TouchTen co-founder and CEO Anton Soeharyo was at Game Developers Conference last Saturday with Andi S. Boediman of Ideosource. The two kicked off the event talking about what investors are looking for in companies. Touchten itself had just announced its latest game, Zico, a football game for iOS and Android based on the career of the Brazilian football legend Arthur Antunes Coimbra, better known as Zico.
The session was set up as a discussion with a host firing off a series of questions to the pair and the audience free to jump in with their own if they wanted to.
One of the early topics raised was when to look for investors. Soeharyo said that companies should “raise funds when you don’t need money, because you will have a bargaining position. Good things will come to you if you raise funds when you don’t need it”.
He explains that when you don’t need money, you can be on the same level with the investors and have the ability and freedom to accept or reject an offer. When your company already has a proven product, a sizable market size, stable revenue, only then should you seek more funds, said Soeharyo, because it’s money raised for expansion and growth, not to finance daily operations.
Boediman doesn’t speak for all investors but when he looks for companies, he doesn’t look for ideas. “I care about capability, don’t talk to me about an idea because fundamental capability is crucial”. This riffs off the popular point of view that anybody can have an idea but only certain people can execute it well. Investors generally look for talent, for the people behind the idea, because entrepreneurs who can execute one idea well are more likely to execute other ideas. “You need to have a proven experience when you seek investment for a game company”.
On the entrepreneur side, Soeharyo said to be careful when selecting investors. “You want someone whom you can sit down with on the same level. They have to be able to help you and guide you. You need to find investors that understand your needs, if you find investors who can only give you money, that’s a nightmare”.
“If someone nobody has ever heard of suddenly wants to invest in your company, be very afraid. Get to know your potential investors, be friends with them before you take the relationship further”, added Boediman.
Touchten’s main market is not Indonesia because the company makes apps primarily for iOS, which means they needed to look overseas for customers since Indonesia is not a big iOS market. Selling applications and games solely to the Indonesian market is a turn off for many investors according to the pair because the market is not favorable to paid games or even freemium games. The willingness and ability of Indonesians to pay to play games isn’t as high as in other countries such as Singapore and Japan.
When you’re selling on the App Store, Indonesia is a limited market thanks to the lack of credit card adoption across the country. “International market is ready in terms of channel and payment”, said Boediman, “you don’t have to educate them on anything, just need to tap into the market”.
In seeking co-founders or partners, Boediman said, “you need to find people with complementing value. If your’e passionate in creating games, find someone who’s passionate about making money. You have to understand what distribution channels you have. Make games that people want to play. Games is not only about creating, it’s also about numbers”.
Asked if Ideosource aims to make money from operations or from selling a company, Budiman said, “at Ideosource, we want to get return from equity, not cash-flow. I see the potential value from the company”.