MASTERING THE ART OF SCALING YOUR MOBILE GAME
For More Information About Launching or Scaling Your Mobile Game, Follow @pollenvc on Twitter
PART 2 OF THE POLLEN/PLAYCRAFTING SERIES
Mastering the Art of Scaling your Mobile Game 2
KENNETH LUI
• Business Development
• Competitive Dota 2 and Smash (Melee & 4)
player
• Previously addicted to Clash Royale,
Pokemon GO, Summoner’s War, and Non-
stop Knight
How To Launch Your Mobile Game
MEASUREMENT
• Bug Tracking
• Analytics
• Chart Tracking
• Attribution/Campaign Performance
WHAT ARE OTHER STUDIOS USING?
Mastering the Art of Scaling your Mobile Game 7
Apple Releases your cash
• Average Revenue Per Daily
Active User
• 1, 3 & 30 Day Retention
• Benchmarks
ARPDAU AND RETENTION
Mastering the Art of Scaling your Mobile Game 10
PURPOSE• Competition is fierce, and getting your
game right for the first time is
essential!
• Testing the user experience/behavior
in the game
• Testing that analytics is working
(Marketing -> In-Game)
• Get an understanding of UAC and LTV
Mastering the Art of Scaling your Mobile Game 12
• ~ 3-4 months
• ~ $15-20k USD
• ~ 2,000 DAU
DURATION, BUDGET & SAMPLE
AALTO EE / GAME EXECUTIVE 2016 13
Apple Releases your cash
• Bugs/Events
• Downloads - by channel
• Monetization ARPDAU - over $.
20
• Retention
• D1 ∼ 40%
• D7 ∼ 20%
• D30 ∼ 10%
• Organic Growth / Virality (k-
factor)
WHAT TO MEASURE?
Source: Fiksu
Mastering the Art of Scaling your Mobile Game 14
Apple Releases your cash
Overspend Even Underspend
Large English Speaking Population
COUNTRIES
Mastering the Art of Scaling your Mobile Game
YOUR PLATFORM RELATIONSHIPS
18
• No substitute for making a quality game that’s fun.
• Pitching platforms early on
• Meet reps at events
• Ask someone if they’ll share your game
• Submit through App Support
21
TYPICAL LAUNCH SCENARIO
LAUNCH
Fail to get
credit with
ad networks
Can’t
reinvest to
acq more
users
You get
paid by
Apple
DOWNLOADS REVENUE
Rev
enue
/ D
ownl
oads
AALTO EE / GAME EXECUTIVE 2016
How to Finance Your Growth: A Metrics Based Approach 25
ABOUT POLLEN VC
MARTIN MACMILLAN, CEO & FOUNDER
Pollen VC provides a new type of growth capital for
app developers who are ready to scale
We enable developers to fund advertising by
unlocking the value in app store revenues early
Our model is a flexible and non-dilutive alternative to
equity financing, allowing developers to retail control
while growing their business
Our mission is to get start-ups to think about capital
efficiency, using the right type of funding for the
right purpose
How to Finance Your Growth: A Metrics Based Approach 26
AGENDA
PREPARE TO SCALE
ALL ABOUT THE METRICS/UNIT ECONOMICS
FINANCIALS
WHAT DOES YOUR ORGANIZATION LOOK LIKE?
How to Finance Your Growth: A Metrics Based Approach 27
ARE YOU READY?
WHAT DOES YOUR BUSINESS LOOK LIKE?
MOTIVATIONS
WHAT’S THE END GAME?
28
Everyone knows the stories about a few apps that go
viral with no promotion.
For the 99.9% of all other apps launched, it’s necessary
to spend to acquire users.
THE REALITY IS THAT YOU NEED TO SUPPORT YOUR APP WITH PAID UA
How to Finance Your Growth: A Metrics Based Approach
29
Let’s start with the basics…
UNIT ECONOMICS OF PAID UA
LTV - Lifetime Value
• Expected value of that customer
over it’s lifetime, i.e. total
amount earned
• What does it mean for app
developers?
• How long is a lifetime?
CPI - Cost Per Install
• How much does it cost to acquire a
user?
• Where do I find these users?
• How do I target these users?
• When do I pay for these users?
How to Finance Your Growth: A Metrics Based Approach
32
THE USER ACQUISITION REALITY
Unless you have worked out an ROI positive way to spend money
on paid UA, no amount of VC or external investment will get you
the result you need.
FACT
Prepare to Join the App Millionaires Club
33
CONSTANTLY TRACK
METRICS - DOWNLOADS, CONVERSIONS, RETENTION,
ARPDAU, CPI etc.
