I co-founded a billion-dollar mobile gaming company and am a Visiting Partner at Y Combinator – Holly LiuFeatured

Hi Elpha! I'm Holly Liu, Visiting Partner at Y Combinator. I joined YC in 2017, and have seen over 500 companies go through the program. Prior to that, I co-founded a mobile gaming company called Kabam.In 2008, our Series B term sheets were signed and the day the VC was to wire the money was the day Lehman Brothers collapsed and began the biggest recession our generation has yet to see. With no investment coming and revenues disappearing we built Kabam. We grew Kabam from $0 to $400MM annual revenue, and sold it to South Korea’s Netmarble Games and FoxNext for $1B in 2017. During my time at Kabam, I wore many hats. I scaled the org to over 1,500 employees globally as the Head of People and Chief of Staff, and eventually developed key relationships with China as Chief Development Officer. I began my time as Head of Design and led the design for Kabam’s flagship game "Kingdoms of Camelot." Building Kabam has not been a straight line. We started as a corporate social network in 2006 and quickly moved into fan communities. We built the largest fan communities for TV shows and Sports teams in Facebook with ~30M registered users. When ABC network wanted to distribute video on Facebook they called us up. Ask me anything about mobile gaming, pivots, impact of design on the business, communities, advising startups, or something else!
Thank you for spending time with us for this holiday week, Holly!Please post your questions for Holly below, and she will answer them by the end of the week. Note that she may not have time to answer every single one, so upvote the ones you’d most like her to answer.
Thanks for having me =)
Hi Holly,Thanks for taking the time to share you experience with us and amazing what you've accomplished - it's so inspiring!I'm the co-founder of Altcoin Fantasy, a crypto trading simulation game and we have just started the fundraising process. I'm wondering how as a game studio you guys pitched your vision to get funding at the pre-seed/seed stage? How did you guys estimate your market size, especially if you didn't have much traction at that point?Thanks!
"How as a game studio you guys pitched your vision to get funding at the pre-seed/seed stage?" THIS. Every time I say "video game company" to an investor (or even other founders tbh) I get looked at as if I have five heads.
hahahaha I know right? Glad someone else feels me!
Yes! you have to make a convincing argument about your game genre and your team. I also think data points is more important in a pure game.
Thanks for your kind words! Ah, I think you have two words in there that narrows the focus of investors: crypto and game. In terms of pitching your company as a game studio, you will need more data than just a prototype, but something with live users and good retention. While market size is recommended, to go bottoms up, I think in the gaming world you can segment it based what is currently out there for non-crypto games and if you have any data of the cross section of gamers who would play your game and who are into crypto. You may also want to ping a Kabam alumni @stephaniemello who was in now in crypto with her own company! I'm sure she has some great ideas on helping you get more traction. She is also on Elpha!!
Thank you so much @hollyster!! This is so helpful!
Hi Holly!I notice that Kabam made a pivot and that it took 10 years to get to $1B acquisition. When is it time to make a pivot and when is it time to walk away? I am personally dealing with this right now. It's a should I stay or should I go now moment despite users who are happy with our product. Thanks!
Feel free to DM me on your particular situation. Hard to tell if it makes sense to pivot if your users are happy. My assumption is that maybe the number of happy users are not growing or they are not returning? And, unclear what stage your company is at to either give pre-seed or post seed+ advice ;). Every stage is different!*******Here is our story and reflection. with pivots. I'm in the middle of a blog post on this, so will post here when I'm done as well! But to answer your question, there are several things when I look back on our pivots and why we pivoted. 1. Factors that were exogenous to us and out of our control forced us to make a pivot. - We could not control the Recession in 2008 - We could not control the changes to the Facebook platform2. The more we worked on the business the more the progress was like rolling a boulder up a hill - As we moved onto mobile from web, we could not sustain as many game teams to get more shots on goal, it was getting too expensive and the mobile platform was consolidating where the Top 10 games would garner 80-90% of the revenue. We began to reduce the number of our game teams, but at the same time our game teams became bigger. - What becomes clear in these situations is that either the more successful the business became the economics don't work in our favor (30% tax Facebook exercised on its developers), or there is a dependency that was core to our business (e.g. Facebook changing navigation to our apps). 3. Our core competencies- Our initial pivot we realized we were all founders with Consumer background versus enterprise- Leveraging our web and backgrounds, we built games as a service to where we did not need to ship a whole feature or product to test. We could ship and fix bugs later. Bugs within the traditional console games are costly. Therefore, we were able to launch and continuously improve it. - This also leveraged our community background. One thing we learned was how to build community that was interest based during our fan communities. Just because we are friends does not mean we like the same TV shows . How do you create community on shared interests first and then a relationship. As a result we've had several marriages, best friends and ad hoc meet ups between our players from meeting in our games. I also think to contextualize things, with a venture backed business there were goals we needed to get to about every 18-24 months. Once we decided we needed a pivot, we looked at 3 things as well:1. What was doing well in the market? 2. Our core competencies3. Our passion pointsThe one thing that is often not talked about is can the team withstand a pivot. My theory is that founders who have a deep trust and enjoy working with one another can pivot more successfully. I've seen many all star teams brought together and fall apart, vs. a small group of people dedicated to each other win championships. Remember the Titanic was built by professionals and the Ark was built by amateurs ;)I often think about doing a startup like surfing. In order to surf waves need to be happening (how are the macro-economics of venture/startup), the second the waves need to happen at the beach you are surfing at (industry) , and finally can you time and have the skillset to get on that surfboard (your ability to launch, execute, find the right wave?) . Out of all 3 of these you have the ability to pick 2 of them - which industry you build your company in, and executing. So pick and execute well!
