Having employees is one of the hardest parts of running a business.
But what if you didn’t need any to build an empire?
That’s what Ben Borton and David Silberman have figured out.
In 2019, David and co-founders Max Kogler and Ernesto Ebuen had the idea for an autonomous ping-pong venue where players could play 24/7 and come and go as they pleased.
They launched their first PingPod location in New York City right before the pandemic hit in March 2020.
Fortunately, the idea still took off because it was one of the few places people could go and have fun with minimal to no contact.
A couple of years later the PingPod founders, along with Ben and CTO Ilya Rivkin, founded PodPlay Technologies, a tech stack for venue operators across multiple experience verticals.
Both PingPod and PodPlay are multi-million dollar businesses today with several locations and clients, respectively.
In this interview with co-founder Ben Borton, we discuss how they initially came up with the idea and the steps they took to get it off the ground. We also dive into the plans they have for the future and some predictions they have for the space.
Check it out below.
Hello, who are you and what is the name of your company?
I’m Ben Borton, Chief Strategy Officer at PingPod Inc. and a Co-Founder of PodPlay Technologies.
PingPod, founded in 2019, pioneered the autonomous operating model.
Today we operate a network of 16 tech-enabled autonomous ping pong venues and 5 autonomous pool clubs (under the Sharks brand).
PodPlay Technologies, founded in 2023, is a wholly owned subsidiary of PingPod, which licenses the tech stack that powers PingPod to venue operators across multiple experience verticals (ping pong, pool, pickleball, and padel).
What was the process of getting the company off the ground?
For an excellent telling of the PingPod origin story, check out this blog post by PingPod co-founder David Silberman, which includes links to two Podcasts he did with Netflix co-founder Marc Randolf describing the process of getting PingPod off the ground: That Will Never Work
Before PingPod, if you wanted to play ping pong in New York City you could either go to one centrally-located, high-end venue that focused on food, alcohol, and events – or you could head to a no-frills basement club with bad lighting and sub-par equipment.
The founding insight of PingPod was that we could use technology to create a third way. If we could substitute technology (a fixed cost) for labor (a variable cost), we could simultaneously increase capacity (open 24/7) and reduce operating costs.
Fast forward to today and there are 16 PingPods and 5 Sharks using the PodPlay tech stack to operate autonomously – with no front desk and no full-time staff onsite.
We see this same “barbell” setup in many experience verticals, in which there are high-end options with large footprints and low-end options that compete on price, with nothing in between. The competitive landscape is dictated by the economics of these businesses.
If business owners pay high rent and provide a premium experience, then they’ll need the additional margin and revenue provided by food and beverage (particularly alcohol) to make the numbers work.
If they compete on price, then they will compromise on quality of experience and generally need to locate the venue in less desirable neighborhoods, to keep costs at a minimum.
Operating autonomously fundamentally shifts the underlying economics, allowing for a new kind of venue that can profitably deliver a compelling combination of value, proximity, flexibility, and community.
By minimizing variable labor costs, the autonomous model allows a venue to stay open for more hours while adding very little marginal cost. Those additional hours offer customers with busy schedules more flexibility to play when they want, generating revenues that go straight to the venue’s bottom line.
With lower operating costs and more capacity, venues can afford to utilize smaller formats, find homes in more desirable locations, and invest in creating a great space with high-quality equipment – delivering value and proximity to customers.
When combined with software tools to create and promote events, a quality space near where its customers live and work will lead to a greater sense of community.
How is the company doing today and what does the future look like?
PingPod has established itself as the category leader in autonomous experiences by operating tech-enabled Pods and licensing our tech stack to other venue operators. We are VC-backed and have raised multiple rounds of financing.
Our operations today are as follows:
- PingPod operates a network of autonomous ping pong studios with 1-5 tables per Pod, offering on-demand table reservations, coaching, community events, kids classes/camps, and private events.
- As of January 2024, PingPod has 16 locations (9 NYC, 3 NJ, Philadelphia, Boston, Chicago, UK). 3 additional locations (2 Miami + Cambridge, MA) will open in H1 2024. The most mature PingPod units (open > 2 years) are generating utilization >40% (open on average 22 hours per day) and operating margins of 25-35%.
- PingPod acquired the assets of the autonomous pool concept Sharks Pool Club in Q2 2023 and has been able to increase profits 14x since the acquisition. For more on the strategic rationale for the acquisition, see Adding a Second Experience Vertical.
- Sharks operate a network of autonomous pool clubs that allow customers to play pool privately, anytime. As of January 2024, Sharks has 5 locations (4 NYC + Philadelphia) with 8 total rooms, and is generating utilization of 30% (open on average 19 hours per day) and >35% operating margins.
