The seeds of the cellular phone revolution that were planted in the fertile economic climate of the Pacific Northwest during the 1980’s have proven to be evergreen, growing into a forested grove of wireless leaders and innovators, some large and well-trunked like T-Mobile, AT&T Wireless (which has been merged with Cingular) and Western Wireless, others more willowy like mobile game producer Mobliss or transaction broker Qpass, and some that are growing rings around their competition as they put down their roots.
Into the latter class would surely be planted MFORMA, the mobile entertainment publisher and distributor that is actively expanding its distribution system for wireless games, ring-tones and other interactive mobile services on a planetary scale. What’s most impressive about MFORMA is the way it is transplanting its “tree of knowledge” to several continents around the world. The harvest of this global mission appears plentiful.
From an evolutionary standpoint, you could say that MFORMA traces its roots back to 1980 when industry pioneer Dan Kranzler founded Beepers Northwest in Seattle and grew it into one of the industry’s largest paging companies. Later acquired by McCaw Cellular Communications, Kranzler became one of McCaw’s first general managers. In 1986, he became president and CEO of AccessLine Technologies, a telecommunications software company that originated the single number concept.
Since 1996, Kranzler has been investing in and advising communications and Internet tech startup-companies whose combined equity values today exceed $20 billion. Besides his role as MFORMA ambassador of new business in countries like Korea, India, Finland, Japan, and China, Kranzler is also an emissary of corporate and financial goodwill as the managing partner of eFund LLC, a seed venture fund which gives back 100% of profits to children’s charities through his Kirlin Foundation.
We caught up with the indefatigable, 51-yr. old chairman and CEO between stops in London and China, and shortly after MFORMA announced $44 million in new capital raising. Since Mforma was founded in 2001, Kranzler has acquired no fewer than eight wireless Internet companies. A month ago, the company added MobileGame Korea giving MFORMA a major presence in one of the world’s most progressive markets. With its latest capital infusion, six or seven companies could soon be on board North America, Europe and Asia, including China — potentially the most exciting MFORMA market of them all. Lesson One: think both market space and time.
Seattle24x7: Dan, your business travel is taking you everywhere in the world in furthering the global distribution network for MFORMA. It seems ironic somehow given the way the mobile industry operates to transform time and distance for its end-users?
Dan Kranzler: There is nothing like looking somebody in the eye, understanding how to communicate with them, on what I would a call a “cultural equivalent” basis. I am an American and I come from American culture. When I meet with the Fins, then it’s a Finnish culture. We have to find common ground to stand on. That only happens through live interaction, getting to understand the human aspect of what they do so that you can both clearly articulate your business and how you want to relate in a way that speaks to all culture.
One of the mistakes Americans have made in the past is they try to export Americanism. You have to do business globally, but act locally. We have to understand our partners thoroughly and completely, and we have to make sure that they understand us and where we’re coming from and what we need in terms of our business, what the American business requirements are for a potential NASDAQ company, and our flexibility to do business with them on their terms to meet financial requirements.
We also believe strongly in local teams in local markets, so our team in China is all Chinese. We don’t export Americans to Italy or China or Korea. We make sure we have local people who understand, who live, who breathe, and who relate to their local markets.
Seattle24x7: What excites you most about the mobile medium?
Dan Kranzler: We have a totally new paradigm here in this small 3″ x 3″ inch screen on a mobile phone. Mobile is a whole new medium and a new access point the same way the Internet was a new medium or that Cable was a new medium. But there are a couple of things to understand.
First of all, this is really the first time-limited medium. My 17-year old daughter carries her mobile phone everywhere. But if she wants to surf the Internet for an hour, she’s going to find a PC and do so on a PC. If she’s got 4 hours she’s going to go sit in front of the TV. As a new media portal, the mobile phone is not going to replace those other outlets, but rather supplement them. On average, somebody will do something on their phone for four minutes, five to seven times a day. “What’s the traffic like?” “Who won the game?” “Give me some music information or some music that I can download or change my ringtone to.” “Give me a game to play.” “I’ve got a short period of time.”
That being the case, this little medium is clearly the highest distributed medium in the history of mankind. Meaning, we’ll be able to get some of our products in front of hundreds of millions of potential viewers. If I am a cable programmer like MTV Networks or Turner Broadcasting, I’d be thrilled to get in front of 21 million subscribers at Comcast. But in mobile, we can reach 500 million viewers!
