Divinia Knowles: How I went from Mind Candy’s studio manager to president and CFO

Once Madonna’s interior designer and now head of the company behind Moshi Monsters, Knowles shares the highs and lows of building Mind Candy

Looking for a female role model? Look no further than Divinia Knowles, the woman largely responsible for the success of Mind Candy and its million-pound baby Moshi Monsters.

Unlike most tech entrepreneurs, Knowles’ background is a far cry from that of your typical start-up mogul. Having left university with an archaeology degree, Knowles decided she wanted to focus on “antiques and old things” and made the progression into interior design with six years spent working for high-value clients such as Sharon Stone, Madonna and Mick Jagger.

So where, then, does Mind Candy come into the equation?

Knowles says that as an early adopter of social networking sites and all things digital, she “made the decision one day” that she needed to get herself “into it” and, as luck would have it, Mind Candy had posted a coded job advert in The Guardian which she quickly encrypted and sent in with her CV. Fast forward to a “magical meeting” with Mind Candy founder and Young Gun, Michael Acton-Smith OBE, and Knowles had secured a role as studio floor manager for the company. Now, nine years later, Knowles runs the business as COO, CFO and acting president. An impressive transition, to say the least.

Yet, as the female entrepreneur outlines below, it wasn’t an easy ride with “creative chaos” and her own personal frustrations just two of many obstacles she’s had to tackle along the way.

Speaking at this month’s Startup Grind event held at Google Campus, Knowles shared her insights on building Mind Candy from the ground up, dealing with “strange” company culture and offered frank insights on Mind Candy’s recent issues with revenues and traffic…

What drew you in to entrepreneurship?

“I knew the company was going to be successful. I bet on Acton-Smith more than what we were currently doing. [The product it was working on] Perplex City had lots of PR, users, it was a very interesting idea but I bet on him because I thought that he would be successful no matter what.

“Acton-Smith had this vision that rather than creating entertainment for broadcast, we could disrupt the entertainment industry and create entertainment brands with a digital path. We’ve always tried to do the same thing with [all of our concepts] by creating a digital path and building a brand around it.”

You originally quit two days into working for Mind Candy, why?

“Acton-Smith loves this story so much. I had come from a completely different environment, customer facing – I was working with an intimate client base, a warm industry.

“The culture at Mind Candy was very strange. I was employee number 15 at the time, the guys that were developing Perplex City at the time were quite geeky. They were developing it because they loved it themselves but it was quite different from what I’d come from. It was a bit strange, people used to message each other when they were sitting next to each other – it was strange and I wasn’t sure I could do it.

“That and the creative chaos when I walked in was a real culture shock and Acton-Smith wasn’t around for the first couple of days. I’d also come in to manage the accounts, there were just lots of 100 line spreadsheets and piles of paperwork on my desk and it felt like ‘welcome to the accounts!’

“I quit and Michael got me back to have a beer with him. He was very influential and talked about how we could change the culture and make it work and so we decided we were going to build the company together.”

When did you know Moshi Monsters was going to be big?

“It’s very hard to tell. I don’t think I ever thought to myself ‘wow this is going to be massive’ what I thought was ‘wow this is amazing, what a great thing to work on’. I thought the idea was brilliant and working with kids is one of the most joyful things you can do. If you really love what you’re working on and the company you’re working in, you’re much more likely to succeed than if you’re working in something you don’t really understand.

“I’m passionate about what we’re doing and Acton-Smith’s very much the same. There’s lots of passion and extra energy.”

How do you encourage creativity at Mind Candy?

“We try to make sure that other people’s ideas in the company are heard. Acton-Smith is a creative visionary, he has a notebook with so many ideas in its hard to count, but he’s also charged with trying to get the most out of others – helping others idea generate and get that into a pipeline into the company. It’s [all about] fostering the ideas of others.”

How has Mind Candy evolved?

“The company has changed a lot in the nine years I’ve been there. I see it as Mind Candy 2.0 when we were in the tea building trying to grow it and then Mind Candy 3.0 when I took over the operational side. We’ve moved to mobile and we need to figure out how to target our audience which is why we have Hopchat.”

Mind Candy – the next Disney?

“We’re trying to do something different – we’re trying to build a portfolio of really engaging brands. A digital entertainment eco-system [is what separates us from competitors]. The larger media entertainment companies are now coming into digital but our original DNA is digital.”

What are you learning from competitors?

“We talk a lot with people in the larger entertainment companies. We’re all experiencing the same problems which includes trying to monitise the child audience, especially on mobile. No one has really solved that yet and there are no massive hits that have been generated there. Apple doesn’t allow gaming subscriptions which really puts a kibosh on kids companies. Something needs to give there.

“We specialise in the seven to 12 year-old audience, they’re on Facebook, Tumblr etc. – all of these places that they essentially shouldn’t be so how do you crack that? How do you create something for them that is aspirational and engaging without it seeming young so you can captivate your audience so they’re not fragmented?

“We’ve been phenomenally successful in certain markets – TV, YouTube etc. – but with kids it’s about providing extra interaction; fun and silliness, if you can capture children’s imagination that’s how you can create a large distribution network. Make something that’s fun.”

What’s it like to run a company which targets children?

