Andrew: Hey before we get started if you need a web app build, or mobile app build, who do you call, check out Kumbia.com. They’ll take your idea from Power Point to product in just a few weeks. And when you go to Kumbia.com, I recommend you look at that top tab, the one that says, Work on it to see their previous work. And understand what Kumbia can do for you. From a minimum viable product to a full blown web app. They have you covered. They work on Ruby on Rails for web, they can build an IOS or Android app for mobile. Kumbia.com
If you need a phone service, phone number, who do I recommend? Grasshopper. com. Because with Grasshopper.com, you can get unlimited extensions. That means that when a caller called your company. They can basically be screened, before they come to you. If they’re looking for sales, you direct them to on place, if they looking for tech support to another place. If you looking to just get on your blog, maybe they go into voice mail, and you can respond to them when you have a chance… Lots of extra features at Grasshopper.com, that’s one of my favorites. Go to Grasshopper.com, and understand why the virtue phone system that they create is one that the entrepreneurs love.
Finally, if you need a lawyer, as a tech entrepreneur, you need to talk to Scot Edward Walker, of Walker’s corporate law. Why, because if you go to the high end law firms they are going charge you an arm and a leg and probably expect to take a piece of your business. They want shares in many cases. Or if you go to the mom and pop law firm, the one that your friend recommends. That lawyer is probably not going to understand issues that you go through as a tech entrepreneur. I recommend go to the guy who specializes in start up entrepreneur, Scot Edward Walker, of Walker Corporate law.
Here’s program.
Hi everyone, I’m Andrew Warner. I’m the founder of Mixergy.com. Home of the ambitions up starts. A place where entrepreneurs come to tell you how they build their businesses, so that you can get some of their ideas, go out there and build your own company. And hopefully do what today’s guest is doing, which is come back and share your story.
How do you let pirates grow your company?
That’s the question that I got coming into this interview.
Joining me today is Alok-Kejriwal, he is the founder of Games2win, a top online game company. When he discovered that people are actually pirating his games. He came up with a clever solution, that spawned a new company, INVISI-ADS.
I invited him here to find out how he did it, and how he builds up his company and as much as I can about his entrepreneur back ground.
Alok, welcome.
Alok: Thank you.
Andrew: Where are you by the way? I see a hotel room over your shoulder, people are going to be wondering.
Alok: I don’t know where I am. My body is in India, because I live in Mumbai, but I’m in Seattle right now. So my brains are with you right now.
Andrew: We scheduled this to, we wanted it to be, since you’ were doing this interview all the way from India, we wanted to accommodate your time.
Now that you’re in Seattle, where are you?
What time is it?
Alok: It’s sharp, right 7:00 a.m.
Andrew: 7:00 a.m., you got up to do this interview, I appreciate it.
Alok: Thank you.
Andrew: So how many users do you have at INVISI-ADS?
Alok: It kind of fluctuates every month, from 11 to 15 million, as we hit the summer month.
And obviously November, December month is the INVISI-ADS traffic peaks.
These are com score numbers recorded on a panel that they called Extended Media.
And it’s just a volume of people who play our games and have installed it.
Andrew: What does that mean?
I kind of talked about it in intro, but help my audience understand.
Alok: So we make a very simple, easy to play flash, casual, snaky games. And these games usually appear on sites we license these games to.
But like the way the web is, people take those games without asking, wither us, or the people they saw the game on, in other words they scrape the game. The more direct way is to say they steal our games.
But having said that, they take the game away, and they put that on their site, or amateur blog, whatever they want. And because it’s a flash file, nothing can really be done about it.
So I think its more entrepreneurs of you to say, ‘Web is free, we can’t stop the web from what it is, can we actually leverage the fact that this happens’.
My partners and I said in a way why does it get stolen right? The fact that you are doing something, creating something valuable is what gets it stolen. That’s a positive way of looking at it.
So why not use that free distribution, because buyers are the best distributors of your content, and we put invisible ads in our games, so that on our partner sites the ads will remain invisible.
And when the game got stolen the ads will become visible. And so [TD].
Andrew: So what kind of ads do you have in the games?
Alok: You know, we have all kinds of ads because there are linked to a live server. We know where they are, we know what time they are being served. We can even do some frequency capping, depending on how the website has embedded the game. But we usually run a combination of house ads and commercial ads, depending on, you know, the kind of interest there is at that time.
Andrew: In preparation for this interview I started playing your games. The one that sucked me in (and I think this will give people an understanding of the kinds of games you have), it’s a game called Flirty Fiona. Now Flirty Fiona, in that game I am Fiona, and I walk around, I guess, the mall or something, or maybe a high school. And my job is, as guys are attracted to me, to make them more attracted, so then hey slavishly follow me. And then I think at some point they were elevating me and lifting me up in some kind of chair. Anyway, I won for a little bit before I lost. So that’s the kind of Flash game that you’ve got.
Alok: Yes.
Andrew: Quick to get into, kind of addictive (unfortunately for me), and it’s very simple. What ad would you have in that? Would you run a banner ad? I didn’t see any ads on there.
Alok: You know, we actually do pre-roll video – and you won’t believe this – it’s one of the most effective ways of monetizing pre-roll video, because it’s before a live game, which is, you know, a video format in almost, in whichever way you look at it. And it’s a 15- or 30-second video and it’s a pre-roll video with a companion ad. So probably you skipped it or it didn’t load up. Effectively, it’s our most monetizable kind of ad unit today on the site.
Andrew: I see. And if I were to steal that game and put on Mixergy.com underneath your video, an ad would come up – a pre-roll ad.
Alok: Absolutely.
