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India's internet gaming pioneer | Vishal Gondal @ Indiagames
241 Plays2 years ago
If we were to write a history of tech startups in India, then surely there would be a pretty big chapter dedicated to Vishal Gondal. From becoming a tech entrepreneur while still in college to selling Indiagames to Disney for almost a hundred mn dollars - Vishal recounts his fascinating story.
Insights shared:-
- Early days of Indian internet gaming
- How to engage customers with adware gaming
- Using branding to scale and acquisition strategies
Recommended
Transcript
Introducing Vishal Gondal: Pioneer of Indian Tech Startups
00:00:00
Speaker
Hello, I am Vishal Gondal, founder and CEO of Gokey.
Early Tech Exploration and Entrepreneurship
00:00:17
Speaker
If you were to write a history of tech startups in India, there would surely be a pretty big chapter dedicated to the guest of this episode, Vishal Gondal. Vishal started tinkering with computers at an era when they did not even have floppy disks and he eventually became a tech entrepreneur while he was still in college, employing people much older than him.
Vishal Gondal's Journey to Disney Acquisition
00:00:37
Speaker
This is a part one of two-part founder thesis episode. In this episode, Vishal talks to Akshay Tath about his amazing journey as a pioneering tech entrepreneur, culminating with Disney acquiring his company for almost $100 million. Stay tuned and subscribe to the founder thesis podcast and any audio streaming platform to learn about the evolution of the entrepreneurial ecosystem in India.
00:01:08
Speaker
I spent
Growing Up in Mumbai: Curiosity and Sports
00:01:09
Speaker
pretty much my childhood and all my life in the city of Mumbai, more specifically in the suburb of Chembur. And in fact, my companies, whether it was India Games or whether it is Gokiri, are all based in this area. In fact, I pretty much walked to my office from my home.
00:01:28
Speaker
Ever since I was a kid, I was a curious kid. I used to love tinkering with technology. I used to open my television set or radio and all their electronic gadgetry at home. Of course, that was a different thing. I could never put it back. But early on, I was involved in two things. One is sports.
00:01:48
Speaker
I was very avidly into sports. I used to play volleyball and I ended up representing the state in the national tournament. I was the captain of Mumbai, captain of my school. So, a lot of my time used to go playing sports, and the rest of the time, I was always trying to tinker with electronics. So,
A Passion for Coding: From Calculators to Computers
00:02:09
Speaker
that's when my father gave me a gift.
00:02:11
Speaker
and that gift was actually a very interesting device and people who are listening to this should actually Google this. It's called the Casio PB110. Casio PB110 was this calculator which you could actually program with basic computer programming language.
00:02:30
Speaker
And this was called the Data Bank version and you can even see it today. And this was like one of the earliest computing device, the Casio PV110. And I think it was released like in the late 70s or 80s, 1983 is when it was released actually.
00:02:48
Speaker
And I got it maybe 87, 88. And I started learning programming myself because I really wanted to make the most of this calculator I had and I programs. And that time there was no place to learn computer programming. So I used to get the manuals.
00:03:05
Speaker
which taught me. So I taught myself basic programming and my father saw the enthusiasm. So then he got me the next thing, which was called the Sinclair ZX Spectrum. Sinclair ZX Spectrum was again one of the early computing devices. It used the Z80 processor and it used an audio cassette to store data. So this is way before even floppy disks, where this is predating floppy disks.
00:03:31
Speaker
So you could get games and stuff in audio cassettes and you actually used to play that whole cassette and load a game. And again, I was tinkering with those devices and making games and codes. And again, this is all self-learning. I was maybe 14, 15, 16 years old. And so my father was really enthusiastic seeing that, hey, this kid is doing all of this.
00:03:54
Speaker
So he then got me, and that was the biggest turning point, he then got me my first PC.
Teaching and Entrepreneurship: Founding FACT Computers
00:03:59
Speaker
And this was the PC device with the two floppy drives it was. There was no hard disk. It just used to have two floppy drives. I think it was... When would be the OS and therefore data storage. Exactly. So this is the five and a quarter inch floppy. And then I pretty much graduated through every computing device. Whether I started with the PC, then I went to the PC 286.
00:04:21
Speaker
386, 486, and then the Pentium. Bottom line is, so I was curious, I started coding, learning, and that one thing led to another. And that's what my first business actually ended up becoming, that I started teaching my friends coding. And this was from home, and I used to be the coolest kid who could play games and code. So I started that, and that led to me starting a computer institute.
