This multi-part series examines the history of Knockabout Games, a mobile games startup I co-founded in 2002, near the start of the pre-iPhone “first wave of mobile gaming”.  The start of the series can be found here, and last week’s post on Knockabout’s product strategy can be found here.

Business Strategy

Building relationships were important for our long term exit strategy too.  By becoming indispensable to publishers, we hoped to create intangible value on top of explicit revenue generation.  And in circumstances where revenues aren’t as high as anticipated, having added value in other areas can often trigger a very profitable acquisition (my first company sold this way).

To get those relationships going, we had a three step approach:

• Step one:  introduce ourselves.  Don’t be arrogant game developers coming to teach mobile how real games are being made.   Be humble and acknowledge that while we know games, we really don’t know mobile and would like to learn.  Spend the first month or so meeting with publishers and asking them questions.  Let them bestow their wisdom upon us (people love to talk about themselves, or in this case, about their companies).  Don’t pitch anything, but leave them with a business card.  The goal was to create familiarity first;  we’d come back later and pitch.
• Step two:  show some demos.  After a couple months, we’d come back and show some early demos.  We would seek distribution relationships, but would also inquire about high profile brands they needed addressed.
• Step three:  close a couple deals over the following three months, both for distribution of our titles and third party development of theirs.  Make sure to diversify our risk by working with multiple publishers.

And of course, step four would be to then deliver the highest quality game we could and up the ante on the next round of development and distribution deals.  And step five would be an acquisition by one of our publishing partners.

I should also note that we didn’t cold call anyone.  For phase one, our plan was to always get an introduction from someone into the company (if we didn’t know someone already there).  Whatever your role in the game industry, after a few years you end up either knowing someone at every company, or being one degree removed (friend of a friend).  Like most industries, we work in a small and nepotistic space.

We also thought it was important to talk to more than publishers.  We spent a lot of time with handset makers and platform technologies (like Qualcomm), building those relationships.  They were great at making further introductions to publishers and other business opportunities.  And we talked to developers.  They’re a good source of information, and by sharing, we could all raise the quality of the deals that were out there.  The traditional game space has always felt a bit like a community — open and helpful — and we thought mobile would benefit from the same approach if we could nudge it in that direction.

Next time:  Funding, equity and staffing.