Sports gamblers' site proves a good business bet.

• Author: Taylor, Mike
• Position: SMALL biz - Www.freeunderdog.com

Geoff Kulesa had more than a casual interest in the New York Giants' Super Bowl upset of the New England Patriots back in February. So did a lot of the 100,000 subscribers to his e-mail newsletter.

Kulesa operates Wunderdog Sports Picks, a sports prognosticating service, out of his house in Golden. Last year his website, www.freeunderdog.com, garnered more than a million visits and 76 million page views.

Wunderdog's free opt-in newsletters include a complimentary pick to demonstrate Kulesa's sports-picking prowess and convince bettors a full package is worth paying for. Many decide it is. In addition to nonpaying newsletter subscribers, Wunderdog has 500 to 1,000 customers at any given time who pony up for additional picks in a given sport--$20 for one day, $75 for a week, $199 for a month or $500 to $600 for a full season.

It's added up to some staggering growth for an activity Kulesa used to do for fun when he was a business major at CU and grew to the point two years ago that he quit his job as VP of marketing for Service Magic, an Internet lead-generation company.

Wunderdog revenues have gone from $5,000 in 2001 to $70,000 his third year to $700,000 last year. He foresees revenues topping $1 million this year with a lean team that consists of two full-timers--one for website development and another for customer service--plus a contractor in Connecticut, Russ Laribee, who goes by the name "Mr. East" and helps Kulesa with the game picks and writing up the analyses. About 85 percent of revenue comes from paying customers, the rest from advertising.

Kulesa says Wunderdog's winning percentage is 55 percent to 60 percent, which doesn't sound great until you consider he's picking against point spreads set by Las Vegas oddsmakers whose aim is to adjust the spread until there are roughly equal numbers betting on each side.

Kulesa, who has an MBA from Northwestern, spent eight years with Hewlett-Packard before moving on to Denver-area startups SafeRent and Service Magic. His lean approach stands in contrast to the venture capital-fueled startups he witnessed in the late '90s.

"My goal was to have something profitable from day one, be very conservative about spending any money and just seeing where it went," says Kulesa, who is married with three kids.

One reason he believes Wunderdog has grown is because of the attention he pays to customers, especially when they have a losing week.

"Inevitably...