Berlin is the place for mobile marketing start ups, reckons HitFox incubator CEO Jan Beckers
Mobile distribution hub
The Bay Area remains the epicentre of the social-mobile app and game ecosystem. But that doesn't meant other significant clusters aren't growing fast and providing the environment for the next wave of start ups.
One such is Berlin, which is building on Germany's reputation for browser-based gaming; an industry that's rapidly shifting into mobile.
And leading the charge is serial entrepreneur Jan Beckers.
Together with three other co-founders, he's set up HitFox Game Ventures; an incubator for game marketing and distribution companies.
We caught up with Beckers to find out more about what HitFox offers and why Berlin is the place to be.
Pocket Gamer: What's the reason you've taken a portfolio approach with HitFox Game Ventures?
Jan Beckers: As serial entrepreneurs. we look for big opportunities and didn't want to limit ourselves to a specific product.
The market for game distribution and marketing offers a wide range of chances in a dynamic billion Euro market. As an incubator we can tackle a broad variety of these opportunities. With our organisational structure, we create a lot of synergies in our holding while each start-up stays focused and entrepreneurial.
Germany has been strong in browser gaming so how well do you think it's dealing with the explosion in mobile games?
At the moment Germany is not as strong in mobile gaming as it is in browser gaming. There are some established exceptions such as Fishlabs and HandyGames, but overall there are only a few relevant mobile-only players and some promising start-ups.
However, within the last 6-12 months online gaming companies such as Gameforge, Wooga and InnoGames have shifted more and more resources into mobile games.
Based on their existing userbases, structures and talents, I expect Germany to become much more relevant in mobile gaming within 2013.
HitFox has recently invested in two mobile starts up: AppLift and App Discovery. What was the thinking behind this?
The mobile space is the fastest-growing games market and the need for app discovery and affordable user acquisition solutions is obvious.
We founded both start-ups together with co-founders who had already proved themselves as managers at HitFox. We knew that our existing start-ups could boost both launches by referring dozens of partner relations within the first weeks.
It was an obvious choice to invest in AppLift and App Discovery and if we look at the early results, it was definitely the right decision.
App discovery - both on a consumer and b2b angle - is already a very competitive market. What are these companies doing different?
AppLift is the first affiliate network worldwide that is focused only on mobile games. While running our online game affiliate network ad2games.com, we saw that affiliates didn't currently have good solutions to monetise their game-related mobile traffic.
Different to banner networks, our clients precisely define the CPI they are willing to pay and the rest is done by our affiliates. Those affiliates can be mobile game review sites or apps for instance. Developers don't have to bother with the hassle of setting up marketing campaigns and knowing exactly how much they pay per install.
Where else can mobile game developers get non-incentivised users for 50c to €2.
In terms of HitFox App Discovery, our Game Finder is one of the first apps that provides guidance within the App Store by listing only the high quality games that get the approval of a qualified editorial team.
There are a lot of other 'App Of the Day' companies, but we are not aware of anybody else that is focused only on games and has a comparable strict quality filtering process. Therefore, the Game Finder is attracting an audience that is used to console games quality, and initial feedback tells us they are monetising pretty well.
You've only just launched but what's the industry reaction been?
AppLift and App Discovery have had the best start I've seen from any of the eight VC-backed start-ups I've co-founded and/or incubated. One of the main reasons is we already had established structures and client relations in place through our existing start-ups.
AppLift benefits a lot from the affiliate and advertiser relations of our four year-old online game affiliate network ad2games. And the launch of App Discovery got a strong push through the existing customer base of HitFox, including our 350,000 fans on Facebook.
It's still early for both companies but we've already adjusted one of the plans twice for faster than expected growth. We are currently considering taking a bigger amount of external funding to fully capitalise on the global opportunity ahead.
Why do you think Berlin is a good place to run an incubator?
Incubators succeed or fail mostly based on the quality of the teams they can attract and further develop. Berlin is probably the best place in the world to recruit start-up talent right now.
The most successful Berlin-based incubator so far, Rocket Internet, has hired more than 10,000 people for its companies within the last three years. Rocket's founders made billions and have done a good job in training IT developers, management consultants and investment bankers for start-up environments.
But it failed in offering their teams good working conditions, fair treatment and significant equity in the companies it's building.
Incubators with a more relationship-oriented approach towards their co-founders and employees can now draw from a huge pool of well-trained talent with strong backgrounds. Plus costs of living and salaries are still probably 40 percent lower than in London or the Silicon Valley.
All that makes Berlin the best place to recruit. HitFox's HR team screened more than 2,000 pre-selected applicants during the last 12 months and the numbers still continue to increase.
What other areas of the industry are you looking at investing in?
We are interested in all growing businesses within the field of game marketing and distribution, but we will only found or fund network, platform or technology infrastructure companies - and not developers or publishers that own games.
We want to be focused on supporting our partners and not to compete with them. Since we always look for the fastest growth opportunities, chances are good that our next announcement will also be in the field of mobile gaming.
Thanks to Jan for his time.
You can find out more about HitFox Game Ventures via its website.
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