Andrew: Gotcha, I see. OK, I’ve got a sense of it. All right, let’s go back and actually, let’s understand just a little bit more about where you are now, and then I’ll go back in time and figure out how you built this business. What size revenues are you guys doing?
Alok: In a way we’re still struggling, breaking out of the under-$2 million revenue. I think it’s been kind of a challenge to build a business on advertising, but I think that the approach has been let’s build a large, humongous audience, and an addictive audience, and then let’s start reaping the benefits of having that on our site.
Andrew: OK. And profitable?
Alok: Yeah, it is profitable, but we still spend a lot of money in doing new things. So I would say P&L profitable, R&D not profitable.
Andrew: Aw, yeah, that makes a lot of sense. You want to reinvest in the business instead of paying taxes on the company.
Alok: Absolutely.
Andrew: And locking in the gains that you’ve got. What else do I need to know before we go back in time? Funding – what kind of funding do you have?
Alok: We are very lucky, you know, we have funding from two VC’s I really love, and this is the first time I’ve fallen in love with VC’s. One’s a partner called Clearstone Venture Partners from Santa Monica, and the other one is Silicon Valley Bank from Palo Alto. And they’ve done a Series A, which they kind of extended a little bit a quarter back, so yeah, we’ve just technically done one round and we haven’t needed money ever since.
Andrew: Oh, wow. Actually, I think I know your investors; Sumat [SP], right?
Alok: Absolutely, absolutely. You’ve interviewed him and I’ve seen that show and it’s awesome.
Andrew: Oh good, cool. All right. So you said you love your investors. You and I before the interview started to talk about some of the drama you’ve had in a past company.
Alok: Yes.
Andrew: Tell us about that.
Alok: It was a very unique situation. It was a cocktail of German, Chinese and Indian entrepreneurs getting together, so, you know, this company was Mobile2win. It was in Shanghai, and we were the entrepreneurs that had started that company out. SoftBank had incubated us in China, and Siemens had become the lead investor. So I won’t say that the ideal mix to have in a boardroom, because three people speaking three languages is not perfect in terms of the way conversation goes. But I think conceptually, I think as a business matures and as a business begins to stretch itself in different ways, entrepreneurs and venture capitalists have different ambitions. And it adds a complexity when you have a management team that is not yourself, which has another kind of ambition.
So, long story short, it was like the biggest party and the nerve-wracking session I’ve had in one day; quite a strenuous but unforgettable board meeting.
Andrew: And they wanted you out, if I remember, right?
Alok: That’s right. I think the thinking was, you know, this guy’s hogging up a lot of my cap table; he’s not really contributing to the business because he’s not an operating guy. We’ve got enough people involved to run this business going forth, so let’s get him out.
Andrew: How do I avoid – but it ended up being OK for you, but how do we avoid that? How do we avoid running a business being a part of it, loving it, and then one day having somebody say to us, “You know what? You’re not really a part of the operation anymore. We don’t need you as much as we need other people. Get out.”
Alok: So, I honestly introspect and reflect on it and I think it’s for us entrepreneurs to accept that rather than fight that.
Andrew: Really?
Alok: Yeah. You can’t be married to your emotional self and say, “Look, I want to run my business because I think I’m the best.” You’re not. I mean, maybe you’re not. I think what’s really important is to preserve the economic condition of that business and to make it flourish, and as long as you can make sure that, even if you’re being ousted or if you’re being removed or if you’re being retired, that happens, if the company still flourishes you should be OK. The trouble is when it seems to be going in a downward spiral and you can’t do anything about it, that’s when it hurts the most.
Andrew: What do you mean by “the downward spiral”?
Alok: I think if operating the team and the venture capitalists want to take an undue risk in the company, if they think that it has to follow a direction that you intuitively believe. Entrepreneurs, we know things people don’t know. Right? It’s like [??] who know it’s going to rain. Nobody tells about how it’s going to rain, but you know it’s going to rain. So, when you see that kind of friction happening you are [??], but you do the best you can in terms of warning everybody and then you just kind of sit back.
Andrew: It ended up actually working out OK for you. Right?
Alok: It was the most amazing piece of luck I’ve every had. Really, really good. We got out rich and we got out famous. We sold our companies to Disney and to Norwest, and it couldn’t have been better now, thinking about it.
Andrew: And, do I understand this right? Didn’t you cash out yourself before?
Alok: I did. I think, the way the deal was structured, it allowed me to cash out myself. So, at least I saw some money. I mean, I could go back to my family, my living room, and say “Hey, I actually made money guys”. It was a sweet outcome and the kind of learnings I’ve had is phenomenal.
Andrew: So, they said, “We don’t want you here anymore. We don’t want you to own a share of the business anymore. We’ll give you the
money and just move on to the next stage of your life”, and that’s what you did. The company afterwards, if I understand this right, was a little bit teetering and, if you would have waited and hung on, you wouldn’t have ended up with anything.
Alok: Absolutely, and, just to add the final nail to that coffin, they said all that that you said to me, and they said, “Hey, you’re going to sign this paragraph that says you can’t even compete with us for three years”. It got even better, but I took a deal that I thought was bad at time which really turned out to be sweet now.
Andrew: That really goes to show that sometimes the things are the worst part of our lives ends up taking us in the best directions unexpectedly. What was the company’s name?
Alok: It is called Mobile To Win.
Andrew So, you’ve got Contests To Win in 1998, you’ve got Mobile To Win in 2001, then Media To Win 2004, and Games2Win you launched 2006. I’m seeing a pattern here. Why the pattern with the names?
