or still are, active members of our community. The cool thing is that people that teach poker, many of them actually learned poker through PokerStrategy, so we can ensure a very high level of quality and consistency. That’s a key thing if you have freelancers.
Finding freelancers is maybe not that hard. Finding good freelancers, or managing them correctly, that you have solid quality standards, that you make sure that you only pay an invoice after work has actually been delivered, which sounds easy, but if you have 550 of them you need to have a good quality assurance in place, good accounting in place. Those kinds of things are what we have learned and perfected over the years. The main source of recruitment is clearly our community.
Warren: Great. What are the different business models that Poker Strategy employ to generate revenue?
Dominik: Well, the key business model has really always been the same. We have mostly taught people that haven’t played poker before, we get them into touch with poker, hopefully create some enthusiasm for the game, and also teach them how to play properly. Once they have learned how to play, there are two ways that they can play poker for real money. One is that they deposit money straight away or the other option is that they take one of our free money offers, which is the promotion that we have been running for almost five years. Or, through another micro bankroll that a few poker rooms give out for themselves.
Once they have money on the site, either by making a deposit or getting the free money offer, and they start playing, as an affiliate, we earn a revenue share or CPA revenue. The key thing for us is that really, once it happens, the ones that have converted to real money players, that’s really when our job starts because then we continue to teach, educate, and support those players. It is really our goal to make them enjoy poker as much as possible and teach them how to play.
Then, of course, many players will be able to become sustainable poker players or even winning players. Others won’t because learning poker is not that easy. They might still enjoy the game and play for fun, even over a longer period of time. Either way it’s a good result, I would say. Our customers really like it because our interest is clearly aligned with them. That has been working quite well.
Warren: Great. In terms of business models, revenue share is obviously a main component. Do you do CPA hybrid deals, just in terms of your actual commercials that you cut with various operators?
Dominik: It really depends. I think historically it has been 50% CPA and 50% revenue share. For us, it’s really the same thing because we would never take the approach to exploit any of those revenue models. Our view is always, if we work with the poker room, to treat a CPA player exactly the same as we treat a revenue share player. We would never discriminate against customers because one customer might be CPA and the other might be revenue share. For us, we treat it very agnostically. At the end of the day for us, it’s a long-term approach. It really mostly depends on the preferences of the operators. If they prefer CPA, we can work on a CPA basis. If they prefer revenue share, we can do revenue share. We really see it as the same thing, ultimately. In the long-term, it really is.
Warren: Great.
Dominik: Having said that, maybe we are a special situation because we have strong relationships with all the operators that we work with from an affiliate’s point of view. If you are starting out as an affiliate, you might propose a CPA because you know what you’re getting or you might prefer the CPA because you might be concerned about not getting paid at some time. For us, we don’t really have those concerns. That’s most due to the nature of the relationship that we have with the operator.
Warren: In terms of traffic, how many page views does PokerStrategy receive on a monthly basis?
Dominik: Let me quickly double-check. I’ve prepared some data. On a monthly basis, we have about 90 million page views. Over the last year, it was in total 1.1 billion page views.
Warren: 1.1 billion?
Dominik: Over a year, yes. On a monthly basis, it’s 90 million page views.
Warren: Without giving any specifics, what are the major markets that comprise of that 90 million?
Dominik: Well, our strongest market is the Russian-speaking countries. That followed by the German-speaking countries. Then, you would have Spanish, French-speaking countries, Italy of course, all the regulated markets are also strong. Then, it kind of diversifies. In total, I would say we have managed to become quite successful in pretty much all of the languages that we offer. Our share of page views is almost getting a strong focus on the Russian market because there we are very successful. It’s almost in line with how the total poker market is. It just shows that our business model really works in different markets and different regions.
Warren: That’s definitely a lot of traffic. Many affiliates look at only first-time monthly depositors. I know that your business is a little bit different. You’re also looking at real money players. Can you tell our audience a little bit about the difference between the two and why looking at real money players is important for your business? Just a little bit of insight.
Dominik: Given that we have been running the free money campaigns, the Free Dollar 50 campaign or Free Dollar 5 or Free Dollar 10 campaigns, for more than five years, and we earn on a revenue share on a qualified CPA basis, at the end of the day, it doesn’t really matter for our business model whether a player becomes a real money poker player by depositing his own money or whether he took up one of the free money offers and then became a high-volume, real money player. Of course, we do also care about deposits because poker rooms care about that, and so on but at the end of the day, it doesn’t really matter for us. As long as there is a good balance between people that make a deposit and people that take a free money offer, it’s going to be fine.
From our point of view, as I said before, we don’t discriminate against players in any way, so we treat everybody the same. From that point of view, it doesn’t really make a difference to us whether somebody is a first depositor or somebody took a free money offer.
Warren: You’d mentioned before the interview, some of your biggest players in terms of rake volume have been players that never deposited, that just took your $50 free money and made a big go at it. Is that true?
Dominik: Yeah, of course. In poker, there is, of course, a strong correlation between how much money a player wins and how much money a player generates in rake. The highest rakers are usually also winning players. Therefore, if somebody is a really strong, smart, and dedicated player, a $50 free money offer in principle is all he needs to become successful. Obviously, we teach all the bankroll management, we teach all the strategies. The most successful poker players, they build a bankroll based on that. Once they have a certain amount of money, they move up to a higher limit. It continues on going until they reach the highest stakes. That’s true for some of the most successful players.
