GameFounders accelerator helps game startups take wing in both the East and the West

Above: GameFounders’ third class in old town Talinn

Image Credit: GameFoundres

GamesBeat: Is the world really flat right now when it comes to making games?

Bragiel: I don’t think it’s super flat. There are some really tall mountains, right? Some places hold some key knowledge. But look at GDC now. I’ve been coming here since 1997. GDC now versus then, back then you saw no foreign developers. You saw a couple of random dudes from western Europe and thought, “Whoa, they came all the way here!” Now it’s ridiculous. I hear a new language every other conversation. The world is getting way flatter in terms of exposure.

Ugand: At the same time, every region has its own challenges. Even the entrepreneurial mindset isn’t the same in some countries. In some places the society requires you to have a well-paying job. You have to address that somehow.

GamesBeat: Do you find that investors might be willing to follow you guys into some of these countries?

Ugand: We’re hoping to find new investors there, I’d say. I see a lot of the Asian players coming to Europe and the U.S. to scout for investments. If we go there and take it to them on a platter, that should be easier. But we also provide more value to the existing ones we’re working with, connecting them with Asian talent.

Bragiel: Investors are opening up more and more in general. Even U.S. investors are investing a lot outside the U.S. Most of our investors are from all over Europe and the United States. If they see a brilliant company from Malaysia or Vietnam, they’ll come in alongside us. But also, the VC market in southeast Asia is really growing fast. I think it’s the fastest-growing VC market in the world.

GamesBeat: Do you have some success stories you can already point to? Do you feel like everyone’s waiting for you to find the next Rovio?

Ugand: We’ve worked with 28 teams so far. We’re investing in such an early stage that we’re not going to get a Rovio in six months. Our last final cycle just finished in June of last year, so it hasn’t been quite a year. But our most successful company in terms of investment has raised more than half a million euros, which is already a considerable amount. All of them are live. If you compare to most tech accelerators, that’s a huge achievement. About three-quarters have published original IP. 40 percent or so have some sort of investment or publishing deals in place. Overall we think we’re on track. We didn’t step into this in a naïve way thinking we’ll be zillionaires in six months.

Above: GameFounders event

Image Credit: GameFounders

Bragiel: It took seven years for Y Combinator to get their first billion-dollar company, right? Their first $100 million company was five or six years into it. It takes time. But there are some good trends.

Ugand: We have six teams here at GDC and they’re all from different places – India, Georgia, Italy, Ukraine, all over. They’re all here showing their games and having really good meetings because we’ve tapped them into the industry.

Bragiel: This is a long-term plan. This is not only something we believe in financially. We believe that this ecosystem—It’s kind of a meta-startup. We can go out there and transform an entire region. I’ve had a couple of startups, a couple of exits myself, so what’s next? I could step it up a little bit.

Ugand: It’s exciting. The whole Game Founders concept is like a startup itself.

GamesBeat: How big a staff do you have right now?

Ugand: We have a core team of three at Game Founders that keeps us operating, but we do look to establish a global presence. We want to have a year-round presence, not only in the time that we run the actual program. Then we can have a better impact on the ecosystem locally. When we’re at our final goal, we’d have that in all three regions.

GamesBeat: How do you feel incubators or accelerators for games should operate and be structured? What have you learned about that?

Bragiel: I approach everything like this. Our goal is to become something like an older brother. I don’t think accelerators should create a kind of VC-entrepreneur relationship, because that can be very antagonistic sometimes. I’ve had some nightmare experiences with VCs. I want to come in as almost a part-time co-founder. They can come to us in the good times, when things are on fire, and they can come to us when they’re saying, “One of my partners wants to quit. We’re about to go bankrupt.” Once you have that very open relationship, it helps a lot. Like I say, you can tell your older brother, “Hey, I met a cute girl, how do I ask her out?” You can’t tell your mom or dad that. We want to have a very open, collegial atmosphere.

Another thing that’s very important is that teams should learn from each other. I sold my last company a few years back, so I’m a bit removed. One team might have run into the same problem as another just a few months back. Having this kind of peer-to-peer mentoring is even more beneficial than we thought it would.

Ugand: That doesn’t end when they finish the three-month program, either. We’re doing weekly webinars now. We have our own teams giving others advice. One of them might have cracked something about how to do ads in free games and he can share with the others. That’s very strong. We’ve even had teams like therapists to each other. Like Paul was saying, a team will have a huge fire or they’re almost breaking up, so we tell them, “Okay, you talk to these guys. Let’s take a step back.”

GamesBeat: What about the question of ownership – how much equity to take, or whether to take it at all?

Bragiel: We believe in taking equity. I’m an entrepreneur. I want to be incentivized. I’m not a charity here. When I look at these government or university programs, I don’t feel like the people there are going to fight as hard. With one of my companies, I know I have a decent piece of it. I’m going to really scrap. I’ve become an entrepreneur with them.

It’s not free money, either. Sometimes people get grants and they don’t treat it like it’s worth something. Here, you’re giving something up to work with us. You have to really want it. I think it’s very important.

GamesBeat: Supercell pointed out something interesting. They said that the government gave them 400,000 euros at the start, and if they’d failed, they wouldn’t have had to pay it back. There’s no pressure.

Bragiel: But the thing is, it was a matching grant. They had to bring in and sell part of their company. It wasn’t free money. Then it multiplied. Some people are just giving away grants, and that—

Ugand: You can also find good examples of people making grants work. But in general I’d still say that—at least every week or two weeks, we speak with all of our companies. We have to be incentivized to be involved and work with all these companies, finding meetings for them, finding contacts for them.

Above: GameFounders fourth class at the highest point in Estonia. (318 meters elevation)

Image Credit: GameFounders

GamesBeat: I went to a talk just now by indie developer Theresa Duringer about the economy of favors in the indie scene. We have all these meetup groups that help each other. That seems like a big part of it.

Bragiel: It’s a family, yeah. People help each other. Going back to Y Combinator, what’s one of the most valuable things about that? It’s the alumni network. You’re very proud to be associated with something and you want to help those other people out. It’s cool seeing our teams say, “Hey, if my team does well, Game Founders’ profile rises, meaning my profile rises, and I can get a better valuation.”

Ugand: Even the ones who haven’t met each other—Here we have six teams from different cycles, but they still all know about each other. They’re helping each other as well.

A third thing about best practices, a big part of mentorship is also making it useful for the mentors. They’re not just teachers, in a way. They also get something out of it. We always try to have mentors who would benefit from meeting each other come on at the same time. Two of our mentors who met at Game Founders created a company together. We’ve had mentors meet investors through us. They feel like they have some incentive to help us more.

In the tech scene I’ve been involved in some of these initiatives before. It’s all about how you take care of your mentors and how you make it interesting for them. They put in a lot of effort and they help you out a lot.