Alok: You know, it works for me. It is a lucky charm with To Win. I come from India and a lot of people recognize me from that To Win brand name. So, I’m that To Win guy. In a plane, “Aren’t you the To Win guy?” So, use what you’ve got. Right? I’m a [??] brand.
Andrew: OK. And, you’re allowed to do that, to just take the format of the company name you were with before and take it to this company.
Alok: That’s a great question, actually. I’ve made sure that I’ve kind of retained the rights to use To Win. It’s actually my brand rather than anybody else’s, so, yes, I do have the right.
Andrew: It really is very catchy. I remember even when I first met the Clear Stone people, I think it was then, I went on to their website and your company name is one of the ones that really stuck with me. In fact, I can’t think of another right now.
Alok: It’s because everybody wants to win, so why not companies?
Andrew: So, then what did you do in the time off?
Alok: There was no time off. I jumped from one ship to the other. Rather, I jumped from the cruiser to the raft. Right?
Andrew: So, they said, “You can’t compete with us but you can do something else?”. What was the raft that you jumped onto, as you said it?
Alok: So, I jumped off everything to do with mobile and I jumped onto online games. At that time I thought it was a really interesting opportunity to kind of start looking for the browser for games rather than PC console downloadables and so forth.
Andrew: The browser as in the mobile browser.
Alok: Actually, no, the PC browser.
Andrew: The PC browser, I see.
So what steps you took when you first started the new business?
Alok: So we did everything that we hate. We made a list of everything we hated doing in those eight or ten years. Actually seven or eight years of being entrepreneur, doing things for ads, and taking orders that we never believed in. Doing small projects for people just to make money.
So we made this big list of, we hate these things. And we said, the company we’re going to do is exactly what these things are never going to be.
So we reversed all our bad learning, turned on its head.
But I think fundamentally the concept was that, games are really going to be casual, they are going to be snaky, they’re going to be nibbled upon.
They’re just going to be consumed when you want to, when you have a minute of time here and there.
And let’s be constructive of the concept of saying, I need a big machine, a big console, and also appreciate in India, it’s not easy to sell consoles, because homes are small and congested. Parents are looking over you all the time saying, “Hey, you got to study more, don’t play games”, so I just thought we took these train of everything being on the net and try to leverage games on it.
Andrew: What about the business model behind this?
It’s one thing to say that people are going to play games, but from what I understand about you, you’re very good about just understanding the business, and seeing the aerial view of it.
And knowing where the customer going to come from, what the customer need to do, where the revenue is, you’re nodding a lot, I’ll stop and let you answer.
Alok: That’s awesome right, I mean, I think you’re right. I think the key inside we had was, we have to make games for the globe, for the world, we can not make games for India.
But unlike a lot of Indian company that sells their services or work on higher resell, we would use Indian cost to create international IP.
And the arbitrage is being exactly that, it’s a value arbitrage, it’s not a man out arbitrage. If you know what I mean.
Andrew: So you’re saying if I’m understanding you right.
We’re going to use outsourcing Indian labor, but we’re going to live in India.
So that handles the cost of producing the games.
What about the thought of, you were going to get the players, where you were going to bring the revenue in, and so on.
What did you imagined before you launched?
Alok: So I think people are very clear, that Mumbai is very cosmopolitan, I look at it as Shanghai meets New York, meets Hong Kong. It got its unique culture and we got Hollywood.
I think it really understand global entertainment teams.
So we put our heads together and said where the generic teams we can work with for young audiences, that just being girls and boys.
And we found dress up and we found romantic game that you played.
Just parking cars. I mean you can give a guy a car to park online and he would park it for 10 hours.
Andrew: You know it’s so ridiculous…
First of all before I continue with this question …
Why is it that I played that Fiona game, and just got hooked?
All I need was just to go in and check it out for a minute and then move on, and do the rest of my research, but I just kept playing.
What is it about this games that suck people in?
Alok: I think that it’s a fact that you can understand it less than 10 seconds.
And it’s visually a delight. It’s not so much anything else, it’s just visually fun, you’re moving an animated person and she or he is doing what you want him to do.
And it’s kind of fun to do that. It’s almost like a bed that looks nice and then you’re in an environment that does something.
Andrew: I see, if I can master it quickly and it looks kind of fun, then I just keep engaged with it.
Do you think that works in other areas of life, like can I make his interview so easy that people feel like they understand your business, No?
Is there a philosophy here that we can take beyond game creation to make things as addictive as Games2win games are?
Alok: You know, I think we can, I mean, Steve Jobs exemplifies exactly that.
There’s no instruction, I don’t even know if there is an instruction booklet in his products any more.
So I think if you can look at it, touch it, and feel it, and move it, I think you’ve done it.
Andrew: That’s right. I guess you’re right.
And it’s true, whenever I get mastery quickly I feel a little empowered. I feel like I just want to keep engaging with it.
Alok: Exactly.
Andrew: So that explains the kind of audience you wanted.
But how do you get it?
If I were to launch beautiful games right now, compete with you and have them just as addictive, just as interesting, no one would know about them.
How did you plan to get all those people who are going to play your games?
Alok: That’s a great question again.
We leverage the fact that international, especially US media companies that need, or hungry for a lot of content. The Viacom’s, the Yahoos and they are the big brands that you and I see everyday.
We became their preferred partner.
Andrew: I see. You said, we’re not going to be destination, we’re going to go to the people that already have our audience, we’re going to partner up with them and just create games for them
Alok: And because we retained IP, we retained our wrapper, and the GamesWin branding.
The people who got exposed to our games on their channels, then to began to
come to our site. So, we piggy-backed our growth on our media partner’s
back side.
