DraftKings founders Jason Robins, Matt Kalish and Paul Liberman were in the early stage of forming the company when the web architect they targeted to be its first chief technology officer passed on the job in favor of another startup.
Crestfallen, they contemplated next steps. Though still employed full time at a Boston area e-commerce company, they were far along enough on their idea that they were ready to develop software. Robins, Liberman and Kalish all had computer science degrees, but none had written code since college.
Their timeline would be delayed, if not derailed.
“Paul just looks at us and goes, ‘I think I can figure it out,’” Robins recalled. “Sure enough, he built the original website. He built it and figured it out. I have a computer science background too, but it’s way more complicated than anything I had done in years. Same thing with him.
“He can figure out anything. That’s what he does.”
For the 15 years since, that largely has been Liberman’s role, whether in brief early-days stints as CTO or CMO, or in longer runs as COO or his current job as president of operations, serving as a trusted No. 2 to CEO Robins.
It has been that way since they began cobbling on their idea on weekends in Liberman’s spare bedroom. Kalish was the fantasy sports nerd who wanted to start a DFS site. Robins emerged as the leader, charged with raising the money that would get them off the ground. Liberman saw himself as the “glue” between them, the “how do we go from here to there type of person.”
“To this day,” he said, “that’s sort of what I do.”
Born in Belarus, Liberman fled the former Soviet Union with his parents and older brother when he was 5, passing through Austria and Italy before securing U.S. visas and settling in Rhode Island in 1988. His father, a “gadget person” who passed him that gene, found a job as an electrician. His mother became a hairdresser. He entered the country knowing four words of English: Father, mother, sister and brother.
Liberman was 10 when his parents bought their first home computer. He tried a few games, but found he was more interested in dissecting the machines than playing on them. Before long, he was teaching himself to program, proudly showing his work off to his parents when they got home from work.
“For me, taking the computer apart and putting it back together was more exciting than playing the games,” Liberman said. “I’ve never been a big gamer. What fascinated me was more the problem solving and building. I’m a builder. That’s what I love to do. I’ll build anything.”
Liberman didn’t play sports or even give them much thought. After graduating from high school, he followed his older brother to Worcester Polytechnic Institute, where he majored in electrical engineering and computer science.
“As refugees, we really had very few options of what our parents allowed us to do,” Liberman said. “You were either going to be an engineer or a doctor. Go figure out a practical skill where you’re going to make money. I didn’t like chemistry or biology, so [engineering] was the path I was going down.
“Those were the truths of my upbringing.”
Liberman met Robins when both were in analytics at Vistaprint, a greater Boston e-commerce company. Over drinks after work, they’d gripe about their jobs and volley ideas for the next big startup. When Robins and Kalish approached him with an idea for a daily fantasy site, Liberman was intrigued. He offered the house he shared with then-fiancée Rachel Nager as a site for a Saturday planning session that ended up consuming most of their weekend.
After about a year, all three quit their jobs to focus on DraftKings.
Liberman’s parents were shocked when he left a stable and promising job to work full time on DraftKings. When he told his mother they’d made $40 on their first day in business, she asked, “How much?” When he repeated himself, she went quiet for a few seconds. “Well,” she finally asked, “What do you do now?”
“Fortunately,” Liberman said, “she had trust and continued to support.”
DraftKings has succeeded despite patches of extreme turbulence. Three years after launching, it endured a highly publicized illegal gambling investigation that prompted Liberman’s bank to close his accounts the week before Christmas. When it shifted from DFS to sportsbook, many expected it to be out of its league when competing against the legacy Las Vegas casinos. It went public during the COVID shutdown, with its staff working from home and revenue slowing to a drip.
“He comes with a co-founder’s mentality,” said Mike Morrison, vice president of betting and fantasy at ESPN. “He’s been in the chair, with a front row seat to everything that has gone on over the years. He’s not always the most public figure externally, but it has been very clear to many of us that he’s been a big driving force together with Jason on everything that they’ve developed.”
Of late, DraftKings’ stock price has plummeted in the wake of the emergence of prediction market operator Kalshi, falling from $48 to $25 in the last nine months. DraftKings launched its predictions offering in December and plans to back it with more than $200 million in marketing spend in the fall.
“We’ve seen this before,” Liberman said. “We’ve had to pivot before. We’ve had to adjust before. Honestly, this is the most energized I’ve been in a while, because this is exactly our sweet spot as entrepreneurial founders: building new things.”
The Stages of Group Development
Paul Liberman, president of operations, DraftKings
Liberman often mentions the four stages of group development when describing DraftKings’ startup. It also can be applied to the company’s path since then:
• Forming, along with co-founders Jason Robins and Matt Kalish:
“One of the special sauces of having three founders is the ability to be honest, transparent and hold each other and ourselves accountable. Less politics and bureaucracy and more transparency and authenticity.”
• Storming, during a 2015 investigation by the New York attorney general’s office:
“You’re on the news. You’re all over The New York Times. You know people are questioning your integrity based on what they’re reading, but they’re not really talking to you about it. … That was really a challenge. You can’t just take the reputational damage and roll over, because then everybody just believes it. So you gotta fight the narrative. Especially since it’s not true.”
• Norming and performing to become an industry leader, now facing an emerging prediction market challenge:
“So many people are discounting us. And that’s no different than in 2015 or in 2018. I’m like, all right, let’s go. Let’s get after it. Because this is where we shine: Proving people wrong when they write us off.”