Having said that, of course, unfortunately, the vast majority of people who take the free money offer won’t succeed because being good at poker is actually quite hard. It is mostly a skill game, actually. Even if you provide great education, what you really can’t control is if people actually take it seriously and actually use that education, study, post hands, discuss strategies, and so on.
Yes, in in principle, there is a correlation between how skilled a player is and how much rake and profits for himself he actually generates. It can actually be a nice win-win situation, in that instance.
Warren: Since launching in 2007, how many real money players has Poker Strategy generated?
Dominik: I think in total it’s now more than 1.1 million that we have generated, which is quite a substantial amount, actually.
Warren: Yes, definitely. How about on a monthly basis? Using an average of the last couple of months, what would you say the number is?
Dominik: On a monthly basis, I would say it’s around 30,000 or so. It kind of depends, but 30,000 is probably the right number.
Warren: How many of those 30,000 are actually first-time depositing players?
Dominik: For us, it’s hard to say because we actually don’t get that data. We don’t get full data because if somebody has taken our free money offer we would not know when they made their first deposit. We see them as generating revenue but we don’t know in many instances. In some instances, we do know. It depends on the poker room. Give or take, first time depositors I would say around 4000 to 5000 a month, roughly speaking.
Warren: That’s helpful. In terms of acquiring new traffic to Poker Strategy, obviously there has to be a huge viral component because it’s just the nature of the business. How does Poker Strategy acquire most of its new traffic and new customers coming into the site?
Dominik: Well, it is largely viral. Our main source of traffic is clearly existing customers recommending other people to join our community. That is by far the most important acquisition channel for us. Now, we do try to incentivize that by having a Tell a Friend program where if you refer somebody to us you can get a small CPA for that. In a nutshell, the answer is virality.
Warren: You do have a paid referral program for players who refer other players, correct?
Dominik: That’s right.
Warren: Great. Talking about a recent trend among many poker rooms, many of them are negatively sanctioning strong players in lieu of acquiring weak players, also known as “fish.” You had mentioned before the interview that this is a fundamental mistake. I know you’ve also written a column. We’ll go ahead and link to that column for our audience. Can you just tell our audience, in two minutes, why is that a bad idea for poker rooms to be avoiding strong players?
Dominik: Let me start with the first point. It is absolutely correct for poker rooms to recruit new players to the game and also recreation of players. Ultimately, every dollar that can be won at poker by strong players that can be converted into rake must have been deposited by somebody else. Increasing deposits from new players is very important for the sustainability of poker.
However, and that’s what I argue in my column, just because acquiring new players, weaker players, or recreation players is a good thing, it doesn’t mean that conversely you should kind of be putting off or discriminating negatively against strong players. There are multiple reasons for that. Of course, it’s a PR thing. It’s a negative marketing thing.
Also, and that’s what I argue in my column, it’s hard to explain in words, but it will actually cause a poker room to earn less money because it affects the conversion rate from deposits into rake. If your average player’s skill level is high, what it usually does from the poker room’s perspective, it actually causes poker rooms to convert more money that’s floating around into rake, as opposed to it all converting into cash outs. Of course, if you are a strong player you might say, “Oh, that’s quite bad because I want to take those profits.”
The reason I think it’s an important argument to make is that it’s probably the most convincing argument to convince poker rooms that are discriminating against strong players to actually stop doing that. Of course, it can be an outrage in the communities. It can be an outrage and Two Plus Two that the poker rooms shouldn’t be doing that and it’s bad for the winning players, and so on. At the end of the day, I think the most convincing argument that gets poker rooms that are on this misguided path to stop doing that is if you can rationally show that this is hurting their bottom line. I’m convinced that it is. The actual details are really hard to explain in words. It’s better to read the column and see it in writing because it’s quite a complex subject. If it was so easy, then obviously poker rooms wouldn’t be making that mistake in the first place.
Warren: Sure. We’ll make sure we go ahead and link to that column for everyone to read. If they have any questions, I’m sure they’ll be in touch. Some broader based questions for you, what were three of the key decisions you made in the infancy of the business that really helped make the company what it is today?
Dominik: That’s a very good question. I don’t really know because, as I see it, it’s like a daily challenge. I don’t think that there has been the key decision. It’s really much harder than that. Very often, when you read success stories of companies, they say, “Then suddenly I had this great idea and everything changed.” I can’t really say that. It’s really doing your best every day, continuing to question oneself, continuing to reevaluate things, and to adjust to the situation as it changes. In particular, in poker, there have been so many drastic changes in the past with the market and so on, that it’s very important to stay open to adapt and hopefully make the right decisions every day.
I don’t really believe in big turning points in a business. At least, there is not something that I would say, “This has made PokerStrategy successful.” Fundamentally, we have stayed true to our core business model and core approach since we were founded in 2007. We haven’t made any drastic 180-degree changes, but we have constantly evolved, and constantly made small adaptations and mostly the correct ones. You rarely come home and suddenly everything is great. I don’t think that actually works in practice.
Warren: How did you stay focused on one site and one business? I think this is a mistake that many affiliates make. The new affiliates in the first year, they launch 50 websites. I don’t know how many other websites PokerStrategy has, but it looks like you’ve stayed focused over the last five years. How did you do that?
Dominik: First of all, we just have one website. Secondly, and many people don’t really believe that but it’s totally true, we have never done any SEO. We had some external agencies, but that was a total failure. SEO is not our focus at all. We’re actually really, really bad at SEO. It’s quite sad to say that, but unfortunately it’s actually true.
