Bubble Gum Interactive

Bubble Gum Interactive is an independent virtual worlds and games studio, founded by Phil Mason and based in Sydney.

Its first game, Little Space Heroes, enables players to create their own hero and explore a galaxy. It has been developed with significant backing from Sydney Angels, which we reported on in August.

Paul Gray, the company’s co-founder and director of customer experience and community, spoke to StartupSmart about catering for kids in the gaming industry.

What inspired the idea for Bubble Gum Interactive?

Bubble Gum Interactive was born from the founding team’s passion to create a truly amazing entertainment experience for kids.

We had all been working for many years in games and kids entertainment on an international level, and wanted to pool our experience.

We saw the tremendous growth occurring in the social games space and we decided to put our collective energies together to create a next-generation kids’ virtual world.

Phil Mason originally dreamt up the story idea for Little Space Heroes over 10 years ago. He’d started writing it as a comic, but the realities of day jobs and life in general meant the ideas sat in the background for a long time.

How long did you work on the business before you launched it?

Around the middle of last year we began planning – working on the story and prototypes for the game, as well as the business and marketing plans that go with it.

We’re building our product for the world stage and taking on some very established rivals so we are finely focused on creating the best possible experience.

This takes a huge amount of effort and involves many specialist staff from developers to programmers, designers to artists, and community and operational people.

In January, we were able to shift into full-time production but it was a hard slog. We had to raise capital at the same time we were building the product.

Right now, we’re in open beta and have had a huge response already from kids all around the world. We’re making good progress but haven’t kept our foot off the accelerator as we head into full launch pre-Christmas.

How did you fund the business initially?

To get started, the founders kicked in some seed capital but at the same time the early days were marked by working nights and weekends – a lot of “sweat equity” from the founding team.

How did you secure funding from Sydney Angels?

None of us were experienced in raising venture capital but we did our homework and started practicing our pitches.

It helped that we know the industry so well and have built virtual worlds before, and our core team had strong business skills too. We made sure we had a working prototype before we started selling our dream to investors.

One of our first pitches in fact was at Sydney Angels late last year. Despite some technical hiccups, we managed to pique the interest of some angels who we then met a few days later.

We secured their commitment to invest as the lead, which was hugely important to us as their validation helped open the door for further conversations with VCs and angels in Australia and Asia.

We have also been very proactive in identifying all possible sources of finance. We successfully raised $245,000 from Screen Australia and the NSW Digital Media Initiative, which was an amazing help in addition to the private equity funds.

In total, we raised over $1 million in round one financing from angels, VCs and the government grants, and we were the first investment of the Sydney Angels Side Car Fund.

How do you promote the business?

We’re operating with very lean budgets and we have had to focus most of our efforts on building the virtual world and gaming experience to excite kids and parents, and meet important expectations like safety.

Throughout the development phase, we continually involved kids and parents. We had over 150 kids and their parents play test the game in Sydney and Hobart, and as we developed we took on board what they had to say.

We’ve had a pre-launch site up since May and kids have steadily been signing up in expectation of the closed beta.

Now that we’re in beta, we’ve been getting kids signing up in the US, UK, Canada, Australia, New Zealand and in over 40 other countries and we’re seeing a word-of-mouth effect begin.

We’ve also been very proactive in using public relations effectively. I’ve personally contacted hundreds of journalists, bloggers, writers, reviewers, parenting groups, games associations and other organisations.

Social media is also a great way for us to take our message out and do our part to help facilitate conversations around our brand, particularly by parents.

We’re working with some leading “mummy bloggers”, mainly in North America, who are reviewing the game and reporting back on it to their readers.

We’re working on some other more traditional marketing initiatives that we’ll scale up as we grow, particularly in 2012 when we should have more resources and a marketing budget.

How many staff do you have?

Right now, we have around 20 staff members. We’ve got a mix of fulltime, part-time and contract employees, mainly in Sydney, but with a few in Brisbane and Melbourne.

We’ve hired almost ten people in the past six months and we’re set to grow further as we scale.

Most recently, we hired our moderator team, which is responsible for looking out for kids in the virtual world, play seeding, and addressing game play and customer service enquires.

What has been your greatest challenge and how did you overcome it?

The most difficult challenge has been juggling the production with the capital raising.

We had to go out and raise the capital ourselves in a market that many report as being challenging given the GFC and other factors.

We gave well over 100 pitches in Australia and overseas and, as with any start-up, you get a lot more knockbacks than successes.

It took a look of time and effort and it can be something of a rollercoaster ride – you can have some very motivating wins but when a conversation falls through it can be tough to keep the energy there.

It was a good experience though and, in addition to raising the capital necessary, we’re also now very fortunate to have the support of many astute investors, all of whom have different areas of expertise.

Our investors act as mentors and give us guidance, ideas and feedback, and help us tap into their networks as we continue to grow.

Given the recent closures of local gaming studios, how do you think the industry is faring?

We’re seeing a shift in consumption patterns amongst consumers. Digital distribution and the rise of mobile platforms has introduced new gamers, while at the same time has given existing gamers more choice than ever before.

I think that any business that fails to invest in creating a unique, compelling and defensible proposition will face challenges in sustaining growth and may even fail.

But you only have to look at studios like Halfbrick or Firemint to see that there is indeed growth within the Australian games industry.

It’s just that it’s probably not going to be in the same areas as it was before. Creating your own IP is super important.

Do you have any tactics to ensure your start-up remains viable?

We think kids are looking for a social experience. They want an opportunity to have fun with their friends. If it’s rainy or cold or they can’t get to a park to play with friends, they can go into a virtual world and play online together.

They can also make new friends from all over the world. Kids also love stories that are fun, exciting and full of adventure.

We’re all passionate storytellers ourselves and are working hard to infuse more story into Little Space Heroes than exists in most other virtual worlds.

Parents’ concerns tend to relate to content suitability and safety. It’s for this reason that we’ve secured an E for Everyone game rating and are now working with a number of parenting groups and associations to get their independent seals of approval.

We collect minimal personal information, we use advanced filtering to ensure no profanity or mature content ends up in games and we have a team of moderators who make sure the games stay safe, fun and inclusive.

We’re already working on mobile games and web comics, and have plans to take the brand to additional digital and non-digital platforms. Our site is also 100% advertising free.