In San Francisco, we meet founder and CEO of Ludei, Eneko Knorr. He shares his story how he came up with the idea and founded this company, how the current business model works, as well as Eneko provides some advice for young entrepreneurs.

The transcription of the interview is provided below.

INTRODUCTION

Martin: Hi, today we are in San Francisco with Ludei. Eneko, who are you and what do you do?

Eneko: Hi, how’s it going?

Martin: Good.

Eneko: So, our company, it’s a platform for developers, specifically for HTML 5, JavaScript, and app developers.

Martin: Ok, great. And how did you come up with this idea and what type of other companies did you start before?

Eneko: I started a web hosting company back in Spain like 10 years ago. This company was acquired by Telefonica. And then I started different companies, so one of them was Ludei, in the beginning Ludei was game studio, and we were looking for a solution for cross-platform development. We were looking for a way to code once and have a game running everywhere. And it was like 4 years ago that we started using HTML 5 or messing around with HTML 5 to see if it was an actual feasible technology to use for games. And we were facing different problems, we solved all of them, and we manage HTML 5 to run really fast on every device, and that’s when we decided to become a platform, in sense of our games to the technology company, to sell this technology through this platform to other developers. And we also open this technology to every app developer, not only game developers. So, Ludei is a platform for every app developer, we make their lives easier, we make their apps run faster without any problem on every device.

BUSINESS MODEL

Martin: And how’s the revenue model working?

Eneko: So, it’s software as a service model. So developers they come to our platform, everything is web-based, really scalable, they sign up for, they choose their plan and they pay, or they have our free plan, or they pay depending on the different features that they want, and we also make money by publishing different apps. When we find an app or a game that could be successful, we partner with the developer and then we share their revenue.

Martin: Ok, great. And if you segment your customers, by size for example or maybe region, what percentage is, for example, in terms of production and developer studios, or single developers, and maybe even in countries?

Eneko: Our developers, now we have more than 40 thousand, they are from all over the world, so a big parties they are here in America, we have tons of, a lots of European developers and also in Asia, so I think it’s like very widespread around the world, and so we have from very small developers to bigger companies, so we are working with Disney, Nickelodeon, with big companies, too. And so it’s from one developer that is working at home from big customers, we have all the range.

Martin: And how did you decide when the pivot was necessary from being a game studio to becoming this kind of ecosystem or platform?

Eneko: It’s a good question. When you run a startup, there is the moment, where you have to try to find where the opportunity is. So maybe, you never know, maybe we could have chosen to keep on building games and maybe we could be have been now like super big publisher. Or maybe we did the right choice by becoming a technology company and now we are very successful, we are going faster, we are now in the space where maybe two years ago people didn’t really believe in HTML 5, and now everybody believes in HTML 5 again, and now we are going really fast. So, you never know, but we thought that there was an opportunity there, and nobody was there, and we had great team, a great technology, so we decided to get there.

Martin: Ok, great. Can you briefly tell us about HTML 5 and why it’s helpful or the right technology now?

Eneko: We believe that today it’s crazy, actually, but idea to have one team to develop an app for iOS, one team to develop an app for Android, and for other platforms, because today maybe you also need the web version or Windows phone version. So, any company that needs either 4 people or 4 teams, that’s crazy. Because, it’s not only developing an app, it’s maintaining the app, because you have an app that is live, and you have to keep on adding features. So, that’s a huge cost. If you have a way to develop cross-platform, to code once and be everywhere, your costs are totally reduced. We believe that today, JavaScript HTML 5 is the way to go, to code an app and to be everywhere. There are great tools, there is this great technology, devices are getting better and better and they run JavaScript faster, so we believe that today it’s an option and tomorrow everybody is going to develop the apps using JavaScript HTML 5.

Martin: What have been the major obstacles when you pivoted and then started to grow your platform / ecosystem? What have been your major problems, where you said “Oh my god, we need to solve this hard problem, how should we do it?”

Eneko: Our biggest problem was when, there was a moment where everybody was pushing HTML 5 and there was even a bubble on HTML 5, it was the next big thing. And at some point Facebook, Facebook was also a big proponent of HTML 5, and one day they decided not to use HTML 5 anymore. So Mark Zuckerberg, he said at a big conference that HTML 5 was a big mistake and then that was a really bad moment for us, for every company that was in the HTML 5 space, that was a bad moment. But, because for the press, for everyone it’s like HTML 5 doesn’t work, but in the end of the day we had tons of customers that they were actually using HTML 5 successfully, it was working. And using technology like ours that actually, our technology makes HTML 5 run on mobile devices, so our customers were able to develop and to use HTML 5 successfully. So, we were growing slowly and now we are growing really fast because now people really believe again in HTML 5 and now we are going fast again.

CORPORATE STRATEGY

Martin: Let’s talk briefly about corporate strategy. So, at what stage of the adaption cycle do you think you are currently? Is it more that you only have the early adopters who would say “Ok, I want to develop an app and I want to lower my cost for distributing this app to different platforms, that’s why I use Ludei”, or is it really like that you have the major parts of the market covered already?

