Chess.com is the world’s largest online chess platform. Erik Allebest bought the domain for $56,000 in 2005 and built the site while at Stanford Business School, as co-founder Jay Severson coded after his day job. It opened in May 2007, no investor backed it, and it never raised venture capital.
Two college friends and a game of chess
Allebest and Severson met as undergraduates at Brigham Young University, on the same dormitory floor. Allebest made a cocky first impression. Severson, the stronger player, beat him at chess. Allebest then paid him $7 an hour for chess lessons, and they became friends.
Allebest was an entrepreneur from the start, and his businesses kept coming back to chess. His first was Schoolhouse Chess, which hired college students to teach chess to children. His second was Wholesale Chess, a chess equipment shop that Severson helped build. He sold both before business school: Schoolhouse Chess for about $250,000 and Wholesale Chess for about $1.5 million, by his own account.
A domain at a bankruptcy auction
In 2005 Allebest entered Stanford Business School. He wanted a great domain for an online chess community and went after chess.com.
The domain belonged to a company that had used it since 1995 to sell chess-tutoring software. Allebest first planned to go into business with them, but the company turned out to own little beyond the domain, and it soon went bankrupt. He bought chess.com at the bankruptcy auction for $56,000.
Owning the name gave them an unusual advantage. At the time, typing “chess” into the address bar of many browsers sent people straight to chess.com.
Built between classes and after work
Allebest wanted to build something new rather than live off the domain’s traffic. Convincing Severson took some effort. Severson loved chess, but he doubted there was much money in it, since people do not like paying to play chess.
He agreed anyway, and the two split the work. Allebest handled the front end of the site. Severson built the back end, working on it after he got off work at 6 pm.
Allebest worked on Chess.com throughout business school. He went to class and met people, but his focus was the launch. While at Stanford he also earned money from domain projects, which paid for his studies.
During his MBA he pitched Chess.com to many venture capitalists. None invested.
A community first, then chess
Allebest graduated in May 2007, and Chess.com opened to the public that same month. It did not even let people play chess at launch. The plan was a community: profiles, forums and a home for chess fans who played elsewhere, on sites like Yahoo.
Users quickly asked to play on Chess.com itself. The few companies that already ran online chess refused to partner with them, so they built the technology themselves.
After graduating, both founders worked on Chess.com full time. Allebest met with more than a dozen investors and still could not raise money. He decided to fund the business from his own savings instead. Within about 18 months of launch, Chess.com introduced paid memberships for its learning tools and became profitable.
Never raising a dollar
Once it was profitable, raising money stopped being a question. Allebest has said they never considered it again, and simply kept growing. Danny Rensch, who later joined as a co-founder and chief chess officer, has said they were laughed out of venture capital meetings by people who thought chess would never be big.
For years the growth was steady rather than spectacular. Then chess itself boomed. Between 2020 and 2023, streaming on Twitch, the pandemic and the Netflix series The Queen’s Gambit brought millions of new players. Chess.com added more members in about 18 months than in its first 13 years.
By 2024 it had more than 150 million members, around 700 employees and more than $100 million a year in revenue. In 2026, Allebest put revenue at more than $200 million, with over 250 million registered members. It has still never taken venture funding.
What the Chess.com story shows
- Study time can be build time. Allebest used his MBA years to build the product, and his co-founder used his evenings.
- A great domain is an asset, not a business. They chose to build a community on it rather than just monetise the traffic.
- Rejection forced discipline. No investor would back them, so the business had to pay for itself within about 18 months.
- Patience paid off when the market changed. Years of steady growth meant they were ready when chess exploded in popularity.
More businesses like this one are in online communities that started as side projects, including Product Hunt and Craigslist.
Frequently asked questions
Who founded Chess.com?
Erik Allebest and Jay Severson, who met as students at Brigham Young University. Danny Rensch later joined as a co-founder.
How much did the Chess.com domain cost?
Allebest bought it at a bankruptcy auction in 2005 for $56,000, according to his own account. Other reports put it at $55,000.
Was Chess.com a side project?
Yes. Allebest built it while studying at Stanford Business School, and Severson worked on it after his day job. It launched in May 2007, the month Allebest graduated.
Did Chess.com raise venture capital?
No. Investors turned it down, it became profitable within about 18 months of launch, and it has stayed bootstrapped.
Sources
- Buying Chess.com for $56k and growing it to $200M in annual revenue, Erik Allebest, Indie Hackers
- Chess.com CEO, Chess.com
- How two BYU grads launched the world’s most popular chess website, Deseret News, January 2023
- The resurgence of chess, Huddle Up
- Chess.com co-founder was laughed out of VC rooms, Fortune, October 2025
- The Chess.com memo, 20VC, February 2024
- How Chess.com bootstrapped to $200M revenue and 250M users, StartupHub, 2026
- Chess.com, Wikipedia