00:04:49
Speaker
So I was doing this at home and then I got to other people and there was a little garage my father had in this area called Shell Colony. And that led to a computer institute and it had an interesting name. It was called FACT computers and FACT actually stood for Futura Academy of Computer Technology. So it was like an abbreviation made up and it was literally among the first few computer training institutes in the country actually.
00:05:15
Speaker
This is pre-NIIT. Oh yeah, this is pre-NIIT, pre-APTEC base also. And I used to train people in GW basic, B base, 3 plus, Word star. How old were you when you lost facts? I think I was 17, 16, 17, 18, around that time. And you managed to clear your 12th port exam.
00:05:35
Speaker
Well, the best part was I did not have to go to school as much because I was volleyball. So in my 10th standard, I barely scored any marks, but the best part was because of my volleyball, I got into the sports quota and I got into Pudar College. And again, the reason, so I choose commerce because science required compulsory attendance. In commerce, you did not need any, there was no attendance threshold. And especially if you are into sports,
00:06:04
Speaker
there is no threshold. As long as you give your exams, that's it. So I ended up joining Podar College and that gave me the flexibility to continue playing my sport and running my business at the same time. And I used to somehow scrape through the exams and from 10th, I did manage to get clear my 12th. Of course, by the time I did my PY or got there, I had many 80KTs and stuff. So anyway, I didn't end up, I failed three, four times.
00:06:32
Speaker
But I think what really happened is at a very early age, I started earning.
Innovation in Banking: Automating Annual Reports
00:06:38
Speaker
So one of my big projects actually came from a bank who wanted to send their annual report every year. And this was a cooperative bank which had some 5,000 members. So it was a task for them to write 5,000 names on everything. So what I did is I created a database and then I created a system which could print on the labels.
00:07:01
Speaker
So from this whole process of manually writing or typewriting I created, then this was a dot matrix printer. And I used to charge the bank per label. So I used to charge them 10 rupees per label, but it was a great thing for them because what was taking them weeks and sometimes months to write 5,000 names, I just said at the press of a button, I give them this and all they have to do is remove the label and stick it on the envelope. The original male birds.
00:07:31
Speaker
And this actually became a great business because once I created the database, I used to keep charging them for every print. They came to me and now once they said, Hey, we sent annual report. Now we want to send this. Now we want to send that. So I did not realize the amount of paper banks had to send their members and account holders. So that, so again, I must have ended up earning a few lakhs by just doing that business. This I'm talking of the year 1994, 95. How old were you in 95?
00:08:01
Speaker
So I was about, so I was born in 1976. So yeah, about 20 years. Yeah. 1920. Yeah. So literally that age. And it was all fun. And then what happened one fine day is that while tinkering with programming and gaming, I got introduced to something called a macro media director. This was pre
The Patriotic Game: 'I Love India' During Kargil War
00:08:21
Speaker
-flash, even slash was not there. So director, and then there was AutoCAD. So I got into AutoCAD. This is a Ventura clipper.
00:08:30
Speaker
So again, I'm talking about this new revolution of DTP. DTP became this new world. Again, nobody uses DTP, but DTP was like the big thing. The whole publishing industry was supposed to be revolutionized. So I got into DTP. I actually got into 3D. In fact, in my Institute, I became the first authorized training center for Autodesk. So I was teaching people how to make 3D models.
00:08:55
Speaker
So I actually have done animation, I've done modeling, I've done rigging on 3D, I've done 3D Studio Max, Maya, everything. And that's what led me to gaming because I already knew programming and I knew 3D art. So I said, then the combination is gaming. And that's when I started coding games. And that one thing led to another. And I think the biggest inflection point for me happened during the Kargil war.
00:09:19
Speaker
in 1998, when this whole thing was happening, everybody was pissed at what was happening. So I created this game called I Love India. It was a game where it was a very basic game. You actually had a screen with an India map. And at the border, we had these characters coming down, which were the terrorists. And you were the Indian soldiers and you had to shoot them down so that they don't cross into the border, like in the border.
00:09:42
Speaker
The only difference was this game was rigged. So whatever you do, at the end, the game India always won. Even if you were not doing anything, at the end, something would happen and you would win. And I put this game online. That time, by the way, internet came in 1997 is when internet came in. So again, I had the first internet connection and first email address from VSNL and all of that.
00:10:04
Speaker
So what happened really is when I was making this game got featured by BBC. That time there was Star News, the early days of news in India. Yeah, early days of cable TV here. Early days of cable TV. And because of this, it was featured. We had almost 300,000 plays of the game because that time these were all, it used to take 20 minutes to download and play the game online. It was like a browser game or you download an exe.
