Angel Investor says “Shanghai Startups too focused on Chinese market”

It has been widely reported this week that Tudou.com, one of China’s two largest video sharing sites has filed with the Securities and Exchange Commission that it intends to launch an IPO on the NASDAQ exchange at an unspecified future date.

I met with one of Tudou’s founders, Marc van der Chijs, now CEO of Spil Games Asia, for coffee and a chat in Spil’s offices in a converted warehouse beside Shanghai’s Suzhou Creek.  Originally from the Netherlands, Marc first came to China in 1999 as a senior controller for Daimler-Benz’ China operations. He left Daimler-Benz soon after to work as an independent consultant.  Marc was unable to discuss Tudou’s upcoming IPO during our meeting because of the public filing.

Instead, our chat focused on Spil Games and the issues that all web startups have with monetizing their sites. We also discussed Marc’s work as an Angel Investor, with Shanghai based technology startups.

Spil Games

Spil Games are one of the world’s leading online gaming companies with 47 websites running fully localised content in 19 languages and serving over 4000 games to upwards of 130 million unique visitors per month. Their games target web and mobile users. Marc explained that, while most of their existing games use Adobe Flash they are now creating their games in HTML 5 to enable them to reach the broadest possible audience and allow them to run on Apple iOS devices reaching a significant proportion of the mobile market. He can envisage a time when HTML 5 takes over as the predominant platform for web and mobile gaming.   Spil are actively promoting the technology with others  by a HTML5 game jam that they organized together with Google in both Hilversum and Mountain View.  So far, most of their titles are single player but, with the rise in social gaming, especially on the mobile platforms, they are finding their output in those genres increasing.

I asked Marc the question on the minds of all web startup developers, how do you monetize your sites? Marc responded, that, at Spil Games, with 130 million visitors per month, advertising revenue is clearly a significant income generator, however, there are many users who ignore advertising, or indeed, don’t even see it. The real growth in monetization is in micropayments and advertising within games. Many game fans, once hooked, are willing to make a small payment for a level up or to buy some item within a game. Micropayments for in-game upgrades are not yet the largest income generator for online games but it is a growing slice of the pie and could soon overtake banner advertising as an income source.

The trick, of course, with all web content, is to “keep it fresh” that means update daily and, for games sites, introduce at least one new game every week. Otherwise, your readership and members are not going return.

Angel Investing

I first came to know of Marc van der Chijs through his Twitter account @chijs. On his twitter profile he describes himself as an “Angel Investor” I wasn’t entirely sure of the distinction between angel investors and venture capitalists so I asked Marc to clarify for me. The distinction as very simple, Venture Capitalists are usually companies where Angel Investors are typically people who may not have as much to invest. However, the boundaries are somewhat fuzzy, especially with the emergence of Super Angels, Angel investors who have larger amounts of money to invest.

Marc continued, that he focused his investments on local Shanghainese technology startups but that he had reduced his investment activity recently, mainly because there were simply too many companies approaching him, but, also because many local startups are focusing on the Chinese market only instead of taking a broader global perspective.

One local startup that Marc has invested in that he does believe can have a global impact, although he was quick to point out that he is also a co-founder, is unitedstyles.com, a personalized kids online fashion site that will go live (in beta) on November 15th.