Thanks Holly! I'll DM you.
Hi Holly! Thanks for taking the time to answer questions. I'm a co-founder in a mobile gaming company called Starting 11 (daily fantasy soccer) and we are about to close on a Series Seed round ($1 million+) with an India-based VC and begin our expansion to the Indian market. I'd love to know what Kanban's most important steps were between Series Seed and Series A (or mistakes you made, pitfalls to avoid, etc.) I'd also love to hear any tips about how you handled a successful foreign expansion and exit; we'd love to follow in your footsteps! Thank you!
Congratulations! The largest challenge with any type of sports games will be seasonality. If you can manage traffic and revenues through seasonality, they would be incredibly helpful. It helps on forecasting. But many great businesses are built with seasonality (look at Walmart). I know less of the India market, but I like seeing more games come from there! If you are in India you really don't need to expand too much, and if you do, make sure you have a good chunk of your home market. I also think foreign expansion with games, esp sports games has a lot of cultural nuances. I do think you have better luck expanding first to Western Europe and then possibly the US. But I'd have a good chunk of the market in one territory. Of course, if it is the same leagues, there is nothing wrong with going into Western Eurpoe right now, from a product perspective. Because there would be seemingly be minimal change to the market. But you know the product and market the best for this one. So, I'd leave it up to you =)
Thanks so much for the encouragement and advice, Holly!
Hi Holly, thank you so much for joining us and offering your insight! Could you please share some best practices in hiring, retaining, and managing people? How do you attract the right talent and take care of them while needing to move fast?
Hiring - Oftentimes a startup will go to its internal networks for the first few hires mainly due to the ability to move faster with something they trust. The downside of this is the lack fo diversity and inclusion that often happens. So that should be a sign that diversifying your own personal networks early will help with whatever you build will be inclusive later and honestly yield better results for your own life personally. Interviewing - We enjoyed doing case studies as well as behavioral interview (tell me about a time...). Case studies enabled us to look at their thought processes and give the candidate a taste of what it would be like working together on a real problem. Remember you are interviewing each other. Retaining- Sometimes a little preparation goes a long way. The largest thing that startups often forget is the on boarding process. It makes sense to set the new hire up for success by discussing they key areas for the role, 30/60/90 day goals and milestones of impact as well as introductions to any tools of success (slack channels, email list serves, admin etc..). Also, send out a welcome announcement when they arrive, so everyone can welcome them. I remember one of my Kabam colleagues told me that people remember beginnings and endings. That thought has stuck with me as I've thought of managing people and teams. Managing - Then it makes sense to continuously upkeep with relationship with 1x1s and constantly helping the employee tie their day to day to the mission and goals of the company.
Holly, thank you so much for this insightful advice/guidance. Do you mind me asking when one should be looking for culture in this process? Do you think that even with the first few employees, when the prerogative especially at that point is to move fast and necessarily rely on internal networks, companies should make the decision to hire/fire with culture as one of the most important (if not the most important) indicia?
Hi Holly!Thanks for taking the time with us. Kabam has an interesting history - congratulations on the success. :) Can you tell us more how you funded the first game or prototype? What were the success factors for your first users? Has the landscape changed for how you would do these again? Thank you!