00:10:32
Speaker
it's a browser, but what happened is to play the game, you required a plugin, the macro media plugin, and that plugin used to take so long to download. So you first download the plugin and similarly with Flash also, if you remember, you needed a Flash player and then your Flash content used to work. And then I said, Hey, this gaming looks interesting. How do I make this into a business? How do I make money with gaming? This is around 97 when you were thinking of
00:10:57
Speaker
pivoting to gaming. Yeah, 98. So my computer education was the first thing. Fact computers and that's when to fact interactive. That was the next venture and fact interactive became and in fact, I still have a card somewhere. So my designation was Interactivist. Okay, nice. In 97, how much was factored? Like how much were you able to monthly and early if you remember it?
00:11:21
Speaker
I would say that a few lakhs a month easily, 45 lakhs a month. And this was a mix of setting courses and services like the printing word service. Yeah, all of that. In fact, in my DTP days, I used to do one other very interesting thing. And if there's anybody listening to this,
00:11:39
Speaker
I have made project reports for many students. So during their university days, the engineering students have to create this project, which was all about, so I used to type, I had data entry operators who used to type it, and then we used to beautify it, make it look good. And again, each project used to be a few hundred pages, and then you required 10 copies of this, and each of that we used to charge about 10-20,000 rupees.
00:12:04
Speaker
for the whole project with printing, designing and all that. And I must have again done quite a lot of that. And I'm sure a lot of people listening to this might, I may have done that for you someday. From coding to banks used to call me when their systems got crashed.
00:12:21
Speaker
I've done it all. I used to even code and assembly. I could get into assembly language and these were the early days when DOS. Windows was not even prevalent. I'm talking of DOS and then Windows. So I've seen all the generations of computing in that sense. The gaming I realised, how do I make money? And that was the time the whole Pepsi war with Coca-Cola was at its peak. Pepsi and Coke were going at each other. And luckily Pepsi... Nothing official about it, Kapai.
00:12:50
Speaker
So Pepsi's office was literally a few kilometers from my house. They had an office in Duke Soda Factory in Chembu. And now, in fact, they've broken it and they're making it to a complex recently. But that was the most famous landmark of Bombay, actually, the Duke Soda Factory. And that's where Pepsi's office was. So I said, let me go. And I created a game demo on my own. The demo basically was that there are these
00:13:12
Speaker
Coke cans
Adware Gaming Success: The Anti-Coke Game for Pepsi
00:13:13
Speaker
which are floating on the screen and there's a cannon which is in the face of a Pepsi bottle and you can hit on the cannon and you're hitting the Coke bottles. And I said, you know what, if they are so much anti-Coke, Pepsi would love this. So I actually went there to meet them, but you know, that time there was no laptop. So I actually took my desktop with me.
00:13:33
Speaker
auto rickshaw. So I carried a monitor on the whole CPU keyboard, everything. And I ended up in Pepsi's office at I think nine or 10 in the morning. And I said, Hey, I want to meet whoever is in charge of marketing. And they were looking at who's this kid who's come with this computer box and all of that. And they said, no, no, please sit and all that. So I must have been there for a couple of hours, actually. Finally, there is a guy who came in. His name is TJ Venkat. He was the general manager of marketing for Pepsi.
00:14:02
Speaker
and Venkat saw this game and his eyes lit up. Wow! So he called a few of our other colleagues here. And they said, we love it. Let's do one thing. Let's install this at movie theater. So Pepsi had deals with movie theaters like Sterling, Regal, all the movies. And the idea was we'll install this at the movie theater and people can play this game. And if you shoot in 30 seconds, X Coke cans, you get a free Pepsi.
00:14:29
Speaker
So we created a little promo out of it, and this game was installed with kiosks. And by the way, we used touchscreen kiosks in that time. This is a game I'm talking about before even iPhone introduced the touchscreen. So the thing was, there was a screen, you could touch it and play this game.
00:14:49
Speaker
And this is just done as an experiment in Mumbai. It really kicked ass. People loved it. There were lines outside this machine in VTA and Sterling cinema was the first place we did it. And they saw the amazing thing this could do. And then the second thing, of course, they paid me a lot of money, a few lakhs for it. But what Pepsi did was the HR guys said, Hey, this is a great tool for motivating our employees. So they got
00:15:14
Speaker
They again paid me a bunch of money and they got this installed on all the computers of their employees. And they said that whenever you feel like having some Josh play this game and you can shoot at cook cans. And then I ended up meeting another lady who, of course, is still very active in the world of marketing and brand and communication. She was the then Marketing Director of Pepsi. Her name is Vibha Rishi. So Vibha saw this.
