Ten years ago (it seems like yesterday), we started building companies. I was talking about this to a group of MBAs the other night and I suddenly realised “we had an investment theme!”. This was a pretty exciting revelation-up until then I thought we’d been just solving problems.
From the day we started DemonWare to the day we exited Jolt Online (and the various undisclosed investments during and after), we had bet heavily on the growth of online gaming as a theme. This graph tracks the approximate MAU over that same period. Clearly we made the right call.
Anyone who’s had a conversation with me in the last year or so will know I’m extremely bullish on the kids space. I think it’s about to go through the same transformation as online gaming. Here’s why;
- Step-change in technology access: Not just kids with iPads but kids with frameworks letting them create applications of their own easier than ever before.
- Disruption via regulation: Brands spend $150B each year in this category. But with extended COPPA legislation plus the crackdown on IAP, plus increased marketing standards (all of which are welcome), it’s going to need a whole new marketing infrastructure.
- Disruption via content creation: The top properties in the kids space are bottom-up (Moshi Monsters, Roblox, Minecraft etc. are driven by users) rather than top-down (Disney, Nickelodeon etc. are driven by adult design) . Moshi Monsters merchandise is now outselling Star Wars merchandise in the UK.
- Device fragmentation: Kids are engaging across all platforms; mobile, browser and table but also on TV. New entrant advantage.
Last week we announced that Box of Awesome (which we launched a few months ago) had acquired Swapit to become SuperAwesome (Angel List profile here if you’re interested), which is now the biggest discovery platform for kids in the UK. It’s only going to get bigger from here