Spotlight on Mike Mawbey, Portfolio Risk Manager
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“There’s really no substitute for hard work,” says Lockwood Publishing CEO Halli Bjornsson on the importance of setting up a solid foundation for your business. Founded back in 2007, Lockwood started life as a work-for-hire company specialising in creating cross-platform entertainment software for the mobile market, with an emphasis on keeping costs low and surviving as an independent studio for as long as possible. As their expertise grew, so did their reputation, and before long they spied an opportunity that could help catalyse their growth. “The main thing was we gave ourselves time to find our feet as a work-for-hire company and look for opportunities to grow our knowledge and skills,” says Bjornsson of the company’s early days. “In the beginning, we could function with relatively little revenue and without any investment for a decent amount of time – and eventually we got a great contract with Sony.”
This contract paired them with Playstation Home, Sony’s virtual social platform which allowed users to create and design their own digital avatar and play with fellow gamers. During their time working with this media giant, Lockwood’s knowledge base expanded further as they created digital spaces, items and games for the service’s 20 million-strong player base. Playstation Home recognized their work, awarding them the ‘Best Developer’ accolade five years in a row – and when the platform folded in 2015, Bjornnson and his team were ready to dive straight into development of their own intellectual property. “Playstation Home was a virtual world and virtual worlds had been around for a while,” explains Bjornsson on how Sony inspired their debut IP, Avakin Life. “Once phones started to be able to do 3D, we thought that doing a virtual world on mobile would be a good idea because mobile is really the killer virtual and social device,” he says. “You could just see that it worked really well.”
Lockwood’s end product, Avakin Life, was a fully customizable virtual world in which users could exist, play and interact with the digital avatars of other customers all over the world. It was a huge success; the company’s gamble of combining ‘second life’ gameplay with mobile technology had paid off and – at the time of writing – Avakin Life has racked up over 50 million app downloads with a multitude of users based all over the worldwide. “You’re never prepared for it,” says Bjornnson on Avakin Life’s rapid success. “We got a lot of downloads and it’s kind of grown really steadily since,” he explains. “We had never really ran a big company before, so it’s a huge learning experience – but we had a lot of experience that we picked up along the way.”
A transitional period quickly followed and to help the company on their way, Lockwood received a Creative England Business Loan to invest in new staff during a time of substantial growth. When it comes to securing investment, Bjornnson believes preparation and presentation is key – but quickly returns to the simple importance of having a strong foundation on which to build your future. “You have to get the stats on your business and prepare a presentation,” he begins, “but you also have to talk to people and start the process of marketing your business years before. You have to think about everybody you meet – talk to them and create a network,” he suggests. “People talk, and if you’re able to continue your success, then people will remember you. It’s a very long process,” adds Bjornnson. “Don’t wait until you’re successful – you have to start getting out there a lot sooner.”
As for approaching new investors with your product, remembering to stay grounded is Bjornnson’s biggest piece of advice: “They’re a lot more human than people think,” he smiles. “Most think they’ve got really good stats and their company makes a lot of money – but, actually, what I’ve found is that a lot of investors invest with their heart first – even they will tell you that.” Finding the right type of investor for your product is also important and something that proved easier said than done with Avakin Life. As an IP built upon a predominantly female customer base, conveying its true potential to the largely male dominated investor sector was tricky. “A lot of investors unfortunately are men – and a lot of men just don’t get Avakin. It’s a game for women so that was a bit of hurdle,” he recalls. “It needed people that could really understand what we were doing.”
If you find yourself in a similar position, don’t fret. At the end of the day, Bjornnson assures us that the quality of your company and potential of your product will cut through any barriers. “The numbers, growth and revenues speak for themselves,” he explains, before returning once more to the importance of word-of-mouth. “A lot of it is down to networking. You build up a relationship with people who then trust you and believe in your company and your team’s vision,” he adds. “It’s not just down to you or me, it’s the whole team.” Bjornnson’s belief in this team-focused method is so strong, he suggests honing it before even considering outsider investment. “Not having any money is a really good discipline because it forces you to think about your customers,” he says. “It’s going to teach you a lot.”
What’s more, this independent approach will also teach you valuable lessons for when your company does finally receive a cash injection. “Talk to people and get introduced to investors. It’s really old school but very important,” continues Bjornnson. “Be communicative and reach out to a lot of people. Ask them for advice on how to do things because it’s not always going to go well – and it might even be dangerous to think everything is always going to go well – so try to get something going on your own and test your ideas. When you do start looking for investment, don’t get a huge amount,” he opines. “Get just enough to take you through each step along the way, because the more investment you get the less you’ll end up owning your company.”
Successfully selling yourself to investors is one thing – but what should a company look for when it comes to selecting who to team up with? “Your investors are like your business partners so it’s very important that you get along with the people you bring in,” reasons Bjornnson. “It’s important that you’re on the same page and you’re going to be able to go through the various ups and downs together. It’s kind of a cliche – but it’s a bit like a marriage,” he laughs. “It’s going to be really difficult if you don’t get along and it’s going to make for a very stressful existence. I’ve heard of people who’ve taken money from investors and it becomes a nightmare so make sure the terms are okay and everything works for everybody,” he tells us. “The main thing is finding people who are excited about your business in the same way you are.”
For Lockwood, finding those people had a startling impact on the ways in which they are perceived within the marketplace – something that’s critical for any company to stand out. “We had some great investors come in who were involved with games and gave us some really good advice. Our knowledge base has widened a lot,” explains Bjornnson. “They own CCP which is an incredibly acclaimed games company in Iceland and the sheer amount of knowledge they bring is incredibly valuable – and a validation as well,” he admits. “People see that these really serious people are into what we’re doing and that’s a great validation for the people working on our team and for those who want to come and join us.”
If Lockwood’s success has made you eager to grow your own company’s potential, Creative England’s recently relaunched Creative Enterprise Evolve scheme can help you do just that. Aimed at high-end screen sector businesses and creatives, it’s a programme that offers investment support, introductions to industry experts and everything a company needs to help them on their way to securing growth funding. “Anything like that is going to be useful, for sure,” says Bjornnson on schemes that help SMEs reach new heights. On the flip side of the coin, the screen sector couldn’t be in a more alluring position for potential investors: “The entertainment sector is already big and it’s probably going to get bigger and the demand in general is going to continue to grow,” predicts Bjornnson. “People out there are already tuning in to that. It’s a growth area.”
