his monsteh - Mind Candy

A MAN AND
HIS MONSTEH
Moshi Monsters want to grab
mor~ u.s. kids-and they're
armed with toys and music.
BY CURT NICKISCH
It's a Monday night, and Michael Acton
Smith is hosting a party at his threestory home in London's Soho district.
Farbelow the flat's high ceilings, techies
and artists navigate mismatched furni.tute and strewn-about gadgets, talking
over one another and partaking in spirits. Unnoticed amid the revelry is a slender woman in a Vivienne Westwood
cape. She steps into the living room, lifts
a ukulele, and thumbs a couple chords.
A few people gasp. "Funny how the
noises that I'm making," she sings over
the hushing room, "can't drown the
sound of my heart breaking." Acton
Smith gets goose bumps as the partygoers recognize popular British musician Martina Topley Bird.
"I tweeted at her earlier," he says later,
"and asked, 'Would you come perform for
us?''' Later, Acton Smith introduces a pair
ofbuskers he discovered delighting a
crowd in front of a Soho sex shop the day
before. That is as Michael Acton Smith
does. He observes. He absorbs. And he
brings things he thinks people will like
to the people he thinks will like them.
Bill Gates once said he wanted to put a
computer in every home. Michael Acton
Smith wants to put a monster in every
computer. His East London company,
Mind Candy, runs Moshimonsters.com,
a world where children adopt, name, and
color an animated creature selected from
a cast painstakingly assembled by Acton
Smith and his team. They take it for
walks, tickle it with the mouse to boost
its happiness, and play games to earn
. "rox" they can spend on food for it at the
"Gross-cry Store."
This concept may sound familiar.
44
FASTCOMPANY.COM
MAY 2012
Michael Acton
Smith walks with
one of his Moshi
Monsters,
whose surging
popularity
provides a
reason to jump
for joy.
"It's an updated Tamagotchi, really,"
acknowledges Acton Smith. It's also a
fresh take on Disney's Club Penguin, the
global leader in virtual worlds for kids
with more than 150 million users. "I felt
like we could create something better,"
he says. "It's not about who gets there first
or who spends the most on marketing.
It's about who creates the best stories,
characters, and experience for kids."
Acton Smith doesn't look like the type
of person youd expect to run a site used
by one out of every two UK. children. He
doesn't even look like someone parents
would want around their kids. With his
leather pants, tangle of bracelets, tousled
hair, and snakeskin boots, the 37-year-old
is more rocker than Mr. Rogers. "I'm very
immature, as many of my ex-girlfriends.
might tell you," he says.
His first entrepreneurial breakthrough
was in the late 1990S with online novelty
retailer Firebox.com. Bolstered by the success ofits Thinking Man's Drinking Game,
a chess set comprised of shot glasses,
Acton Smith was able to secure financing
for Mind Candy-a company that first
focused on developing an alternate-reality
PHOTOGRAPH BY RUSS + REYN
NEXT
game called Perplex City.Effectively a reallife treasure hunt, it captured a modest
but passionate audience. Nevertheless,
Acton Smith realized its potential was
limited. In 2007, he laid off all but a few
employees and started up MoshiMonsters.
A year later, the company was in a
bind. Mind Candy was rapidly running
out of cash, and the financial crisis made
investors skittish. Acton Smith desperately
appealed to a London hedge-fund contact
"Look, I don't get it," the guy responded,
"but my kids are playing Moshi nonstop.
So I'll give you a couple hundred thousand
pounds, and we'll see what happens."
Four yea~s later, they're enjoying the
view. Moshimonsters.com has more than
50 million registered users globally, with
one-third in the U.S.,and has grown into
a full-fledged social network. Users can
interact as they navigate their pets
through a virtual land, friending one another and sharing tips on how to boost
their monsters' health and happiness
meters. More than half a billion messages
have been-sent to date.
Though the site is free to use, a small
percentage of subscribers pay 5 pounds
($6) monthly for a passport that enables
monsters to access exclusive areas on the
site. It's enough to have earned the companya $200 million valuation-and, more
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FASTCOMPANY.COM
MAY 2012
important, recognition as a bankable
retail property.
Now, much like Rovio has done with
its Angry Birds franchise, Mind Candy is
aggressively bringing its characters out
of the game: It signed more than 100
licensing deals in 2011; launched Moshi
Monster Music, a label' aimed at kids; and
began printing'MoshiMonstersMagazinewhich quickly became the top-selling
children's magazine in Great Britain,
"Look, I don't get
it;' says a Mind .
Candy Investor,
"but my kids are
'Playing Moshi
nonstop:'
prompting Disney to respond with Club
Penguin Magazine. The newest Mind Candy
offering is Moshi Tv, a web-video hub intended to serve as an age-appropriate
You'Iube, A beta version of the site went
up in late December.
"One of the great things about having
a digital heart for your intellectual properties," Acton Smith says, "is that it's
easier to evolve fhem with changing
fashions." In the past, entertainment
companies had to invest heavily to introduce new characters on high-profile
platforms such as TV or film, then wait
and see if there was enough traction for
retail extensions. The feedback to roster
additions on Moshimonsters.com is immediate, and Mind Candy is nimble
enough to capitalize on clear fan favorites.
If the company moves slowly in any
way, it's with regard to acquisition. Club
Penguin was once a startup, but sold out
when the getting was good. Acton Smith
is taking a longer view. "There are some
eye-popping numbers that we could sell
the business for, but the world needs
more entrepreneurs who are willing to
keep their chips on the table," he says.
"ldlove to have a multibillion-dollar business that transforms what it is to be an
entertainment company. I know, it's ambitious." Sure, but so is inviting a pop
star to a party via Twitter.
WHATEVER HAPPENED TO ... TAMAGOTCHI?
EARLY1996
Co-inventor AkiMaita
tests the prototype
r with high-school girls
from the Tokyo district
of Shibuya. Results
are overwhelmingly
positive.
;
#'
would die out almost
as quickly as it arose,
despite crossover
attempts such as a
game for Game Boy.
MARCH2004
Arevamped version
called Tamagotchi Plus
reintroduces the toy
NOVEMBER1996
first to Japanese conThe first generation of
sumers and then overTamagotchi is released
seas markets. Though
inJapan. Scarce availsimilarto the original,
ability would lead Japa- . infrared technology alnese consumers to pay lowsthe pets to interact
upwards of $1,000 in
and mate with other
alternative markets.
Tamagotchis.
MAY1997
. Tamagotchi flies off
American toy shelves.
The national frenzy
NOVEMBER2004
The KeitaiTamagotchi
Plus reintroduces
macro-world Tama-
Town. It would become
an online virtual setting
offering supplementary
items available for nonvirtual purchase.
MARCH2006
Bandai partners with
Japanese airlineJALto
fly special-edition
Tamagotchi jets, replete
with branded headrests, paper cups, and
swag for the kids.
DECEMBER2007
The first feature-length
Tamagotchifilm premieres in Japan. It has
'enough success to earn
worldwide distribution.
NOVEMBER2009
Japan welcomes the
arrival of Tamagotchi
iD,the first webdownloadable model.
NOVEMBER2011
Tamagotchi turns 15.
NOVEMBER2006
Bandaiannounces
The two-day Tamagotits first Tamagotchi
chi World Event opens . social game for Moin Tokyo,commemorat- bage, directed at firstgeneration owners now
ing the 10th anniversary. More than SO,OOO in their late twenties.
"parents" attend.
-Laura Turner Garrison