Crucial to evaluate and adjust
Redvik believes that Appland now has a very good market-fit. But it took the company seven years to get where it is today.
“The original business idea was not perfect, maybe not even good. But it was in an area - distribution of software - that was extremely strategic. We started with one thing and it didn’t really work out. We evaluated it together with customers and made some adjustments. This happened three or four times.”
The company has run at a loss every year since it was started in 2011. But the Appland team believed they were building something valuable and were able to convince investors, who continued to invest for seven years.
“I think our investors saw the team and our motivation and believed in us. It turned out good in the end.”
Joining forces with OnMobile
The deal with OnMobile is reportedly worth USD 15 million (approx. SEK 143 million), according to the Swedish tech news site Di Digital.
“As I saw it we had two alternative strategic ways forward. One way is that we needed to raise SEK 100 million and develop our building capabilities and user acquisition capabilities. And that would take us two years,” says Jonatan Redvik.
The second option, he explains, was to join forces with OnMobile, which has an ecosystem with around 80 million subscribers.
“Right now Appland is in a position where we have a fantastic product. But we will not be alone forever. When we do this acquisition we jump two years ahead of the competition, because OnMobile already has all of the building and user-acquisition capabilities that we need,” says Jonatan Redvik.
“So we are taking a leap here and that’s why I think this is a good strategy for the company.”
Following the acquisition, Appland and its team will remain in Gothenburg. Jonatan Redvik will take on the role of Vice President of OnMobile’s newly-formed Games Services Business Unit (GSBU). Appland’s CTO Henrik Lewander will assume the role of CTO of GSBU.
“In the end, we want to become the Netflix for mobile apps,” says Jonatan Redvik.
ADVICE FOR TECH START-UPS THAT WANT TO TAKE THEIR BUSINESS GLOBAL
“I believe if you have a really good service with a good value proposition, an indirect sales model can be quite good. Try and find smaller companies with 50-250 employees that will resell your product or service to the real customer. If you want to sell something to a big enterprise company with many thousands of employees, the process is killing you as a start-up. You will have a life cycle of 12-15 months and you will not close a deal in that period,” says Jonatan Redvik
He also stresses the importance of finding the right product-market fit.
“You can’t get that sitting in your start-up and talking to your start-up friends about your product and trying to improve it. Which is what a lot of start-ups do. They’re not really getting the feedback from real customers and that is crucial. To get that started I would recommend reseller or indirect sales model.”