Angry Birds: Investing in the Big Game Thursday 30 June, 2011
I recently attended a talk, Angry Birds: Investing in the Big Game, where Chris Dark, Senior Investment Manager at venture capital firm Atomico, spoke about Atomico’s recent investment in the game maker Rovio. Chris also shared some general tips for startups and entrepreneurs in the audience looking to work with VC firms. Don’t worry if you weren’t able to attend, sharing is the rule here at buildabrand.
The Angry Birds franchise (Angry Birds, Angry Birds Seasons, and Angry Birds Rio) has been inspirational as we make updates to our brand builder. We think Rovio tapped into an important idea when they created a game so accessible and utterly satisfying in it’s single-motion use. Finding the mark for a similar mix of engagement and simplicity is what has driven our thinking for all things user experience related as we get closer to launching the second generation of our product.
At the talk, Chris explained some of the thought processes behind the game’s design and was especially engaging in his Q&A. He even gave away a sizable Angry Birds plush toy to his favourite question (in truth, the person he decided was most helpful in answering a tough question).
According to Chris Dark, there are a few things you need if you want to attract the attention of VCs.
1. Potential or opportunity. Seems like a given for most any business, but its importance cannot be overstated. More than just a perceived need, a company’s product or service needs to be all or a mix of: a category winner in a big market, a large opportunity in a big/global market, and/or a disruptive or game-changing technology.
When Rovio set about creating Angry birds, it was designed specifically to capitlise on the early shift to touch screens (iPhones, iPads, smartphones, and tablets). They wanted everyone (2-99 yrs old) to understand the concept from a single screenshot. Instant understanding made it more likely to be engaging to a greater audience. They also wanted a product they could merchandise. If you haven’t seen them around, you can get Angry Birds plush toys, iPhone cases and I think I even heard there’s a cook book on its way!
2. A great product. This, too, might sound like basic common sense, but let’s differentiate between a great product and a great idea. If you have a great idea, go for it! As in, go as far as you can with making it real. Bootstrap and borrow to get it up and running and get it done. With development costs as they are, Chris believes it should be possible to raise 100k from friends and family (I think I need new friends) to get a product created, then take it to a VC. In the case of Angry birds, they had over 40 million active monthly users when they received their Series A funding in March 2011. However, their situation is also a little different from a startup as they’ve been around for several years making pre-iPhone/Android mobile games.
3. A great management team in place. Chris explained that a typical team these days for a startup includes a tech leader (CTO) and a business leader (CEO). On occasion, these skills reside in an individual, but it’s not usually the case. Once the team is in place, they must continue to execute on decisions. Prior to their Series A, Rovio had tested different revenue streams and pricing schedules and had pushed ideas on distribution. Capitalising on the shift to touch screens also meant they could capitalise on new distribution channels, namely app stores. Presence and distribution are key and Rovio has worked to have Angry Birds on all platforms before developing more games.