Starting in your home market is not necessarily the best way to success, a lesson Iraqi-founded Apps Lab learned the hard way.
Apps Lab is a mobile gaming studio that started in June last year. CEO Ali Al-Hilli said their original target markets were their homeland Iraq and their headquarters of Jordan.
“I was contacted by a friend of mine [in Iraq],” he said. “Abdullah wanted to invest in the software development industry and especially mobile gaming. His first impression was to team up and start this business in Dubai because it is becoming the place to be for tech startups. But my first impression was why Dubai? I highly value the foundations in Amman.”
The data on Iraq’s mobile and telecommunication industry was very appealing so Apps Lab went full throttle developing games like Night Hunter and Baghdad Taxi for the Iraq market, as well as Amman Taxi for Jordan.
None of these games hit the big time but they hoped that would come with a game that used the region's history to promote Jordan as a tourism destination to foreigners.
The mobile game had its characters ‘run’ around cities in Jordan to explore natural and historical attractions.
The studio worked on two separate titles with different storylines, one for Iraq and another for Jordan. But because the team is based in Amman, they moved on the Jordanian project first, teaming up with Zain Jordan.
But before they release it, they were to find their blockbuster market.
Finding the right market
A panel in early May in Amman with gaming companies Tamatem and Play 3rabi pushed the team to start thinking about Saudi Arabia.
“Both panelists talked about the user retention and the revenue streams that can be generated by doing business in the Saudi market and the numbers were promising and kept us believing in what we’re doing,” Al-Hilli said. “One of the panelists suggested that in China mobile gamers spend an average of $47 a year on digital goods while in Saudi Arabia the number is $276.”
Ali proudly speaks about the hit car racing game that cracked the secret to their success.
“On May 10 we launched our first product for Saudi Arabia, Hajwilha ya Saudi, and the numbers clearly said this market is marvelous. We started getting, from ads only, 10 times more than the average numbers we were having from Iraq,” he said.
“On May 24 our Saudi game topped Saudi Arabia, Jordan, Bahrain, Oman and Qatar and was featured in the iTunes homepage in the racing games category. This gave the team a positive push forward to continue.”
They released the game “Road to Petra” on May 25, Jordan’s Independence Day and dropped the Iraq project. Based on their experience from the earlier games they’d released, they believed the game had no future and would not take off.
Gamers in Saudi Arabia engaged with Apps Labs’ social media channels to thank them on the game. They provided constructive feedback on how to improve it and what on features they wanted to see.
It was a watershed moment for the team, as they didn’t have that experience with the Iraqi audience.
That doesn’t necessarily mean the market is not a good place to invest in: perhaps the products were not good enough as the developers were amateurs (a hiring decision that was made by Al-Hilli to keep costs down), or maybe the Iraqi audience was not ready to trust local developers with their data.
The lesson here is that startups should not just focus on their homeland, because neighboring countries could be the key to success.