Do indies care about data? What makes a good business partnership between game publisher and service provider? To get the answer to these questions and more, join our co-hosts Peggy Anne Salz from Mobile Groove and Target Gamer's Oliver Kern in our new web series. In this month's episode of The Mobile Vending Machine they speak with indie-darling Lucky Kat Studio and hypercasual data- and attribution- provider tenjin.io to learn how these two companies teamed up to make the most of their data.
Peggy: Hey, welcome to The Vending Machine where game publishers meet their service providers. It’s all about straight talk, no easy questions. I’m Peggy Anne Salz, a mobile analyst, tech consultant, frequent contributor to Forbes and Pocket Gamer and one of your co-hosts on today’s debut show. I’m super excited to introduce my co-host noted hacker, mobile marketing guru, yes stand up for it, Oliver. Helped app companies ranging from Indies to market giants like Rovio and Wargaming. More than 20 years, count them, 20 in marketing and advertising, marketing hundreds of casual core MMO games and online and mobile space. Boy, it just keeps on going on here. Now, managing target gamers and also Chief Commercial Officer at Lockwood. Oliver Kern, welcome. Great to have you here.
Oliver: Yes. Hi Peggy, Great to have you here.
Peggy: We’re the dynamic duo. We’re the co-host here. It’s been a while. I enjoy it every time that we connect, and we’ve known each other for years. So here we are, a new series. Like no other series out there. I have to say I host a few others, but this is very different. What started this before? I mean, I think we have to tell our audience where the spark came from here?
Oliver: Yes, it’s number one, so maybe yes. So I’ve contributed to a few podcasts and have been on plenty of panels, and then there was somebody who asked me, why don’t I do a podcast myself.
You know, there are plenty of podcasts, webinars out there. I mean, now more than ever, I would say, and I didn’t want to cover something already covered. I mean, what’s the point of that? I listened to lots of them myself. I don’t want to repeat what others are saying in different words. But what I observe is that there are thousands of service providers out there with an armada of salespeople, at least in the mobile space. I get so many emails every day, we all probably do, and it’s really hard to find the good ones.
I don’t believe in a TripAdvisor like solution where maybe there are a few stars and a few comments, and that’s kind of it. So I thought, maybe do something where we go a little bit under the surface. Get some interesting providers that maybe are not so much in the spotlight because of millions of dollars of marketing budget, and try to also, at the same time, get an objective view of having a business partner there. Somebody who uses a service provider and shares their story and experience with them because I believe that there is not always the silver bullet with service providers.
It’s not like, okay, you’ll have one service provider, and he will solve every solution for everybody, that just doesn’t work.
Peggy: It would be great if it were that way, Oliver, but it’s absolutely not. When you came to me with this idea, I mean, that was that it was like breaking new ground, you know, pushing some boundaries. I’m on board, absolutely, our guests are on board in this show. So, it’s basically very much about a dialogue. You said service provider, business partner. That’s what it’s about dialogue, not a deathmatch, although they are in two different corners, so I’m going to use that analogy to get us through this.
So let’s introduce our guests. We will say in the publisher corner; we have Herdjie Zhou. Herdjie is co-founder and CEO of Lucky Kat, well known for making casual games. Probably best known for Grumpy Cat, that’ll take you back just a bit. Long track record, therefore, of making engaging hyper-casual games.
Great to have you, Herdjie, in our publisher corner and on our debut show. Just great to have you; how are you doing?
Herdjie: Thanks for having me. I’m doing all fine. Thanks.
Peggy: So, where are you based, by the way?
Herdjie: We are based in the Netherlands in The Hague. So I call that the San Francisco of The Netherlands, near the sea, great tech companies here as well in The Hague. So really lovely. You should definitely visit sometime.
Peggy: Well, you’re on, I mean, when it’s all about work from home, you’re definitely on. And if you did work from home before you were doing conferences and you will know our guest in the vendor corner, I certainly do, very familiar to us. Matthaus Krzykowski, responsible for product at Tenjin, was instrumental in building up European operations and founder of Xyo. I remember that one way back, app search engine, very cool in the day. So a pioneer there, but also a pioneer in many other things, when he’s not building companies, mentoring and investing in them, helping technical founders, and frequent angel investments as well. Matthaus, are you ready to rumble in the publisher corner? Great to have you.
Matthaus: I’m a little bit afraid, but I hope Herdjie will be gentle with me.