Eneko: That’s a good question because maybe a few months ago we had only the early adopters, we have now more and more customers. But we are in the beginning, so most of the development today is native, so exclusively for each platform. So we are just in the beginning, there are only a small percentage so far that companies hire our developing apps using cross-platform technology, so the opportunity is there and we are in the first line to catch the wave.

Martin: And what are the major challenges when trying to convert prospect to a customer? Because from an ex owner perspective it looks great, I can distribute it to another platform, if you pitch me without having background knowledge I would say, “Ok, come on, let’s try this.” What are the major challenges for pitching this?

Eneko: Developers are used to code in one language and sometimes for them it is hard to learn a new language and to start using it and to try it unless they are sure that it’s going to be successful. So, that’s when these developers or people in general, when they see success stories, apps that are developed in HTML 5, that are in the top of the app stores, and everybody’s using them, so they are going to be more confident. But today there are more and more good applications, people believe in that and also that the cost, you can’t have four teams to develop an app.

Martin: What do you think, what are the percentage of let’s say cost savings, for example if I develop for each and every platform my app vs. I develop at HTML 5 and then just distribute it via Ludei?

Eneko: So you can reduce the cost like 4 times, you can spend only 1/4 of the cost of cost of having 4 teams.

Martin: Ok, great.

ADVICE TO ENTREPRENEURS

Martin: Let’s talk about your learnings as an entrepreneur. You started some other companies. What have been your major problems that you needed to overcome and what have been your major learnings?

Eneko: As an entrepreneur, of course, usually the most difficult thing is.., it’s important to find the right direction for your business, the right idea to push that idea, to follow that path, and it’s also really difficult to find the right team. Now, I’m really proud to have like a rock star team, really good developers and really amazing team, we’ve been working together for 4 years. But this is really difficult to find that team and it’s really difficult to manage all your team, your employees, and that’s the most challenging part for the business. And of course it’s also difficult to sell, to get a name for your company, to make people know about your technology, of course those are really difficult things.

Martin: Eneko, what other learnings have you, maybe we can also talk a little bit about your first startup, the hosting company?

Eneko: So, we started a hosting company where, of course, there were other hosting companies in Spain, so we were struggling, we were trying to grow and we couldn’t find the way because the beginning is very difficult to get the first customers, and then I discovered, I don’t know how I discovered, there was one thing that was totally new and even in Spain, was totally new something called AdWords, Google AdWords.

Martin: I don’t know, what’s that? 🙂

Eneko: So, I said ok, let’s try to use AdWords, and we spent some money there and it was very, very cheap to get the first customers. So one click for the word like domain, or hosting was like 5 cents, and today that word, the click would cost like 5 dollars, so that was a good price. Of course, it was luck, but it was also trial & error, because I tried everything, every other marketing, ways to try to promote our company and that was successful. So, sometimes in there, when you run a startup, sometimes to be successful you have to work really hard, that’s for sure, and find the right opportunities, but sometimes there’s a bit of luck. Good luck or bad luck, but, and I think that’s something that’s, you need to have luck, of course you have to work hard, but there are parts where you really need this bit of help, of luck.

Martin: The interesting thing about your company right now is that you moved from, or at least partly, from Spain to the Silicon Valley. What would be your advice for other international startups that are sitting in the UK, or in Germany, etc.? Should they move here, and if yes, what parts?

Eneko: I’ve been here in Silicon Valley for 3 years, so I learned that maybe from the European companies within that this is, the paradise. It’s very easy to be here and you get tons of investment, they are going to give you money like tomorrow, and that doesn’t happen. And so it’s hard to run a company here and to be successful. There are like 5.000 companies looking for fund today here in the Bay Area, there is a lot of noise and you need to, if you want to have press, so there are tons of interesting companies, the best companies in the world are here, so you need to do something different to be out there. So, that’s challenging. But, I moved here because I believed that this is the place to sell technology and to become a global company, a global successful company. And 3 year later, I still think that this is the place to be. Because, maybe you could have really good technology, like in the small village in Spain, or in France, or in Germany, but it’s really difficult, sometimes I feel like if you are not here, that technology is difficult to sell. So this super cool technology that comes from this small village in Italy, so I think that people don’t believe that company, that technology could be better than technology that is created here in Silicon Valley. So, I still believe that this is the right place to be for a startup.

Martin: This is, so to speak, because of the customer proximity or something else?

Eneko: So, it’s the customer proximity, and you have the bigger, the biggest partners that you can have here, doing technology like the Facebook or Google or Apple, the technology press is here. So and the technology press, sometimes if you’re based here in the Bay Area, they don’t write about you. So, this ecosystem is, it makes that you can be here and so the chances to be more successful globally I think that are bigger. Of course, there are disadvantages of being here, it’s challenging to get inside the Silicon Valley ecosystem, and it’s very expensive to live here, and it’s very expensive to hire people here, and everything is really expensive. But I still believe that this is, I would recommend any European startup to move here, of course.

Martin: Thank you very much, Eneko. And if you are still trying to develop your native apps for each and every platform, maybe you should think about it and move to Ludei. Thanks.

Eneko: Thank you.

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