Andrew: Interesting way to put it. They pay for you to develop the games. You brand the games. You wrap them up. You link back to your site, and They just put them up on their site.
Alok: Absolutely. It’s beautiful because we always own the I.P., and the final part we forgot was all those games get stolen. And once they get stolen, they can not increase the volume, and they will not steer trafficto our sites.
Andrew: So, if I play a game on one of your partners’ sites, no ads, because
the partner pays for it.
Alok: Absolutely.
Andrew: OK. How did you find the partners? Who’s the biz-dev whiz who made all these deals? Am I looking at him?
Alok: It’s a guy called Google.com. You just start Googling everything you want to do. You find out people who have your content, and you start meeting them. So, we e-meet them, and then we go and physically meet them.
Andrew: So you started Googling to see who’s running games already?
Alok: Absolutely.
Andrew: Who’s the first company that you met with?
Alok: Addicting Games, Viacom, California.
Andrew: Addicting Games is a Viacom company?
Alok: It’s the largest U.S. destination for teen-aged boys and girls for casual games. We struck up a conversation within the first three or four weeks of starting up, and they’ve been our biggest and our best partner so far.
Andrew: And did you just cold e-mail them, or you just sent them a message?
Alok: I sent them a game.
Andrew: A game. How?
Alok: Everybody now has a ‘contact us’ if you have something interesting, let us know. We had this really funny game called Bombay Taxi, which was parking a taxi on the roads of Bombay. It was the most exotic and funny he’d ever seen. We just said, ‘Take a look at this, maybe you’ll like it.’
We got a report back saying ‘We love it.’
Andrew: That’s interesting. So, let me see if I understand this. Your biggest customer came to you because, essentially, you used the ‘contact us’ page on their website. You just sent them a free sample and said, ‘This is what we’re able to do.’
Alok: Absolutely. I think, Andrew, reaching out to people is much simpler than we make it out to be, and we just complicate the process so much. Everybody needs something interesting if you can send them that.
Andrew: I do think we over complicate it, but I think that there’s a lot to what you did here that we can learn from, and I don’t want to just brush over it. That fact that you just went and you reached out to them, that’s impressive. But, you didn’t just say ‘Hey, I can create games for you.
I’m in India, so I can probably do it cheap. Goodbye. Contact me.’ You said, ‘Here’s a game.’ Let them play it. Let them see what you do.
Alok: Exactly.
Andrew: All right. So then what’s the next step after that? After they saw it, and they liked the game, what’d they do?
Alok: We began a trade-off with these games. We did one, then we did two. Then I said, ‘Hey, I’m in San Francisco, and I want to meet you.’ There was no trip planned to San Francisco, but I pretended, and they said, ‘OK. Come over.’ That’s how a good meeting guy starts his meeting.
Andrew: All right, I see. So, you asked them to pay what kind of deal? I wrote down the things you didn’t want to do – you didn’t want to work for Brant [SP], you didn’t want to do small projects. How did you ensure that this was a big project that you’d get excited about?
Alok: Awesome. I think what we figured out was that a lot of these large media companies were exhausting their game budgets very quickly, because they were buying, or renting, games from U.S. developers. The cost of the economy is high here. So, we though of that as an Achilles heel, and we said, ‘Let’s attack that.’ We went down to a deal where we said, ‘Don’t pay $5,000 and $10,000, pay us $1,000. How does that sound?’ And they were shell shocked. They said, ‘Are you serious?’ We said, ‘Yes, we are serious, and not just one game. So, we increased velocity. We reduced the prices 1/10th, and we just said, ‘It’s the same vanilla licensing deal. We’re not ever going to give you the game. You will have to bear with our branding, which is clickable. And it’s a win, win, win.’ And they said, ‘Sure, let’s go ahead.’
Andrew: How did you do market research and know what your competitors were charging?
Alok: That’s what I’m really bad at – I don’t do market research. It’s intuitive. It’s my business. My view is, let’s do stuff that makes sense for me, or for us, as a business. I’ve learned over the last 10 or 12 years that it almost always begins to be market sensible. I’m not one of those data guys who ponders over reams of stuff and says, ‘Hey, this is what the best price should be,’ because it’s too late by then.
Andrew: You know that your competitors were charging multiple times what you were charging. You knew that you coming in with $1,000 per game would just blow their mind. How did you know that? What kind of research did you do to get that information?
Alok: It’s disruptive, right. Anything you do that’s disruptive, look at it
like a free drink at a bar, everybody runs to it.
Andrew: I know it’s powerful, but if I’m looking at this business, I don’t know today, what a site like Addicting Games would pay a company like yours, or what they’d pay American developers. How did you even know that, did you know that from experience from a past company, or did you call up your competitors before hand and pretend that you wanted a license?
Alok: We didn’t do either. I think that a lot of disruptive humongous ideas that have ever been done before, whether you see free email or anything that’s been out on the web for free. I think an entrepreneur is always come back by saying, if I do this for x dollars, of course it has to be disruptive, let’s go for it, and let’s see the market respond from this.
It’s like Amazon (________) is being free for you to host. They know it’s disruptive and we’re all flocking to it.
Andrew: I see, so you didn’t know what your competitors were charging, you just knew that you were going to charge so little that no one was going to keep up with it?
Alok: We call it a no-brainer, just make everything a no-brainer.
Andrew: How are your partner sites going to monetize the games you created for them?
Alok: They are very, very, established well known media brands. They have humongous armies of sales people who pound Madison Avenue everyday getting monies out from those advertising agencies. And they really need fresh content that they can wrap adds around. You know they really know how to sell high CPM’s and licensing a game from us was like almost nothing in terms of the cost, so it just worked out beautifully. I think it’s just being able to understand like you said, if an entrepreneur can step back and think, how does the business model of online games work. And then you break it up saying the big guys will sell the big ads, the small guys like me can make the small games and you fit that as a jig saw, it makes magic.
