After Kickstarter success, Ouya CEO just getting started

Ouya, a $99 Android-based video game console, has picked up more than $5 million in the biggest Kickstarter campaign to date. It’s also received plenty of doubts from skeptics as well. In an interview, Julie Uhrman, the CEO and founder, said Ouya is the real deal.

Kickstarter’s records have been smashed by Ouya, a $99 Android-based video game console that promises to bring affordable games to the television. The project, which originally set out to raise $950,000, is now up to $5.7 million pledged from more than 47,000 backers with 10 left to go.

Built using standard components like a Tegra 3 quad-core processor and hackable, Ouya will create a new platform for developers looking to bring both casual and hardcore games to the living room. The console, which is being designed by famed designer Yves Behar, will work with a standard controller that includes a touchpad. Developers will be able to use an SDK to create an array of titles, which will all have a free component to them.

While the project isn’t expected to debut until March 2013, it has started revealing some partnerships, including a deal Friday with OnLive, which will offer its cloud-based streaming games at launch on Ouya. Ouya has also announced its first exclusive title Human Element, a zombie game from developer Robotoki.

I talked by phone last week with Ouya’s CEO and founder Julie Uhrman, who first conceived of Ouya while leading digital distribution and business development for gaming site IGN. We talked about the rising skepticism about the project and how Ouya is working to deliver the goods.

Ryan: Talk about the deal with OnLive. How did that come about and does that change the nature of your console?

Julie: There’s a lot of content and games that we want for Ouya and we listen to our audience. They wanted OnLive so I made it a point to go out get them. OnLive signals some of the types of partnerships we can have on Ouya. The idea is we can have streaming and downloadable content. Because it’s open and built on Android, all different kinds of content would be available: games, videos, streaming and music content. Ouya is about being open and bringing the best content to gamers and anyone who enjoys entertainment. We don’t think OnLive’s content cancels out any publishers or developers, it enhances the platform.

Ryan: Some people are skeptical of Ouya and wonder if it will pan out. Will this project deliver on time?

Julie: We have every confidence that we will do this. The technology isn’t rocket science, it’s standard stuff combined in a new way and wrapped in a beautiful package. It’s been incredibly embraced by gamers and developers. We get hundreds of emails from developers wanting to develop for the platform; the idea of openness of Ouya has resonated. Until we have things on store shelves, we can’t prove things and there will be questions but most (developers) say they want Ouya or something like this to succeed. We have vetted our process, capped the amount of units we are shipping on day one and we have great advisors, who have built great hardware and software. We feel very confident we will deliver in March.

Ryan: So where did this idea come from? What was your vision?

Julie: I was part of the game industry for a long time and I saw AAA developers leaving for mobile. But if you interview gamers, the number one platform is the TV. The most time is spent in the living room, even for mobile games. The experience is better on a TV but all the excitement and growth was in mobile. I grew up on TV games and I wanted to bring it back and I saw an opportunity for a device that has Android as its operating system. The value proposition is there. People don’t have to spend hundreds of dollars on a console. Ouya is $99 and games are free to play. What’s not to like?

Ryan: But building an ecosystem is hard work. Trying to court and keep developers and convince them there’s money to be made here is not easy. What are you planning to do to ensure that Ouya is appealing to developers?

Julie: The one thing that is always important to remember is this is still a product in development. We are focused on creating a great product. Kickstarter is opening up a two-way dialogue with folks who will benefit and we’re incorporating their feedback. People are incredibly excited. The developer conversations are incredibly well. You aint seen nothing yet.

Ryan: What has Kickstarter meant to you and what does the added money allow you to do?

Julie: It’s been a phenomenal platform for us and allowed us to create a dialogue with an audience of gamers and developers. We knew this was the only way to get to market quickly, raise money and bring this idea to fruition. Our goal was to hit $950,000 and we knew we could deliver units and even provide tools and support for developers with that. Anything over that is truly unbelievable and it means we can build more tools.

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Business ideas are dead; chase after market opportunity

In my previous blog post titled “How making money changed my perspective on startup ideas“, I argued that business ideas don’t have a lot of value in isolation. It is the market opportunity coupled with good execution which generates value and revenues. In this post I want to go one step further and argue that most successful (software) companies got there by chasing a market opportunity and not by having a unique business idea.

Take example of any successful software company and you will find that their business idea was not unique. You say Facebook, I say Friendster. You say Google, I say Altavista. In fact, I think citing such examples is not a good idea because odds of a startup achieving a billion dollar valuation (and becoming a brand) are close to none. I am more interested in knowing how the “long tail” of software companies achieve million dollar plus revenues. That’s a realistic, achievable target and the odds of your startup becoming a Fortune 50000 business are much higher than it becoming Google. So, we should drop the dreams of IPO (for now), let’s just see how businesses make million dollar revenues.

How software businesses achieve million dollar revenues?

Go to Inc’s listing of 5000 fastest growing companies and sample a few company descriptions. For software hackers, go and study Inc’s listing of fastest growing software companies. What do you learn from this list? I realized two main patterns:

• I only recognized a few companies there (apparently you don’t need to be on TechCrunch in order to be successful)


• I did not see many “unique” business ideas here (all operate in generic industries such as backups, SEO, encryption, sales automation, etc.)

Almost every software company in that list is chasing a generic, huge market opportunity and executing really well. They have a 1000%+ growth rate today because they chose the market wisely and provided a solution that people wanted. They are not making millions today because they had a crazy good idea.

So, what’s the key point?

My key point here is that instead of coming with a business idea and then trying to validate it, why can’t you work backwards. Why can’t you first choose a market and then come up a solution to ease a recognized pain in that market. Even if you don’t make millions or achieve a spectacular growth rate, you will be at least profitable because your market is large and has people who are already spending money (I’m assuming your solution/product is good!). This scenario of slow growth and profitability in an already validated market is much better than the scenario in which you have one in a million odds of achieving hockey stick growth because of your new, revolutionary idea.

Key lesson: choose a market/nice first, come up with “idea” later. And then, execute really well and persevere for years before hitting million dollar revenue!

Possibly related posts (automagically generated):

• How making money changed my perspective on startup ideas
• How to find startup ideas that make money
• Growth startup v/s lifestyle startup: why should there be a difference at all?

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