Prediction markets incentivize truth. Everything else incentivizes clickbait. That’s the core argument Luana Lopes Lara makes for Kalshi, the prediction market platform she co-founded that has gone from $5 billion to $22 billion in valuation in under a year and is now being sued by New York’s attorney general for $36 billion. Lara, the company’s chief operating officer, makes the case that Kalshi is fundamentally different from DraftKings—even though 75% of its volume comes from sports—and shares what Kalshi’s data actually says about the midterms.

This is an abridged transcript of an interview from Rapid Response, hosted by former Fast Company editor-in-chief Robert Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode.

Kalshi launched in 2021. Last year at this time, Kalshi was valued at $5 billion. I think by early this year, it was up to $22 billion. That scale at that speed—what makes that possible? Is there luck in it?

It’s a great question because actually, though we launched in 2018, right, in a lot of ways it looks like an overnight success. Like it was all up two years ago, and we just started growing a lot around the election. But it was the result of eight years of work. When we started the company, it was very important for us to be legal and regulated from the start, so it took us four years before we could launch the product, launch anything really, or have any users.

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