The Serbian hit: how Nordeus became one of Europe's most successful gaming companies without raising a dime in funding

After spending almost two years at Microsoft, Branko Milutinovic decided to jump ship and launch his own startup.

Nordeus was born in 2009 out of Belgrade (Serbia) and it has become one of the biggest mobile gaming companies in Europe thanks to hit game Top Eleven. Nordeus has never raised any external funding and to this date remains a bootstrapped company.

To learn more about how they achieved this and how Milutinovic believes the mobile gaming industry may evolve, we sat down with the entrepreneur at LeWeb. Here’s an edited version of our conversation.

Nordeus just announced that Top Eleven has reached 100 million registered users and 5 million DAU. You've done this bootstrapped instead of raising money. Was this a concerted effort or did you just start building the company and soon realized you didn't need to raise any external funding to grow?

It was a bit of everything.

VCs are interesting and when you visit these conferences there are a lot of topics gravitating around funding, as if that's the most important thing when you start and want to build a company. It's important but maybe it's not as much as most people think.

We were lucky enough that our business model, as well as the product, gave us the opportunity to start generating revenues very early on, versus some other models that need a lot of capital at the beginning.

The other main question we faced was: what do we want to do with the company? There are strings attached when you raise money, and the main one is that investors want a return on their investment in a short period of time and to do that you need to get the company to the next level to go public or sell. This pressure is not really based on the business itself, but on the need investors have to provide liquidity to their limited partners. And then you enter this phase where you are growing your business not because you want to, but because you have to. We never liked this and it was always a showstopper for us when it came to fundraising.

Do you feel like there are other negative aspects related to fundraising?

Yes, and the other main one is that you are encouraged to spend a lot. I'm not sure how investors persuade founders and entrepreneurs to spend money fast, but it happens very often. People spend a lot of money as if it was free, to achieve hyper growth and sell the company in a few years.

In some cases this is fine, because it actually helps the businesses in the right way, but there are also a lot of cases where companies grow too much and too fast. So I think it really depends on what you want to achieve. In our case we knew we were in this for the long term.

Four years ago we knew that mobile games were here to stay and we felt it was better if we had no pressure and we could work the way we wanted to.

From your perspective, do you feel that media and entrepreneurs celebrate rounds of financing too much?

I was very surprised at the beginning about this. I don't come from a business background and my knowledge of economics and businesses was pretty basic.

When I started seeing this it seemed like a very interesting phenomenon: someone announces a round and everybody congratulates them and it all seems like a big party. I understood it to some extent because that means that somebody who can recognize a potential successful business (VCs) found the company and gave them trust. I do get that part, but it's not like they've done something amazing and superb. I would be happier if people celebrated real successes.

In that sense, do you feel like you already are a real success?

It depends to what you compare us to. If you compare us to where we want to be there's a long way ahead of us. We want to become a sustainable and world-class company that's delivering games to the whole world. We are sort of there, but not exactly.

If you compare where we are now from where we were four years ago, it does seem like a huge success because we have the most popular football manager in the world: 100 million users, 5 million DAUs, boostrapped, more than 160 employees, several offices, only one guy has ever left the company, etc.

There are a lot of aspects that I find very important that are directly associated to how the company operates, and that's what we focus on. And it's all coming out of Serbia.

Now that you mention Serbia, how tough has it been to where the company is right now? Do you feel like it would have been easier if you were in London or Berlin?

I think it would have been equally tough and there are pros and cons. Serbia and Eastern European countries have started to receive tax incentives when it comes to fundraising, which is good for companies established there.

But I do see a lot of pros when it comes to building from Serbia or similar countries: very good talent, less expensive, less competition from other companies and thus that talent will be more passionate and involved in the company, etc.

It's kind of rare to see a company -bootstrapped or otherwise- to reach the level you're at. Specifically about the gaming industry and you as a company, what have been the keys to your success?

We've made a lot of good decisions when they were supposed to be made. For example, one was to make Top Eleven a cross-platform game while getting rid of the Facebook exclusivity. It was the first game ever that allowed you to play on your laptop, close it, and then continue playing from where you were at using your smartphone.

This was a big move because we invested a lot into technology, mobile and learning how it all worked when very few gaming studios had done it. And it actually helped us get to the next stage where many of the first gaming companies had died. We also made a lot of bad decisions though, but when it comes to the really important ones we feel like we made more good than bad ones.

If there's one constant about the company, is that most of the time we are focused on what we want to do and become. I've seen many entrepreneurs become distracted by many things, from personal stuff to thinking too much instead of making quick decisions, and I don’t want to make those mistakes.

You previously mentioned that you have bigger goals and you want to reach higher levels. However, when you think about where you want to go, what do you see as the biggest challenges that could stop you from getting there? What are your main threats?

I'd be cocky if I'd say there are no problems or challenges ahead of us.

But our philosophy is that when there is a challenge you can interpret it as a problem or as an opportunity, and we do the latter whenever possible.

There are also challenges when it comes to competitors, but I honestly believe the most important thing is to actually focus on what you want to achieve. We don't spend too much time thinking on nightmare scenarios and so far it has worked really well.

Lately we've seen several gaming companies that have suffered quite a lot after launching games that went on to became real hits. Is this business a hit-driven one?

The games industry historically has been a hit-driven business. And what we're seeing is that producing a hit is really hard and it involves talent, passion, hard work, making good decisions and then... the element of luck.

You can do everything perfectly but nothing is guaranteed, so luck can really put you over the top and help you become successful. And I'm not going to lie, luck has also helped us reach the level we're at.