I was fortunate enough to do two great deal with incredible entreprenuers over the last couple of years. Tapulous was the first of these and was just sold to Disney in a great transaction for everyone involved. In one of the earlier times I talked about Tapulous it was at just around 6.5M users. It is now well over 35M users and it did this while going to cash flow positive within the first 18 months and ending up with more cash on the balance sheet than was invested in it.
Learnings from this deal:
Take on a big market trend and stay focused. The Apple platform was the core call that Bart DeCrem made and he stuck to it in spite of pressure to expand to many other places.
When an experiement works, double down. Tap Tap Revenge was not the focus of Tapulous in the beginning. But once it worked, Bart and his Cofounder Andrew, doubled down and made it a dominant experience.
Exit people who are not delivering and not with the program. Tapulous had a very difficult situation with a person who was only there for a few months. They made the hard decision and exited him quickly. I have no doubt without this decisions, Tapulous would have died.
The other deal was Mesmo. The founder of Mesmo had some some consulting work for MerchantCircle and had an idea for building a directory of video on the web. He sold earlier this year in what is going to end up being a great deal for Game Show Network and everyone else involved. The digital assets of Game Show network combined with the capabilities of Mesmo is going to be an incredible corporate story of well placed corporate development.
A few lessons learned:
When it is not working and you don’t have a business to protect, change. Mesmo made two big changes, jumping into the facebook platform and then giving up one successful game with 23M users to jump into casual gaming on facebook. The second of these changes was made with only a couple of month of burn in the bank.
Again, jump on big changes. The facebook platform changed the way gaming worked. Mesmo saw this and rode the wave.
Have a small loyal team. Mesmo could have never made these changes with a big mercenary team. They were able to do it because it was not hard for a small group of committed team members to make the change and they had to financial flexibilility to make those choices.
Have committed investors. When the team needed a small boost there were a small set of loyal investors like Ayden Senkut, Jeff Clavier, and Mike Maples (Senkut and Clavier were also in Tapulous) stepped up with few questions and bet on the team.
wo great deals that make clear the most important lesson:
True Entreprenuers who are willing to risk it all are central to winning in any investment.