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Is Moshi Monsters’ Mind Candy preparing an IPO?

By on March 14, 2011
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Moshi Monsters is on a roll. Over 34 million registered users, its CEO Michael Acton Smith in demand at investor conferences around the world and a product that is a must-have amongst all 6-10 year olds.

So it is it surprising that they are considering an IPO?

I confess that my evidence is shaky. It is contained in a tweet from Chief Marketing Office Ed Relf last week:

Just approved the Moshi taxi livery at Moshi HQ. Moshi taxis coming to London streets soon 🙂

m6fzib.jpg

To explain why I think this means Moshi is about an IPO, I’d like to take you back to the dot com boom. In the year 2000, I was Chief Financial Officer of Shopsmart, a comparison shopping website that made comparing the prices of music, games, books and electronic products easy.

The market was hot and we’d raised double digit millions to grow our business. Much of this would be spent on marketing.

We were on a fast track to IPO (one of the reasons I got the job was because I was an former investment banker and equity analyst who knew many of the public market investors). We knew that it was important to get out of the door as soon as possible, before investor enthusiasm dimmed. (The more honest amongst us might have said “before the bubble burst”)

One of the things that we needed to do was to make sure that investors had heard of us. We needed the brand to be well-known. We bought banners and buttons. We did a lot of PR. We took out a 12 month sponsorship of movies on the newly launched Channel 5.

But we really needed to talk to investors. Besuited types who hung out in the Square Mile. They weren’t exactly Five’s core audience. Then we had a brain wave.

Bankers use taxis. They travel on London’s streets where taxis drive. So we started a marketing campaign aimed not at our customers, but at prospective investors.

We bought half a dozen taxis, liveried in full ShopSmart colours. We bought the side of the number 11 bus (which runs from Liverpool Street to Chelsea). We bought bus stop hoardings in the Square Mile.

We weren’t trying to attract customers to come to our site for comparison shopping. We wanted investors to think that we were a successful company with marketing campaigns *everywhere*.

It’s like being the marketing manager who buys billboards on the side of the road on the CEO’s route to work. That way, the boss thinks the ads are everywhere, when instead they are just targeted at the person who is in charge of the marketing manager’s bonus, not at revenue-generating customers.

So as I think of Moshi, I think of a business that has had great success trying different marketing channels. CEO Michael Acton Smith has been open about his scepticism of television advertising, for example, but a test budget with a unique URL that could be tracked proved to him that it paid back in revenues within a single weekend. He was very happy with the result.

I know Moshi is inventive about customer acquisition, but I struggle to believe that a taxi is a good customer acquisition tool for a 6-10 year old child.

It’s a great acquisition tool for a City-based public market investor, though.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • Tont Coles

    I was mind-boggled when I saw a Peggle-branded taxi on my morning walk to the tube last year. I think it’s just lovely to see these kind of IPs on display rather than trad publishing stuff like COD etc.

  • Facebook User

    Well Michael lastminute.com also used taxis and buses very intensively pre-IPO and it had a product for a wider audience. Anyway well done on the Moshi Monsters great results, btw what are the active numbers? Registered user numbers sounds like page views numbers in 1999 ;o)

  • Another commenter suggested that while an IPO might be difficult or unappealing for a web startup, raising private money in a large institutional round would also benefit from a City-focused publicity boost.

  • I admitted my evidence was shaky 🙂

    I do get that you need parents to buy into Moshi. But deep down, I thought there were legs to my analysis…

  • Amusing analysis but there’s no IPO on the horizon.

    We’re very experimental with our marketing. Taxi media is relatively cheap and so we thought it would be fun to have a play around with. Moshi is obviously designed for kids but building recognition with parents is an important part of our strategy too