Thanks so much for your kind words!I'll try to answer this in how we did it for that time and because it is a different time now, how I would consider thinking about this differently in the current state. 1. We pivoted from fan communities on Facebook and into games on Facebook. By that time we had raised a total of $4.5M dollars within a year. We kept our burn low, but our team had ballooned to 30 people. We had to reduce costs and took away our sales team, because we were not becoming an ad supported business anymore. We used art students to help with with the artwork, and used a theme , Camelot, which had not been copyrighted yet. 2. In today's world, I think if you are building a mobile game you have two choices - venture backed or bootstrapped. In general if you can afford it, it would be great to get it bootstrapped. The first successes will be looking at retention, since likely you will buy some traffic for your initial users. You could ask friends and family to download the game, but relying on word of mouth from friends and family may be harder. If it is your first time launching a game, hard to get venture funding without any proof points. If you have had a success under your belt a lot easier to get funding.
Thank you for your time and thoughts - I genuinely appreciate it!
Just here showing support for the Hollyster! I can attest to her full-on status as a legit inspiration and all around good person.
ah thanks smello! DM me!!!
Hi Holly,Thank you for your time! I'm wondering how you found/connected with the team you built Kabam with. Was it something that you had been talking to friends and your network about, and then the founding team came together organically? Or did you seek out specific people? How did you know they were the right fit to go on this journey with?Thank you!Jenn
I am cousins with one of the founders, so we have been building trust our whole lives. There are pros and cons to building a business with family. But overall, it was a great experience! I think the fundamental trust plays a lot. He was the first person I contacted about starting a business together. He told me immediately that we would need an engineer to help us build it - he had seen so many businesses being a VC. I told him I knew just the guy. I met our CTO several years ago at work and we've been working on side projects ever since. Once I recruited the CTO, he told me that because he was a backend guy, he would need a front end guy. I told him I knew just the guy. I worked at AOL for almost 3 years and spent some of my time hacking with a front end guy. We all came together and decided to build this. It helped that some of the founders had other friends in common as well. I guess it sounds fairy-tale ish but we did get along quite well which helped us move fast. And we needed as much time as we could get because we made so many mistakes. I think team is really a big secret foundation in all of this. None of us had any management experience, we had all been individual contributors. Some of us had only worked in one place before doing this. We had no money, none of our parents were great business people, they were all immigrants that escaped war, revolutions, and turmoil, they came with nothing but a dream and passed it onto us kids. Never underestimate your team - it's all you have.
Hello Holly,It's great hearing about your success in the gaming industry! Also I love seeing all the other women here with their gaming startups :)I'm the founder of Sundew Studios, a video game development company aiming to create a space within games that celebrates women's interests. I'm currently figuring out if our next project should be premium (on Steam/Consoles) or F2P on mobile. My fear with F2P is that it'll be ridiculously hard to gain traction and scale without $$$$$$ in investment. However, I feel like it'll be *easier* to reach my target demographic on mobile. If you had to do it all over again in today's highly competitive mobile market, how would you begin scaling your audience?Also a more general question, mobile gaming seems to accept that women play and enjoy games (while PC/consoles is quite the opposite...). Do you find that this makes mobile gaming more friendly towards women founders and women-targeted games? I find that because I'm a woman founder making "feminine" games, either no one wants to talk to me, or when they do they don't seem to take me seriously and quickly brush me off. Thanks!
Unfortunately I'm a bit biased coming from the mobile gaming space, and know less about the console/PC space. I agree that mobile gaming has a lot more women playing it because of the accessibility of the device as well as the games are more accessible. I also think that processing power and the graphics that you can get on your phone is almost as good as console quality. In your specific case I would consider going to where your users are and since your users will likely be on mobile to consider mobile. If you believe you are making something for a unique audience, who has never been catered to, your cost to acquire could likely be less.
Hi @holly, Do you believe that the next 'facebook' will be an e-sports game? What are your big bets in this space?
I definitely can believe it. Many folks view Fortnite as a new social network. I also think humans are made to play games, video games are just becoming more accessibly in both playing (the mobile phone is so much more accessible than the controller! ) and in building - hello roblox! There is something very human about yearning for play because I do believe it is how we learn. While people are waiting for VR (and I do think it will get there), I'm waiting for voice. I'm a bit surprised on how it is not taken off as much - discoverability and retention. I believe sometimes the NLP is not quite ready to be that interactive which limits the ability for input and play, then you are just on the receiving side - like TV or radio. A game is a game when it is interactive, and the player is pulled into the storyline or plot or quest.There is also eSports. I think it will just become another sport with watching and playing. The space will become more and more mature. If the fix latency then one thing that will be pretty clear is you don't need to be in the same space to play the game. I think that's amazing scale. Finally, the blockchain and crypto. Whenever it is new technologies, we look to the game developers to push the boundaries. There is freedom in play, which breeds experimentation. I always have felt if anyone was going to crack this space it would be game developers. Let's put it this way, I've been taking your fiat currency and giving you virtual currency for years!
