A Q&A with Lookout Gaming co-founder Casey Chafkin. The Boston–based company was founded in March of 2012 and closed a $1.3 million Seed funding round in mid-November. Investors include Atlas Venture and Nextview Ventures.
SUB: Please describe Lookout Gaming and your value proposition.
Chafkin: We have this outlandish notion that great mobile game developers should be financially rewarded for their creations. The reality is that today there are really only two viable ways to generate revenue from indie game titles—advertising and in-app purchases. These tools are insufficient in many cases as these techniques require really large audiences. As a result, both developers and gamers are suffering because it’s very difficult to generate revenue despite building a great indie game.
We have a solution to this problem, and we’re going to fix this broken ecosystem. We’re still in stealth mode, so we can’t get too specific about exactly what our product does, but the initial feedback from closed beta testing has been exceptionally positive.
SUB: Who are your target markets and users?
Chafkin: Our immediate customers are indie game developers. We’ve built an SDK for them that will unlock a brand new revenue stream in their games while complementing, rather than cannibalizing, their existing monetization tools. Our whole staff loves video games, and gamers are our end-users, so we wouldn’t have built this product if we didn’t think it enhanced game play.
SUB: Who do you consider to be your competition?
Chafkin: Our product’s functionality is truly unique, and we’ve filed for patents to keep it that way. I know many companies claim this but stay tuned because this one is real. Ok, many companies probably say that too.
Anyway, our competition is really all of the other things that claim they can monetize games and require an indie developer’s time and attention. Indie game studios are often a one-man-band. They’re trying to get so many things done at once that no matter how compelling our value proposition is, we’re still fighting for their most valuable resource—time.
SUB: What differentiates Lookout Gaming from the competition?
Chafkin: That’s easy: we increase our customer’s revenue by a multiple.
SUB: When was the company founded and what were the first steps you took in establishing it?
Chafkin: Andrew Paradise founded the company in March of this year and immediately brought me on as a co-founder. We spent a lot of time validating the idea through various forms of market research. Starting a new business requires a ton of investment, and we knew what starting this business would take. We wanted to make sure we were investing our capital in the right place.
SUB: What was the inspiration behind the idea for Lookout Gaming? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Chafkin: Andrew initially conceived our first product in 2005. He’s an avid gamer and consummate inventor, and he was thinking about new ways that gamers could engage with games. The idea didn’t have the urgency then that it does today, because in 2005, monetizing great video games was not the challenge that it is today.
SUB: How did you come up with the name? What is the story behind it?
Chafkin: Lookout Gaming is a stealth mode place-holder name. We wanted people to know that we’re in the gaming industry, but we needed something sufficiently vague that no one would be able to guess what our product is going to be. The word ‘Lookout’ allows for a range of fun puns and intonations around our pending launch that hopefully keeps everyone amused.
SUB: What have the most significant obstacles been so far to building the company?
Chafkin: Without a doubt, building the team. Our team has nine full-time employees and another six contractors. It’s the most talented group of people I’ve ever been around, and it was enormously difficult to find them.
SUB: You just raised $1.3 million in new Seed funding. What are your plans for the funds?
Chafkin: We want to finish building a groundbreaking product, and that requires brilliant people. We’re investing heavily in both, while making sure that we have plenty of beer, coffee, burritos, and chocolate to keep us going. We have five open positions listed on our website so if you’re the kind of person who wants to change the video game industry, then please apply.
SUB: Why was this a particularly good time to raise funding?
Chafkin: This is the third startup that Andrew has founded, including AisleBuyer, which was sold earlier this year to Intuit. His track record for building great companies, combined with the team we’ve assembled, and a product with serious home-run potential, made Lookout Gaming an exciting opportunity for those we approached in the investment community.
SUB: How does the company generate revenue or plan to generate revenue?
Chafkin: We have a revenue share with the game developers that we work with. They keep all of the money from their existing monetization tools, and we share incremental revenue that comes through using our product.
SUB: What are your goals for Lookout Gaming over the next year or so?
Chafkin: We’re going to show the world what we’ve built. In just a few months we’ll be launching our product inside the absolutely stellar games built by our partners. I don’t want to jinx things, so we’ll keep our projections to ourselves for now.
Lookout Gaming – www.lookoutgaming.com
