Startup founders often refer to their projects as “their babies” – implying that running a business requires the same amount of emotional attachment and effort as raising a child.
But for Jason Warren, CEO of the Taipei-based Roam & Wander, the business sort of is an actual baby – or rather, a pink bunny rabbit named TuTu.
“She’s on a schedule where she gets hungry sometimes and thirsty sometimes. So you need to feed her and take care of her,” says Warren, a thirty six–year-old HTC alumni, as I, a twenty-five-year-old hoodie-clad blogger, carefully hold a mini milk-bottle to TuTu’s touchscreen face, which is encased in a frame of pink fuzz.
“Since she just came out of the box, she’s really thirsty now,” Warren assures me. “Don’t worry, she’ll tell you when she’s had enough.”
Roam and Wander’s flagship product might be a furry stuffed animal, but the company has proven it’s about more than just playtime.
Last Friday, the team announced its third round of funding, once again led by Greater China-based WI Harper, along with Taiwan’s TMI, and new angel investors from KAMIA and the Marlion Group in Hong Kong.
In addition, the company has inked retail partnerships with the France-based FNAC, Amazon, Toys R’ US, and Studio A – the latter of which, for all practical purposes, serves as the Taiwan extension of Apple’s Hong Kong branch.
On top of that, TuTu just won the award for Best New Toy at the Hong Kong Game and Toy fair, which is taking place this week. Given the importance of that expo in the industry – Warren estimates over 2,500 companies have registered to attend – Roam and Wander seems poised for big things in 2014.
“We’ve had a ridiculous amount of success getting TuTu into stores,” Warren says. “Now we have the chance to focus more on getting consumers into those stores.”
The two-sided business plan
If you’ve used a Tamagotchi before, you’ll be familiar with the concept behind TuTu. Users who download the TuTu app from the App Store and activate it on their iPhones can insert the device into TuTu’s headframe to transform the stuffed bunny into a talking pet-friend. Users can feed and play with her using the accompanying toys, and she’ll say if she’s hungry or lonely. If you keep her happy, she’ll show her appreciation. And if you’re feeling a little lazy, you can let her play with her “magic ring,” which serves as “get out of jail free card” that restores her mood back to normal.
But Roam and Wander aims to be more than a toy company. One of the ways Roam and Wander distinguishes itself from other like-minded “smart toy” startups is through its ingenious business model.
In order to attract children’s attention, Roam and Wander offers free-to-download iPad app “Sticker Games,” in which kids can play games with flagship characters TuTu and DiDi. Players are rewarded with physical stickers (the sticky kind, not the chat app sort) that are mailed to their doorsteps from the company headquarters in Taipei.
These stickers serve a twofold purpose. First, they’re an incentive for children to keep playing the educational games. But they’re also used to bridge the gap between the free-to-play games and the physical TuTu doll – which is the cool product that kids really want, and retails in stores and online for about $40. Childrens’ ownership of the stickers helps assure retailers that the TuTu doll indeed has a customer base, and also opens the door for potential discount incentives, which parents like too.
“We can say to retailers, ‘listen, we’ve got this many kids in your country with our stickers. Let’s use these stickers as incentives to bring the kids into your stores,’” explains Warren.
After updating Sticker Games on December 23 and bringing the game to Japan, the US, Canada, and China (it was already available in Hong Kong, Taiwan, and Singapore), the game has seen 7,000 new downloads, and 400 envelopes full of stickers have been shipped.
With nearly $1 million in funding, Warren hopes that he can spend the year growing his team and ramping up sales and marketing through social media and events.
Breaking the golden handcuffs
With just sixteen employees, Roam and Wander remains small and scrappy. But despite the company’s young age, Warren has been in mobile before ordinary people were even talking about mobile. He released his very first app all the way back in 2001 – an mp3 player plug-in for Handspring, the Palm OS handset maker.
After that, like any young and hungry developer with a strong vision, he dived right into entrepreneurship, bypassing entry-level jobs in order to quench his ambition. But his first few companies flopped. Luckily his talents didn’t go unnoticed, and he was soon tapped to roll with the big dogs.
After my first two companies failed, a very good mentor of mine gave me some advice. He sat me down and said ‘Listen, what you need right now is a little apprenticeship in software land. You need to go learn how people really build things. Does Waterfall work or does Agile work? Do you want to give people more autonomy or do you want to give them more control? And then after maybe two or three years, come back to entrepreneurship.’
Warren eventually become a product manager for the first release of Windows Mobile OS. He then moved over to Motorola, and in 2010 was handpicked by top executives to head up HTC’s then-fledging cloud services division. Warren served as the mastermind behind a string of global acquisitions that helped the company develop an in-house mobile ecosystem. But five offices and 200 new employees later, Warren felt fatigue setting in.
“At HTC, I probably worked on average 90 to 100 hours a week for thirty months. I had golden handcuffs. Eventually when I saw this disruptive $100 billion dollar industry that hadn’t been affected by mobile technology yet, and that was fun and that was really interesting, I decided it was time to break those handcuffs.”
That industry, of course, was early-childhood toys and entertainment. Having witnessed first-hand the death of camcorders and GPS to smart devices, Warren remains confident that fun, educational products for kids are among the final frontiers for mobile disruption.
For the very first time, there was a generation of humans that were born without a television screen as their primary source of entertainment. I was like, okay, that’s big. And it’s not just big because it will kill the PC, it’s big because there’s this new generation of humans whose formative experience with different technologies starts at the age of two. I learned to use a computer when I was seven. Both of my kids learned to use an iPad when they were one-and-a-half years old. So my observation was, the toy industry is big, it’s profitable, and it will get totally upended by mobile more than any other industries have.
Warren founded Roam and Wander in 2012 and quickly hired a small staff of the most talented designers he could find, including an alumni from Studio Ghibli. The team is young and all are from Asia, but Warren says that he finds the cross-cultural and cross-generational working environment refreshing.
“From the start I set out to build a world-class team. We try to run things very democratically, and since not everyone here has worked at a startup, sometimes I need to sit back, and let everyone know that I’m sitting back, and want to hear everyone’s opinions.”
With solid grounding in Greater China, Warren hopes to spend 2014 focusing on markets beyond Asia, and expects to be going back and forth between Taiwan and the US more frequently than usual. At the moment, he’s working with his team to develop a life-size TuTu doll for the iPad, along with an entirely new doll. And while he looks back fondly on his days with HTC, Motorola, and Microsoft, he doesn’t at all regret making the return to the startup world.
“I didn’t plan on staying in the corporate world for that long, but I lucked out that I rose very quickly at big companies. But ultimately, that helped me get responsibility more quickly, and the lessons from those responsibilities will hopefully help me face more challenges at Roam and Wander.”
(Editing by Paul Bischoff)