ATTRIBUTION - WHICH NETWORKS ARE WORKING OR NOT
WORKING - NB THIS CAN CHANGE DAILY
35
RECIPE FOR SUCCESS
Understand what it costs to acquire
a user
How to Finance Your Growth: A Metrics Based Approach
How long before you receive the
revenue?
The revenue they will generate
VS +
How to Finance Your Growth: A Metrics Based Approach 36
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
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361
PROFIT & LOSS DOES NOT EQUAL CASH-FLOW
Days from launch
37
THE PROBLEM: PLATFORMS ONLY PAY OUT REVENUE UP TO 60+ DAYS AFTER YOU’VE EARNED IT.
LAUNCH You’re earning money from day 1
This is your moneytrapped in the payment system
Platforms release your cash…
How to Finance Your Growth: A Metrics Based Approach
38
HOW TO USE THIS TO YOUR ADVANTAGE
Unlock the value of your earnings
rather than using venture capital to
fund growth
Think of your accrued
app store earnings as an
untapped asset
How to Finance Your Growth: A Metrics Based Approach
40
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50 LTV
365 Day max.
41
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50 LTV
365 Day max.
$1.00 CPI
42
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50 LTV
365 Day max.
$1.00 CPI
1,000 Installs daily
How to Finance Your Growth: A Metrics Based Approach 43
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
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LET’S GET BACK TO LTV
Days from launch
How to Finance Your Growth: A Metrics Based Approach
-$100,000
-$80,000
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000 Se
p-1
5
Oct
-15
No
v-15
Dec
-15
Jan
-16
Feb
-16
Mar
-16
Ap
r-16
May
-16
Jun
-16
Jul-
16
Au
g-1
6
44
NET CASH POSITION
Net Cash Position
first becomes
PositiveFirst App Store
payment hits bank
account
Spending $1,000/
day on ads
How to Finance Your Growth: A Metrics Based Approach 45
USING REVENUE RECYCLINGN
et C
ash
Po
siti
on
-$400,000
-$320,000
-$240,000
-$160,000
-$80,000
$0
$80,000
$160,000
$240,000
$320,000
$400,000
Weeks After Launch
0 4 8 12 16 20 24 28 32 36 40 44 48 52
Net Position w Revenue Recycling Net Position
-$100,000
-$80,000
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
Sep
-15
Oct
-15
No
v-15
Dec
-15
Jan
-16
Feb
-16
Mar
-16
Ap
r-16
May
-16
Jun
-16
Jul-
16
Au
g-1
6
How to Finance Your Growth: A Metrics Based Approach 46
USING REVENUE RECYCLINGN
et C
ash
Po
siti
on
-$400,000
-$320,000
-$240,000
-$160,000
-$80,000
$0
$80,000
$160,000
$240,000
$320,000
$400,000
Weeks After Launch
0 4 8 12 16 20 24 28 32 36 40 44 48 52
Net Position w Revenue Recycling Net Position
-$100,000
-$80,000
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
Sep
-15
Oct
-15
No
v-15
Dec
-15
Jan
-16
Feb
-16
Mar
-16
Ap
r-16
May
-16
Jun
-16
Jul-
16
Au
g-1
6
Recycling
revenue allows
you to achieve
same UA
spend on 20%
of your
starting
budget or
spend 4x more
on paid UA
with same
budget
c.$20,000 required
c.$80,000 required
How to Finance Your Growth: A Metrics Based Approach 4747
Reinvest earned LTV directly into advertising
Acquire more users faster
Extract LTV on a daily basis
A NEW WAY…
Extract your LTV as you earn it, to fund
your advertising spend and fuel your growth.
Keep your VC money in the bank!
How to Finance Your Growth: A Metrics Based Approach 48
FINANCES
WHO IS THE CFO?
WHERE ARE THE GAPS IN KNOWLEDGE?
PROCESSES AND SYSTEMS
49
FINANCING OPTIONS
VENTURE FUNDING
Product
Team
Acquisitions
DEBT FUNDING
Marketing/Paid User
Acquisition
Financing projected
cash flow
How to Finance Your Growth: A Metrics Based Approach 50
LONG TERM GOALS
WHO WILL BUY YOUR COMPANY AND WHY?
BUILD YOUR BRAND!
PUBLISHER OR SELF PUBLISH?
RAISING VC/ANGEL FUNDING
IF YOU WANT US TO MODEL YOUR LTV AND CASHFLOW PLS EMAIL US!
@PollenVC