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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Month: July 2013

The importance of on-boarding

As important it is to recruit the best talent to your company, you also want to leverage that talent by having as strong an on-boarding process as your recruiting process. Last year, I wrote about how central good recruiting is to creating a successful game company. An article in the MIT Sloan Management Review, Reinventing Employee Onboarding, provides great advice on how to make your new hires more engaged, more connected with their colleagues and, most importantly, likely to stay.

The weakness of traditional on-boarding

Typically, on-boarding is focused on indoctrinating new employees into the organizational culture. The article explains that HR often believes to build and retain talent it is important to get employees to understand and commit to the companies’ values starting the first day. In their research, the articles authors found several weaknesses in this approach: Continue reading “The importance of on-boarding”

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Unknown's avatarAuthor Lloyd MelnickPosted on July 23, 2013August 19, 2013Categories General Social Games BusinessTags On-boarding, recruiting1 Comment on The importance of on-boarding

Turning your customers into your venture capital

John Mullins
John Mullins

Raising capital to finance growth for game and tech companies is one of the important responsibilities a leader will havem=, and to do it successfully you must realize it is not just about getting money in the bank. My post last week about Hasbro’s acquisition of Backflip Studios highlighted how smart cash management enabled the Backflip management team to capitalize on the opportunity with Hasbro (and make out quite well for themselves) largely because they did not receive significant investment. Had they taken a large investment at a high valuation, they most likely would not of been able to work with Hasbro. A recent Harvard Business Review article, Use Customer Cash to Finance Your Start-Up by John Mullins highlights the success many tech companies are having building a business through their customers’—not investors’—cash.

The Airbnb story

Airbnb is a great example of a company relying on customer cash to finance growth, allowing it to reach a point at which it was valued at over $1 billion when it did raise venture capital. Continue reading “Turning your customers into your venture capital”

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Unknown's avatarAuthor Lloyd MelnickPosted on July 18, 2013August 19, 2013Categories General Social Games BusinessTags Airbnb, Deposit, Financing, John Mullins, Matchmaker, Scarcity, Standardize and Resell, Subscription3 Comments on Turning your customers into your venture capital

Six lies about entrepreneurs

A recent Forbes article, Six Whopping Lies Told About Entrepreneurs … Sometimes By Entrepreneurs Themselves, created quite a stir online. It listed six myths about entrepreneurs that are worth repeating because these misperceptions dissuade some who from starting businesses and create a false sense of confidence in others.

Image from Forbest.com

The six lies

  1. They are the smartest and most high achieving people in the room. The data shows this is not the case, as most the top achieving entrepreneurs were not considered the smartest growing up (though I am sure their parents thought so). The article quotes one very successful entrepreneur as saying, “If I had a 4.0 at graduation, it stood for the number of parties I went to the night before rather than my GPA.” Entrepreneurs don’t typically try to please other people; rather, they find something that deeply fascinates them and then hyper-focus on that particular opportunity. Hence, the high dropout rates. Just looking back, none of my friends and classmates in high school and college who were considered “smartest” have achieved anything entrepreneurial. Continue reading “Six lies about entrepreneurs”

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Unknown's avatarAuthor Lloyd MelnickPosted on July 16, 2013July 18, 2013Categories General Social Games BusinessTags Entrepreneurship1 Comment on Six lies about entrepreneurs

Dealing with emotions and politics during a change initiative

Change is the cornerstone of building a successful a business, but while many people look at the strategic reasons to pivot equally important for triumph is managing the politics and emotions involved. Left unattended, skepticism, fear, and panic can wreak havoc on any pivot. These emotions create resistance, distraction and burnout when you are trying to make a strategic or tactical change. A recent article in the MIT Sloan Management Review by Ellen Auster and Trish Ruebottom highlights a five-step process to address these issues.

Change

Continue reading “Dealing with emotions and politics during a change initiative”

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Unknown's avatarAuthor Lloyd MelnickPosted on July 11, 2013July 18, 2013Categories General Social Games BusinessTags Change, emotions, politicsLeave a comment on Dealing with emotions and politics during a change initiative

The real takeaway from Hasbro’s acquisition of Backflip

The announcement yesterday that Hasbro acquired 70 percent of Backflip Studios for $112 million is great (and well deserved) for the Backflip team but potentially disastrous for many mid-level social game companies. Backflip has a history of successful—and profitable—games, highlighted by DragonVale, one of the most successful games in iOS history. The game launched in 2011 and still in the top 15 in the top-grossing charts.

DragonVale image from GooglePlay store

The valuation bodes poorly for other social mobile game companies. Given the $112 million purchase price for 70 percent, the Backflip team accepted a valuation of $160 million. There are many, many, less successful mobile game developers who have taken significant amounts of venture capital at valuation two to six times the valuation Hasbro paid for Backflip. How could a company that does not have a franchise as strong as DragonVale argue it is worth more than $160 million? Continue reading “The real takeaway from Hasbro’s acquisition of Backflip”

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Unknown's avatarAuthor Lloyd MelnickPosted on July 9, 2013July 11, 2013Categories General Social Games BusinessTags Backflip Studios, Crowdstar, Hasbro, Kabam, Pocket Gems, Storm8, TinyCo, valuation13 Comments on The real takeaway from Hasbro’s acquisition of Backflip

Get my book on LTV

The definitive book on customer lifetime value, Understanding the Predictable, is now available in both print and Kindle formats on Amazon.

Understanding the Predictable delves into the world of Customer Lifetime Value (LTV), a metric that shows how much each customer is worth to your business. By understanding this metric, you can predict how changes to your product will impact the value of each customer. You will also learn how to apply this simple yet powerful method of predictive analytics to optimize your marketing and user acquisition.

For more information, click here

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Lloyd Melnick

This is Lloyd Melnick’s personal blog.  All views and opinions expressed on this website are mine alone and do not represent those of people, institutions or organizations that I may or may not be associated with in professional or personal capacity.

I am a serial builder of businesses (senior leadership on three exits worth over $700 million), successful in big (Disney, Stars Group/PokerStars, Zynga) and small companies (Merscom, Spooky Cool Labs) with over 20 years experience in the gaming and casino space.  Currently, I am the GM of VGW’s Chumba Casino and on the Board of Directors of Murka Games and Luckbox.

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