USA 2015Video Coverage

Martin Macmillan and a New Business Model for the Digital Industry | Casual Connect Video

November 13, 2015 — by Catherine Quinton

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USA 2015Video Coverage

Martin Macmillan and a New Business Model for the Digital Industry | Casual Connect Video

November 13, 2015 — by Catherine Quinton

'Failing isn’t the end of something.' - Martin MacmillanClick To Tweet

As the CEO and founder of Pollen VC, Martin Macmillan is working to give indie developers a way to get off the ground and into the market. There is “hope and the naive belief that you are going to launch and it is just going to take and the rest is going to be history. It does happen but it happens so infrequently that you wouldn’t want to bet the farm on it”, Martin expressed during his talk at Casual Connect USA. The App Economy has exploded, being predicted to be worth $143 billion by 2016. But there is a serious credit bottleneck for Indie developers, which prevents them accessing credit or the high levels of funding needed to adequately support paid advertising. Without being promoted effectively, many apps and games never make it off the starting blocks. But there is a solution. If developers could access their app store revenues faster, they could reinvest into user acquisition earlier, which would both accelerate and sustain growth earlier. Revenue recycling doesn’t just benefit the developer; everyone in the App Economy benefits from additional revenue streams.

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Martin Macmillan is the CEO and founder of Pollen VC

Martin Macmillan has created, with Pollen VC, a new disruptive business model for the digital industry. This is a financial technology platform which allows mobile developers to gain early access to their revenues from the app stores. Recently he described to Casual Connect the reason for this new platform and the experience of creating it.

Casual Connect: Tell us about the work you do at your company. How did you come to establish the company?

Martin Macmillan: I am the CEO and founder of Pollen VC, which gives app and games developers faster access to their app store revenues.

Before Pollen VC I was in the developers’ camp. I co-founded a music app company named SoniqPlay. We discovered that although the app was making money, we often had to wait up to two months before we got paid by the app stores, and during that time it was very difficult to grow our business. Traditional invoice discounters were reluctant to advance us any money against our sales receipts because we didn’t have physical invoices to prove our earnings – they were very hung up on having a piece of paper to show what we were earning despite the fact that we could show everything that was due in our developer accounts portal. We knew the app stores would eventually pay out, but it was very frustrating that we couldn’t unlock our revenues faster and put them back into growing the business when we really needed it.




Because of my earlier career in finance, I knew there must be a way to calculate a developer’s earnings and speed up cash flow, without needing a physical invoice. When I talked to other startups in the app and games space, I realized they had experienced the same payment delay with the app store, and that they had found it often limited their ability to grow. We launched Pollen VC in May 2014 and we have been steadily building up our operations and customer base in Europe and North America. I’m officially based in London but I now spend about 50% of my time in San Francisco.

CC: What is your favorite thing about your work?

Martin: I feel like we are going to have a big impact on the app industry. For many developers, the most crucial time for growing the audience or user base for their app or game is just after they launch, but most don’t have access to adequate marketing budgets and still more struggle to get access to finance when they need it, for various reasons. We’ve seen countless indie developers crash and burn simply because they don’t have access to cash when they need it.

We’ve seen countless indie developers crash and burn simply because they don’t have access to cash when they need it.

If we can resolve some of the cash flow issue for smaller, independent developers by providing access to their sales revenues earlier, they can use that cash to fund user acquisition campaigns during the crucial period straight after launch. This makes it possible for them to gradually build up their user base and extend the lifecycle of that app or game, without having to borrow money, either on credit cards or from external investors, which means they can maintain control over their own destiny.

I think that could make the difference to many indie developers. They may not be turning over the millions of dollars that the big studios do, but they should be able to make a living doing what they love, if they use their cash wisely and have figured out their user acquisition techniques for their game.

CC: How have your past career experiences been helpful to you in your current position?

Martin: I have a previous career in finance, which has helped inordinately with developing Pollen VC. As an ex bond trader, I have been able to draw on my understanding of the old world of financial services and the new world of the app economy to figure out a way to bring a solution to the app store payment delay. Bridging the gap between how traditional finance providers think about the app economy and the financing need of developers has been an interesting journey.

CC: What inspired you to pursue this career?