Peggy: Absolutely, Tenjin, just high level, you know, elevator view. Tell me about it. It’s an attribution company, but it’s more.
Matthaus: Sure. Yes, I think we provide a specific set of tools and training, and one of them is attribution, but there are many others. I think most importantly, our data warehouse, which makes us unique in the space and we have a set layer of training which we provide to our clients, and I think we have the best fit with free to play publishers.
Peggy: Yes, that’s why we have you here. It’s about, and we have hyper-casual.
Hyper excited Oliver, we have them all, we’re going to kick in a little bit with, going on with the show, of course, but I just wanted to be clear. I think you’re the best one to say it, talking about again, the core of this show, what are the insights that might be applicable to a viewer? I mean, it’s definitely about sharing, but maybe you want to give me a better idea of the value here. We talked about being a unique show. Let’s talk about the unique value.
Oliver: I think there can be some value in actually having a conversation and somebody sharing experience with a service provider, and we will ask the question. So it may help also make sure that it’s not just a pure endorsement. Everything is great, and everything is green, but as I said, there is the right partner for the right studio, and we want to kind of dig a little bit deeper and try to find out, okay, why is this relationship, why did this start all these kinds of things? We want to make sure that there are no bullshit pitch conversations or something like that from Matthaus. I know he’s not that kind type of person, but nevertheless, and you’re definitely going to help me, so that doesn’t happen. Right, Peggy?
Peggy: Absolutely. And I have to smile because if there’s someone I know who’s no bullshit, it’s you first Oliver, you definitely Matthaus.
So let’s just start for our audience. They want to understand your studio because it’s hyper-casual. It’s hyper-competitive out there. It’s great to understand some of the milestones really, we talked about Grumpy Cat, but you’ve done loads since then.
Herdjie: Yes, we have done a lot. It seems like a lifetime ago that we released Grumpy Cat. Especially in mobile games, everything happens so fast. First of all, I want to say that I’m also no bullshitter, always very direct, Dutch people, Oliver probably knows. Talking about our studio, we started five years ago. We did some unique marketing back then. We did some influencer marketing with celebrity internet cats. That’s how we actually started our game studio. So our first game immediately got 2 million downloads in the first week without any paid user acquisition. Throughout the years, we were quite dependent on discoverability through the editorial team from the app store.
We did not do any user acquisition until the beginning of 2019. Meanwhile, like this year, we have had three top 20 games in the US, I think, even worldwide, and we are on track on about 30 million downloads for this year. So the studio is doing well, and yes, since Grumpy Cat, as I mentioned, a lot happened. I feel like a couple of gray hairs popping up here if I think about it, but yes, it’s been a great year.
Oliver: So what do you think, in hindsight, five years has probably gone by like a blast, is there something where you feel like, oh, if I would have only known back then. In terms of the studio, maybe, or maybe the choice in terms of how you position your studio, these kinds of things?
Herdjie: Yes, first of all, I want to say that I wasn’t in the game industry before that, so everything is new. Looking back on what kind of things I would like to have known back then is definitely more about user acquisition. As I mentioned, we were only having one channel, if you put it that way, and that is the editorial team off of the app store, and we only started doing user acquisition from the beginning of 2019.
Peggy: Currently, where do you think your headspace is at? Are you focused on UA? Are you focused on new projects? Targeting? Retention? I mean everyone has to sort of pick their battle, what’s yours currently?
Herdjie: Well, I think when it comes to hyper-casual, it’s actually all of them, and it’s a lot of things to balance obviously, but the first part of the funnel is marketability. So what we look at is, we do a lot of gameplay testing, video test, creative testing, and see if there’s any market for a type of game. Then obviously, when a game works or when we notice the demand for that type of gameplay, then we start actually developing a game. Then obviously, retention comes into play, and lifetime value, monetization, those kinds of things. But I think a hyper-casual studio actually needs to be able to do all of them. Whereas if you want to be a publisher, you need to know all of them, but if you just want to be a development studio, it’s just that last part of the game where you just focus on game and metrics.
Oliver: I hear a lot of hyper-casual studios talking about marketability and testing that. I do feel, or I would hope that this is actually almost something that now comes into the general mobile games space. At the end of the day, if I build a game, not a hyper-casual game, but a game for $3 million, let’s say, a big production, maybe then a marketability improvement by a slightly different theme could save me in UA, probably millions and millions of dollars, right?