Andrew: And so they’re going to run ads not within the games themselves, but around them, the full page adds that are background, the banners, all the standard stuff that we know. So, you get your first customer, how do you celebrate?
Alok: We made more games.
Andrew: At what point did you talk to Clearstone and other investors and decide I’ve got to bring some money in in order to grow this business?
Alok: India is really buzzing right now and we’ve had this kind of constant stream of men in suits who fly in from California, and from Menlo Park. At that time, Clearstone had begun scouting India as a natural place to be, doing venture capital business. And when we pitched to (________) and we said look, we want to be this unique Indian/US corridor company which is not going to relying on a market called India. I think he was smitten. I like this concept, no one’s done this before, and we like to take bets on new ideas and it was love at first sight to be honest with you, it was just instant.
Andrew: How did you meet him?
Alok: The usual circuits where people get to know each other, and one introduction lead to another, it was simple.
Andrew: I know in LA they throw parties at Clearstones offices, have you been to any of those?
Alok: I’m a conservative guy, I come from India where everything is by the book and you don’t touch a drink until it’s like 7:30 p.m. And I ended up at this first Clearstone party at 3:30 in the afternoon, on a Wednesday and there was wine being served, and I was shocked, I was saying am I invested by the right people, but I’m so happy.
Andrew: They have really well curated events to, beyond the fact that it’s a fun event, beautiful office. They pick people who are doing stuff, who are doing interesting things. Which sometimes in LA if feels like it’s tough to find. Not that there’s nothing being done technology wise or that there’s no new innovation. It’s sometimes hard to find because what you see are the people who are Hollywood. So Clearstone ends up with these great people.
You find the first partner, how do you grow to the next, and the next and the next, still, you, you, you, making these email introductions?
Alok: I think the Indian back-end is really now powerful. A lot of the back offices as you know are already run from India, with lots and lots of very, very polished English speaking people with great communications skills who can reach out to multiple partners. So once my co-founders and I had kind of curated this engine we set it loose and we said look, the worlds at our beck and call, just go out there and mail 5000 companies and let’s get them to work with us.
Andrew: Wait, you told who to go call up 5,000 customers?
Alok: Yeah, just like a core team, right? We just hired [??], and we hired people who are passionate about games. And we said, “Here’s Google. Here’s the e-mail. Here’s what you’ve got to say. Go right ahead.”
Andrew: So, basically you created a telemarketing operation, more or less.
Alok: Like an e-mail marketing.
Andrew: OK. I’ve got to go into this. How did you put together the list of potential customers?
Alok: Oh, there are lots and lots of databases on the web that allow you to scrape and lead you to beep and what they are doing and who’s in charge. You have this wonderful website called LinkedIn where you can look at everybody and everybody. That’s for leverage.
Andrew: Did you do that yourself, or who handles that?
Alok: It’s the same guy.
Andrew: Same guy, so outbound goes by the guy? He gets a response. What does he say about the response, if I had an email we might be started in teaching?
Alok: He puts that person onto an account manager or to a content manager, saying I’m so happy to meet someone he is actually going to take the call.
Andrew: And that why anyone who can close the sale gets on and builds a relationship.
Alok: It’s like a relay race. We’re always running this relay. One guy’s running the first 400 meters and then he passes the baton on.
Andrew: Who gets the baton afterwards? So, we know the first guy. We know the second guy.
Alok: It’s the third and fourth. I’m the fourth guy who’s physically running the baton in America, so I’m jumping from conference to conference with that baton, meeting people. But I think the third is a senior guy in the system who really knows what clients could end up with and what their aspirations can be. So, he’s almost like marketing director level or content director level guy or woman who can really craft the need and then serve it.
Andrew: This is really interesting. How many people did you have contact all those prospects?
Alok: So, we had like an army of five people constantly e-mailing people out. That team remains intact. It’s grown to about seven or eight people.
Andrew: You still will do this. You’ll still reach out to people and say, we want to partner with you.
Alok: Absolutely. I mean, games are the hardest things that’s ever happened to the Internet in the last three years, and everybody wants games now. So, in a way it seems . . .
Andrew: They’re all willing to pay it. Whatever it is, they’re willing to pay it.
Alok: Yeah. Everybody has a deal. Everybody has a requirement. Everybody has a need for games, and we’re very flexible because we are a startup and we look at the need and say, look, if it’s a trial customer, someone who can give us a lot of exposure, someone who comes back and says they’ll pay you anything. There are people who come back and say, pay us money. It all depends on who you’re dealing with.
Andrew: And you have to deal with them. Each one gets its own deal. So, it’s not necessarily they pay you for the right to carry it. If they don’t pay you, what else is there? What are the other options?
Alok: I think we do a lot of co-branding deals. We don’t allow them to do advertising around a game. They say, can we put our own ads in the game and so on and so forth? As long as we can leverage our asset to get back traffic or money or both, we’re happy.
Andrew: I see. All right. So, people are starting to copy your game at some point. What year is this roughly when you’re saying, we need a solution for all this piracy?
Alok: It’s exactly six months from going live with Games2Win. We had Bombay Taxi, the game I mentioned. It became an instant hit on Viacom [SP], and we were seeing a lot of traffic coming back to our site because of the click through. You wouldn’t believe it. One day that traffic just fell off the cliff. I mean, literally it dried up. From 3,000 visits it became 300, and the next day it became 30. And Viacom’s removed the games from the home deck, and when we looked back it was still there, what’s going on. And when we look it up on Google, about 350 sites had stolen the game. So there was so much of that same content on the web, nobody was looking back to the original destination, and that’s when we said we’ve go to solve this problem.
