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1. A Big Frackin’ Market
IDC estimates that there will be 1 billion mobile Internet users by 2013 and that estimate may very well be low. There are currently 4.5 billion mobile phones worldwide and, despite the fact that some think that there will always be a place for so-called feature phones, feature phones will be replaced entirely by smart phones over the next 5-7 years. As smart phones become the volume leaders, the component costs for smart phones will fall below the corresponding component costs for feature phones. Some people may be very happy without an intelligent phone, but in the future they will have to pay more for a dumb phone than a smart one. This trend will eventually render feature phones obsolete. The same phenomenon happened when the world moved from text-based to graphical PCs in the late 80s and early 90s despite many users claiming they would be “just fine” with their text-based computers. 4.5 billion mobile Internet users translate into an extremely large number of potential mobile gamers.
As importantly, the early data suggests that the mobile game market may be distinct from the web-based game market. Intuitively this makes sense as the screen sizes, user interaction methods, and usage models are all quite different. Thus far, the top selling mobile games have not been the same as the top performing web games. As a result, the eventual market leader may well be a new company.
2. Impressive Execution
Although web-based gaming and mobile gaming may be different, much can still be learned in mobile from the explosive web gaming market and TinyCo has done just that. In their initial games, TinyCo takes the best elements of Facebook gaming—continuous product updates and content additions, virtual currency and goods, and constant, relentless review of user data to improve the overall experience—and optimizes them for mobile devices.
This approach has delivered stunning early numbers. TinyCo’s early games, Tiny Chef and Tap Resort, have been downloaded over 10 million times. They both reached the top 5 in the App Store and generated enough revenue to profitably build the company to 40 employees with no invested capital.
3. Phenomenal Entrepreneur
Despite terrific early traction in what appears to be a massive market, it would be too early for us to invest in this kind of company unless we believed the entrepreneur behind it was so determined, skilled, and talented that he would likely build the team that wins the market.
Suli Ali, TinyCo’s co-founder is just that type of guy. A graduate of Georgia Tech and a veteran of the gaming business at an early age, he moved the TinyCo team from Brooklyn to San Francisco, because he understood the size of his opportunity and its implication that he could make no compromises in building his company. He knew that he would have to have direct access to the best talent, financial resources, and thinking that the industry had to offer.
Even more impressively, based on his early career experiences, Suli thought long and hard about the kind of company he wants to build and what that means for everything from TinyCo’s hiring practices to their employee on-boarding and training programs, to the principles required to construct a true meritocracy. The result is an exceptionally well-run, profitable, 40 person company with the foundation to be one of the few large companies in the world that will be a terrific place to work for extremely talented people.
And we are very excited to be a part of it.