Interview with CEO and entrepreneur Jens Begemann
Jens Begemann has been one of the most influential entrepreneurs in the mobile entertainment and games sectors over the last twenty years or so. In his early career, as Chief Product Officer of Jamba, he helped to build one of the first successful mobile content businesses. In 2009, he founded Wooga, and as CEO grew the company to become one of the largest mobile and social games companies in the world.
We’re delighted to have had the opportunity to talk to Jens and get his perspective on his career so far and being an entrepreneur:
Did you join Jamba straight after graduating or did you work somewhere else before that?
During my studies at university I had kind of a stipendia program with Siemens. I did 30 months of internships during my studies – but I always had this entrepreneurial drive.
I always wanted to work in startups. So for me, my time at university was the more corporate contrast to my later career.
Siemens to start-ups – that’s quite the change of environment!
Startups wouldn’t pay for the four years of studying!
Did you know Oliver Samwer [the CEO and founder of Jamba] before joining Jamba. or was it through Jamba that you got to know each other?
I had heard about him in the media, but I didn’t know him personally.
I had always wanted to work in startups and ideally wanted to found my own business. But I realized, okay, this was 2000 and the dot-com bubble had just burst.
There’s no chance I’m getting any funding. I don’t have a co-founder. I actually have no idea how startups work.
So, I tried to become a late co-founder in startups in Berlin, I gave my CV to everyone. And everybody said, “no, you just graduated. You’re 24”.
Fortunately, my CV made it to Alexander and Oliver Samwer, and they offered me a job within the company.
How did your responsibilities within Jamba evolve over time?
When I joined, the vision for Jamba was to be the homepage for the mobile internet, to be the Yahoo of the mobile phone, the start page.
I joined as a product manager and my first project was to bring email on the phone in 2001. The technology at the time wasn’t ready with most phones having tiny black and white screens and mobile internet being slow and expensive. It was impossible to create a great user experience.
But our side business of selling ringtones became really big. I started to explore how we could also provide games for mobile phones. As the company grew, I became Chief Product Officer of the whole business.
Jamba was bought by Verisign for $270 million in 2004. How much did things change following the exit?
Following the exit, the Samwer brothers had an earn-out based on quarterly goals. So, the next year we became even more short-term oriented and focussed on how can we make more revenue this quarter.
How can we push even more ringtones and game subscriptions into consumers? How can we increase our marketing budget? At one point, we had more gross media volume than large companies like Ford in major markets such as the UK and Germany.
We reached a point where the business had probably peaked and we were way too aggressive, we weren’t consumer-friendly, regulation kicked in and it all collapsed.
The Samwers left the business and I became part of the team that tried to turn around the business.
Do you think that with the rise of smartphones and therefore Apple and Google having their own mobile content platforms, that was always going to be a big challenge for Jamba?
I think so, yes. However, I was at Jamba in 2007 when the iPhone came out and I was also there when the App Store was announced. At that point we had turned around the business and we were profitable.
We were still doing like 300 million a year in revenue. So in theory, Jamba could have taken that position and done something else. We also created a music streaming service back then that was like Spotify.
It was about a year before Spotify. The idea was that you could have all the music in the world you could have streamed to your phone. This was in around 2006 – before the iPhone had launched.
We were a little too early as people were still buying individual songs on iTunes at the time and the idea of renting music via a subscription hadn’t taken hold. We didn’t have the right brand for it either and had lost consumer trust.
If you look at Jamba and Wooga together, perhaps a theme that both companies share is this idea that mobile phones had become more than just communication devices, that there was this new world of mobile entertainment. Was this a vision that you had early in your career?
In 2001, when the first phones with Java came out, and I started this project at Jamba to sell games on phones, I think we were the first people in Europe to do that.
There was definitely a thought that more content could be delivered to mobile devices, but it’s often easier to see these things clearly with hindsight compared to looking forward at the time.
What inspired you to found Wooga? What was the vision behind the business?
In 2001, I had decided to join Jamba to learn how a startup works. And initially, my plan was to only be there for a couple of years, then leave and do my own thing.
I ended up staying with Jamba for seven years – until 2008, way longer than I had planned. I’d seen the company grow from being very small to over 500 people and felt much more prepared to found my own business.
I had not yet decided on the actual idea. In the summer of 2008, I was traveling around, I was in Silicon Valley, I was in Los Angeles when Lehman Brothers collapsed. It was not a great time for startups at that time.
I remembered how much I loved games, how as a 10 year old, I learned how to code in order to write games. I decided I wanted to create games.
I wondered, why is the games industry still so niche? Not niche in terms of revenue, the industry was already bigger than Hollywood. But niche in terms of audience: Only traditional gamers would play games, and they were mostly male and quite young. If everyone listens to music everyday, or watches TV everyday, why shouldn’t they play games every day?
The vision behind Wooga was to create games that the mass market would want to play every day, including non-traditional gamers. So let’s create games that have the broadest mass appeal that you can think of, create games that people play that don’t play games at all.
A lot of the traditional console and PC game publishers struggled to adapt to the new world of online and mobile games. Presumably your experience of building a direct-to-consumer mobile business in Jamba was very helpful when it came to building Wooga?
It was a big help for sure. We did a lot of direct marketing and had a data-driven approach at Jamba with lots of A/B testing. Marketing was our bread and butter. The challenge was that at Wooga, initially we had no experience of making games, because back then at Jamba we were mostly just distributing other people’s games rather than focussing on making our own.