Seattle24x7: How has MFORMA been structured in order to deliver its products to that kind of marketplace?
Dan Kranzler: We’ve really created a hybrid. A hybrid of the EA model for games, meaning the best distribution in the business, and the Turner Broadcasting model for cable television. Our model for media is right in between those two things. MFORMA is something of a cross between a gaming console and a cable TV.
The first thing we had to do was bring together the technological pieces that would allow us to take a piece of content and optimize it for over 100 different handsets for each different carrier. That includes dealing with features like high scoring and multiplayer, and interfacing the games with billing systems.
Our strategy was to acquire a series of companies that brought individual features of the total solution. Realizing that the carriers want everything to be combined, MFORMA bought those capabilities and combined them. Then MFORMA began to buy companies that offered us the distribution footprint. We’ve either opened offices or bought companies that had strong distribution in the UK, strong distribution in Germany and Spain, strong distribution in Korea, across North America, and now in China.
Seattle24x7: The complexity of platforms, devices and languages seems like it would be prohibitive?
Dan Kranzler: When we produce a game, MFORMA has to literally be able to deliver a couple thousand different SKU’s every month across the world to play on different handsets, over different carriers, and in different languages. Whereas a domestic games company might try to get that game out to AT&T Wireless, Sprint, Verizon, or T-Mobile in the US, MFORMA is producing that game and it’s playing in Telecom Italia and Telefonica in Spain and all over the other countries in Scandanavia, Europe, Korea, China, Japan and the US.
Each office has its own editorial group that modifies content to meet the cultural requirements in its region and also the technical requirements. For instance, the technical requirements in Korea are completely different than those in Japan or China or the US. So we have to make sure that the product is modified to be delivered under, for example, a special JVM application, or under Qualcomm’s CDMA application in Korea, whereas in China it’s GSM using GPRS. The end result is that we can now scale the business such that we can buy the global rights for the content people want the world over. We have the ability to distribute that content in Japan, China, India, everywhere that can generate a large economic benefit in return.
Seattle24x7: What kind of content is MFORMA distributing?
Dan Kranzler: What MFORMA does is create mobile entertainment, starting at the top, on a global basis — leveraging cultural icons and entertainment brands from Universal Pictures, Paramount Pictures and other movie studios, hit console games from Activision and Atari, and even sports stars like Venus Williams in tennis and Coach Bill Parcells in football. Then we also get involved in the regional content. For example we’re working with baseball star Barry Bonds here in the United States on an exclusive basis. MFORMA is the only company in the world to have the right to work with Bonds on games on any platform. Not even the game console publishers have achieved that.
Seattle24x7: You have an especially strong lineup of games built around motion picture stars?
Dan Kranzler: It’s really a pan-global set of content brands. The “X-Men” movie played just as well in Italy, Korea and China as it did in the US. There are Universal Studios’ monsters, such as Dracula and Frankenstein. They play astoundingly well abroad as does Paramount’s Top Gun or The Italian Job, Activision’s Call of Duty and True Crime, and the great Milton Bradley and Parker Bros. board games.
Seattle24x7: On a separate subject, you also have set up a venture group, called eFund that donates all of its profits to children’s groups. The tagline for the fund is “Investing in Entrepreneurs for the benefit of kids.”
Dan Kranzler: eFund is a seed fund that invests in a number of new things and new entrepreneuers, including wireless. It is the only fund in the world where 100% of the profits that the fund makes goes back to children’s charities. Our objective is to give back to this planet. We have an event at eFund called Global Classmates which is a Web-based system which connects young people from all over the world with other people. Let’s have a dialogue about what’s happening in Iraq. Let’s have a dialogue in regard to the pressures facing youth today. “What’s it like for you in Russia?” “What’s it like for you in Finland?” Our belief is that we’re laying a foundation for generations to come.There are many programs through the Kirlin Foundation to support kids, from birth through high school, from early learning, to public school change, to science and environmental learning that Kirlin Foundation supports. The profits from our fund goes to help people who really deserve and need it. That is what makes me get up every day and put in 18 to 20 hours to make eFund companies successful. [24×7]
Larry Sivitz is the Managing Editor of Seattle24x7.