PodPlay Technologies is a wholly owned subsidiary of PingPod Inc. that was formed in the summer of 2023 to license the technology we built to power PingPod to other like-minded venue operators.
Our near-term objective is to become the go-to software solution for the fast-growing pickleball market, and our longer-term ambition is to be the default operating system for all sports venues pursuing the autonomous operating model.
We like to say we are in the business of increasing the quantum of fun being had in the world.
Upon launching publicly in October 2023, PodPlay has quickly established itself as the preferred technology partner for tech-forward venues.
Through starting the business have you learned anything particularly helpful or advantageous?
Trust is a superpower for startups.
We have been able to move fast and innovate because we have intentionally hired a high-trust team.
The best startups share two competitive advantages: they move faster than other companies, and they do more with less. Trust is the critical ingredient in determining these efficiencies. As Stephen Covey wrote in The Speed of Trust, “Trust always affects two outcomes – speed and cost. When trust goes down, speed will also go down and costs will go up.”
The core of a business is making decisions and executing decisions.
Not every decision needs to be made fast – the irreversible ones should be made with deliberation – but the vast majority of decisions benefit from quick action, feedback, and iteration.
To act fast, your team needs to be empowered to decide and act. In a high-trust environment, you have confidence that your team will exercise good judgment. They shouldn’t be afraid to take smart risks. Failure is not fatal. Feedback is the lifeblood of learning.
Slow decision-making is often a function of bureaucracy and processes borne of low trust. If a manager needs to sign off on every decision, no matter how small, the team can only move as fast as that manager’s response time.
Decision execution slows further when it requires coordination between internal teams (e.g. marketing and engineering) that depend on, but do not trust, one another. Projects grind to a halt if two functional teams each think the other is “the blocker.”
Beyond slowing things down, low trust also yields increased explicit costs. Legal bills go up, the compliance team grows, and the focus shifts from delighting customers to managing a dysfunctional team.
What advice do you have for founders looking to raise capital?
Many people think of capital raising as a process you do during discrete periods of time.
Our advice is to think of it as a continuous process that involves communicating a clear vision and giving investors regular updates and data on how it is playing out.
We regularly publish blogs here and here that lay out our strategic thinking and allow investors to follow along on the journey.
If we do this well, investors will already be familiar with the story when it comes time to raise capital, and discussions will be more substantive around strategy and milestones to hit with the next capital raise rather than getting an investor up to speed.
The second piece of advice is to lead with your product. We have been most successful when we get investors into a Pod to experience the technology firsthand.
Going through a deck or a demo on Zoom or Google Meet is great, but when the product is tech-enabled in physical spaces, it is tough to beat the in-person experience.
What are some predictions you have for the industry over the next year?
With PodPlay, we are very focused on the fast-growing pickleball market. In their 2023 State of Pickleball: Participation & Infrastructure Report Pickleheads / SFIA estimate that there are 12,081 Pickleball facilities in the U.S. with an average of 4.3 courts per facility, for a total of 51,937 courts. Over 70% of these courts are temporary.
The report estimates that the U.S. will need to spend $900 million over the next 5-7 years to build 25,800 dedicated courts to reach 1 dedicated court per 500 participants.
We think this market will coalesce around a single default technology solution for managing clubs, and we bet that the winner will combine hardware and software to produce the best user experience.
Integrating software with hardware goes beyond the traditional role of vertical software (venue management) to impact the consumer experience itself in the case of replay and the business model in the case of autonomous mode.
Video replay, as implemented by PodPlay, is a vehicle for authenticity in a world that is progressively becoming more staged for Instagram. As we like to say, “sharing from life rather than living to share.”
Below are links to pieces we have published on hardware-enabled features:
- Blog on Replay Feature: Changing the Game
- Blog on Digital Scoreboards Digital Scoreboards + DUPR
And here is a Podcast I did with PodPlay client Performance Pickleball RVA in Richmond, VA.
The PodPlay portion starts at the 13.30 mark if you are time-constrained.
Are there any particular tools, software, or resources you use to be more productive?
We are heavy users of the Google Suite, Slack, Notion, Hubspot, and Tableau.
What advice do you have for founders trying to run an autonomous business?
We have been open-sourcing the thinking behind our business model to encourage founders to pursue a similar model in other experience verticals (PodPlay will provide the technology), so I would point founders to the following blogs:
And this profile of the autonomous business model in the Nov/Dec issue of Entrepreneur Magazine:
Are there any books & podcasts you recommend?
Books:
- Build by Tony Fadell
- Play Bigger
- Zero to One by Peter Thiel and Blake Masters
- The Nix by Nathan Hill
Podcasts:
Are you currently hiring and if so, where can people apply and find out more?
Not currently hiring but I recommend following along on LinkedIn:
– https://www.linkedin.com/in/borton/
– https://www.linkedin.com/company/podplay-technologies