At Wooga we had to figure out – how do you make a game? What is the production cycle? How does it work? What kind of content should it have? Games were now services rather than products. A lot of traditional console publishers struggled to adapt to this new world.
When Electronic Arts bought Playfish in London, they applied all of the EA processes and structures and they killed the company within two years.
Do you think that execution is more important than innovation when making hit games?
I think that’s true for almost every product or at least every entertainment product.
If you look at the most successful first-person shooter today on consoles like Call of Duty, it’s based on so many predecessors and it’s much bigger than games like Doom that pioneered the genre in the 90s. Over time they have iterated and made so many tweaks to improve the product. Nor was the iPad the first tablet, Microsoft had released tablets before that.
The iPhone was not the first smartphone. And I think it’s true for almost everything – the devil is in the detail and you need to perfect the product and the marketing.
What changes have you seen in the mobile game sector over the 10 years or so that you have worked in the industry?
One of the first big changes was the shift to a free-to-play business model between 2010 and 2013.
Before that you paid a sum to buy the whole game, and that was the traditional “premium” model of buying computer games. And the change to free-to-play was huge because consumers were 10 times or 20 times or 30 times more likely to download a game that is free than if it was priced at 99 cents.
When Apple allowed in-app purchases for free apps in 2010, that is when innovation in the sector began. In 2012 and 2013 the market started to explode with big hit titles like Candy Crush Saga. Over the last the last 12-13 years since then, the industry has grown to a point where now games are services: They never stay stale or the same. Adding new content, events and features to games post-launch has been essential to maintaining their success over time and growing / retaining the players.
The big mobile games now have well over 100 people working on them. And every day there’s something new that they have added to the game.
User acquisition is so expensive these days. It may cost you 10 euros to get a new user to just install your game and to get someone who plays it for a long time may cost 100 euros. So how do you get the most out of that consumer for two, three, four, five years? You give them a stream of new content and tweaks and innovations that keep them entertained.
They’re all A/B tested and what is most successful sticks. Establishing a new game in the market is much harder than it was ten years ago given the level of competition in the market.
Now it’s about finding and building evergreen games that can last for 10 years or more.
It must be extremely hard for a new mobile games company to compete with established players in 2024?
Yeah, it’s very difficult. It sometimes happens, but very rarely.
The big barrier to entry isn’t necessarily the brand or the existing player base or the level of financial resources. It’s that competitive games might have had five years of development and optimization and content that a new game hasn’t.
Even if you have a new game that is as high quality as the competition, it’s hard to afford effective user acquisition, because you don’t have the same level of customer lifetime value as your competitors. You need some sort of viral appeal or mechanic that attracts and keeps users.
In 2018, you sold Wooga to Playtika and stepped down in 2020 as CEO. What have you been up to since leaving Wooga?
Since then, I’ve been angel investing into young startups, ideally where it’s just me and the founders initially.
I’ve only made five or six investments so far and I try to be really hands-on with them. I spend time with the founders every week, helping them to build their businesses.
I also have a lot more time now for my family compared to the previous 20 years: It was not just 40 or 50 hour weeks, it was much longer. And it was mentally really taxing. So having enough time for my family is has really been great since then.
Nai Chang, who took over leading Wooga after me, has done an amazing job and the business has performed really strongly over the last few years. Wooga is more successful than it has ever been.
The mobile games sector has had some difficult times since the pandemic and I’m pleased to see Wooga growing nicely.
It was tough for him to take over from me, as we had to do the handover over video calls during the first lockdown of 2020. I had been the only CEO in the 12 year history of the business and everybody had been working in our office in Berlin every single day (with no work from home).
So how do you establish yourself a CEO? How do you take on the culture? How do you build a relationship to employees with everyone working remotely? It was the most difficult circumstances that one could think of. It wasn’t an easy challenge at all, and he’s done a fantastic job.
When you’re making investments today, are there particular industries that you’re bullish on? Beyond that, what do you look for when evaluating investment opportunities?
I couldn’t initially invest in games companies due to a non-compete clause when I left Wooga. I initially focussed on direct to consumer businesses as that’s where most of my experience lies.
The mobile games industry is close to a $100bn revenue industry today and it’s very advanced in certain areas, like data science, product management and marketing. So how could I help maybe with that knowledge in young consumer businesses? It’s hard for consumer-oriented businesses to raise funding at the moment with many investors preferring to invest in B2B SaaS companies.
The B2B software world is one in which much of my knowledge doesn’t really apply. How do you do enterprise sales? There’s a reason why I left Siemens!
I didn’t like the enterprise world. So yeah, that’s not my cup of tea. I prefer direct to consumer.
Based on your own experiences, if you were giving advice to a young founder CEO, what might you suggest?
One of the most important things I learned from Oliver Samwer was focus, relentless focus.
Focus is not about what you do. Focus is about what you don’t do.
It’s about saying no to those things that you really want to do, but you shouldn’t because as a startup, you have very limited resources, especially if you’re at an early stage. Be disciplined about your sector and your audience.
If something doesn’t work, switch quickly as you don’t have unlimited resources.
At Wooga we were very focused in our first few years, but as we became more and more successful, we became complacent and thought everything we touched turned to gold: We lost our focus, started games in all kinds of genres and this led to a three year crisis, that was very difficult and painful to turn around.
Focus doesn’t mean you shouldn’t experiment and try new products and propositions: You should, but do it as controlled experiments. Usually, you shouldn’t pursue projects that aren’t working for too long.
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