“Kids aren’t shy, they’re not afraid to say something is ‘rubbish’, when they love something they want to share it with everybody. They love being in the playground and being the person that knows something that others don’t. They love going to the playground and exchanging trading cards of Moshi Monsters. Everything you can do about collectible things really helps. On the sites we have a friends element, we have public chat which is really popular, kids have their own URL, we have Moshi memberships which kids went nuts about. There’s lot of things you can do for kids that’s brilliant for them but also encourages ways to share.”

Can you detail your revenue split?

“At the height of Moshi’s success in 2012, half of our revenue came from digital, half from licenced products. These days, the web is still a great business model – parents love our subscription model. Our digital model does make up a smaller percentage at the moment.”

If you could go back and change anything in Mind Candy, what would you change?

“Moving to mobile – we should have thought about it earlier and it’s made us very aware of other platforms that we should think about moving forward [Xbox and the like]. Other things around Moshi [I would change] would be not globalising. There’s huge potential still for Moshi to expand, there’s all these kids that have yet to see Moshi but at the same time we should have done that sooner.

“Keeping your culture as you grow is really difficult. When you have to restructure and resize that’s also really difficult and coming out the other side successfully. Finding amazing people is tough. Dealing with lots of stakeholders, investors, policy makers and regulators is all very difficult.

“Finding great partners and servicing those partners [has also been difficult]. I’m sure there’ll be more mistakes in the future but as long as they’re learning experiences then I’m ok with that.”

Have you had any personal frustrations along the way?

“Trying to prove to everyone that I could do the job. Proving to our board members, who are really savvy and experienced, that I could do what I set out to do and that I was prepared to learn. It was really hard, I was really worried about that and making sure that they could see I had real potential.

“There were lots of different ways I tried to get around that. I’m the eternal student; while at Mind Candy I did my accountancy course in the evenings as I needed the qualifications to do that. It’s all about trying to hack the system.”

What were the biggest obstacles you had to overcome?

“My biggest one is the perception of me externally. There were points, back in the day when we had gone out for investment and there was a particular investor we were courting at the time that made it very clear that, if they came on board, I would no longer be in my role. That’s not something you talk about but in the end they didn’t invest and we showed them!

“It’s when you think to yourself ‘I’ve put so much effort into this, I’ve really bust a gut to learn everything, late nights and tried to be on my game and I’ve got someone telling me they don’t want me to do it’. It’s about continually trying to rise above it.”

Funding – how did you raise it?

“Acton-Smith raised his initial round from family and friends, and then, because he was so well networked, he then got a loan note from a group of VC’s and one of these then became a major investor in the company.

“I started six months before we closed our Series A; we had one investor who we knew fairly well and we went out and pitched and brought on another VC. We’ve gone on and raised smaller rounds, we had been raising funding in 2008 but then there was the horrible crash and two term sheets disappeared overnight. We quickly brought in subscriptions and that saved the day really.

“We’ve also been to Silicon Valley to pitch for funding, that was fascinating, we met all of the Silicon Valley VC’s – terrifying but brilliant fun. We didn’t end up doing that round in the end but we’ve also done some venture debt. We’ve done lots of different things. It’s a very hard thing to do. You learn so much every time. It’s very different when it’s just an idea and a concept to when you have traction and milestones which you need to use the funding to bounce off of.”

Is Mind Candy thinking about an IPO?

“We don’t focus on that. I feel incredibly humbled about the way Mind Candy is treated in the UK – we have enormous support from other start-ups, other entrepreneurs and I think people want us to do a London IPO so we can start that scene but we just want to build really great things.”

You’ve had issues with finances and traffic recently, how do you plan to overcome that?

“Like any business, we’ve grown over time. We had enormous success with Moshi which we hadn’t planned for. We’ve had to grow up, the US is a huge market that we’re yet to crack. Over the last couple of years, we’ve been investing really heavily in the business in growth, we’ve been talking to people that can help us build our business across territories where they have expertise and we may not.

“Obviously when you do that you have to take a hit because you have to plough your profits back into the company. It’s about understanding your strategy and not being taken off course and being really strong about what you’re doing. We’re trying to build a business that’s sustainable.”

What advice do you have for other women in business?

“Women need to be their own champions and believe. They need to put themselves in difficult situations. It’s hard to talk about but it’s difficult when you’re in a business where there’s lots of talented woman and they don’t put themselves out there. I encourage them to do it, be your own champion. Put yourself forward if you want to grow and be successful.

“Take advice and feedback from others and mentors; not just female mentors, it’s male mentors as well. Feel perfectly comfortable to say to people ‘this is an area I don’t really know very well but want to learn’.

“There’s so much more work to be done to let young women know there are amazing jobs to be had in maths and tech but I just don’t think they understand.

“Quotas? I don’t believe in that, I’m sorry but I think there are amazing women out there who can get there on their own merits. Quotas aren’t the answer.”

What advice do you have on building an effective team?

“It’s important to have a strong tech person. Having a tech CEO was really important for us at the time, we also then had a COO but for many businesses that does come later depending on what type of business you are and what kind of founder you have. We also had a creative being a creative company. It took us ages to hire a product person – to find a good multi-disciplinary product person. Having a strong tech co-founder/CTO is integral for a tech company.

“At Mind Candy, we’re looking for people to give 110%, we’re looking for them to potentially work evenings so they really have to be passionate about it.

“If people come in and you ask them ‘Have you played Moshi, have you played Warriors?’ and they say ‘no’ I’m like ‘OK well this is the end then because I want people who are passionate about what we do’.”

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