Funware Development was a really lean startup. So lean that the max number of employees working for it (myself excluded because I didn’t get salary) was 3. Nevertheless, we delivered over 10 games and applications to Odnoklassniki, Moi Mir and VKontakte social networks. The total number of installations of these apps is just under 14 millions. Several months ago we were among the top 20 companies (for Russian social networks) based on these numbers. Despite the large number of users, the monetization didn’t go well, and eventually it became clear that the thing just wasn’t worth the trouble. If you are interested in numbers, the total revenue (including the sale of the company) was about $26K with all the costs totaling in about $26K. That’s right, the total profit over the startup’s life is about zero. It’s not as bad as it sounds, because most startups don’t even recover the money that were spent on them.

We surely made many mistakes along the way, and it is clear that we could really make it work. The hindsight is always 20/20 though. I’ve learned so many new things that no amount of reading other people’s blogs could deliver. Lessons learned, moving on.

The picture above is an actual screenshot from the site before I took it down.

… until they get you and your cars…

Courtesy of TechCrunch.

Microsoft released Onenote for iPhone in January and then Onenote for iPad in December 2011. What’s good about these releases: first, they determined the price and trial terms. It will definitely influence our decisions in the future. Second, their release allowed us to differentiate our product from theirs pretty easily. Microsoft provides basic access to their Skydrive stored notes, which is totally free for everyone except power users. MobileNoter gives you full access to the notes stored on Skydrive, Dropbox, your computer, while preserving all graphics, drawings, and provides complete Onenote for Windows experience on the mobile devices. The release of Onenote for iOS from Microsoft has some positive and negative impact on us. Overall, it is a somewhat neutral event.

Android was our top platform in 2011. The sales of MobileNoter for Android went from zero to more than that of for iOS during the year. Two factors helped: exceptionally great releases of MobileNoter for Android and skyrocketing growth of the platform itself. Even MobileNoter sales in Amazon Appstore showed significant growth despite a slow start. The Kindle Fire is to thank for this.

We expect to have some great releases of MobileNoter of iOS in 2012, so this platform is not to be ignored. The dominance of iOS over Android is however evaporating and soon it will be gone forever, as more as more developers find their income from Android growing over that of from iOS.

Our plans for BlackBerry lost some priority as the year of 2011 clearly demonstrated that the platform is struggling to survive. If the enterprise mobile users move to Android/Windows 8 and leave RIM products, then those Blackberries may never see a native MobileNoter and thus receive access to their Onenote notes.

Finally, 2011 was the year when MobileNoter as a startup reached several important financial milestones. If you ever ran a startup, you know what I’m talking about. We never doubted that the day would come, but it’s nice to actually experience it.

Overall, the event became somewhat smaller: fewer startup teams, fewer experts, fewer solid ideas, and fewer crazy ideas. Many experts that were working during the spring Weekend didn’t show up this time, meaning they probably didn’t like it enough. The overall level of ideas was pretty good. Only one idea (out of about 50) was to create a new social network, one to create a 3D game for social networks, and one to create a copy of Ning (which is a factory for social networks).

The most solid idea was a clone of gild – which would be a success on a local market, if properly done. Another cool idea was a widget for online gadget catalogs – the widget would display detailed information about a gadget, with specs, photos, reviews, etc. Every site that sells computers and gadgets has its own presentation engine for this, and many times the information is not accurate or poorly presented. The widget would solve this problem. I am sure this is also a clone of someone’s idea, since it is pretty obvious.

I spent a lot of time with Vasiliy Gnuchev talking about his startup – Team Plan. The logo (or theme picture) for Team Plan is at the top of this post. It is trying to create a collaboration tool for architects (the real ones – not the IT ones). It is a clone from Construction Online. Team Plan definitely has some promise if the guys can handle the development.

Here is a picture from the event. The guy with the money is Arkady Moreinis.

i-Jet used to be a famous company, a typical success story, widely covered in the press including Forbes (published in Russia) and Vedomosti – the leading Russian business newspaper created by the Financial Times and The Wall Street Journal. One of their first games “Happy Farmer” brought them over $20 millions in the first year ($10 million after the social network cut).

The company was said to be estimated at $100 million at its peak, but apparently the owners never sold for different reasons.

Alexey Kostarev blames the saturated market: there are just too many games. The average time a user plays a game reduced from 2 months to 2 weeks. That hurt both DAU and ARPU. The marketing costs skyrocketed. The costs of development of a game increased tenfold. This sounds like a helluva market. Zynga, what are you waiting for?

• Yam (2nd place in Web Ready 2010) received investment of $500k from Foresight Ventures. YaM (Yet Another Meeting) is a cloud-based solution for effective meeting management. It covers meeting scheduling, agenda management, note-taking, and follow-ups.
• SaeX (one of the semi-finalists) received investment of $500k from Foresight Ventures too, and then (in a second round) $300k from unnamed Canadian investment company. SaeX is a service that lets people sell and buy other people’s contact information, for example emails and phone numbers of top managers and politicians.
• copiny (one of the semi-finalists) received angel round from a private investor. Copiny aims at simplifying communications between a company and its customers.
• No public information is available about 1st place winner Quadra and 3rd place winner Alloka, but given their plans to expand into new geo-markets in 2011, they must be either doing really well or silently getting some investments too.

The most grave news however is a lack of growth in the key metrics: all of them (DAU, MAU, and MUU) are essentially the same when comparing Q1 2010 and Q1 2011. While the revenue is higher, it will stagnate without growing user base. Apparently, Zynga realizes this too, that’s why they are in a rush for IPO. The time is not working in their favor.

UPDATE: here is what Zynga says about the 30% cut: “In July 2010, we began migrating to Facebook Credits as the primary payment method for our games played through Facebook, and by April 2011, we had completed this migration.” So, it is safe to assume that Zynga wasn’t leaving 30% of their revenue to Facebook for the most of 2010. That’s why income in 2011 is down by 50%.