London’s Accel Partners’ StartUps Share Why They’re Great

by on July 22, 2009 at 5:35 am

Alfresco logo I met with a number of Accel Partners portfolio companies in London recently; the industries ranged from enterprise content management to virtual games for kids.

Alfresco’s CEO John Powell’s core competency for the past 20 years has been working with enterprise content management systems that help you power companies. “Open source is a model we want to use,” he says, “we want to make money, but we also want to make a difference.”

It’s not all viral for them. Powell says they do invest a lot in brand awareness and marketing and although they launched the company in the U.K. in 2007, they are currently running businesses in five European markets.

WeeWorld The one woman CEO in the room was Wee World’s Celia Francis, whose company offers a virtual world for teens with a massive mainstream appeal.

More and more educators and researchers are seeing that social play is important throughout a person’s life, particularly through adolescent teen years, when teenagers are trying to learn to navigate their way in the real world.

Their previous service Wee Me has 29.5 million registered users, so based on that stat, there’s still room for the virtual world to thrive. For their newer service Wee World, which is extremely visual, they currently get two million uniques, 90% are return visitors and 85% of those are from the U.S. Why? “Because it’s important to win in the U.S. market first,” Francis says.

They’re also trying to expand their reach in the U.K. and the rest of Europe. 90% of the traffic is organic through word-of-mouth and the other 10% is from people who are making a Wee Me on partner sites.

She describes the service by using one example of life in Wee World, “you can get yourself a pet dog, and every time someone pets it, it evolves and grows. Teens can also make up their own games on the site.”

Apparently 70% of their audience changes things in Wee World every day. “We’ve added trophies, quests and ways you can accomplish things,” she adds, which adds achievement layers on top. It’s a combination of socialization and expression.

The two companies I was most intrigued by and had a chance to spend more time asking questions was Wonga and Mind Candy, most known for their brand Moshi Monsters.

WONGA FINAL FINAL Wonga CEO Errol Damelin is originally from South Africa, so we had a lot to talk about.

Wonga provides short term loans ranging anywhere between five days and a month. Says Damelin, “we want you to repay your loan quickly and, unlike many traditional sources of credit, we’re not about stringing repayments out for as long as possible. Our service is designed to put you in control of your cash flow, for those times when an unexpected expense catches you by surprise.”

Social marketing is limiting because people don’t want to tout that they need money. That said, there’s clearly a market for this service and not just in the U.K., which is where their focus is today. They’ve been live for a year and are focusing their efforts in the early days, on building trust, which is based on three core principles.

Damelin adds, “we get a significant amount of our traffic through word-of-mouth, which comes from us over delivering, being consistent and treating people the way people want to be treated. At the end of the process, did we deliver and would you use us again?”

Unlike most lenders, they enable you to choose exactly how much money you want to borrow – down to the last pound – and for exactly how many days. Wonga doesn’t force you to borrow a fixed sum you might not need, nor do you accrue interest for longer than necessary.

The amount you apply for and the length of the loan naturally affect the cost of repayment too, so you can make adjustments until you’re happy with all elements of your application.

One key difference with Wonga vis a vis a credit card or overdraft: you must commit to settling your Wonga loan quickly. They actually make their money when you repay them on time, not by continually extending a growing line of credit. They don’t endlessly roll their balance from month-to-month and no further funds are made available until your existing loan is repaid.

Wonga is not a typical internet lender. Because they have a sophisticated credit reference system, all application and payment is entirely online. Their technology allows them to assess applications in seconds and select people whom they believe are able to repay them.

He adds with a smile, “the lending business has been calcified and static for years, but over the past couple of years, it has liquified, which has created a lot of new opportunities for us.”

I also shot some video of Damelin on site in London, so be sure to listen to his pitch in his words.

Moshi monsters At Mind Candy, the parent to Moshi Monsters, they make multimedia games. “Playing alone is fun, playing you’re your friends is even more fun but playing with people from around the world is the ultimate,” said CEO Michael Acton Smith.

“The coming boom of the next two years are games for everyone else, like games around subjects that are more mainstream, such as dancing, fashion, sports, and virtual pets,” he says.

Moshi Monsters is a little bit like Facebook but for kids, but you can also create your own custom monster. Apparently 7-11 year olds is the prime audience for virtual pets.

The heart of the game is called stealth education. There’s a puzzle palace where kids can play and compare their scores with each other.

“We’re trying to adopt adult behaviors and make them safe and usable for the kids space,” said Smith.

There’s also a Friend tree and every time you add a friend, your tree grows. Kids can leave post-it notes on their friend’s walls and create their own puzzles and then rate each other. They’ll soon be launching a news feed, so kids can get a personalized view of what their friends are up to.

They launched a little over a year ago, and within five months, the site became cash flow positive. They currently have over 4 million registered users, a 1 million of those users signed on in the last month alone.

Viral? The early traffic was but not the big spike in the past couple of months. They just doing some TV advertising and it’s paying off.

A third of their traffic comes from the U.K., a third from the U.S. and the remaining third is from the rest of the world. 70% of their audience are girls and revenues are growing at 75% month over month.

I shot video of Smith at Accel Partners, where he talks not just about their growing in popularity service but their experimentation with marketing in both traditional and non-traditional outlets so be sure to tune in.

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