The inspiring story of how a small community of Mexican game developers became one of the most successful video game studios in Latin America and was taken on by a big European company. All thanks to hard work and smart decision making.
Terry Pratchett, a British fantasy author, once said:
“If you trust in yourself. . .and believe in your dreams. . .and follow your star. . . you’ll still get beaten by people who spent their time working hard and learning things and weren’t so lazy.”
When I first heard Jorge and Karaokulta’s story, that quote was the only thing I could think of. I spent half of my career in the videogame industry, both in marketing and management. Jorge’s name was always popping up everywhere. I’ve had the pleasure of following his career and his company’s growth for over 15 years, and now I’m delighted to share their story, hoping you find not only inspiration, but a couple of lessons and maybe fuel to push your project forward.
The Basics: Karaokulta is a Video Games Development Studio just out of Guadalajara, México. The CEO and Founder Jorge Suarez Basañes started the studio in 2004 having previously worked making art for Videogames in his early years.
In Karaokulta, they believe they can transcend by creating art and entertainment in the form of games and apps. They began with a Lean Start Up philosophy, both in how they structured the company but also in the way they developed products with a Minimum Viable Product scheme. This allowed them to create products they could test in App Stores and find out what they could improve and what the people really liked and consumed.
Once an investor asked Jorge if he wanted to be King or wanted to be Rich. He also told him we all work for someone, whether it was a bank, the government, your own family, so why not just accept it, take our money, come work with and for us, and we will help you get where you want to be. And that’s how he convinced him to accept the money and grow his business outside of his “Freedom.”
One of their biggest challenges was being in a culture that consumes a lot of video games. Mexico is actually the 5th largest consumer of games in the world, but they don’t consume Mexican video games, so they needed to work on projects that appealed to the international market and not only the Mexican market.
Looking for a way to expand his business, he partnered up with a company that sold video games through SMS. In Mexico and Latin America, only around 25% of the adult population has a credit card. To solve that problem, they forged ahead with a new business model selling games through SMS, and the company started earning revenues of around 15,000 Usd monthly.
Karaokulta started working on Newsjacking games. The first was one with a National Soccer player, and then they hit the jackpot with Trumpealo, a game where you could throw objects at then presidential candidate Donald Trump. The game brought them worldwide fame with CNN, Univision, and even media from Japan asking for interviews and giving the small studio full coverage. By 2016, the company had created 170 games that summed up over 3 million downloads.
For Jorge, his main jobs as the CEO and Entrepreneur are:
- To bring in money
- To find and keep the best talent possible
- To tell the company’s story
As an Entrepreneur his mission is to actually impact people through his work, and to give knowledge and tools to his audience, too. He is worried about schools, particularly on the business side, because he doesn’t think that school teachers are qualified to create entrepreneurs since they live from teaching, not from being business owners.
After their success with Trumpealo, Karaokulta kept growing their team and their catalogue of products, starting to center their work around the development of IP’s and not only game engines. They began developing for big companies and studios in Mexico and San Francisco, helping brands to gameify their platforms. Cinepolis, a huge Mexican Movie Theater, invited them to their accelerator and shortly after that, Jorge participated in SharkTank Mexico, increasing their visibility worldwide. This attention is way more important than many people realize, because these little events along with constant work to build the company’s community and the marketing around the brand is what gets the bigger eyes to look at you and make good things happen.
Mihai Pohontu, the CEO and Founder of Amber Studio, a company founded in Eastern Europe, was looking to expand their successful company in a smart and not extremely expensive way so they could better service their clients in the Americas. Pohontu started looking to Latin America for options to acquire or absorb. They started going to conferences and shows, until he was invited to give a two day master class on game development in Guadalajara, Mexico. He started looking around the city for local studios, and continued his lectures in Guadalajara. At this point, their Head of Product Development knew that the courses were attended by 40-50 students. Both the CEO and Head of Product Development realized that the city itself could be an opportunity because of the size of the city and the great universities, that could help bring out great talent and grow the industry locally. When they started talking about starting a studio in the city, a mutual friend pointed them in the direction of Jorge Suarez. After meeting, the decision was obvious to simply merge Karaokulta with Amber.
Now they are putting together a super Studio, with new offices and a new legal entity. They went from 30 to 50 employees and focused more on hiring senior roles and planning to hire 100 people in the company by the end of the year.
Jorge’s story with Karaokulta is filled with lessons (that will come in a different article) but we hope that it inspired you as much as it inspired us.
by Miguel A. Castro Arguimbau