Through my own experience as an app developer and talking to others in the same situation, I realized that there was a gap in the market for a dedicated solution for mobile developers.

Martin: Through my own experience as an app developer and talking to others in the same situation, I realized that there was a gap in the market for a dedicated solution for mobile developers – most of the traditional invoice discounters had no understanding of how digital marketplaces actually work. Having an understanding of how both sides work was crucial in developing a product offering that met the needs of developers, but in a way that we could raise significant debt funding to fuel the cycles.

CC: How did you become involved in the game industry? How did you make your start? What do you find to be the most fun part?

Martin: Many of Pollen VC’s customers are free-to-play mobile games developers since they largely monetize through in-app purchases which are paid through the user’s app store account. We work with a few productivity and children’s apps but the majority of the indies we work with are producing games, mostly free-to-play, with a few paid games also.

The most fun part is meeting with indie games developers who have so much passion for what they do. Compared with other industries I’ve worked in, I’ve found that people who are involved in games are highly enthusiastic, both about their own work or what other people are making or doing – they’re always really happy to make recommendations or introductions and help each other out.
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CC: What are some of the challenges you have faced in your current position? How have you overcome these challenges?

Martin: I think our greatest challenge is education. The service that Pollen VC is offering is something new to the market, and developers are understandably cautious about getting involved with a new service they haven’t heard of before; however, once they see how early access to their revenues could help them grow faster, they see it’s useful. Making the product proposition free for developers who are recycling their money back into user acquisition was an important step.

Another challenge for the business is making sure we operate in the most financially secure way – we have to adhere to strict guidelines in order to be able to operate in our core markets, the US and UK, so we do all we can to ensure that we comply with the relevant regulators and operate in a secure way as we scale up the business.

ads-landscape-banner-4-nobleedCC: What do you do in your free time? What are your hobbies?

Martin: Fly back and forth to the US! Spend time with my family.

CC: If you were not involved in this industry, what would you be doing?

Martin: I think I would still probably be involved as a developer. If three years ago I had known half of what I know now, or if a service like Pollen VC had been available, then we would be using it to run Soniqplay, which was a music remixing app. I am very passionate about music and we had great fun creating the content for that app. It actually launched very successfully but, as I mentioned, we were hamstrung by the app store payment delays and struggled to raise relatively small amounts of money from the banks and traditional invoice discounters to fund user acquisition and growth. It’s neither feasible nor advisable to use equity from VCs or private investors to fund user acquisition; that is a very expensive and inefficient way to use capital in my book. If we’d had access to our sales revenues earlier, I think we could have pushed Soniqplay a lot further.

CC: What was your dream job as a child?

Martin: Rapper. Musician?

CC: What has been your proudest moment during your career so far? What led to this moment happening?

Martin: I’m proud of the progress we’ve made with Pollen VC already. Having only launched a year ago, we already have a great roster of customers in North America and across Europe. We hadn’t anticipated being able to set up in so many countries in such a short time, and the reception from the industry has been overwhelmingly positive. Some of the biggest names in tech have been very supportive of what we are doing because they see how it can add value for the whole ecosystem, not just for developers.

Some of the biggest names in tech have been very supportive of what we are doing because they see how it can add value for the whole ecosystem, not just for developers.

CC: What do you think will be the next big trend in the industry in the next three to five years? How are you incorporating this trend into your future plans?

Martin: I think we will see huge growth in the long tail for games. Recent research from MiDIA indicates that the superstar games are slowing down, while many smaller studios are making great games and learning how to monetize effectively without overspending on user acquisition. Many developers are learning how to optimize user acquisition with lifetime value so they make a reasonable profit. We are seeing growth of what we call the “middle class” of developers – they might not be raking in the millions that King or Supercell were, but our research has seen there are an increasing number of publishers making anywhere between $5,000 and $500,000 a month in revenues.

CC: How do you think M&A activity in the game industry will respond to these trends?

