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Is this Moshi Monster’s moment of maximum peril?
Moshi Monsters is on a roll.
So why am I so worried?
The answer is this:
It’s a photograph of Mind Candy’s swanky new offices in Shoreditch, underneath the trendy Shoreditch House (sister of Soho House) and recently refitted.
They fill me with fear.
And when you are in a bubble, hubris is your worst enemy.
The perils of hubris
I don’t bemoan the right of Mind Candy, and its successful, charismatic and charming CEO Michael Acton Smith, to celebrate their success. It’s been a rocky ride over many years, and they have worked incredibly hard to build Moshi.
But the news stories that I see – another party, an expensive new office, jetting to Hollywood – have a decidedly hubristic air.
To be clear, it’s not about the expense of the offices. Shoreditch is not expensive, and making an office look nice need not break the bank. It’s the dangers to a startup of becoming caught up in its own hype cycle that worry me.
Moshi is transitioning from startup to corporate beast. This is a tough change for any business that migrates from discovering the business plan to executing on it.
Hubris makes it even more difficult to recruit the right people to help with this change.
Are people joining Moshi because they have a laser-like focus on making the best possible online experience for kids, or are they joining because it is cool and throws good parties. Will there be a steady stream of bankers, consultants and corporate executives trying to join the company, bringing big corporate baggage and expense?
After hubris, comes nemesis
Hubris is so dangerous because it is so blinding. Mind Candy is, quite rightly, the darling of the British new media and games scene. More open than Jagex. Still independent unlike Playfish. Trendier than Splash Damage or Blitz.
But their position of success is not held by right.
The competition for kids virtual worlds is insanely intense. It’s a highly-profitable, huge market that is endlessly renewed as kids grow into the right age bracket for your product. About two years ago, there were 200 virtual worlds for kids in development. It’s a very competitive space.
Moshi Monsters got to its position by having a brilliant product, a focus on execution, great marketing and a wonderful team.
The risk is that they take their eye off the ball.
Some might say this post is typical British sniping at the successful. I am British, so they may be right. But I lived through the last dot com boom, and I watched good companies die because they became drunk with their own success. (I watched a lot of bad companies die as well – they should never have been funded in the first place).
I don’t want Moshi to be another dot com boom to bust story. I don’t even want it to be a successful £400 million exit.
I’d like Moshi to become a massive domestic British success that will expand and grow globally. Someone to provide part of the new media ecosystem that is so critical to a successful entrepreneurial culture in Britain.
So I hope that the parties, and the jetsetting, and the swanky offices are just a front. And that behind it all, there is still the obsessive, product-focused, company culture that will ensure Mind Candy is a great success for decades to come.
In short, I hope that every morning, despite the hangovers, the hard work of being a leading player in a hypercompetitive space carries on undimmed.
* Note this is gross revenue, including retail margin, manufacturing, distribution, marketing and so on. Mind Candy, the parent company of Moshi Monsters, will only see a small fraction of this number as its own revenues.