Trutap - Riot-E for the IM Generation
I was just commenting on Tom Hume of Future Platform's riposte to everyone's favourite pundit, Ajit, over the rapid and expensive demise of Trutap, when it struck me - Trutap has to be this bubble's version of Riot-E.
For those who don't know, Riot-E were the original mobile badboys/money wasters - these guys were so visionary, they signed up the rights to the Bridget Jones mobile game for a six figure sum back when mobile games were SMS-based (and tiny). They had giant dollops of Nokia cash and they spunked it left, right and centre with little to show for it at the end except some great stories - such as the time the CEO started naked wrestling in covered in olive oil in one of Helsinki's top restaurants, realised he couldn't buy his way out of it, and so led the whole company on a naked charge through the centre of town back to the office. But hey, they do that sort of thing in Scandinavia. The documentary is excellent and well worth a watch for anyone interested in either tips on how to invest VC cash for maximum fun, or an insight into the Finnish psyche (things get messy at the end).
The point being - you have to hope there are some amazing stories of champagne jacuzzis in private jets to explain how that $14.5m got spent, because there is no rational way a boring conventional company should spend that much to create what in the end is a <$1m fancy JavaME IM and social network aggregation client. Sadly I haven't heard any stories of this nature - so Trutap people, if they exist please share!
For those who don't know, Riot-E were the original mobile badboys/money wasters - these guys were so visionary, they signed up the rights to the Bridget Jones mobile game for a six figure sum back when mobile games were SMS-based (and tiny). They had giant dollops of Nokia cash and they spunked it left, right and centre with little to show for it at the end except some great stories - such as the time the CEO started naked wrestling in covered in olive oil in one of Helsinki's top restaurants, realised he couldn't buy his way out of it, and so led the whole company on a naked charge through the centre of town back to the office. But hey, they do that sort of thing in Scandinavia. The documentary is excellent and well worth a watch for anyone interested in either tips on how to invest VC cash for maximum fun, or an insight into the Finnish psyche (things get messy at the end).
The point being - you have to hope there are some amazing stories of champagne jacuzzis in private jets to explain how that $14.5m got spent, because there is no rational way a boring conventional company should spend that much to create what in the end is a <$1m fancy JavaME IM and social network aggregation client. Sadly I haven't heard any stories of this nature - so Trutap people, if they exist please share!
Inspiration
posted by raddedas at 5:17 PM
7 Comments:
If this kinda thing happened, it was well hidden from us at FP ;)
Let's look at the figures tho... say there was $14.5m investment. The business has been running with a staff of about 30 (according to TechCrunch).
You can see they started hiring in the team at the end of 2006 (http://www.mobileindustryreview.com/2006/11/hotxt_hires_ian_brayshaw_from_yahoo_and_alexis_johnson_from_shoppingcom.html)
So that's 2 years, say... though the company existing before then in the form of Hotxt and was presumably spending money, but let's (for the sake of simplicity) forget that period.
This works out as $241k per person per year, which is £160k at todays exchange rates (or £120k as the dollar stood back when the money came in).
Out of this comes PR & marketing costs, infrastructure, office spaces, salaries, etc etc - oh and that time before the team was hired in. I recently spoke to a chap from a Large Telecomms Business You Know who informed me they consider their average cost per staff member to be £100k considering salary, travel, training etc. £120-160k doesn't seem to be too much more considering all the additional expenses (marketing, infrastructure, etc.) it covers.
Not cheap, and you might wish to argue that they could have done things differently, but this is a long way from Riot-E-style excess.
(I'm familiar with Riot-E btw - met em when they were around London in 01/02 and spent ages tracking down a copy of the film ;))
1:21 AM
So this Trutap thing is like fring, except not as popular?
7:11 AM
what i don't understand is what the 30+ people we're actually doing for the past 2 years. in the age of web 2.0 apps, it surely doesn't take a lot of people to develop an app that only works on one platform and had very few users. and they even outsourced their dev work, so what were the rest of the people actually doing?
so the cost calculation might be true (although i think £100k is also on the highside--perhaps that might be the cost at Nortel (look where they are today!), but certainly not for a start-up. what seems to be the problem is that the hiring side was, for some reason, out of control.
10:59 AM
Anonymous: Trutap outsourced the client work to us, but had an in-house team working on all the back-end, operations, infrastructure, biz dev, web, product management, QA, marketing and PM.
My point with the costs is that if £100k is reasonable for a corporate, then £120k doesn't allow much room for the Riot-E style excess Trutap are being accused of.
Please note that this £120k includes marketing, PR, infrastructure, and costs for the years before the team was built: so the true figure per staff member would be much lower.
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10:21 AM
Hey - I think most of the money went on building the platform not on partying:
http://www.mobileindustryreview.com/2008/12/trutap_-_mjelly_mobile_20_service_of_the_week.html
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