How To Make Freemium Work: Niccolo de Masi, CEO of Glu Mobile (Part 7)

Sramana: What are some of your key lessons learned from Glu and the other companies you have led?

Niccolo de Masi: Over the years I have learned that it is important to be adaptable, that actions speak louder than words and that sometimes you just have to try things out. We are quick to try stuff and double down. We are also quick to withdraw from opportunities as they come up.

Sramana: Can you give me an example of an opportunity that you have decided to withdraw from?

Niccolo de Masi: We try different operating systems, handsets, billing platforms, and advertising networks on a quarterly basis. We were a launch partner with Palm, we were a launch partner with RIM, and you can imagine that we are not doubling down on those technologies now. We try new monetization strategies and game mechanics all the time. We are very much a learning company. I think it is important in this space to realize that in six months you can go from zero to hero or hero to zero in no time at all. You must know the tides of the market.

Sramana: What insights can you share regarding mobile advertising? What works?

Niccolo de Masi: There is no specific partner or channel that works extremely well. I am bullish that incentive marketing will work long term. If you go to a cinema and you are prepared to be subjected to trailers for 30 minutes, and you have paid ten dollars for the privilege for watching them, then imagine what the experience is if you are playing one of our games and you have the option of earning a gun by watching a film trailer. At the end of the day I am very bullish on incentive advertising although I do think there are kinks to work out.

The interesting thing about Glu is that we are a company that has been very strong about taking the advantages of the past and carrying them towards the future. We took our porting expertise and we are making them work for Android. We are taking our console DNA and leveraging that as well. We hire a lot of console developers. A few years ago people said that we could not use console developers. We have created a new hybrid genre where we have the web analytics people in our DNA but we also take advantage of people who have high production value experience.

Our games offer the best of both worlds. We do use analytics and we capture data every hour. We know what our consumers are doing. We know how long they spend in our game, what level they get stuck at, and what they are buying or not buying. We use that data to update our games every month to cater to that demographic.

Sramana: What is the infrastructure for incentive advertising? Are there ad networks or platforms that power that?

Niccolo de Masi: There are a number of them. There are a host of startups that are coming out with competing networks. The venture backed space has a number of them.

Sramana: What does the future hold for Glu?

Niccolo de Masi: I think you are going to see a great Q4 from us. In Q2 of this year we did around 9.7 million dollars of smart phone revenue and 8 million dollars of feature phone revenue. Our smart phone number will grow and feature phone revenue will decrease every quarter from this year out. The company has been a 50 to 100 million dollar revenue company for a few years now. That difference is the change in mix of our revenues. We have guided to double smart phone revenues between the second half of 2011 and the second half of 2012.

Sramana: This is a very interesting story, thank you for your time.

This segment is part 7 in the series : How To Make Freemium Work: Niccolo de Masi, CEO of Glu Mobile
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