Andrew: How did your competitors solve it?
Alok: A lot of them unfortunately are in a protective frame of mind, they want to DRM their game, they want to say hey it’s my game you can’t rob it. If you rob it, the game will deconstruct, or self destruct.
Andrew: So they had a game that just didn’t work on anybody else’s website, except where it was supposed to.
Alok: I think it’s a curse you put onto yourself, because you want the world to know your game, so let it be free and let it roam out there.
Andrew: Now that doesn’t solve the problem for Addicting Games for example for Viacom, because Viacom had this hit game, it’s terrific, everyone loves it, people started to steal it, and they’re now playing it on Viacom site, you’re happy because you’ve got the new invisi-ads on there, but what does it do for your partner site like Viacom.
Alok: That’s a very good question, and we’ve actually begun to license invisi-ads to some of the larges media companies. Warner Brothers has used it to claw back traffic to their site. I think the challenge is, a lot of these large media companies are engrained with the philosophy that we should not allow piracy to happen. It’s taken some time to convince them that piracy does happen and you have to accept it and do some (________) and not prevent it, so that’s the challenge.
Andrew: But that still doesn’t solve the problem for the host company the one that just paid you to run your game, and now your game is no longer popular because it’s bringing you revenue from all these pirate sites.
Alok: You know you’re right. In a way I look at it by saying this is not a one title games business. This is a huge momentum velocity business, it’s like the news business. You know, news gets stale and I think the challenge is just to make lots more content so that it keeps the ball rolling and use the long tail of games to [??] you know which remains stuck on many sites to just build brand and traffic. That is the way the web is, you can’t change the web.
Andrew: How do you come up with so many hits? I mean Hollywood, the most professional hit makers in the world can’t get it right all the time. In fact they get it wrong so much some times that their companies get into danger. How do you do it, how do you program hits?
Alok: That’s the most difficult part of my business, and we actually measure everything that moves. We have so many analytical tools within our games to just check on, what’s the kind of color of the dress Fiona should be wearing. What kind of table should the first customer sit on. And we take flash games to a nuclear science saying can we look at everything and anything that happens and it’s been a painful process. We’re not magicians, we’ve learned the hard way, and sitting 12.5 hours [??], difficult, if you’re not sitting in the land for whom were making games.
Andrew: So when you’re saying that you test even the dress color that she’s wearing and the table and so on. How do you do that, do you put that into a small group of people into a focus group and you watch them. No, that’s too expensive right. Do you put it out into the world and then adjust based on the feed back you’re getting, based on the stats is that what you do?
Alok: So actually we put out three versions of the games and consumers see one of three versions and then we see which one has a better uptake and we knock off the other two.
Andrew: I see, so basically A-B testing of the games.
Alok: A-B-C-D.
Andrew: Right. As many as you can get in there. Now, even there, you still have to have some process for coming up with a hit. You can’t A-B test the core concept right? You’ve got to think about what kind of concept is going to be interesting enough to get peoples attention, how do we make it in a way that’s engaging. You must have some rules internally. I think it was Business Insider that showed all the different viral hooks that Zenga has into their games. Like their constantly thinking virality [sounds like], and you can see the ingredients or some of them from a distance if you just spend some time looking at the finished product. Tell me about some of yours. What is it that makes a game so addictive, that makes a game so interesting that it becomes a hit?
Alok: Our core philosophy is what we call a slice of life. And we have this huge clock in our office on a white board that describes the life of 24 hours of a tween and a teenager in America, boy and girl. We constantly feed ourselves with content that these kids are watching. Thanks to YouTube and thanks to Hulu we exactly know what content is being programmed for them. And then, we kind of [??], hey, if I want to be in high school five hours a day, then what’s the funny thing that I can do in high school? If I’m going to be walking my dog, what’s the funny thing I can do there?
So, literally try and recreate the life of a virtual teenager in America in our offices and then we say, let’s put a small spin on that. Let’s get a slice of their life and make it interesting and glamorify it to use a very often used word. I think we come closer to the process of holding into the fact that if you serve an audience something that they’re used to every day, they adapt to it. And then, they say, here, I never thought of my high school as a place where I can get flirty with someone that I don’t know and so on and so forth. And so, I think there is a little bit of fantasy that we inject in these slices of life, but that’s the core concept.
Andrew: I see. So, slice of life, people are parking cars, people are flirting at the mall, people are . . . Then, you look at YouTube and see what’s hot. So, maybe, it’s like, a bulldog skateboarding, so you say, let’s put that on the whiteboard. Maybe, we’ll have a bulldog skateboarding game, if that becomes really hot, OK. And then, a little bit of fantasy, so, of course, if you’re the hot girl, all the guys are coming to you, right?
Alok: Yes.
Andrew: What about . . . I talked to the founder of Ivy Insiders about how when he teaches SAT courses, he wants to give people a quick win because if as soon as they come in give them a win, he can make them feel like, I can do this, I can do the SAT. They’re going to give him their attention for as long as it takes for him to really drill in the useful tougher tactics.
Do you do that, too? Do you make sure that within a few seconds the person can win, get a little win?
Alok: Absolutely. And we call that leveling up, so most of these games are about ten levels and the first three levels are designed in such a way that we call . . . the [??] is just so easy and so beautiful that you feel like you’re a winner, right? Hey, I got level one. I got level two. I got level three. And so, four really begins to trouble you, and by then you’re so deep sucked in you want to complete the game.
