In knockout (or elimination) events, players start with a limited number of lives or attempts. They then try to set the high score or complete the event before being eliminated.
To better balance such systems, try using the current winning streak or score when matching players against one another. Natural escalation of difficulty will make things easier at the beginning and far more exiting after several wins:
By their very nature, elimination events tend to have a short lifespan, which can be further secured by placing a cap on wins ...