Now, I guess this habit of starting many websites probably comes from an SEO mindset. I don’t know because I’m not knowledgeable in SEO, but if you kind of think that an affiliate website is there to generate leads, you put a banner on the site, and hopefully people click on it, it’s a classic old-school affiliation approach. I think that is going out of fashion more and more quickly. My recommendation to affiliates is to build a valuable product. What does value mean? Value either means value to the customer or value to the business partner. A website that actually does something and adds something. This has always been our focus.
Now, of course building a valuable product is much more effort. There’s a reason why we have 230 full-time employees and 500 paid freelancers all working on one website. Basically, the reason we just have one website is that one website is so much work and requires so much attention and development on a daily basis that there just wouldn’t be enough time to do other things.
In general, that would probably be my recommendation for affiliates that are starting out is to build something that actually generates value in any way, shape, or form. It could be different things. It could be news content. It could be education like we do. It could be some kind of more disruptive idea like Pokertube, for example. It could be something that I couldn’t even think of. I do think that is the most sustainable thing to do.
Also, if you build proper value for the customer and for the business partner, you are much harder to be cut out as an unnecessary middle man. Some poker rooms have cut back on their affiliate programs in the past. It’s very hard to get hit by that if you really are just a pass-through kind of trafficker. I do think building a valuable product is key. If you do that, you won’t have time to do multiple websites.
Warren: Thank you for that. In terms of choosing the right partners, I understand creating a lot of value for your audience is key, but sending that audience to the right poker rooms where they’re getting the right experience and the product they expect, and you, as a business, get paid—how do you choose the right partners, the right poker rooms to work with, especially with the volume of players that you’re delivering, just to ensure that the relationship is sustainable? What’s the process?
Dominik: Well, that’s a very difficult and complicated one. Luckily, we got it right thus far. We have never had any poker room that we’ve worked with seriously screw up or go out of business with the exception of Altered, although I guess nobody saw that one coming.
It’s multiple things. Again, speaking from an affiliate’s point of view, I do think it’s very important that you absolutely know who you’re dealing with. What kind of company is it? What kind of substance do they have? Are they a big company or a small company? Are they trustworthy? All these kinds of things, you must check. You must check as an affiliate for your own security but also for the security of your customers. We take that very seriously. Probably every week, we turn down three different poker rooms or entities that want to incorporate with us because we have relatively high standards when it comes to choosing our business partners.
Then, of course, when you want establish a business partnership, I always recommend to have a proper contract in place. Standard terms can be very one-sided at times. That covers the business-to-business side.
More important is the business-to-customer side. You have to make sure that the poker brands you promote are actually good products, ideally. It’s not always possible. Companies change and there might be differences in quality. One poker room might have great software, another poker room has poor software, one poker room has a great customer service, and another has not such a great customer service. It’s very important that one keeps its eyes open for them and is aware of it, and then has a threshold under which one would not work as a poker room anymore. Even though they might be offering good rates to you as an affiliate, I don’t think it’s worth it if it means you have to upset your customers.
It’s the same long-term philosophy that goes with building a valuable product for the customers. You can only work with certain business partners. You just can’t work with everybody. If you just look at the amount of poker rooms that have gone bankrupt or out of business in the past, it’s probably more than 40 or so. It shows that it does payoff to choose your partners very carefully.
Warren: Great. Talking about value again and what affiliates can do, your brand is probably the strongest in the poker industry from an affiliate or just a core perspective. What can affiliates do to build a strong brand? Delivering value is definitely a key component, but what else can be done to have a brand that stands out from a regular website?
Dominik: I do think, ultimately speaking, if you want to have a strong brand you need to have a strong product. What can it be? It can be a strong product. You have a great website and it’s great for the customer. You can try as a business to contribute to the industry. That might help, but it can also backfire. It depends.
Ultimately speaking, if you want to have a strong brand, you must have a strong product. It’s as simple as that. I don’t think that with a crap product, just throwing money and marketing is going to get you a strong brand. It could work, but it’s most likely just going to be not worth it.
In the Internet age, in particular, when you take the poker audience, people are just too smart. They’re not going to be clouded by expensive marketing if they can see that your product is not great, your customer service is not great, or anything else doesn’t really add up. You’re not going to be able to build a strong brand. My recommendation is, for affiliates, to really focus on the product and value. Treat your customers well and the brand will come naturally.
Warren: Dominik, we know that PokerStrategy has a robust affiliate program. What are the different ways that affiliates watching this interview can potentially work with PokerStrategy as an affiliate?
Dominik: Our affiliate program is relatively simple. It’s basically a tiered CPA program. You refer a player to PokerStrategy and he gets converted into a real money player, either by making a small deposit or by making one of our free bank rolls, and he earns a certain amount of strategy points which are ultimately based on rate, you as an affiliate get a CPA. It’s a tiered CPA with different targets. You can earn up to $500 for each player. It’s really simple to use. You just sign up on the website and you get your referral code. You can also use our income access integration, which has more sophisticated statistics.
I would say the advantage that you have as an affiliate is that it’s different from you classic proposition. On the affiliate’s side you might have 10 poker rooms on there, but they’re all poker room. Poker Strategy is unique because it offers poker school, it offers poker education, and it offers a free bankroll. It’s a different product.