00:15:39
Speaker
And Vibha loved it. And Vibha said, you know what, we'll take this national. And from just doing this little experiment in Mumbai, I ended up taking this game all over India. And that was one of the biggest success. And that led to this whole idea of what I call adware gaming. So the idea was go to a brand.
00:15:56
Speaker
and tell them, I will create this amazing game, which will engage with your customer, and you give them a gratification, and you do that at the point of retail. So, the whole thing was, by the way, this is the time when new shopping malls were new, stores were new. So, people were saying that, how do we engage? So, I met brands like Kellogg's, Pepstodent, many brands from Yuligiva, and even I went to pharma companies.
00:16:24
Speaker
And we made this for medicines, for doctors to play games. In fact, I remember why one of my biggest projects actually came from a company, which immediately after this thing went bankrupt. This is the start of the whole crash, which was that time called Arthur Anderson.
00:16:40
Speaker
so Arthur Anderson called me this what was that oil trading company for the name which got caught in some scandal and the fallout was Arthur Anderson so they said they have hired some very expensive consultant to make a new logo for them
00:16:56
Speaker
and the new logo was nothing but an orange circle with the gradient orange like a sun. So I had a meeting with all these top guys and they said, this is the logo, this is the new and they wanted all their employees to play with this logo and imbibe this logo.
00:17:12
Speaker
And I created a jigsaw puzzle, I created hidden object, find the logo. So basically, again, I charged them a bomb and we created this games of all different kinds, all involving their logo, which is only used for a few hours for their lawn when they were supposed to unveil the logo. But again, they were all thinking innovative, right? I mean, how do you make something like an orange logo so exciting? So what happened is that this started seeing
00:17:38
Speaker
Seeing my business started growing, I had all these revenues coming in. That was the time somewhere in 1999, I got a call from this company. Never heard
Venture Capital and Founding India Games
00:17:47
Speaker
of them. They said, I am calling from Price Waterhouse and I am an investment banker. So my father used to tell me one thing, think here, don't take a loan. You don't need a loan. And I told them, listen, we bank went and said, hey, I don't need a loan. He said, no, no, we are not that banker. We are an investment banker. I had no idea what an investment banker is.
00:18:05
Speaker
I said, okay, we'll call you back. So, I spoke to a friend of mine who, by the way, did his Chaddan accountancy. So, he was the smartest kid in my college. And I told him, he had a company, a prize water house. He said, no, he had a very big company. They do this, they do that. So, they came to meet me. So, my office was just to give you an image.
00:18:25
Speaker
It's in the middle of Chambur Station. Chambur Station is like a bhaji market. There are vegetable vendors all over. Like a station, you know, this is like a station area of a suburb. You can barely walk in our office. The entrance is in this lane and that lane has all these
00:18:47
Speaker
exotic vegetable vendor, so it in a way stinks. And then we were on the second floor of that building, it was called Parekh building in Chembu station. And so I was, so I normally am always in t-shirts and jeans or t-shirts and shorts. So these guys said, we are coming to meet you. And the guys are Girish Sahajwala, who by the way, now is a very big guy in, I think he's now in PwC with somebody else, I met him recently in Singapore. And both these guys came in and they came in full suits.
00:19:15
Speaker
Everybody in our building was like, you know, I don't think anybody in our entire complex who ever came wearing the black, they were even wearing the suit. So imagine in this bhaji market, there are these two people coming in and then they come up and I'm in shorts and t-shirts and they told me that, oh, you know, what you're doing is amazing. Gaming industry, we will get you something called venture capital.
00:19:45
Speaker
I said, listen, we're going to venture capital, capital nature. No, no, we'll get you. Basically, they insisted that they can get me venture capital. I had no idea about venture capital. Nobody had heard of it. I mean, there was no example of VC funding in India at that time.
00:20:00
Speaker
Exactly. This is 1999. So they said, no, we will get you. And they said that we will get you two crores. Two crores. Like, that's good. Again, you know, I said that, listen, what is this? How will you, why will somebody give me two crores? And he said, no, this is equity. I had no idea what equity or what debt or any of this. So basically then they explained to me, they said, venture capital is like a capital which you never have to return back. I was like, wow. So I said, if I use the money, I can do whatever, you can do whatever you want. And if it doesn't work out,
00:20:29
Speaker
Do I have to give it back? They said, no. That makes sense. I said, we can take it. And then they said, we will make it success fees. So you only pay me if you get the money.
00:20:45
Speaker
Well, that's even great. Before I could say anything, suddenly we had a prize water house appointed as our banker. These guys came in and they asked me lots of questions. And then they said, we'll create a business model for you. What is a business model? I have no idea.
