Michael Acton Smith, founder and CEO of kids entertainment firm Mind Candy, shot to prominence as one of the UK's top entrepreneurs after creating Moshi Monsters, an online world for kids which lets them adopt their own pet monster.
The site exploded in popularity to gather 80 million users in 150 different countries around the world. Moshi Monsters' popularity led to numerous spin-offs, including a range, a kids magazine, video games, trading cards, books and a music album which went gold in the UK.
Mind Candy ,the firm managing Moshi Monsters and Acton Smith's other ideas, was valued in 2011 at $200 million and according to its latest accounts , was posting a turnover of nearly £11 million in the same year.
Acton Smith founded Mind Candy in 2004 after securing $10 million in backing. He initially spent $9 million and three years on developing a game, Perplex City, which drew critical acclaim but commercially flopped. In 2007, Acton Smith was inspired by kids brands like Tamagotchi to launch his world of Moshi Monsters, which took off.
Mind Candy has expanded to a 200-strong team, with a jungle-themed office based in London's 'Tech City' hub for businesses in Shoreditch, which has been praised as one of the nicest places to work.
Acton Smith has been variously described as the "rockstar version of Willy Wonka" and the "polite version of Bob Geldof" for his wild hair and colourful style. He may be 39 but he doesn't like to act his age.
With a vision to build "the largest entertainment brand in the world" for kids, Acton Smith talks to HuffPostUK about what he has learnt along the way, what other projects he is planning and where next he plans to take Moshi Monsters.
Where are you planning to take Moshi Monsters and Mind Candy next?
The biggest shift this year for us is away from the web and towards mobile, it's extraordinary how fast this has happened. Kids love smartphones and tablets and we're working to take the Moshi universe into the touch-screen arena.
Beyond Moshi Monsters, we've got several new projects bubbling away, none of those have been announced yet but we hope to do so in the not too distant future. All the new products would be starting life on touch screen devices, which we think are the heartbeat of our kids entertainment properties, and once successful, we'd expand them like we did with Moshi. The new brands are a completely new universe separate from Moshi, so that means new characters and separate stories.
We've had a few spin-offs from the Moshi world. One of the most successful has been a character called Poppet, who has been very successful with girls. She has been so popular that we've done her up in her own licensing business, She has her own app coming out, her own website and so on. She's like a new Hello Kitty.
The "free but pay-for-premium" (freemium) model has been controversial, how are you planning to get money from these apps?
We've looked at a few different models and it's obviously quite complex given the age of our audience, we believe that freemium products can work if the developers do it in a respectful way for the parents and the kids. I think most of our products going forward are freemium products but we may still experiment with paid-for products as well.
It is a little bit of a Wild West as people work out the best way to do this. There are things you'd look at like ensuring children can't spend more than in a certain time period, or the parents have to input a password before payments are made.
Is there a formula you've devised to make Moshi Monsters an addictive product?
We wouldn't use the word addictive, we'd say amazing, magical entertainment. What we don't want to do is create products that kids spend all their time on. Moshi Monsters was designed for short play sessions rather than spending hours in front of the computer.
We talk about magic a lot at Mind Candy and how to make things magical for our audience, yet there isn't one simply way of doing that. The look of the characters and cuteness enters into it, as does the stories we tell, the names and how the whole piece fits together. It's similar to what Disney has been doing for cartoons and films, but we're doing on different platforms.
What about the process of making the characters? What if they are not popular?
There are hundreds of different characters in Moshi Monsters, some are much more popular than the others. Even if a character doesn't resonate or prove to be that popular, I don't think we've ever killed any off, they just exist in the world and might not make it onto the music album or an appearance in the cartoon.
But ones that are very successful like Poppet will get their own show and their own toys.
You've done Moshi magazines and music albums. How far can the brand go?
We've done a few events, partnering with Chessington World of Adventures and Alton Towers. One day, I'd love to have a Moshi theme park, although we've got a little way to go before we get that far - they're not cheap to build!
