Bucking the Silicon Valley trend of prioritizing growth over profit, South Korean gaming startup 111Percent proves that both can be achieved simultaneously.
Founded in 2015, the company generated $1.9 million in revenue in 2016 and increased that to $84.1 million in the first half of this year.
They did this without venture capital investment and maintained an average profit rate of 36% over 4.5 years.
The startup's success can be attributed to several factors:
- Start small and move fast: 111Percent has launched 150 hyper-casual games in four years. The company's projects start with a small planning cell that can quickly pivot or terminate projects based on performance. This approach helped its main cash cow, Random Dice, grow from a five-dice legacy game to a popular 100,000 MAU title.
- Internal data analysis: The company uses a data analytics engine called "Fun Graph" to measure players' emotions every five minutes. This allows them to identify negative experiences and offer incentives to engage users.
- Working with ad tech partners: 111Percent partnered with Silicon Valley-based ad tech company Moloco to optimize its marketing strategy. This collaboration resulted in 10 million application downloads, a 14% increase in incremental revenue, and an 8% increase in profit.
111Percent's success is only guaranteed for some startups seeking to combine growth and profitability.
However, the company's approach provides a valuable case study for those looking to create a sustainable business model in the gaming industry.