Herdjie: Yes exactly. It’s a funny thing, this morning I also talked to another studio. I think we all, all game studios make the same mistake, which is they don’t test marketability first. Everyone thinks like, Oh, I’m going to just make a cool game and that game will be played. But the reality is that there are so many games out there, and the competition is really fierce. So marketability is definitely super important, and we’ve all made that mistake to develop a game for eight or nine months and then find out that no one actually wants to play your game.
Peggy: Which is all about commercial fit, which I know you, Oliver, we’ve talked about many times. You are an expert in that, and you have a sort of checklist. Yes, you do, I know it. In what to look for and to say, okay, look at this, and you’ll know you have a hit on your hands. At the end of the day, it’s all about looking at data. It’s all about juggling a lot of data. You have to do that because you have your UA. We’re talking about marketability. Let’s talk about attribution providers because you chose Tenjin. I’m also wondering the value overall, the position, what you look for in an attribution provider, because that is also evolving, it’s almost like BI instead of what it was, maybe a few years back.
Herdjie: Yes, that’s completely correct. Well, I think we started using Tenjin by word of mouth, which is actually, I think, the best marketing tool out there. So a friend of ours, they are using Tenjin as well. I think one of the key things that convinced us is that Tenjin is able to provide us knowledge because once we started thinking like, okay, let’s do UA.
As I mentioned, there’s no step by step tutorial out there. So once you find an article, you keep digging for more information and then at a certain point, it’s like this jungle of information you have. There’s just no organized information for that. So I think once we approached Tenjin and we actually mentioned how our studio is positioned.
Obviously, we are a small studio. We didn’t have a lot of knowledge. They were pretty keen to help us, both financially, other attribution tools were a bit too pricey for us, and in terms of knowledge, which I find even more important—getting to know what to do actually, how to start your first campaign. That is something that we found very important, which is why we were still with Tenjin.
Peggy: So you talked about word of mouth, that’s really important, but what I’m also hearing here is an evolving relationship. I mean, how would you describe a relationship today?
Herdjie: Yes, if you have a product, obviously your customer is number one, and I think with Tenjin, they are definitely customer focused. So, I think if you have a service tool and you’re customer-centric. Take care of the little ones, but also the big ones. I think that is important, and I don’t feel like we are less important than maybe the bigger clients.
I think you also need the willingness of the publisher or the client to get work done and also the willingness to learn about that information you’re getting handed over to you. So I think it’s like a chemistry that’s going on, and if both partners are really willing to make each other successful, then I think we have a magic formula.
Peggy: Okay. So, get stuff done, partnership, and also understanding the data isn’t what it used to be. Now, as I said at the start, it’s really about how to run your business. It’s not just saying event A, did this, etc.and you have that sort of micro view. It’s more about a macro view.
So it takes a different type of relationship. It takes a different type of provider. Now we said, this is straight talk. So we get to say, and he’s here to listen to you and to respond, what is missing? What would you like to see?
Herdjie: Well, first of all, I would like you to call me a bit more often, Matthaus. No, I am just kidding.
Peggy: Now he’s got you on spin dial here. I am just kidding.
Herdjie: I think there’s a couple of things. So, first of all, I think there’s a lot of information out there. So also on the Tenjin website, there’s a lot of information. There’s not really a training module that is put on the website. I believe you guys are working on that. So I think that’s definitely helpful.
For us, when we got started, there was still a lack of information. When you do a call, there’s a lot of different metrics that everyone is mentioning. You’re trying to keep notes, but also trying to listen. So at the end of the day, we still had to do a lot ourselves, and there was not really information somewhere on the website, I think, which is sort of like training.
So that’s definitely one of the things I would definitely improve. Another thing that could be improved is attribution on, yes with iOS 14 coming along, I’m not sure how useful this is, but on a creative level seeing lifetime value, on the creative level seeing more data. So a bit more granularity regarding that.
Oliver: So Matthaus mentioned earlier that their big, let’s say, USP or competitive advantage is the data warehouse. Are you using that? What does it bring you?
Herdjie: When it comes to that, I think this is also a point of improvement, the data you get is super raw. Which, on the one hand, is good. You can do everything you want. You can build models on top of that, but the question then is, what kind of models and how are you going to use that type of data? It’s so fast and so much, that again, I think the same analogy applies to having a lot of raw data, you turn a rock, and there’s another rabbit hole. So I’m definitely more.
Peggy: So we’re hearing a positive here. I mean, all I’ve heard is just more guidance, more connection, maybe a few calls Matthaus, but overall, a positive scorecard here, but I want to take a step back and just understand that relationship overall between attribution companies and their clients. How do you see that? What would you describe that partnership as being or evolving into?