Martin: I guess it’s likely that some big games companies will try to buy smaller studios that are on the up, but on the other hand I’m not sure how likely it is that this would be a successful strategy. Apart from the practical considerations, it’s still really very difficult to predict a hit with mobile games, although a bigger studio may be able to help a smaller studio hone monetization strategy, work out which metrics to measure and offer marketing funds. Many small studios will struggle to keep going without these skills, so I think an increasing number will do work for hire while working on their own projects on the side. However, something we hear a lot, especially from our customers, is that most indie developers are keen to keep hold of their own destiny, rather than let someone else buy them out and control what they do with their game. That’s why they started an indie game in the first place.

CC: What interests you about the games industry?




Martin: I find the attitude really fascinating – the indie spirit and how collaborative the industry is – is really encouraging. Most people involved are keen to innovate and embrace change, which I think will make it possible for the industry to improve and grow. If you look at mobile games in particular, the App Store didn’t even exist eight years ago and now it’s a multi-billion dollar global industry which has made it possible for millions of developers to create and publish their work. Not all of them will be able to build a successful business out of it, but you see many incredible innovative projects which also become a commercial success.

CC: Are you a gamer? What are some of your favorites?

pollenvc-vertical-lightMartin: I test out all the games our customers are creating and love to see early versions. Personally, I play mainly casual games whilst on planes and commuting. One of my recent favourites is NomCat by Lucky Kat Studios, where you can pit celebrity cats like Grumpy Cat and Nyan Cat against each other in a fish-eating contest. It’s incredibly tricky! I also really admired how they went about securing the cat brand owner’s support for the game, so they were promoted by these cats who have millions of supporters.

CC: What do you think your staff most commonly says about you? What do your employees think of you?

Martin: Hopefully they’d say I was super passionate about what we’re doing at Pollen VC and focused on delivering our vision as well as committed to building a great environment where our employees enjoy working and learning.

CC: What attributes do you look for in a member of your team?

Martin: We’re a pretty small team at Pollen VC so hopefully they all feel the same when I say we try not to focus on hierarchy. We all work pretty closely together so work isn’t siloed into one department or another; everyone gets to see what everyone else is doing and will usually contribute at some point, though of course everyone has their area of expertise. Therefore we look for people who are happy to “get their hands dirty” and help out when needed, but at the same time, we respect each other’s opinions and trust each other to work autonomously.

We’re working in a very specialist area, bringing together finance and technology, but also having experience working in the mobile apps or games industry is pretty important. It depends which area of the business we’re hiring for. On the Risk and Operations side, knowledge of risk and understanding of process is imperative, but they also have to recognize that our customers often aren’t familiar with financial documentation, so we like to talk it through with them transparently. On the Business Development side we tend to look for team members who have been immersed in the gaming industry because they can really understand a developer’s point of view and build great networks.

On the Business Development side we tend to look for team members who have been immersed in the gaming industry because they can really understand a developer’s point of view and build great networks.

CC: What type of talent do you find is the hardest to find?

Martin: Not so much in our case, but I guess for many game developers, finding someone who can manage user acquisition is increasingly important but also very difficult. App or game promotion is highly subjective, so it takes a bit of time to master and you need someone who has a solid understanding of how the app store works, how to programme and optimize ad campaigns effectively by analyzing all the right metrics, as well as having the creativity to maximize opportunities. It’s a tricky balance.




CC: How do you handle complications within the team?

Martin: We haven’t really had any complications within the team (yet!). We’re pretty well-balanced and, as I mentioned before, it’s a small team so there’s not a lot of complexity to deal with. I think that we all respect each other, so if people don’t agree they tend to discuss it, weigh up the options, make a plan and then we all talk it through at the weekly company meeting or set aside time to talk about it.

CC: What was a painful experience you found a way out of? How did you do it?




Martin: Not being able to fulfill the potential of Soniqplay was a disappointment. Having come from a banking, then software background and really wanting to do something different in music, I was disappointed that we could only take it so far at the time. Of course we learned a huge amount from starting that company, and that experience became the concept behind Pollen VC, so it had many benefits. I guess what I realized is that failing isn’t the end of something, and the experience and knowledge I’ve gained from my previous careers made it possible to found Pollen VC with a better understanding of how to overcome hurdles and build something great.

 

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Catherine Quinton

Catherine Quinton

Catherine Quinton is a staff writer for www.gamesauce.org. Catherine loves her hobby farm, long walks in the country and reading great novels.

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