00:21:02
Speaker
So basically, they asked me a bunch of questions and then they created an Excel sheet. The Excel sheet has a number, so you click on it and click on it. So you click on it and click on it. So you click on it and click on it. They created a sheet of five layers and then they set assumptions and you change one number and the entire sheet changes. So the whole model was how many games, how many corporates are there, how many games we'll make.
00:21:23
Speaker
how much per revenue per game and then we are going to put it on so we by the way that time we got the domain name indiagames.com the concept is that we are going to Indian themed games which will be funded by advertisers so we will create an Indian game
00:21:40
Speaker
But the Indian game will have Pepsi or Kellogg's or Boost or whatever brand integration and people will play it online and all of that. So the model was great and I had no idea. They
Mobile Gaming Revolution and Global Success
00:21:53
Speaker
just told me, just sound confident and go and do this. Then they got meetings. My first meeting was with a gentleman who I have great respect for and coincidentally, he's on my board even today, Praveen Gandhi. Praveen Gandhi had just set up Infinity Venture Fund.
00:22:09
Speaker
This is the first venture fund which was set up by Praveen Bhai, Saurabh Shrivastava. This predates any angel fund, nothing, but the infinity was the original fund of angels. So this was all the Thai. So the Thai what we see now, Thai, all the original guys of Thai set up.
00:22:25
Speaker
Infinity Ventures Fund. So all these guys were the LPs of the fund and Travinbhai loved it. And then I had another meeting with another gentleman called Rahul Shah. From that time, of course, the ILFS is not a good name. But in 1999, ILFS was a great Institute. They had a fund. So I met Rahul and Rahul asked me the most notorious questions. And I literally fought with them. He said, nobody is going to ever pay for it. This is a fad. Aiming is all bullshit.
00:22:53
Speaker
So he provoked me and I said, listen here, if you don't know gaming, then don't challenge me. And I literally stormed out of that meeting. And I told prize water house that make a win. But you won't believe. They are the guys, both Infinity and ILFS said, do you want to fund you? And now the problem was they wanted to give me more money. Infinity said, I want to be the lead. And ILFS said, I want to do this. So Infinity wanted to put 1.75 crores. ILFS wanted to put it 1.5 crores.
00:23:18
Speaker
So now they wanted to put more money. So finally the amount of money I was getting was almost three and a half, whatever that crores. And I said, wow, in a matter of weeks, but the presentation and you know, public, I was like, man.
00:23:36
Speaker
I don't even have a lawyer. And that's again, the dots connect so amazingly. So I had gone to a bowling in Pareil. This bowling company had just started.
00:23:51
Speaker
And I saw a senior from my college who's well-respected, Bholing, and I told him, I am a lawyer. So I said, great. You are hired. And by the way, for everybody listening, this senior of mine was just, I think, I don't know whether he was appointed, but he was just nominated to be a High Court judge. He's one of India's top lawyers. He was with J. Sagar Associates. He's
00:24:16
Speaker
The most sought-out lawyer for Sebby, his name is Soma Shekhar Sundarshan. So Soma, as he's popularly known, his first case was actually, one of his first case was my case, or my term sheet which he negotiated, and then he also did my shareholder's agreement.
00:24:32
Speaker
And the best part was, we did not have any negotiating points, because I was simply saying that, listen here, I never negotiated equity, I never negotiated any of these things. Today, a lot of people overanalyze and do all of this. I sometimes say that not knowing is actually a good thing. In fact, a lot of people who knew a lot kept negotiating, and literally what happened is,
00:24:55
Speaker
We were among the last few deals which happened in 1999 and 2000.com bust happened. So basically, literally, we were among the last few deals which got done before the bust. And the deals which did not get done were people who were negotiating and saying...
00:25:17
Speaker
So suddenly, imagine at that time, in 1999, I was 22-23 years old with 3.5 crores. And in that time, again, for people to know the context, in that time, 3 crores is today's 30 crores or maybe 40 crores. So it is like at least 10x or if you can't take inflation, it is 10-20x. And I had a venture-funded company, I had a board. And again, just to give you a flashback,
00:25:43
Speaker
They wanted me to get a president. They said, our CEO, they said, you don't have grey hair, you need grey hair. So I went, guest to who? To the same guy, the Pepsi guy who gave me my first business, TJ Venkat. TJ Venkat, by the way, by that time had become the country head of Sri Lanka, of Pepsi. So I used to go to Sri Lanka, did some business and then I convinced TJ Venkat to come and join us to be the CEO or president of the company. And Venkat came on board.
