The cult of Venture Capital and its individual founders first started with the Dot Com bubble and gained traction after the Great Financial Crisis.
The likes of Apple, Amazon, Facebook, Netflix and Google (also known as FAANG) seemed to all have started from a magical garage to conquering and dominating their fields reaching trillions in valuations. The first investors behind these companies have made insurmountable gains that every venture capital firm wants to recreate them. VC firms started to look for founders with the same character traits as the FAANG founders. There is no better example than the founder of WeWork Adam Neuman and his Jesus complex (nypost.comWeb resultsOusted WeWork CEO a 'phony' with a Jesus complex, say insiders)
The cult of personality behind Steve Jobs too with 2 main movies launched and every company presentation imitating his style. This cult of personality was best depicted when talking about the founder of Oracle, Larry Ellison in the 2004 book: “The difference between God and Larry Ellison: God doesn’t think he’s Larry Ellison”1
The cult of personality hasn’t reached Jordan (hopefully it never does) but something else has: the Dream Big complex. Either the founders make promises that they will achieve grandiose targets or the VC investors themselves encourage the founders to dream big while achieving little.
This all started in Jordan with the successful and biggest acquisition in the region of a local startup “Maktoob” by Yahoo in 2009 for $164 million.2
This newsletter is a 4 part series on the current VC environment in Jordan looking at 4 companies in particular with big potential (Tamatem, Mawdoo3, Jamalon and POS Rocket).
TAMATEM INC: Playful yet forgetful?
The Good
The founders of Tamatem have an interesting background - they come from Maktoob3 and have brought with them the necessary skills and experiences to launch their new venture into the gaming world, a space traditionally hard to enter and controlled by a set number of payers in the market later was opened up thanks to arrival of smartphones and the App Store. Basically anyone can create an app and sell it.
What they saw is that the market does not tend to the Arabic speaking world. And the market is easily accessible and reachable: mostly everyone in the Arab world today has smartphone, whether old or young, rich or poor.
Investors were interested and during the period : they have managed to attract millions in investment and creating 100s of games.
What is interesting in this space SCALABILITY: any app or game can explode in popularity and become an overnight success through “word of mouth” (these days called social media). Two examples come to mind: Flappy Bird and Among Us.
Tamatem can easily hit it big reaching millions of players across the globe.
The Bad
And yet the company didn’t get a best-selling hit as of yet. They have launched many games and some can be considered relative successes.
The main problem with Tamatem is that they are not really creating their own IPs (intellectual properties) nor are they developing their own games in house (for the most part mostly). They are simply borrowing games from other countries and adding an Arabic translation and localising them to meet local standards: for example, an NPC (non-playable character) in the game might have too short of a skirt and that is altered to a longer dress.
Tamatem will need to innovate and create games by Arabs for Arabs. The only successful and purely “Arabic” game is Tarneeb (luckily Hasbro does not own the rights to this one).
Yet the competition is very high on this one. Many other Jordanian companies have developed their own card game including Jawaker and Maysalward and all had an increase in usage during the 2020 lockdowns.
As shown in the Sensor Tower chart below, their most revenue generating game was the Tarneeb card game and the other two popular games are translations of a Croatian app or an Indian app.4
Source: https://sensortower.com/ios/publisher/publisher/661999421
The Ugly
Tamatem is technically not a Jordanian company. They might have an office location in the capital Amman, but they are re legally registered in some Cuckoo Island. Not to place blame on them, most “Application software” companies are forced to do this to avoid regulation and taxes in order to sell on Apple’s or Google’s own “Application stores”.
During the 2019 London conference, Tamatem has shown that it made $10 million in revenue in 2018. This can be considered an impressive number when you remember that not all that revenue goes to Tamatem.
Source: https://data2.unhcr.org/en/documents/download/69605
First the company needs to pay a fee for the application store, a fixed percentage of their revenue (up to 30%)5 goes to either Apple or Google. And if the application was developed by another company, Tamatem, acting simply as a translator and distributor, would then need to pay a royalty fee to the original developers and license holders. It can be assumed that 35% of that $10 million is actual direct income for Tamatem and looking at the sensor tower chart, it seems the numbers match and since 2018, Tamatem’s revenue hasn’t grown substantially.
Last Thoughts
Let’s compare Tamatem with another recently launched and successful venture into Gaming: Niantic Inc and their hit Pokemon GO.
What they both have in common is that they were founded by experienced managers (Niantic is founded by the founder of Google Earth in collaboration with the Pokemon company and Nintendo) while Tamatem came from the Maktoob background. The similarities end here.
Unlike Tamatem, Niantic had a valuable IP on their hands: Pokemon. This franchise has been famous for the last 25 years and it is still growing in popularity amongst old fans and new ones alike.
But there is big potential for the company imitating many other successes in the space. I simply look at Candy Crush which became an overnight success, went public and was acquired by a large gaming studio.
Let’s hope Tamatem finds their overnight success.
https://en.wikipedia.org/wiki/Yahoo!_Maktoob
https://tamatem.co/1-5-million-people-download-croatian-gaming-studio-nanobits-game/
https://www.mobiloud.com/help/knowledge-base/what-are-apple-and-googles-fees-and-revenue-share-percentage-on-in-app-purchases-and-subscriptions