It sounds like you've explored the idea of a theme park...
We've had a look, we've had a few conversations with partners, and it's definitely a long-term expensive project. We've done smaller scale things as well. We 've had an amazing kids birthday party in our office and invited a lot of kids to that.
We had a Moshi bus that we converted from a double-decker bus that we drove and met fans.
What is the ultimate ambition with Moshi?
We want to continue expanding and making it relevant to future generations as well. There are a lot of kids properties that burn brightly and fade away but there are some that stand the test of time - think of Hot Wheels and Lego. We want to make a property that is enduring.
As long as we respect our audience and we continue to keep it fresh, then I think we've got a great chance of building a property that has got a great chance of still being around when I have kids.
What about your own business plans, besides Moshi Monsters?
I personally have made some investments in different businesses. I love entrepreneurship and am always looking for exciting ideas.
Would you ever sell Mind Candy?
We've thought long and hard about it and discussed it internally and we could sell the business. There are a lot of companies that I think would be very interested but for the long term, we'd rather have an extraordinary entertainment company and hopefully have something that lasts the decades rather than just a few years.
I'm not ruling it out but it's not a short-term objective of the business, maybe if we find the right partner, we'd consider it. A more likely route at some point would be to take the company public when we're ready for it.
Is there anything else the government can do to help entrepreneurs?
I don't think it's the government's place to get too heavily involved. They're shining a spotlight on this area, they're inviting us to Downing Street and showing us they care and understand that this is an important part of the economy. I'm not sure they need to do too much more than that.
If there is anything to do, it's the more entrepreneurs we have, the better. If we start teaching kids in schools that becoming an entrepreneur and working for yourself is a viable option, then we'll see more successful start-ups emerge a few years down the line.
What inspired you as an entrepreneur?
I loved reading books and read everything from Richard Branson and Ted Turner's autobiographies. Their stories are very inspiring and it's where my entrepreneurial zeal came from. I'd love to write my own book at some point to help the next generation at some point.
What sort of advice would you put in your book?
I think one of the most important things is firstly to go into an area that they're passionate about and care deeply. Running a business is incredibly intense, complex and time-consuming. It has to be something you love.
The second would be research. Go super deep on whatever you're doing, read whatever you can, check out the blogs and attend the trade shows and you'll really understand every aspect of the business that you're diving into.
The third is when you start, just begin. Test things out and don't worry about failing, just make sure you fail fast. Keep trying and trying and you'll build an amazing business.
Have you made any mistakes yourself?
Yes, many many mistakes!
Probably the most public mistake I made was with the first product I launched at Mind Candy before Moshi Monsters, which was a game we launched called Perplex City. We raised a lot of venture capital for it, I hired a big team and we spent many years building this game and while it was creatively amazing, it was commercially disastrous. It wasn't an example of failing fast but it took many years for us to realize it wouldn't work.
A lot of entrepreneurs are so wedded to their single idea and so blinkered to it that they just go down with the ship instead of being very smart and sensible and tweaking what they're doing, until they finally get a product-market fit.
You say don't fear failing, but other entrepreneurs say you should be persistent. Isn't there a paradox?
This is one of the big dilemmas that many entrepreneurs face. Never give up is one thing they're told but on the other end is give up when it's not working and try something new.
Only you as an entrepreneur who are living it and breathing it and deep in the trenches know what the right thing to do is. I'm a huge believer in intuition and gut instinct and that has stood me well over the last few years and it has got sharper the more I've been involved in business.
Are there any ideas that you'd have loved to do with Moshi?
We did do a pop-up retail store, but the economics weren't great so we pulled back from that. We looked at doing a stage tour and taking a Moshi show around the country but again we didn't quite feel like it made sense.
Over the last few years, we've gone at a really great pace, we launched toys, books and then did a magazine, clothing, a music album and then a cartoon, I think it's important when you're running a business to go fast but not too fast.