Gamblit CEO Eric Meyerhofer: "The Keys to our success? Talent, flexibility and agility"
By Gambling Insider
The gaming industry has been the scene of scores of innovative and entrepreneurial success stories in the past few years, but none more so than Gamblit. Gambling Insider sits down with Gamblit’s co-founder and CEO Eric Meyerhofer to discuss the secrets to his start-up success
Taking all of your experience into account, how long has it taken to get where you are today in the gaming industry?
It has taken me a total of 18 years to get to the position I’m in today. I was initially in charge of product development for FutureLogic, supplying printers to a variety of OEM applications. When the opportunity arose to work with IGT on a new TITO printer, it seemed like a project worth getting involved in. Well, as we know, TITO exploded worldwide. Riding that success took me to all of the major EGM suppliers, where I got a chance to network with suppliers and learn all about the industry.
What role did you play when the parent company of Gamblit Gaming, Hard 8 Games, first started?
I co-founded Gamblit and was the company’s first CEO. Hard 8 Games was always a parent holding company, and at first Gamblit was registered under a different placeholder name. At that time, we were just a think tank. We took on the Gamblit name when we decided that we were going to become industry-facing; we wanted our handle to be a hybrid of a supplier company name and a customer-facing business name.
When you began this mammoth project, what was the ultimate goal? What inspired you to chase this goal?
The goal was, and remains, to develop and introduce new types of gaming forms which were better adapted to the changing market demographic. This is a journey which will continue into the future, whereby we’ll supply products which have resulted from the past years of ideation, exploration and innovation on new forms of game designs and mediums.
What obstacles did you need to overcome in order to successfully break into the industry?
It wasn’t a challenge of breaking in per se, but rather the time it took to educate the industry on who we are, what we’re doing, and why we’re doing it. This process took a couple of years to complete, which is an epic amount of time for a start-up. However, we knew this would take a lot of time when we first started out, so we accounted for this. At the outset, operators found our ideas interesting and were curious, but they were more inclined to watch and wait to see what we would become before truly investing. As time went on, there was a cry for casinos to adapt portions of their floors to the changing demographics. It became increasingly apparent that these new products were going to be radically different from traditional casino gaming products, potentially posing a risk to the industry’s continued health. Today we’re at a point where most operators have accepted that this challenge exists, and realise that it will take time to experiment and discover how they will adapt to this drastically evolving market.
We are excited to see that not only are operators receptive and even coaxing us for new products to put on their casino floors, but they’re investing in the kinds of spaces necessary to attract a younger generation of players. The environment now, three years after we began our public crusade, is finally engaged and ready for new and interesting products.
In your opinion, what made your company so successful as a start-up?
Three words: talent, flexibility and agility. We have a load of super-sharp, motivated people who are extremely efficient. We are also quick to abandon ideas that develop too many issues, while preserving an environment where all ideas are honoured. To me, open communication is of fundamental importance, although looking at a singular idea from various angles can be quite mentally challenging at times; the opinions of our numerous departments can clash, but this communication is necessary to get the very best out of our product.
How do you define success in this particular industry?
Success for me comes in two stages. The first stage is engagement, and the second, of course, is monetisation. The games need to be able to engage players for a reasonable period of time; if you can engage players, you need to develop a strategy to optimally monetise these games. As we hit the field in the first quarter of 2017, I’ll be examining the level of player engagement first and foremost. I expect there will be a need to re-tune both engagement and monetisation, but that is to be expected in games that are so daringly different from traditional casino products.
What would be your vision of a successful skill gaming launch?
We would be glad to see a fair number of people trying one or more of our games, and remaining to play them for at least ten to 15 minutes. Ideally, of course, we would see longer periods of play, but if the players engage in multiple rounds of the game it means they understand and enjoy the gameplay as well as comprehend the wagering system.
What piece of advice would you offer to today’s start-ups?
As a start-up company, there are a number of factors that should be kept under surveillance. Funding is always first and foremost, because the company cannot exist without it. People would rank high up in the list too: you can have all the money in the world, but if you don’t have the right people to action ideas, you would be better off putting your money in bonds than starting up a company.
Finding the right work environment is also key to a successful start-up, and I don’t mean fancy offices and material things. It’s important to create an environment where people can be the best they can be, without fear or ridicule or reprisal. If you don’t want to stifle the necessary creativity you need in any kind of start-up, make people feel confident to express themselves. In order for your employees or colleagues to flourish, they must feel respected.
Agility and the ability to pivot quickly are also vital to a start-up: You can’t get too attached to any particular idea or approach within the early stage, because there just isn’t the funding runway to go down dead-end paths because of egos or politics.
You also need to inject a healthy dose of fun into the work environment, otherwise why would anybody want to work there, and why would you want to spend your valuable years miserable? Things typically take longer than you expect to come to fruition and you don’t want to burn yourself or the team out before you get there.
To what degree do you think going to the table with industry-leading partners is a challenge for start-ups?
Suppliers to the industry are several times the size of our company, so over the years habitually formed structures and approaches are applied. For regulatory entities and small companies, such as ours, this can lead to challenges with timing and terms. However, we can’t expect the industry to adapt to us, so we do our best to mould to their requirements within the bounds of what is possible with resources more limited than enterprises they’re used to sitting across the table with. Some of the earliest adopter parties we have worked with have encouragingly shown unprecedented flexibility; I believe they view this as an industry partnership which will symbiotically benefit both parties.
Do you have any tips for start-ups who want to pitch to potential investors?
Here is my ‘Pitching to Investors 101’; what your company does has to be compelling and yet adhere to common sense. Obscure and esoteric reasoning is a siren that wards off investors: it signals too much risk and instability for them to take on. If you can’t make them think “Of course his idea makes sense; I can’t believe someone else didn’t think of it”, your idea probably isn’t going to be funded.
You should also communicate your fantastic idea crisply and smartly with a combination of visual and written information. Every disciplined investor will have a healthy dose of doubt which must be overcome to achieve a comfortable interest in your business; you should acid test your ideas on other sceptics first, and produce reasonable answers to all aspects of risk. Assumptions, of course, must be carefully vetted. You also need to be extremely well prepared with a realistic and thorough financial model. You need to sensitise the model by showing the best and worst-case scenarios. The worst-case scenario needs to be bearable, and the best-case scenario needs to show venture returns commensurate with the risk profile you present. Lastly, with all this preparation in, you need a big dose of luck that you will find a sponsor who is as excited about your offering as you are.