iFundVC

Cyriac Roeding joined Kleiner Perkins Caufield & Byers in 2008 as Entrepreneur-in-Residence, to focus on next-generation cross-platform mobile and online venture concepts. Previously, Cyriac was EVP of CBS Mobile, CBS Interactive. He launched CBS Corporation’s (NYSE: CBS) mobile businesses across CBS Entertainment, CBS Sports, CBS News and The CW. In partnerships with technology start-ups, he created U.S. industry firsts such as location-based mobile advertising, mobile video breaking news and sports alerts, and avatar-based mobile games tied to major TV shows. He grew CBS Sports Mobile into one of the Top Ten highest traffic ad-supported mobile websites in the U.S.; created the first virtual reality video gaming experience across TV, online and mobile with “CSI: NY”; and launched the first Alternate Reality Game with full primetime TV drama episode (Numb3rs) and outdoor billboard integration.

Is the iPhone the answer to all prayers and complaints in the mobile startup world?

No, it is not. One phone alone cannot deliver that.

But it is the kickoff to a tectonic shift. Away from an industry structure based on structural and size advantages to an industry structure driven by innovation, consumer choice and software developers. To date, the players owning the customer billing relationship and the infrastructure have been favored (carriers/operators). The iPhone AppStore and its ease of web browsing kick off the shift to an industry structure that unbundles billing and infrastructure from the services running on top of those.

Part 1: The independent developer community for the first time is becoming the mobile innovation powerhouse

Let’s be clear, we are certainly a long way from the form of perfect competition found on the internet, where the best one (or the one kicking off the network effect first) wins, regardless of size. But for the first time, we are truly on our way.

The Silicon Valley developer community is quickly becoming a center of innovation for mobile. That is nothing new for the online world, but it is completely new for the mobile world. In the last decade, mobile innovations came mostly from Europe (especially Finland), Korea, Japan and Taiwan, and some large U.S. companies outside Silicon Valley. The Valley didn’t get into the game because Silicon Valley developers did not have a platform to work with that allowed them to fairly compete against large sized players. The iPhone AppStore changes that dramatically. While an approval process for new apps still exists on the iPhone, the time to deploy apps went from about 18 months to a few weeks. Consumers are responding to the ease of use as well. 200 million downloads occurred in little over 100 days. Suddenly, we are past the (previously very popular) discussion “Do consumers really want to do anything else besides calling and texting on their cell phones?”  The mobile web is also becoming significant. Apple has only been on the mobile market for 16 months, and the iPhone’s web traffic is already exceeding that of the most established smartphone makers.

This is all good. But there are more key steps that need to happen. We need

- Usage scalability

- Revenue scalability

- Truly mobile services.

In other words, we need rapid growth of open platforms for usage growth; mobile advertising and mobile payments for revenue growth; and creative thinking around new services that goes beyond the cell phone as an extension of online platforms.

These three factors combined, will unlock the full potential of the mobile device for consumers.

So, the kickoff to the tectonic shift in mobile has already happened with the iPhone; now it’s about accelerating the shift further.

More on each of the three factors above in upcoming blogposts here.

Neil Young is the CEO and a co-founder of iFund company ngmoco:) a developer and publisher of games for the iPhone and beyond.  Prior to founding ngmoco:), Neil spent 11 years at Electronic Arts, producing and managing the company’s first MMO Ultima Online, the industry’s first ARG, Majestic and two of the most successful game franchises in EA’s history - Lord of the Rings & The Sims 2.

It’s an important day in the life of our company as we’re announcing Rolando, MazeFinger & Topple - 3 of a dozen games that we have in development at ngmoco:)

We started our company with the commitment to make Apple’s handhelds the leading platform for games through killer, native software. What you’ll see from us is a range of games, available at a range of prices from free to premium, that are fun, beautiful and compelling. We’ll strive to raise the bar for gaming on the platform and our commitment to customers is that we’ll always try to give you great games that showcase this amazing device in a broad range of categories. Over time you’ll see the games and the framework that they are a part of evolve into a network that connects players together both with new games and with one another in new ways.

The iPhone can give you all the gaming goodness from arcade to adventure, from puzzle to platformer & from shooter to sudoku, but it can also give you games that you’ve never seen before - alternate & augmented reality games, mobile social experiences, games that use multi-touch, accelerometers, gps, the camera, your media and your friends to bring you amazing new experiences.

We’re embarking on the next phase of our mission to make the iPhone & the iPod touch the great gaming machines they deserve to be - we hope that you enjoy our games and are as touched by the iPhone as we’ve been.

Check out our games and learn more about the company at www.ngmoco.com

I have found it useful, when adventuring after killer apps, to use 5 thought filters.

Ship early
It is no accident that so many defining applications launch in the first year of a new platform. The “feeding frenzy” of press and early adopters makes it easy to get ink and word of mouth. These people are hungry to sell magazines and gain street cred by being the first to discover the “new new thing.” For these people, there is nothing better than demoing to agape and envious others.

Most customers feel more intense emotion about their hardware “investments” than their software “consumption.” So the second need of new adopters is to justification. “Look how smart I am (how dumb I am not!); I got this new (insert hardware model here) and it can do this!!!”