From an affiliate’s point of view, our products would be perfect for converting marginal traffic. If somebody has already determined, “I want to gamble, I want to make a $600 deposit at a poker room straight away.” As an affiliate you should sent them to the poker room. You shouldn’t send them to us. All these unconvinced players, people that are not convinced that they must make a real money deposit now, as an affiliate, if you refer them to PokerStrategy, we have a much better chance of converting them and helping them out with our education, free bankroll, and so on. That’s why I do think that if you are a poker affiliate having Poker Strategy as a part of your portfolio is always a great thing to have. It’s kind of synergistic to promote a poker room.
Warren: Finally, Dominik, what are your thoughts on the US market in terms of poker? How is Poker Strategy positioning itself? Give us your general idea.
Dominik: The US market is also an opportunity, but also a big chance for us because historically we never took any US customers. We have always been on the paranoid side when it comes to the legal thing. Luckily, or unluckily, depending on how you see it, we have been proven right by those Black Friday events and so on.
Now, of course, that regulation is upcoming in the US. We are seeking to play a role there. We are talking to many companies in that space and will see what we can do there. We already started with a database of US customers because now we can because there’s no way they can play. They can’t play real money poker through any of our partners. We’re just trying to get the ball rolling there.
Obviously, it is a question of when the regulation will actually happen because that’s going to be the starting point for us. At the end of the day, we have to start it fresh because we don’t have any historic database we can use.
The other thing that could be interesting for us, apart from the classic affiliation model, is using our expertise when it comes to poker education. For example, to help poker rooms or upcoming poker rooms to build their own educational portfolio. If the US operators want to have their own poker school, we can clearly help them build it and run it. That’s also something that we are looking into.
Warren: Potentially white labeling the PokerStrategy concept to operators?
Dominik: In principle, yeah. That’s something we are looking into. It could be a white label, but most likely it’s going to be tailor made. It really depends on what business partners we’ll be looking for. That’s something we have so much experience in. We have the infrastructure and the people to do it. There’s clearly an opportunity for us in the United States.
Warren: Well, Dominik, thanks very much for your time today. Congratulations on all the success and achievements you’ve accomplished. If our viewers are interested in getting a hold of Dominik, please send an e-mail to [email protected]. We’d be more than happy to put you in touch. Thanks for watching. Stay tuned for future interviews with iGaming industry leaders.
Dominik: Thank you.
Thank you, Bet365, for making this video interview possible.
Warren: Hey, everyone. I’m Warren Jolly with CasinoAffiliatePrograms.com. I want to welcome you to today’s interview with Dominik Kofert, CEO of PokerStrategy.com. PokerStrategy is the world’s biggest poker community and strategy website with over 5.5 million members and thousands of educational videos and articles. PokerStrategy is also one of the top three poker affiliates in our industry and, for that reason, we’re very pleased to have Dominik with us today. In this exclusive interview, Dominik will share some insights on the tremendous success that PokerStrategy has seen, along with their future as a business in the poker vertical. Dominik, thanks so much for joining us. It’s really a pleasure to have you today.
Dominik: Hi. Nice to meet you.
Warren: To start things off, would you please take a minute or two and tell our audience a little bit about the history of PokerStrategy, as well your own personal background?
Dominik: My name Dominik. My personal background is very common. I went to a high school in Germany and did my graduation there. Then, I went to the UK to study mathematics and philosophy. There I got in touch with PokerWorld for the first time. I was very skeptical at first because gambling is something you were not supposed to do. I basically rather quickly started looking at poker from a very mathematical and strategic point of view. Once I had convinced myself that it’s actually a game that can be beaten, I started playing at while I was at university. That worked out quite well. I started with Micro Stakes and worked up very quickly.
I said to myself, “Hey, that’s something you could actually teach others.” That’s what I started doing just as a hobby, basically. A little later, I started earning a few affiliate banners and that worked really well. Then, in 2007, I decided to turn it into a proper business and professionalize. That was basically the foundation of PokerStrategy.com. That was almost five years ago. Since then, we have grown extremely well. We are now live in 19 languages and have done really well for ourselves. The core aspect of our website is the focus on the poker education, but also a strong focus on building a community of poker players, which has been a tremendous success for us.
Warren: Great. What year did you start out as a poker player?
Dominik: As a poker player? That was probably in 2004.
Warren: The first version of Poker Strategy launched in 2007?
Dominik: Well, no. There was a professional version. I did have a very ugly, small poker forum, which hosts at PokerStrategy. That was before that, which I basically started from my college dormitory. That really wasn’t what you could call a legitimate business, but rather just for fun with a couple hundred people there. It was quite ugly, actually. From a business point of view, it really took off in 2007.
Warren: What was the original idea when you turned the forum into PokerStrategy.com and decided to make it a business? What was the commercial idea behind that move?
Dominik: Well, the commercial idea was always the same. When I started it, I didn’t really intend it to become a business. I really just did it for fun. I thought as a university student, I could make $100 or $200 a month, which would be fine. I realized the first time that this might become a business when it just started growing and kept growing. Obviously, then I basically realized, “You can’t really keep up with that. There’s too much stuff going on, on the website. You need to hire people. You need to professionalize. You need to roll out that product to different languages and different markets. You need to get the proper infrastructure in place, and all these kinds of things.” It was a very gradual kind of evolution until at one point I realized it can’t really go on like that. It has to become professional, or I have to stop it, because it was taking too much of my time.