00:26:11
Speaker
It has been a crazy journey. And by the way, my volleyball was going on the side, but my volleyball came out, sports came out and you know, I started gaining weight and all of that because now that suddenly I'm running a company.
00:26:22
Speaker
So I think the starting of India Games has literally lots of ups and downs and challenges. I think the journey was even bigger on the roller coaster. The minute we launched. Dot-com bust happened. We had also put money in marketing. So within less than 12 months, we were about to run out of cash because we had to run out of cash.
00:26:42
Speaker
like everybody else. But because my core skill was making games, we quickly moved our model to a services model. We said, we'll make games for others. And we continue to survive. Games for brands for engaging customers or what? No, games for brands. Games for brands. The original model for advertorial. Exactly. So the whole .com model came advertised. In fact, I jokingly say we were saved by RBI. So the reason we got saved was otherwise we'll have zero money. We made a full ad.
00:27:12
Speaker
film of one of our games and that ad film was supposed to play on TV. But that time to put your ad on TV, the MTV office was in Hong Kong and Star TV office was in Hong Kong. So you needed RBI approval to remit money to play your ad and RBI disapproved our application. So we were about to spend almost 75 lakhs
00:27:35
Speaker
on our biggest ad campaign and RBI disapproves the campaign. I thank RBI and sometimes I say that when we say that these things are blocks and bottlenecks, but sometimes these bottlenecks are for the good. This lovely signal, thank God for unanswered prayers. Exactly.
00:27:54
Speaker
You know, I mean, like I said, I've seen it all with India Games. I look at India Games in three phases. Phase one was when 2000 to 2002, when we were struggling as a startup. Phase two of India Games was very interesting. We had discovered mobile gaming. This is a game when something called WAP WAP was announced. I told my board key mobile gaming is going to be the next big thing.
00:28:18
Speaker
He said, who is going to play games on their phones? I said, believe me, gaming is going to be big. And since we could make games, we approached Nokia and we told Nokia that Nokia had the most phones that we will make games for you.
00:28:33
Speaker
Nokia was in the process of launching its first colorless phone, color camera phone, and that was the first phone which supported Java games in Symbian games. And Nokia told us that, listen, we want games for this, but we will not pay for the games. You have to make the games.
00:28:53
Speaker
We will give you revenue share. What is revenue share? They said, listen, revenue share, mobile operators will sell these games to their customers and they will retain 50% and you will take 50%. But we will not pay any money. We said, okay, Chalo, we give you some money for it, but we are just going to support you from our budget.
00:29:12
Speaker
But you have to make the game. So we made 11 games totally for that phone for 7650 and the rest is history. What happened is that there were only four companies in the world who Nokia told to make games. One was us, one was a Finnish company, one was American company and one was I think from Barcelona or Spain somewhere.
00:29:38
Speaker
And what Nokia was the dominant mobile phone manufacturer. So what Nokia did is they went to every mobile operator and said, here is the new phone. And they said, please launch this games on your portal. Nokia helped us get contracts with 65 mobile operators.
00:30:02
Speaker
Across the world, be it Singtel, Verizon, KDDI, you name a country and you name a mobile operator, Nokia got us, I was literally on a plane and all of them did deals with us.
00:30:17
Speaker
and these games launched, and from having no revenue, we ended up doing almost a million dollars in revenue, a million dollars. And from these leaven-odd games, we said, man, this is crazy. And that's when we got the next idea. We said, this is a game, we have a tank attack, zapper, these are all like simple games with no brand. So then the idea was, what if we could get a brand? Can those games become very big? And that's when we said, let's get a brand.
00:30:46
Speaker
So I scribbled the name Superman, Spiderman, Batman and let's get one of these games. So we then identified Marvel. This is Marvel comics before they were acquired by Disney. So Marvel had an office in New York.
00:30:59
Speaker
So I went to Marvel Comics and I said, listen, we need to make games for you. And they said, listen, we don't make games. We license out. And the licensing amount they asked us basically took, basically we had to bet every dollar we have in our company to get that license.
00:31:17
Speaker
Again, that negotiation went back and forth for many months. And finally, what we did was the biggest hack. I told my team, let's start making the game. Anyhow, whether we have the license or not. So while we were negotiating, the game was getting developed. And finally, they said, we can only give you a six months license.
00:31:36
Speaker
Six months license, we are happy to take six months. What are you going to do? I said, yeah, we will take six months license because they thought that six months license made in-charge development time. So they actually gave it in a way to dissuade us. But we said, no, we can do it. They did not know that my game is almost ready. And how much did they charge for six months license?