The strategy for a developer aiming at early adopters is to get to market first. Of course, the problem is that most software shipped into the first holiday season of a new platform is not good enough to last. The software rushed to market in August and October can feel very stale by March.

Some games that were “first to market” with proven game types on new platforms include John Madden Football on Sega Genesis; Need for Speed (driving) on 3DO and Playstation; Battlefield 2 (combat) for PC online; Godfather for Xbox 360. On the iPhone, some notable “feeding frenzy” successes have been Super Monkey Ball and Tap Tap Revenge.

For those of you who misses the first month of iPhone app downloads, this is still a useful lesson. The earlier you ship your first app, the sooner you can get to great. And there are still new territories, new languages, and probably new hardware and software releases to be early against.

Be first to digitize a hobby
In the history of videogames, it has been new game categories, not new technology, that has attracted new customers. Pilots bought computers to play Flight Simulator. Paint Ball fans went online to play Doom. Sci fi movie buffs installed CD-Roms to help Mark Hamill succeed in Wing Commander. Doll housers got into gaming for the first time to play The Sims. Dancing Queens bought floor pads to play DDR. Rock fans bought plastic Fenders to play Guitar Hero and Rock Band.

The best development strategy is to build a team with to fans, and trust their decisions. A self-described “girly girl” designer was key to the success of The Sims. Ultima Online was designed by a core of experienced text MUD designers (multi-user dungeon).

But a little research never hurts. I recommend a simple “concept test” approach, which consists of giving potential customers a list of 10-30 one line concepts of a game, and let them rate or circle the ones they think they would “definitely check out or try.” EA Sports “NBA Live” was conceived when “5 on 5 NBA Basketball” was the number one pick two years in a row in the mid-1980’s.

Popular vertical interests usually have their own communities, opinion leaders, magazines, web sites and blogs. Software that delivers the first “authentic” digital experience of a hobby wins the community and the word of mouth quite handily. It certainly seems to have been the case with iBeer!

Discover a new demographic
Geez, I remember when “all gamers” were anti-social male loners…nerds…way back in the 80’s. Then Nintendo and Sega happened, and overnight, junior high school presidents were into gaming. “Cool” games like Punchout and Test Drive, Road Rash and Skate or Die, Desert Strike and Doom were killer apps for popular boys.

In the 90’s, the Playstation went after 20-somethings with its “You are not Ready” challenge, which, along with Sega CD, opened the door to more grownup themes like Twisted Metal and Resident Evil, Night Trap and Mortal Kombat, and eventually all the way to the mature content of Grand Theft Auto.

Pre-teens swarmed to Pokemon and Neopets in the 90’s. Casual games from labels like PopCap and Pogo brought gaming to women in the past decade, with titles like Bookworm, Lottso, Bejeweled and Snood. And then the most surprising of all, Brain Age and Sudoku on the Nintendo DS brought videogaming to grandparents. It is a lot cheaper to get a story in AARP magazine than buying a commercial spot on the Super Bowl. But who can prove that the latter is more valuable?

No one seems to have mined a new demographic among iPhone fanatics, in the US at least. Does iTunes usage define a new audience class? Is Is iPhone the first application platform for people who want to game away from their couches, desks or backseats?

Harness New Tech
While new tech garners more headlines than new hobbies, it tends to inspire new features, instead of altogether new categories. In other words, it is a good, but not great, development strategy. “16-bit” brought us sports simulations with real statistics, and grew the sports category. CD-Rom added “interactive movies” to story games, but didn’t expand that segment. Internet and 3-D video cards turned shooters into FPS, helped RPG’s become MMO’s and turned car racers into “virtual item” games, but again, replaced existing markets. Analog controllers led to “Freestyle” in NBA Live rather than a new sport. Motion controllers gave us the full-body swings and touchdown dances of Wii Sports and “Family Play”, but within football and golf themes.

iPhone brims with new technology for mobile gaming, from the multi-touch interface to accelerometer, always connected wireless, proximity and light sensors, web browser and smart typing. The physics of the GUI is breath-takingly cool, and must be considered. We’ve seen lots of tilting to date, and Spore is great, but so far there haven’t been many apps that successfully use multiple iPhone tech advances. There are hints of new discovery categories using maps, and new social innovations using contacts, but we can only hope for untold surprises ahead.

Align with the Brand Position
The platform owner/manufacturer is very likely to have its own positioning bias, that arises from the corporate personality rather than the technology. Xbox went after core gamers and so Halo was a killer app, literally. Microsoft pushed CD-Rom capabilities in PC’s and was the launchpad for Wing Commander. Nintendo wanted gender balance with its lighter, pinker DS, and so Nintendogs won the show. Sega wanted to position around speed with Genesis, and so Sonic the Hedgehog grabbed the brass ring(s).

What does that mean for iPhone developers besides dressing your avatars in black turtlenecks? Beauty and style matter on iPhone, perhaps moreso than on any previous interactive platform. And of course, an iPhone app should leverage the best of iPhones new tech and interface, be intuitive, gorgeous and polished to a superior luster. It must be pleasing to touch, playful to tilt and twist, puckish to pinch. In short, your iPhone app should be “insanely great.” But if you’ve read this far, you probably already knew that.