Warren: I think many affiliates can relate to this, but you went to school for mathematics, not business. How did you start the growth of the business? Did you hire a manager or did you just begin hiring people yourself? Could you just tell us a little bit about how you made that transition from a one-man affiliate to an actual business?
Dominik: It was very slow. Probably, if I had had some business background, I would have turned it into a business much quicker, instead of waiting for more than two years. Once the decision was made to turn it into the business, I had two co-founders. One was a very experienced business person. The other was actually a chess grandmaster, so he was more on the strategic and the content side. I did basically get outside help with turning it into a proper business because I didn’t have any business background or knowledge whatsoever. I was the typical university geek, I would say. Philosophy and mathematics was not exactly the most business-minded thing to study. If I could do anything different, I probably would have professionalized it much sooner. At that time, I just didn’t have the knowledge and the experience to do that. I got other people who were good at that involved at that stage, which was the right decision.
Warren: Do you believe it was the co-founders that really played the key role in that?
Dominik: I wouldn’t say the key role, because the key role of PokerStrategy is still the quality of its content and the quality of the education, the credibility of the product, building the community, and so on. All of that is not going to help you grow a business if you don’t have the business expertise. In a sense, it was key to the success of it, but so was the other stuff. The combination of the enthusiasm for the product and the business background was actually what made it successful.
Warren: How did you meet your co-founders?
Dominik: It was quite funny. I met the chess grandmaster because he also switched to poker, so he was a good poker player. The business person was basically a good friend of his. It was purely a coincidence, so to speak. We basically met online, and then we met up. Chance occurrence.
Warren: How does the non-business guy end up being the CEO?
Dominik: Well, I kind of turned into a business guy over the years. I was also always the front-facing person. In our forums, for example, I, myself, have more than 12,000 postings. I still am in daily touch with the community. In the early days, I did most of the poker coaching myself. I wrote lots of the strategy articles myself. Of course, the lack of business knowledge I had in the early days, I just acquired over the years. I guess that’s why.
Warren: Great. How many employees does the company currently have? Are there multiple offices or one office? Can you tell us about the corporate makeup of the business?
Dominik: We are based in Gibraltar. We have 160 full-time employees here. In addition to that, we have around 550 to 600 paid freelancers around the world, in all places, like China, Russia, South America, Germany, and the UK. Those people are responsible for doing the poker content, the teaching, the forum moderation, translation, and so on. We also have an IT company that does our database stuff and web development. They are based in Germany with about 70 people. In total, that makes 700 or so, of which 230 are full time and 550 to 600 are freelance. It’s quite a big operation, actually.
Warren: Wow. How do you find these freelancers? Without giving away any secrets, that’s a lot of freelancers, probably more than anyone else in the industry from an affiliate perspective. How do you find good quality freelancers to work with you?
Dominik: It’s hard and it took a lot of time. At the end of the day, it took us almost five years. Basically, we recruit from within our community. We have more than 5.5 million members and that’s how we recruit those freelancers. I would say it’s probably fair to say that out of our freelancers, maybe 90% were, or still are, active members of our community. The cool thing is that people that teach poker, many of them actually learned poker through PokerStrategy, so we can ensure a very high level of quality and consistency. That’s a key thing if you have freelancers.
Finding freelancers is maybe not that hard. Finding good freelancers, or managing them correctly, that you have solid quality standards, that you make sure that you only pay an invoice after work has actually been delivered, which sounds easy, but if you have 550 of them you need to have a good quality assurance in place, good accounting in place. Those kinds of things are what we have learned and perfected over the years. The main source of recruitment is clearly our community.
Warren: Great. What are the different business models that Poker Strategy employ to generate revenue?
Dominik: Well, the key business model has really always been the same. We have mostly taught people that haven’t played poker before, we get them into touch with poker, hopefully create some enthusiasm for the game, and also teach them how to play properly. Once they have learned how to play, there are two ways that they can play poker for real money. One is that they deposit money straight away or the other option is that they take one of our free money offers, which is the promotion that we have been running for almost five years. Or, through another micro bankroll that a few poker rooms give out for themselves.
Once they have money on the site, either by making a deposit or getting the free money offer, and they start playing, as an affiliate, we earn a revenue share or CPA revenue. The key thing for us is that really, once it happens, the ones that have converted to real money players, that’s really when our job starts because then we continue to teach, educate, and support those players. It is really our goal to make them enjoy poker as much as possible and teach them how to play.
Then, of course, many players will be able to become sustainable poker players or even winning players. Others won’t because learning poker is not that easy. They might still enjoy the game and play for fun, even over a longer period of time. Either way it’s a good result, I would say. Our customers really like it because our interest is clearly aligned with them. That has been working quite well.
Warren: Great. In terms of business models, revenue share is obviously a main component. Do you do CPA hybrid deals, just in terms of your actual commercials that you cut with various operators?
Dominik: It really depends. I think historically it has been 50% CPA and 50% revenue share. For us, it’s really the same thing because we would never take the approach to exploit any of those revenue models. Our view is always, if we work with the poker room, to treat a CPA player exactly the same as we treat a revenue share player. We would never discriminate against customers because one customer might be CPA and the other might be revenue share. For us, we treat it very agnostically. At the end of the day for us, it’s a long-term approach. It really mostly depends on the preferences of the operators. If they prefer CPA, we can work on a CPA basis. If they prefer revenue share, we can do revenue share. We really see it as the same thing, ultimately. In the long-term, it really is.
