Traditionally, game studios don’t fit the same profile and growth horizon as other technology companies seeking external funding such as venture capital. In a talk given at Casual Connect USA, Shelley Lau, managing partner of IPC Ventures, covered the nuts and bolts of building the next “ventures” in the mobile gaming space that, in turn, will be on par with other tech startups to take advantage of the ecosystem of venture capital and startups and hit the critical mass. “Think from the perspective of your investor. It’s not easy to be in the business. It’s not easy for them and it’s not easy for you. Just try to be collaborative. Try to think of a win win situation for both of you.”
Shelley Lau is the managing partner of IPC Ventures, a venture capital investment company that focuses primarily on early stage startups in the mobile ecosystem, including mobile games. She is responsible for overseeing all the investment activities and managing portfolio companies, including defining strategies, closing partnerships and driving growth. In her sixteen years of working in this industry she has covered a variety of stages of investment from seed through late stage to mergers and acquisitions.
Generating Successful Companies in the Mobile Space
As an entrepreneur herself, including a number of startups and exits, Shelley knows what it takes to succeed when founding a company. Although she is no longer interested in creating her own company, she has been able to develop an instinct for recognizing talented entrepreneurs and has the operational experience to help them get off the ground. She believes investing is the best way to generate more successful companies in the mobile space.
In terms of mobile games, IPC focuses their investments on the free-to-play model. Shelley states, “Essentially, freemium is a scalable business model, not solely or uniquely for gaming, but common and proven in many digital startups, including Facebook, Dropbox, Pinterest and many others. Freemium encourages open innovation, adoption and a network effect. This is what makes the traditional gaming business into a scalable business with the game as the content.”
Shelley studied computer graphics and animation at college and once aspired to become an animator, but she realized this was not her strength. So she moved to digital media and has since become very experienced in the business aspects of digital and social media. She continued with her education, receiving both an MBA and an MS from MIT but maintains ideas and theories are less than 10% of what it takes to realize success. Execution is the critical factor to drive success. And she recommends applying the 80/20 rule to the startup journey.
Empowering Developers and Designers
Although she didn’t plan to become involved in the gaming space, she has seen mobile increasing in importance and gaming become more social, and she enjoys the mix of creative and technical advancements in mobile gaming. From an investment perspective, she finds it rewarding to empower talented developers and designers, helping them become successful in game studio ventures through appropriate planning and execution instead of relying solely on luck.
After being involved with a startup from the ground up, coaching, steering it toward the right vision and guiding it through execution, the reward for Shelley is seeing it do well. It is especially gratifying when they come back to give her a thank you note. As she says, “That shows that the vision and hard work bear fruit.”
On the other hand, getting a strong, talented, but genuinely naïve founding team to follow her guidance is a challenging undertaking. She has various ways of doing this but maintains the most painful way, letting them fail but rescuing them before they quite fall off a cliff, is also unnecessary. Instead, generally she treats them as if they are her little brothers or sisters, with patience and persistence, keeping them on track and doing the right things.
More Opportunities
Shelley foresees many opportunities coming for the industry in cross-border and global prospects, with east meeting west and vice versa. She expects that, as the taste and creative styles of west and east evolve, so will the business model. She also emphasizes, “The advance of mobile phone and technologies will continuously enhance the quality of mobile games.” In response to this trend, she anticipates much more consolidation and many more cross-border transactions. As she says, “It will be an interesting five years to come.”
Shelley spends her free time doing photography and traveling. She began with black and white photography and spent many hours in the photography lab while in college. She was already traveling alone by age fifteen, taking her SLR camera everywhere she went. These days, she often takes advantage of advancing technology by using her phone to take pictures.
She does not really consider herself a gamer, but while she was growing up in a family of boys she played Street Fighter with them on their home arcade console. These days, she enjoys simple mobile games such as Tiny Wings, Oddwings, Benji Banana and others.
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