Start-up Nation: Success story for interactive book business
Barry O'Neill: "Parents like books. They're intrinsically linked with education and seen as something that is beneficial to a child's development."
Carving out a niche for yourself in the children’s digital content market isn’t easy but StoryToys, an Irish company that offers interactive books for children on iOS, Android and PC platforms, has managed to make a name for itself in a tough sector.
To date, the company has raised just over €1.675 million in two rounds of funding, and has attracted the backing of Leaf Investments, Folens’ investment fund. It has also increased in size, with Barry O’Neill coming on board as chairman in late 2010, before joining the company full time in August 2012
StoryToys started life out as Ideal Binary in 2008, founded by brothers Aidan and Kevin Doolan. After an initial success with a product called 3D Bookshelf, a 3D simulation of a book for iOS, the firm looked to develop the idea further. Children’s applications were a particular focus.
The initial titles enjoyed a good level of success, with Rumpelstiltskin, Rapunzel and other apps based on public domain IP. That included the Grimms’ fairy tales titles such as Little Red Riding Hood – familiar titles for both parents and children, with an added digital twist.
The books are designed to satisfy both the child’s requirements and that of their parents, providing both entertainment and educational material.
“Parents like books. They’re intrinsically linked with education and seen as something that is beneficial to a child’s development,” O’Neill said. “Kids love them because they’re games. In every book, there’s 11 or 12 pop-up scenes that are effectively minigames that help progress the storyline. They’re not agressively gamified; you’re not penalised if you don’t complete them, you can always proceed with the story. So there’s a balance, where parents like concept, children like games; put together, we ended up developing a product that had two to three times better retention rate than other products in the interactive book s pace.”
Although many products have been based on intellectual property such as Grimms’ fairy tales, the company last year branched out and decided to create its own unique IP. Farm 123 is the first original title, aimed at a younger age level – two to three year olds.
“Something we never realised before in 30-odd years of educational technology and kids technology is what a barrier the mouse was to a child being able to interact with a computer,” O’Neill says. “Touch just transformed that, completely changed it. It’s such as natural interface.”
The company changed name last year, rebranding to Story Toys. The plan for this year includes targeting 12 title releases in 2013; so far, five have hit the market.
It has between 500,000 and 750,000 active customers currently, depending on the month, generating up to five million play sessions every month. A recent promotion with Amazon netted StoryToys 70,000 new customers in a day, which the company is hoping it can retain and turn into revenue.
It is certainly gearing up for growth. In the past year, the team has expanded from eight people to 22 and O’Neill says this will only grow further as it seeks to develop both its range of apps and the type of services it offers. There are plans for online services that will help the company retain its existing customer base and scheduled improvements to user experience elements, adding functions such as remote co-play to allow parents and children to interact together.
“The core focus of the development team is what’s the new ‘new thing’? What can we focus on next? How can we generate better retention rates, how can we transform the users of our app into a market for StoryToys?” he says.
That will inevitably lead to more jobs at the company, with O’Neill proedicting further expansion. The current team includes Emmet O’Neill as product manager, formerly of educational publisher Houghton Mifflin Harcourt.
“It’s a significant hire for us. Emmet has come in as chief product officer; it’s hard to find a more experienced person in Ireland with that broad exposure to games and the educational market and design for interactive media specifically for kids. He’s the ideal fit for the business,” O’Neill said.
With a loyal following in Europe – Germany in particular – the company is planning to target the US market next, and is raising Series A funding to help fund the expansion.
“The US figures very strongly on the agenda for us at the moment,” O’Neill says. “It’s a pretty aggressive growth plan.”