Warren: Great.
Dominik: Having said that, maybe we are a special situation because we have strong relationships with all the operators that we work with from an affiliate’s point of view. If you are starting out as an affiliate, you might propose a CPA because you know what you’re getting or you might prefer the CPA because you might be concerned about not getting paid at some time. For us, we don’t really have those concerns. That’s most due to the nature of the relationship that we have with the operator.
Warren: In terms of traffic, how many page views does PokerStrategy receive on a monthly basis?
Dominik: Let me quickly double-check. I’ve prepared some data. On a monthly basis, we have about 90 million page views. Over the last year, it was in total 1.1 billion page views.
Warren: 1.1 billion?
Dominik: Over a year, yes. On a monthly basis, it’s 90 million page views.
Warren: Without giving any specifics, what are the major markets that comprise of that 90 million?
Dominik: Well, our strongest market is the Russian-speaking countries. That followed by the German-speaking countries. Then, you would have Spanish, French-speaking countries, Italy of course, all the regulated markets are also strong. Then, it kind of diversifies. In total, I would say we have managed to become quite successful in pretty much all of the languages that we offer. Our share of page views is almost getting a strong focus on the Russian market because there we are very successful. It’s almost in line with how the total poker market is. It just shows that our business model really works in different markets and different regions.
Warren: That’s definitely a lot of traffic. Many affiliates look at only first-time monthly depositors. I know that your business is a little bit different. You’re also looking at real money players. Can you tell our audience a little bit about the difference between the two and why looking at real money players is important for your business? Just a little bit of insight.
Dominik: Given that we have been running the free money campaigns, the Free Dollar 50 campaign or Free Dollar 5 or Free Dollar 10 campaigns, for more than five years, and we earn on a revenue share on a qualified CPA basis, at the end of the day, it doesn’t really matter for our business model whether a player becomes a real money poker player by depositing his own money or whether he took up one of the free money offers and then became a high-volume, real money player. Of course, we do also care about deposits because poker rooms care about that, and so on but at the end of the day, it doesn’t really matter for us. As long as there is a good balance between people that make a deposit and people that take a free money offer, it’s going to be fine.
From our point of view, as I said before, we don’t discriminate against players in any way, so we treat everybody the same. From that point of view, it doesn’t really make a difference to us whether somebody is a first depositor or somebody took a free money offer.
Warren: You’d mentioned before the interview, some of your biggest players in terms of rake volume have been players that never deposited, that just took your $50 free money and made a big go at it. Is that true?
Dominik: Yeah, of course. In poker, there is, of course, a strong correlation between how much money a player wins and how much money a player generates in rake. The highest rakers are usually also winning players. Therefore, if somebody is a really strong, smart, and dedicated player, a $50 free money offer in principle is all he needs to become successful. Obviously, we teach all the bankroll management, we teach all the strategies. The most successful poker players, they build a bankroll based on that. Once they have a certain amount of money, they move up to a higher limit. It continues on going until they reach the highest stakes. That’s true for some of the most successful players.
Having said that, of course, unfortunately, the vast majority of people who take the free money offer won’t succeed because being good at poker is actually quite hard. It is mostly a skill game, actually. Even if you provide great education, what you really can’t control is if people actually take it seriously and actually use that education, study, post hands, discuss strategies, and so on.
Yes, in in principle, there is a correlation between how skilled a player is and how much rake and profits for himself he actually generates. It can actually be a nice win-win situation, in that instance.
Warren: Since launching in 2007, how many real money players has Poker Strategy generated?
Dominik: I think in total it’s now more than 1.1 million that we have generated, which is quite a substantial amount, actually.
Warren: Yes, definitely. How about on a monthly basis? Using an average of the last couple of months, what would you say the number is?
Dominik: On a monthly basis, I would say it’s around 30,000 or so. It kind of depends, but 30,000 is probably the right number.
Warren: How many of those 30,000 are actually first-time depositing players?
Dominik: For us, it’s hard to say because we actually don’t get that data. We don’t get full data because if somebody has taken our free money offer we would not know when they made their first deposit. We see them as generating revenue but we don’t know in many instances. In some instances, we do know. It depends on the poker room. Give or take, first time depositors I would say around 4000 to 5000 a month, roughly speaking.
Warren: That’s helpful. In terms of acquiring new traffic to Poker Strategy, obviously there has to be a huge viral component because it’s just the nature of the business. How does Poker Strategy acquire most of its new traffic and new customers coming into the site?
Dominik: Well, it is largely viral. Our main source of traffic is clearly existing customers recommending other people to join our community. That is by far the most important acquisition channel for us. Now, we do try to incentivize that by having a Tell a Friend program where if you refer somebody to us you can get a small CPA for that. In a nutshell, the answer is virality.
Warren: You do have a paid referral program for players who refer other players, correct?
Dominik: That’s right.
Warren: Great. Talking about a recent trend among many poker rooms, many of them are negatively sanctioning strong players in lieu of acquiring weak players, also known as “fish.” You had mentioned before the interview that this is a fundamental mistake. I know you’ve also written a column. We’ll go ahead and link to that column for our audience. Can you just tell our audience, in two minutes, why is that a bad idea for poker rooms to be avoiding strong players?