Matthaus: On my end or?
Peggy: Working with people like Herdjie. I mean, he was very straightforward. He likes to work with you, what’s it like working with him?
Matthaus: Yes, I think the question, let me also maybe take stakes back and describe what I think the relationship is.
The best definition of innovation I ever heard was that innovation is 95% of the things you don’t want to do. If you know that you’re really understanding what you don’t want to do. When I talked to you in the beginning, you were a small team and a lot of freelancers, which everything shifted to an app store featured, and then you kept on being an indie. And I think at some point in 2019, you had hits and especially non-planned, which is, I think, still a significant gain for you guys today. Suddenly, you guys became a company, and I think having this patience and talking to each other and I think training is not like here’s a piece of training, and when you learn it, actually years pass by.
You choose as a founder what to do and what not to do and in your approach to everything. On the UA side, I would also say that you made a learning curve from Facebook first and Facebook only in the beginning to also looking at other channels. I think Facebook is just one of the smaller channels these days. You gained a lot of knowledge around it. As you say, it’s hard, as a creative person. So making the creative and the right type of creatives for these channels and finding your relationship with this nasty UA works for you as an indie person and as a creative person. This is this fair.
To answer your question directly, Peggy, I think for us, we love relationships like this. We know it may take a long time. That’s why we have a free tier and give a lot of free tooling away, and we give a lot of free attribution away, and examples, like Herdjie’s are examples that we like a lot.
Oliver: Maybe there was this case where there was this desire, Okay, I hear everywhere UA is the silver bullet, but then you try to figure out like, okay, how does this go? Then you start those conversations, and then maybe it’s not the right time. It’s great if you realize that before you actually kill your company. At some point, there might be then the right moment where you say, okay, now you have the confidence, maybe then this is now the right moment in time to actually take the data that you provide and really action on that. Probably more than just UA. I don’t know, is it also on the monetization front that you do there or do you use other tools?
Herdjie: Yes, definitely also on the monetization side, obviously, so that we can predict lifetime values as well, based on data fold. But to get back on Matthaus and I think that’s a fair point. I think that’s also where we were at the point we had to make a mistake where we wanted to do UA, but we were developing a game that took eight or nine months before it was released. Meanwhile, as a business developer or company, you also try to like, Oh, we’re going to do UA, so we also need an attribution partner? So you’re already starting those conversations, and we had to learn the hard way that’s actually not the way we should do it. I think it’s also a fair point what Matthaus was saying about freelancers and hiring. Getting information or getting knowledge externally, I think that is also one of the mistakes we’ve made to be fair. I think to build that in-house was actually a big thing for us so that we could execute much faster.
Oliver: I absolutely agree, and then you need a good toolset and, at the end of the day, a really reliable source of data that you can actually make smart decisions. But yeah, you probably do have to build also infrastructure around that yourself because whoever you choose at the end of the day for attribution will do a certain thing and may provide you with a raw data in some shape or form, but then, yes, I think in any case you’re always dependent on, somehow using the data to make smart decisions and because the marketplace is shifting all the time you basically have to be very fast, very agile. Very, I don’t know exactly, what does my gut tell me, does this make sense, etc.?
Peggy: It is about how to work together in a partnership, and I would love to hear from you, Matthaus. In a best-case scenario, how does someone come prepared? We talked about the partnership. I want to talk about the preparation. It seems to me listening to both of you that you have to come into this with your attribution provider in a certain way. What is it from your view?
Matthaus: I think it’s really patience, right? Like for us, we build for that by allowing this free tier and access to a lot of tooling. We don’t want people to pay, which was, in our view, the old way. I think you need to give the partner the freedom to spend all the time they need to get there not to get there, to figure out whether this is a fit or not a fit. Then the second piece is if you’re passionate if you’re in love with your game publishing, you know, we’re nerds all here, right? Our world is changing so much and so new trends all the time and some degree of openness towards these trends, right? Like four years ago, hyper-casual didn’t exist.
From my perspective, a lot of tooling didn’t exist, there was no LTV data for ad revenue, which we invented in 2017, and then many more people followed suit. So there are always pieces that allow for certain things. I think openness to experiment, to change your mind. On a private note, Peggy, if you had asked me ten years ago that I would be married now and I have two kids, I would have laughed at you and like I suddenly went this direction.