00:31:56
Speaker
So we paid them, I think at that point of time, a minimum guarantee of almost, I think it was almost $150,000, a minimum guarantee. Which means that their share of the revenue went through these, basically it was an OTT model, right? Like mobile operators would sell an OTT and 50% of that comes to you. Out of that 50%, some percentage goes to borrow, which you guaranteed at $50,000.
00:32:21
Speaker
And that was all the money I had in that sense. And Varvel said that these guys are probably stupid, right? I mean, anyway, we did the deal and again, touch wood for us. And I say Spiderman always saves the day. And that game became, and within a minute contract was signed, a game was ready. In one week after the contract, the game went to all the mobile operators. We did it in, I think, 20 languages. And on that one game in six months, we made close to $2 million in revenue.
00:32:51
Speaker
So again, we bet the whole house on that. And that's what got us to the next thing. So again, we were now rocking, right? A company which was going bankrupt to suddenly having millions of dollars in revenue. Which year was this? The Marvel Spiderman Deep. So this is 2004. And how big was your team by that time? Tell me about the org. We were about 60, 70 people, not too much. And these were like designers and coders who were basically making gives. All of that. All of that.
00:33:17
Speaker
Basically, the very interesting part about the gaming industry is that today, if you look at the gaming industry in India, you will not find a single company that does not have an ex-India Games employee. So, in its entire career of India Games from 2013-14, a few thousand people came and lectured, etc. So, he became like the University of Gaming in India, in a way. So, what happened in 2004?
00:33:43
Speaker
Our initial investor wanted an exit. And that's when we again said, okay, let's go to the market. Let's raise money. And we got a new banker. And this time we appointed Ernst & Young as our banker. And St. Young was led by this amazing gentleman, of course, he passed away a couple of years back, Sameer Bangara. Sameer Bangara
Tom Online Investment and Exit Strategy
00:34:03
Speaker
was CEO of Qkey.
00:34:05
Speaker
Sameer came in as our banker. And again, we were negotiating with multiple VC funds and we had term sheets, etc. We were about to finalize a deal. Then I got a call. Here we are. There is this event happening. Please come to Beijing. So I went to Beijing for an event and there I met this amazing company.
00:34:25
Speaker
never heard of them. They were called Tom Online. Tom Online was one of the biggest companies. They were listed on NASDAQ and Tom was big into the mobile VAS space in China. It was basically part of Hutchison Group. So Tom Online, I met the
00:34:40
Speaker
people in Beijing and they said, man, we've just went IPO in NASDAQ and Hamari strategy that we have to grow outside China and we want to do gaming. This sounds very exciting. We are happy to come as investors, etc. So I said, listen, Hamari already deal is almost done. We can do it. We like you a lot, etc. Can you come to Hong Kong and meet our groups here?
00:35:05
Speaker
So I told them that, listen, I have a flight to go and my flight ticket is directly from Beijing to Bombay. I can't change my ticket to go to... So basically, I just said, I can't do. They said, no, no, no, no. Don't worry, we will get you a ticket and you will take me to Hong Kong. So I said, okay, ciao.
00:35:21
Speaker
They flew me in business class and made me see the rates and all that and they took me to Hong Kong. And then I met the group CEO and they were very impressed and they said, what to do? So I told them, our deal is already done, more or less. And unless you are going to offer something which is truly exceptional to our investors, why will they do the deal? They said, no, no, no. Tell us what is exceptional.
00:35:42
Speaker
So, I called Ravin Gandhi. So, just to give you a context, our investors had invested around $600,000 that time, whatever, $400,000, $500,000, they had invested that and our VC deal was at around $78 million. So, it was like a 2x, 3x.
00:36:00
Speaker
jump. So they jokingly told me, I went to them and I said, listen, the investors will do the deal at 20, 20 million, that valuation. So they came back and they said, not 20 is a little high, but we can do 18.
00:36:20
Speaker
Great. So I went back to our board and investors and I said, listen, you wanted 12, I'm going to get this elect at 18. And within 24 hours, we got a term sheet signed and finally took 30, 60 days to close. But what happened is these investors who came in at, who put three and a half crores in 1999, ended up selling at a valuation of 18 million. So they made 17X.
00:36:45
Speaker
on the money they put in. And the deal was they bought out the investors. Me and my team sold a small percentage and we wanted to still, I mean, I was not going to do anything else. So we still continue to run the company. The only difference was now instead of having two, three VCs, we had one, one investor, which is Tom online.
00:37:04
Speaker
which was this large Chinese company. And that was the first time when I saw an exit, and we saw how employees made money, investors made money. In fact, if you talk to Praveen, he will tell you that the only two bets which actually paid the whole fund of infinity, because most of them were write-offs for them during that time,
00:37:23
Speaker
There were two companies, India Games, and they also had one other company called India Bulls. That was their company. So then again, I started developing the companies from 2004, but 2006 was another turning point.