Dominik: Let me start with the first point. It is absolutely correct for poker rooms to recruit new players to the game and also recreation of players. Ultimately, every dollar that can be won at poker by strong players that can be converted into rake must have been deposited by somebody else. Increasing deposits from new players is very important for the sustainability of poker.
However, and that’s what I argue in my column, just because acquiring new players, weaker players, or recreation players is a good thing, it doesn’t mean that conversely you should kind of be putting off or discriminating negatively against strong players. There are multiple reasons for that. Of course, it’s a PR thing. It’s a negative marketing thing.
Also, and that’s what I argue in my column, it’s hard to explain in words, but it will actually cause a poker room to earn less money because it affects the conversion rate from deposits into rake. If your average player’s skill level is high, what it usually does from the poker room’s perspective, it actually causes poker rooms to convert more money that’s floating around into rake, as opposed to it all converting into cash outs. Of course, if you are a strong player you might say, “Oh, that’s quite bad because I want to take those profits.”
The reason I think it’s an important argument to make is that it’s probably the most convincing argument to convince poker rooms that are discriminating against strong players to actually stop doing that. Of course, it can be an outrage in the communities. It can be an outrage and Two Plus Two that the poker rooms shouldn’t be doing that and it’s bad for the winning players, and so on. At the end of the day, I think the most convincing argument that gets poker rooms that are on this misguided path to stop doing that is if you can rationally show that this is hurting their bottom line. I’m convinced that it is. The actual details are really hard to explain in words. It’s better to read the column and see it in writing because it’s quite a complex subject. If it was so easy, then obviously poker rooms wouldn’t be making that mistake in the first place.
Warren: Sure. We’ll make sure we go ahead and link to that column for everyone to read. If they have any questions, I’m sure they’ll be in touch. Some broader based questions for you, what were three of the key decisions you made in the infancy of the business that really helped make the company what it is today?
Dominik: That’s a very good question. I don’t really know because, as I see it, it’s like a daily challenge. I don’t think that there has been the key decision. It’s really much harder than that. Very often, when you read success stories of companies, they say, “Then suddenly I had this great idea and everything changed.” I can’t really say that. It’s really doing your best every day, continuing to question oneself, continuing to reevaluate things, and to adjust to the situation as it changes. In particular, in poker, there have been so many drastic changes in the past with the market and so on, that it’s very important to stay open to adapt and hopefully make the right decisions every day.
I don’t really believe in big turning points in a business. At least, there is not something that I would say, “This has made PokerStrategy successful.” Fundamentally, we have stayed true to our core business model and core approach since we were founded in 2007. We haven’t made any drastic 180-degree changes, but we have constantly evolved, and constantly made small adaptations and mostly the correct ones. You rarely come home and suddenly everything is great. I don’t think that actually works in practice.
Warren: How did you stay focused on one site and one business? I think this is a mistake that many affiliates make. The new affiliates in the first year, they launch 50 websites. I don’t know how many other websites PokerStrategy has, but it looks like you’ve stayed focused over the last five years. How did you do that?
Dominik: First of all, we just have one website. Secondly, and many people don’t really believe that but it’s totally true, we have never done any SEO. We had some external agencies, but that was a total failure. SEO is not our focus at all. We’re actually really, really bad at SEO. It’s quite sad to say that, but unfortunately it’s actually true.
Now, I guess this habit of starting many websites probably comes from an SEO mindset. I don’t know because I’m not knowledgeable in SEO, but if you kind of think that an affiliate website is there to generate leads, you put a banner on the site, and hopefully people click on it, it’s a classic old-school affiliation approach. I think that is going out of fashion more and more quickly. My recommendation to affiliates is to build a valuable product. What does value mean? Value either means value to the customer or value to the business partner. A website that actually does something and adds something. This has always been our focus.
Now, of course building a valuable product is much more effort. There’s a reason why we have 230 full-time employees and 500 paid freelancers all working on one website. Basically, the reason we just have one website is that one website is so much work and requires so much attention and development on a daily basis that there just wouldn’t be enough time to do other things.
In general, that would probably be my recommendation for affiliates that are starting out is to build something that actually generates value in any way, shape, or form. It could be different things. It could be news content. It could be education like we do. It could be some kind of more disruptive idea like Pokertube, for example. It could be something that I couldn’t even think of. I do think that is the most sustainable thing to do.
Also, if you build proper value for the customer and for the business partner, you are much harder to be cut out as an unnecessary middle man. Some poker rooms have cut back on their affiliate programs in the past. It’s very hard to get hit by that if you really are just a pass-through kind of trafficker. I do think building a valuable product is key. If you do that, you won’t have time to do multiple websites.
Warren: Thank you for that. In terms of choosing the right partners, I understand creating a lot of value for your audience is key, but sending that audience to the right poker rooms where they’re getting the right experience and the product they expect, and you, as a business, get paid—how do you choose the right partners, the right poker rooms to work with, especially with the volume of players that you’re delivering, just to ensure that the relationship is sustainable? What’s the process?
Dominik: Well, that’s a very difficult and complicated one. Luckily, we got it right thus far. We have never had any poker room that we’ve worked with seriously screw up or go out of business with the exception of Altered, although I guess nobody saw that one coming.
It’s multiple things. Again, speaking from an affiliate’s point of view, I do think it’s very important that you absolutely know who you’re dealing with. What kind of company is it? What kind of substance do they have? Are they a big company or a small company? Are they trustworthy? All these kinds of things, you must check. You must check as an affiliate for your own security but also for the security of your customers. We take that very seriously. Probably every week, we turn down three different poker rooms or entities that want to incorporate with us because we have relatively high standards when it comes to choosing our business partners.