Hi Holly! Can you share some stories about the problems you had early on in building these fan communities and how you solved them? What was similar between each community, and how did they differ?
The largest challenges we had was that the community and the business was dependent upon user generated content about content that as out of our control. So, when a TV show or sport was off season, traffic and retention within that community fell , when it was doing well, the community would become vibrant. Remember that year Arizona Diamondbacks went to the World Series? All of a sudden everyone was a fan of that team. Also moderating the content was a challenge. So what we did is nominate members or super fans and have them moderate both the content and community. They would approve trivia questions, pictures and quotes. We hired two full time Community Managers to help manage those moderators. We had to do this because each community had very specific content, but all the same feature set. The other challenge we had was our business model. We were dependent on traffic because we were ad supported. Oftentimes there were 3 stakeholders over the product: the user, the product and the ad-revenue. A great example of these colliding is ad-revenue wants as many impressions, so that is why you find annoying ads, not a great user experience, while product is trying to increase virality and wants a different feature execution.
Hi @hollyster! My question is, how did you find yourself on your journey of entrepreneurship? Have you always known that you wanted to be an entrepreneur? Another question is, what advice (professional, personal, or both!) would you give to a woman who is in her early twenties and just starting her career? Thanks a lot!
I never was the type of kid who did a lemonade stand or wheeling and dealing my stuffies as a kid. But one thing I did have always ongoing, were projects, lots of projects. Sometimes by myself and other times with people. I That might be a bug or a feature of entrepreneurship, I'm not sure yet. ;)Some things I learned that I think has been incredibly helpful is working in a team - I do the best when the team is collaborative and in project mode; it is the one I enjoy the best and full of dreams. I also think I can switch easily into being a good follower or team player when necessary. That may have to do with my birth order and culture - I'm Chinese, kid of immigrants. I also think I've been able to try a lot of different types of work to see what I liked and what suited me. I'm still on the journeying some ways, but I was able to rule out things that I was not designed to do - like accounting or auditing - God bless all you accountants out there!!! Early twenties are great! I'm a huge fan of being able to try a lot of things. You should go to things that have the best upside from an experience level. Experience compounds over time - positively or negatively. If you are interested in startups, you should join one that is high flying or if you want to do one that's early on, know that the outcome is binary and if you are on a startup train, I would consider swapping between the two so you have flexibility in your career. Better yet, if you have an idea and a team, you should start a company! =) If you fail, you are still young and can get hired by Google / Facebook etc... if it fails.
Yay Holly! Great to see you on here! My question is - as a YC Partner and Investor, what is your favorite part of the entrepreneur/advisor relationship? What do you most like to consult on? Favorite types of problems to help solve?And since you mentioned design - what have you learned that most impacted the design and experience of your product?
Hi Holly! Nice to see you here sharing your knowledge and wisdom. My question is: Do you remember the first real customer transaction Kabam made? How many times did you pivot your revenue model until you landed on the one that would take your company to intense scale?p.s. Fancy another trip down to Melbourne anytime soon? 😜Cheers, Sheryl Thai
Hi Holly, as a People and Chief of Staff, can you give me feedback on my service: We are a People Analytics company focused of team´s emotions to improve engagement in the workplace. I would love to have your feedback.
What's your least favorite hat to wear at Kabam and what has the experience taught you?
First off, congrats and thank you for sharing your awesome story! Would you be open to creating an action plan with us on how to do something that you are passionate about?
Hi Holly - Can you share more specifics on what happened with the FB communities business model you created and how you pivot to becoming a mobile gaming company. What forced you to pivot and how did you make that shift?
Hi Holly! Kabam sounds very inspirational — congratulations and thanks for sharing your story. I love gaming in general, have been playing mobile and PC games for quite a while. I also believe there is a huge business opportunity there, so I recently founded my own project ARENA ( It’s a service where fans can book games to play together with their favorite streamers LIVE on stream. ARENA support all major games (LoL, Fortnite, PUGB, etc) and works as a book-and-play website and as an extension for Twitch.We successfully passed the MVP stage, validated the concept and now move on with scaling. I’ve invested $45k in the MVP launch myself and now in order to grow, we are in the process of raising seed round. Also, we recently re-applied to YC W2020 batch, since we got into top 10% when we applied last time. I understand your experience is more mobile oriented, yet the number of the games we support is very successful on mobile, e.g. PUGB recently claimed they reached over 50 million DAU and have 400 million downloads in total.I will be extremely grateful for your feedback / advisory on the product. Ready to share our pitch deck in PM and share all the details.Thank you! Kate