We take almost instant gratification to a leveling process, and then we start leveling . . . We start saying, now that they’re instantly gratified, why don’t you start deriving enjoyment. And then we start saying, now that you’ve enjoyed yourself and you’re gratified, we’re going to torment you a little bit because you like to be challenged, and that’s going to be the real satisfaction.
Andrew: This is great. I see what you mean. Let’s go through that again, and let’s see if we can fill in even more details. So, first thing you do is you look for a slice of life. Second thing you do is you look to give people instant gratification. Then, you let them level up quickly so that they don’t have to wait to get a lot of gratification before they move to the next level.
Alok: That’s right.
Andrew: Then, you say you torment them a little bit because they want the challenge, they want to feel like they have to figure it out. What else?
Alok: And then, I think it’s essential by the time you’ve gone through level five or six or what, a ten level game, you get the sense that this was not something that was so easy that everybody could have done. Therefore, naturally you want to boast it out loud to anyone who wants to create some vanity around it. So, very slowly and very quietly, the right vanity buttons slowly begin to appear on the home page, which is “Share this. Tweet this.” Tell people how excited you are. Unless you’re like a real genius, you would have not been able to complete a level, so now you are going back and saying, play again
So, you do get a little stuck like between level six and eight because you’re trying to master those levels. And I must admit, there are very few people who do level nine and ten because by then they’ve kind of said, I’m done with it. I’ve had my fun, and I don’t want to spend so much more time just doing those two levels. But it is there for people who really like to go the last mile.
You’ve got the sense of . . . it’s like a . . . You play a cartoon. You enjoy a cartoon, and you made that whole animation something else, something that you could control, so we take that from it. It’s light entertainment. You have ascent control over and you can shape and size as you wish.
Andrew: I feel like a lot of what you’re saying could be used, of course, in other parts of life, like I’m thinking, you hire a new person. Once of the first things you could do is give them that instant gratification, that small job that they could do, and they could feel like they could conquer it. And then, you give them a few . . . you give them a sense of like, now they’ve mastered this whole area or level. Then, they master that whole level, and then you start to torment them and give them the hard stuff that will make them feel in love with and challenged by the job.
Something I’ve been thinking . . . you and I . . . I screwed up the first time we did this interview. I had some tech issues here, I called you and said, ‘I can’t get this working. Do you want to do it later in the day?’ It was something like 6 o’clock and you said, ‘I can’t do it after that so let’s schedule for another day.’ You were very accommodating. It seemed to me like you had a hard stop at the end of the day and I said, ‘I’ve got to come back and ask him about lifestyle choices or time choices.’ I sensed there was something there but we couldn’t talk about it privately so I figured I’d bring it up here. Tell me about that.
Alok: Honestly, it’s unfortunate but it’s work, work, work. By 6:30 or 6 in the evening a lot of US clients come alive. The New Yorkers…it’s almost exactly the time you began the interview. California is now getting started and we start getting a sense of how the day has been in the US just [INAUDIBLE] for us before. So we have a huddle about 6:30 in the evening which is a very, very intense, ‘Is everything on track? Are all the metrics showing green and not red?’ And that’s a really sensitive time in my day where I don’t want to do anything but just concentrate on my numbers and make sure everything is looking fine. I become a zombie for anybody but just my business. That’s what I prioritize.
Andrew: I see. At that point, 6 o’clock you have that huddle every day. What else do you have on the calendar every day or every week that helps organize the company?
Alok: We’ve invented this new idea called ‘grapple’. Grapple is G for ‘growth, R for ‘revenue, A for ‘analytics’, P for ‘product’, P for ‘profile, L for ‘look and feel’ and E for ‘economics. This is a very simple acronym for a business review that we do every day at 11 a.m.
Andrew: Every day at 11 a.m. you look at the growth, the revenue, the analytics, product, economics, look and feel?
Alok: And it’s ‘profile’. It’s ‘grapple’; like, grapple with me.
Andrew: Two Ps, I see. What does that mean when you get together at 11 a.m. with your people and say, ‘We’ve got to look at growth.’ What are you looking at when you’re saying that?
Alok: We’re comparing how much traffic grew from yesterday to today; did it grow? Did we do better than last week, the same time, same day? Did we do better last year, same time same day?’ Day on day, month on month, year on year which is the normal protocol for measuring growth and then we apply that across all the businesses that we run.
Andrew: So you want to know did we grow our revenue for everything.
Alok: No. Growth is only traffic. Then the next one, R is ‘revenue’ so we say, ‘What is yesterday’s revenue position? Did we grow? What’s going on? Has Google become unkind to us and given us lower ECPMs and why? Can we talk to them and say, ‘Can you be a little kinder.’ So on and so forth. Growth is traffic.
Andrew: One of the things that I found when you do these every day is that people don’t take them as seriously. Or they realize, ‘This is a problem we had a problem like this yesterday, we didn’t fix it…’ It becomes this routine, no thought type of meeting. How do you prevent that?
Alok: I actually disagree. We’ve institutionalized this almost like an army call at 6 a.m. We assemble in the yard and we have to report. You can’t take that lightly. I’ve been in the US now for 12 days and just yesterday, just quietly I asked my guy, I said, ‘Hey, how’s grapple doing?’
He said, ‘We do it every day; we’re having so much fun.’ I think it institutionalizes a review process which otherwise is kind of in the air. It’s sacrosanct. We do a Sunday mass every day and you can’t avoid it.
