Brothers, Startup Game Site Receives Seed Funding
Put together an investment banker and an avid chess player who develops software and what do you get?
GameColony.com.
The web site offers games of skill, like chess, and players compete online for prizes. The company, which has five employees and no revenue, recently received its seed funding worth $625,000 from Dover Capital and Acorn Angels, both based in Beverly Hills, and the Newport Beach-based Dubrow Kavanaugh venture-capital firm.
“We both quit our very cushy corporate jobs,” said Leonard Shneyderman, 29, the investment banker half of the brother team. Shneyderman worked for General Electric Capital Corp. in Irvine until January, when he threw in the corporate towel.
His brother Boris, 40, quit his programming job at Fidelity Investments, where he helped develop fidelity.com. But before he quit, in his spare time, he developed chesslab.com, a nonprofit chess game analysis database site.
“Boris told me he got 50,000 hits a day,” Leonard Shneyderman said. “I was intrigued.”
It didn’t take but a few months to turn intrigue into a business model. The brothers chose the B2B model in which GameColony will offer content and act as a “preferred gaming provider.” Which means other sites will use GameColony’s content to promote and enhance their own sites. Shneyderman says it’s on the verge of sealing a deal to provide content for two “really large entities.”
Its marketing budget is a “dismal” $50,000 Shneyderman said. But while many dot-coms are spending large amounts on marketing and advertising, he insisted it’s not necessary with the B2B model.
Now the brothers are trying to secure a few big sponsors to provide prizes to the players, who play for free. The site’s big asset, he said, is that it’s “very sticky,” meaning because the players are playing games, they spend a long time at the site.
The site offers chess and checkers and soon it will add 11 other skill-based games like backgammon, bridge, hearts and euchre.
GameColony employs five developers, who use a patent-pending “lightweight” Java technology, which requires virtually no downloading, even with a 28.8 kb/sec modem. Players from anywhere in the world can compete with each other, and they can chat at the same time or watch other games, Shneyderman said.
The goal was to create the fastest-loading, most functional and appealing site, he said.
The brothers are also taking advantage of their Russian heritage, employing Russian programmers. The dot-com is sponsoring two developers, who will be immigrating to the U.S. this month and next. Russian programmers are “extremely talented and very inexpensive,” Leonard Shneyderman said.
With low overhead, a few key sponsors, and what Shneyderman believes is a winning idea, the plan is to eventually be acquired or merge. He cites the Internet portal Lycos’ $207 million acquisition of Gamesville.com (a competing game site) as a dot-com aspiration. n