Then, of course, when you want establish a business partnership, I always recommend to have a proper contract in place. Standard terms can be very one-sided at times. That covers the business-to-business side.
More important is the business-to-customer side. You have to make sure that the poker brands you promote are actually good products, ideally. It’s not always possible. Companies change and there might be differences in quality. One poker room might have great software, another poker room has poor software, one poker room has a great customer service, and another has not such a great customer service. It’s very important that one keeps its eyes open for them and is aware of it, and then has a threshold under which one would not work as a poker room anymore. Even though they might be offering good rates to you as an affiliate, I don’t think it’s worth it if it means you have to upset your customers.
It’s the same long-term philosophy that goes with building a valuable product for the customers. You can only work with certain business partners. You just can’t work with everybody. If you just look at the amount of poker rooms that have gone bankrupt or out of business in the past, it’s probably more than 40 or so. It shows that it does payoff to choose your partners very carefully.
Warren: Great. Talking about value again and what affiliates can do, your brand is probably the strongest in the poker industry from an affiliate or just a core perspective. What can affiliates do to build a strong brand? Delivering value is definitely a key component, but what else can be done to have a brand that stands out from a regular website?
Dominik: I do think, ultimately speaking, if you want to have a strong brand you need to have a strong product. What can it be? It can be a strong product. You have a great website and it’s great for the customer. You can try as a business to contribute to the industry. That might help, but it can also backfire. It depends.
Ultimately speaking, if you want to have a strong brand, you must have a strong product. It’s as simple as that. I don’t think that with a crap product, just throwing money and marketing is going to get you a strong brand. It could work, but it’s most likely just going to be not worth it.
In the Internet age, in particular, when you take the poker audience, people are just too smart. They’re not going to be clouded by expensive marketing if they can see that your product is not great, your customer service is not great, or anything else doesn’t really add up. You’re not going to be able to build a strong brand. My recommendation is, for affiliates, to really focus on the product and value. Treat your customers well and the brand will come naturally.
Warren: Dominik, we know that PokerStrategy has a robust affiliate program. What are the different ways that affiliates watching this interview can potentially work with PokerStrategy as an affiliate?
Dominik: Our affiliate program is relatively simple. It’s basically a tiered CPA program. You refer a player to PokerStrategy and he gets converted into a real money player, either by making a small deposit or by making one of our free bank rolls, and he earns a certain amount of strategy points which are ultimately based on rate, you as an affiliate get a CPA. It’s a tiered CPA with different targets. You can earn up to $500 for each player. It’s really simple to use. You just sign up on the website and you get your referral code. You can also use our income access integration, which has more sophisticated statistics.
I would say the advantage that you have as an affiliate is that it’s different from you classic proposition. On the affiliate’s side you might have 10 poker rooms on there, but they’re all poker room. Poker Strategy is unique because it offers poker school, it offers poker education, and it offers a free bankroll. It’s a different product.
From an affiliate’s point of view, our products would be perfect for converting marginal traffic. If somebody has already determined, “I want to gamble, I want to make a $600 deposit at a poker room straight away.” As an affiliate you should sent them to the poker room. You shouldn’t send them to us. All these unconvinced players, people that are not convinced that they must make a real money deposit now, as an affiliate, if you refer them to PokerStrategy, we have a much better chance of converting them and helping them out with our education, free bankroll, and so on. That’s why I do think that if you are a poker affiliate having Poker Strategy as a part of your portfolio is always a great thing to have. It’s kind of synergistic to promote a poker room.
Warren: Finally, Dominik, what are your thoughts on the US market in terms of poker? How is Poker Strategy positioning itself? Give us your general idea.
Dominik: The US market is also an opportunity, but also a big chance for us because historically we never took any US customers. We have always been on the paranoid side when it comes to the legal thing. Luckily, or unluckily, depending on how you see it, we have been proven right by those Black Friday events and so on.
Now, of course, that regulation is upcoming in the US. We are seeking to play a role there. We are talking to many companies in that space and will see what we can do there. We already started with a database of US customers because now we can because there’s no way they can play. They can’t play real money poker through any of our partners. We’re just trying to get the ball rolling there.
Obviously, it is a question of when the regulation will actually happen because that’s going to be the starting point for us. At the end of the day, we have to start it fresh because we don’t have any historic database we can use.
The other thing that could be interesting for us, apart from the classic affiliation model, is using our expertise when it comes to poker education. For example, to help poker rooms or upcoming poker rooms to build their own educational portfolio. If the US operators want to have their own poker school, we can clearly help them build it and run it. That’s also something that we are looking into.
Warren: Potentially white labeling the PokerStrategy concept to operators?
Dominik: In principle, yeah. That’s something we are looking into. It could be a white label, but most likely it’s going to be tailor made. It really depends on what business partners we’ll be looking for. That’s something we have so much experience in. We have the infrastructure and the people to do it. There’s clearly an opportunity for us in the United States.
Warren: Well, Dominik, thanks very much for your time today. Congratulations on all the success and achievements you’ve accomplished. If our viewers are interested in getting a hold of Dominik, please send an e-mail to [email protected]. We’d be more than happy to put you in touch. Thanks for watching. Stay tuned for future interviews with iGaming industry leaders.
Dominik: Thank you.