Disney Acquisition and Transition to Gokey
00:37:35
Speaker
What happened is the stock of Tom Online tanked in NASDAQ and their CEO got replaced. There was a new CEO.
00:37:42
Speaker
And the new CEO said, we don't want to do anything outside China. We only want to focus in China. We want to get out of all assets outside China. And they told me that. And I said, okay, don't worry. I will get you a new investor and I will get you a new thing. And then again, we went to market. And by the way, before I forget, again, I went back and Samir, who was that time our banker,
00:38:03
Speaker
I got Samyut to join as our COO. So I told Samyut, you have sold them the plan? What was the plan? Licensing the Marvel experiment. You wanted to scale that up? There were many. Now we were in the mobile gaming. So we set up offices. We set up offices in Spain. We set up offices in Los Angeles. We set up offices in China. So global domination was the plan. And this was through OTT route. Like, you will. So this was called Vast. This was pre-app store.
00:38:30
Speaker
This time, there was no Android or no Apple App Store. This is pre that. This is when A10 had A10 Live, Vodafone, Reliance, Web World and whatever it was. And they would make a lot of money through things like Hello Tunes, Wallpaper, Ringtone, Wallpaper.
00:38:49
Speaker
In fact, PTM, by the way, PTM was 197 that time, and 197 used to run callback tones, ringtones, and Vijay, and all these guys, their own roots are in the VAS space. We operate for SMS, Hangama used to do the ringback tones. So, a lot of the companies today have their roots.
00:39:08
Speaker
or their founders have their roots in the vast ecosystem in some way or the other. So in 2006, the Chinese wanted to get out. So that time, again, we went to market and then we did another deal. We got Ronnie. So Ronnie had UTV wanted to get into gaming a big way and Ronnie loved us and we loved Ronnie. So UTV was a film production company till then.
00:39:31
Speaker
New TV is business only films and television. Ronnie wanted to get into gaming and that is the time we said, listen, we are the best gaming company in town. So Ronnie came in, he bought out the Chinese, put some more money and basically we then replaced the Chinese with Ronnie. But then there are two other investors on our cap table. One was Cisco. So we were, by the way, Cisco's first investment in India.
00:39:54
Speaker
First ever investment of Cisco in India was India Games. And Adobe also, by the way, invested in us. So we had Cisco, Adobe and Ronnie on the capital from 2006-07. And the deal with Ronnie was that all the movies of UTV, we will be making games for. So you made the movie, whether it was Swades, Ravan, all the movies which was made under the UTV banner, India Games got the rights to make games.
00:40:18
Speaker
Yeah, 2006 to 2010, 11 was again very good time. Our team was almost 400, 350, 400 people. We had the peak had almost 60% share of the gaming market in India. So Nazara, by the way, was maybe 20% at that time. We were like 60%. Nazara was just...
00:40:39
Speaker
We used to go and run gaming for operators. So what we went and told operator was here, gaming gaming Chordo, we will be running your game store. So Airtel store, we were working with Airtel, we were working with Vodafone. And now it was not just about giving them games. So we had two businesses. One was our own games.
00:41:00
Speaker
but the other was we were aggregating games from all over the world and we had our own platform which operators were running in so it was our games plus so the business had really matured to another level what kind of revenues were you doing by 2010 we were close to
00:41:16
Speaker
At the time of exit, so I don't remember 2010 exactly, but when we sold, so 2012, we sold the company to Disney. When Disney bought UTV part of them. Disney did two transactions, they bought UTV and they bought India games. I think we were around a little less than $10 million when they bought us.
00:41:33
Speaker
with profitability and Disney bought us. And so it was a great journey and I'm just again summarizing this, but I can tell you that there were many ups and downs. I have done multiple transactions of getting new investor, getting old investor, getting money. We are some strategic investor, we have worked with strategic, we have worked with private equity, we have worked with venture capital, so all kinds of investors.
00:41:55
Speaker
And 2012 is when the grand finale happened, in a way, when Disney acquired the company, and then I was with Disney for a year as an employee of Disney. What did they value if you were at Liberty? I think publicly, they talked about a hundred million figures at which they bought the company. But again, me and my team were just having fun, so it was more fun. So I was with Disney for a year, but then Disney had a non-compete with me. So I left Disney, and that's what led me to Cookie, which is my current company. And that brings us to the end of this conversation.
00:42:24
Speaker
I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at ad at the podium dot in. That's ad at t h e p o d i u m dot in.