Overwolf – MVP Iterations Until Product-Market Fit

In 2010, Uri and his co-founders raised a Pre-Seed round to build out an MVP. In Uri’s defense, this was a time before books like The Lean Startup45 were published and terms like ‘agile methodologies’ became so widely used. Uri and his team were inventing as they built, without much practical thought to the product roadmap or to the preservation of resources. They developed a lot of functionalities to solve many micro use cases for many games, instead of developing one functionality to solve one highly needed use case for one popular game. Their quick and dirty MVP turned into a long and yet still relatively dirty version of one of the platforms. With a regretful tone, Uri describes the MVP that he should have released – a simple music player for World of Warcraft – but instead, they built a platform that offered a music player that worked in all games, a web browser that worked in all games, and even a built-in voice calling feature that again worked in all games. “It’s a disease that a lot of entrepreneurs have. It’s about wanting to bite off more than you can chew, and not really understanding your capabilities at a certain point in time. There’s a way to be more pragmatic in assessing capabilities,” Uri said.

All things considered, by mid-2011 Uri and his team had managed to release a working product. As a first release, Overwolf was well-received by gamers, and their idea made quite a bit of noise in the gaming industry. They managed to turn heads within the larger gaming companies, who shared their interest in Overwolf’s vision. They acknowledged the various solutions that Overwolf had already started solving, and offered ideas for new use cases. That's when they began pivoting between use cases, developing to solve various micro use cases across the gaming industry. What seemed like opportunities at the time, in hindsight turned out to be distractions. By the summer of 2013, Uri spent over $900,000 dollars, and honestly took stock of all they had developed in the last three years. While their technology worked, they didn’t have many users or revenue to show for it.

Running out of cash, Uri used their losses and learnings as the basis for their Series A thesis. They knew for sure that people were going to continue playing PC and Esport games, but was there actual room for a solution like Overwolf? Uri was convinced there was but sought to find a more scalable execution strategy. Instead of Overwolf building all of the functionalities for games in a closed shop, Uri wanted to release an open platform where third-party developers could share in the execution risk. While owning their own development would give them 100 percent of the reward, it would also give Overwolf 100 percent of the execution risk. According to Uri, opening the platform would give Overwolf 30 percent of the reward, but zero percent of the risk. The app store model seemed to be the holy grail of distribution, and a good story to boot.

With this newfound vision to create an open source platform, Uri and his team would need to create a framework that developers could use to build features for games. They had little in the way of cash left, so they got to work. They spent the first year using the technology they already had to build the platform and finish what Uri called “phase zero.” They spent the next two years convincing partners, otherwise known as app developers, to start developing on Overwolf’s new platform. Uri sighs when explaining how slow and tedious this process was. Even after a partner would agree to build on Overwolf, it would take them between six months and a year to release any given functionality. It wasn’t until 2016 that Overwolf made their first buck. Around the time they started generating revenue, Uri was also able to close bridge loan financing following their A round.46 They would spend the next several years evolving the platform and growing their revenue model.