To be open, to go in a different direction. I think for a lot of indie developers who are really passionate about the craft, I think that’s something. We need these two pieces.
Oliver: Matthaus, so here’s the question, you obviously see a lot of companies obviously come knock at your door, right? Where do you feel like, okay, they didn’t work out, and in hindsight, you understand that’s the reason, or you could already even smell at the beginning, okay, this is probably not going to work?
Matthaus: So that’s actually great because you’re touching actually how we operate as a company. So we don’t have outbound sales. We don’t have many accounts, we’re still below 30 people, but this allows us not to charge people for a long time. So the way our operations work, let’s say a couple of hundred people sign up to Tenjin. We internally pick a few people we think have a lot of potential for what we are and where we fit, and then we give them this extra training and attention, which no one else does in the industry. So our model is to find these gems, as early as possible, and grow with them and convert them to paying clients.
Matthaus: Yes, so what I’m saying is we have a formula about that actually. We think what these people are, I’m not sure to which extent I want to share it, but I think the key ingredient we’re looking for is, do we talk to the deciders, right? Or is it like in hyper-casual, we got so many inbounds from X studios where some very passionate, talented person came to us, but within one or two calls, they don’t have the buy-in from the mothership to actually go on this learning curve.
Peggy: So there’s great common ground, what are you going to do? How are you going to address what he’s missing? Is it an easy fix?
Matthaus: I think first free pieces, right? Like, so I made my notes here, so I don’t forget.
Peggy: I saw you doing that. So he’s taking them seriously, Herdjie.
Herdjie: That’s good.
Matthaus: I know he’ll come back to me about them. So, I think when we launched his product, data warehouse project, we didn’t know how to empower people. We actually changed a lot of things there, but his criticisms about our training model, those not being structured enough, I totally accept that as criticism. At the time, we were still figuring it out. I think how life for people like Herdjie changes? You know, in 2016, 2017, he was just launching the game, and now suddenly, he has to work with data scientists and data engineers. I think that’s new for game publishers, but it was also new for us to figure out how we actually teach people this. Also, working with a data warehouse, you get the raw data. We actually built for Herdjie a load of data points, which are not raw anymore. So we had a learning curve on our end but to provide much more training around that, that’s happening, it’s one of my big projects for this year, which I’ve been on since January.
So, and Herdjie knows, I believe you’re part of our alpha group of people testing I heard a couple of days ago. The last piece was attribution and granular data on a creative level. I think as we will be talking about it, I think on iOS just goes away. That was a fair point, but it came up with our business model. Like when you go to other attribution providers, and you want to calculate LTVs or build a data warehouse, you have to do it yourself. We’re great with these free game publishers because we give them basic versions of this straight away. Here’s something to run, test it, but it also made it much harder for us to add more granularity. You could assume that we were, and we’re still working on it.
Peggy: But we do have to perhaps just think about continuing the conversation, as I said, it’s a dialogue. I’m sure that people tuning in they might want to connect with all of you actually. So why don’t we just do a round here, of how can people connect with you best? Is it social? Is it LinkedIn? I’ll start with you here, Herdjie.
Herdjie: Yes, the best way would be to know, drop me a message on LinkedIn, Herdjie Zhou. That would be best.
Peggy: All right, you’ll get tons of those. How about you, Matthaus?
Matthaus: If it’s about me, the individual, you can find me on LinkedIn or Twitter. If you want to engage with Tenjin, come to our website. Give a shout out that you heard about us on this podcast, and I’m sure I’ll be notified.
Peggy: Okay. Oliver?
Oliver: Yes, LinkedIn is perfect for me, as well. Always respond there.
And you, Peggy?
Peggy: Well, I’m over at mobilegroove.com, and I’ll also be with you for our next show and all the shows going forward, Oliver. This is exciting, and I enjoy the idea we connect literally because we’ve connected them, we’ve connected here on this show. Thank you also for connecting with us, and thank you for watching, and we’ll look into next month.
Who do we have, Oliver? I mean, you’re the one, you’re the keeper of the guests. Tell us a little bit about what we can look forward to.
Oliver: Yes, so I want to discuss creative because, especially with the lack of targeting coming, I think creative will really be the targeting, and I want to discuss it with a service provider and their client. Where we talk about creative is King and how they actually collaborate to get better with regards to creative.
Peggy: Yes, so winning with creatives, great topic. So until next month, stay well, keep safe.
We’ll see you soon. Thanks, everyone.