Andrew: But you can’t produce results every day. You’re naturally going to have days when, not only are you going to fail but even worse than that, where you stagnate for a few days and you don’t get anything done and the company still continues. If you have daily meetings where the company still continues even though you stagnated, even though you were warned or you were alerted to this bad data you start to take for granted that everything’s just going to work out. Tell me about some of the issues you’ve had. Maybe instead of me trying to describe an issue that I’m anticipating you can tell me some of the issues you’ve had with this.
Alok: I think you’re absolutely right and to be honest there are more bad days than good days like we all know. These businesses are tough. Review processes every single day just allows us to focus on the problem. And we say, “Look, hey, guess what? Why are we degrading [??] in the U.S. for the last three days?” Now, it turns out it’s the fault of the July holidays, and we don’t know that because we don’t have 4th of July holidays in India.
So, if you look at these three numbers on a consecutive basis and you get alarmed, someone goes up to Google and says, what the hell is going on in the U.S.? And someone is saying, here, they’re celebrating 4th of July. We reach out to people like yourself, our friends, our families saying, is there something wrong going on? And people say, no, they’re having fun, actually. Thank you for asking.
I think the consecutive review of anything on a regular basis allows us to pinpoint the issue, and that’s when we kind of dig deep. And also, Andrew, remember because you train something on a regular basis or a daily basis, you can really spot something happening, that you can prevent some disaster happening before it really becomes a big deal.
Andrew: Can you give me an example of how you did that?
Alok: So, for example, AdMob keeps changing its policies on its IOS ad platform. We look at our fill rates for all of our ads on all of our IOS games, and on a certain Thursday we began to see that fill rates had begun dipping. And Friday the fill rates were frightening, and that’s the same day we were going to release three more games.
When we found out AdMob had said they changed the SDK and we were not up-to-date with the new SDK, they were not even filler ads. We immediately withheld the three games that were going up, changed the SDK in them and then revisited the whole plan. So, saying, OK, let’s review fill rates every week, would have resulted in three new games going up with bad SDKs.
Andrew: All right. I get it. I see that. What else? What else do I want to dig into? I know we only have a few minutes here together. I know what it was. I circled metrics. What metrics are important to you?
Alok: I think, we’re an audience company so we keep measuring the number of people we entertain every day. We’re obviously a company that needs to break even and probably make a little money, so we want to make sure that we’re profitable, if not very profitable so, at least, we’re keeping the company together.
And I think most importantly by saying, I’ll be going where the trend is. Are we on the right track with IOS? Are we on the right rack on Android?
Andrew: I see.
Alok: These are the three things we’re measuring, right? I guess that’s what my attention is spent on all day long.
Andrew: All right. You tell me, actually. You know what, here’s the problem. We didn’t hit on any big challenge that you had, that you struggled with. And so, I’m worried that maybe we left people with the sense of… We didn’t get the depth of your experience. Tell me about a challenge where unlike the one challenge that we talked earlier where everything worked out and you ended up doing much better than if you hung onto the shares in the business.
Tell me about one of the challenges that you were wrestling with that was a little bit harder, that maybe you didn’t do so well with.
Alok: I think, it just, even within Games2Win. Let me go to the biggest challenge companies like mine have, and that’s Facebook. When you have a quarter of… 750 million of a one billion people on the Internet migrating to Facebook and just making that their second home, and if you are not able to adapt to that environment which is a challenge we’re having, right? How do you make a Facebook game that you don’t need to spend ridiculous amounts of money on and still can make money? It’s a big problem.
We see our audiences, the minute they turn 13, quickly they’re migrating to Facebook. That was not a problem we had three years ago. So, this is a giant shift that’s appeared just about like Independence Day, and it’s like we don’t know what to do with it. I mean, how do we get those things out of the air? Right?
Andrew: So, the games you have, because they’re so casual and quick, they don’t do well on Facebook. Why?
Alok: Because they’re not social. And I think the big currency of games which is sociality is something that is so tough to master. I mean, people are spending their lifetime trying to understand what zinger has cracked and it’s very difficult.
Andrew: Can you tell me one of your attempts at it that didn’t work that maybe we can learn from?
Alok: Sure. We did a game called Junk Yard Mayhem. I had this inspiration. I was riding the Caltrain in California, and I saw these junkyards all the time. And I said, it’s a cool game, right? Manage a junkyard, strip cars, rebuild them, sell them for a profit. It’s a beautifully executed game, but it’s just so difficult to get people to come to it regularly to play it, to be able to ride it out, to just get those hooks and saying, I want to send Andrew a junk car. I don’t want to do that.
The real challenge, Andrew, is what you believe yourself to be a great game is not usually what the market wants, and it’s so difficult to say no to yourself. That’s, I think, the biggest entrepreneurial challenge. Forget being games to anybody else. Can you say no to yourself all day long?
Andrew: To say no to yourself. Do you have somebody inside the company who will say no when you want to say yes?
Alok: Absolutely.
Andrew: Who’s that person?
Alok: My co-founder, Michael Libes who has been with me for 10 or 12 years. They have the right to actually scream and shout out, man, you’re just talking bullshit.
Andrew: They’ll scream in the company with other people watching.
Alok: Absolutely, absolutely.
Andrew: That’s part of the process.
Alok: That is part of the process.
Andrew: All right. Well, it’s great to meet you. If people want to connect with you, what’s a good way for them to connect with you directly? They can hire an army of Indian hunters and hunt down your contact info or . . .
Alok: It’s A-L-O-K@G-A-M-E-S, 2 as in numeral two, win.com. So, alok@games2win.com.
Andrew: Alok@games2win.com. Thanks for doing the interview.
Alok: You bet. It’s been a pleasure, Andrew. Thank you so much.
Andrew: You bet and good morning. Thank you all for watching.
Home of the ambitious upstart, yeah!
