Ouya is an interesting hardware startup to consider, because its story isn't one of immediate success. The startup was founded in 2012 and received funding over two years for a total of $23.6 billion. The product was an open–access television gaming console that would bring hundreds of free games to user televisions for a price around $99. Think Roku for the app gaming market.
The product, which launched in 2013, let game and app developers publish their products to Ouya just as they do to social media or mobile apps, but users could easily play the games on televisions. The intent was to open the console gaming market to developers and players outside of the culture of PlayStation or xBox, but the product debut was a mixed bag. The product sold out before launch, due in part to a stunning Kickstarter campaign that raised both $8.5 million and ample awareness about the product. Those with industry knowledge also anticipated the product because it was designed by Yves Behar, a recognized name with ties to UP and Jambox.
Ouya's product kickoff was problematic, however, pointing to possible problems with the startup's execution plan. Early buyers complained about late deliveries, and the product itself had consistency issues. Another issue, which might have muddied branding waters, is that the company managed to get the console into high–end retail locations before it met promised shipping dates for Kickstarter backers. Unlike Formlabs, which used its Kickstarter funders as the first rung in a loyal following, Ouya may have burned some of those bridges. The result of all these issues was that industry publications started to declare the startup dead, which might have you wondering why this hardware company is on our hot list.
We like the Ouya story because it illustrates a point about flexibility for both startups and investors. As we said in our product chapter, angel investors back people and ideas, not perfect products. And the Ouya team demonstrates the ability for startups with good ideas and people to bounce back from poor product launches or performance.
In early 2015, Ouya announced that Chinese Internet company Alibaba was investing in the startup. Both companies held investment details close to the chest, but did talk about why they were teaming up. By 2015, Ouya had developed a gaming library of over 1,000 games. The plan is to integrate those games with Alibaba's existing technology.
Ouya founder Julie Uhrman was asked why the product might see better success in China than it did in the United States. She pointed out the ample opportunity for gaming developers in the global space and stated that many concentrate on the saturated US market because it's what they know–perhaps a mistake that even Ouya itself made. By partnering with the Chinese company, Uhrman's startup not only opens global doors for itself, but for all the app developers that launch via the Ouya platform. That open–market mind set and ability to make execution changes that might be better for the startup and investors is why Ouya makes our list.
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Ross Blankenship is the "expert on venture capital and angel investing" for startups and investments for venture deals. He is also a proven entrepreneur, and the Founder and CEO of AngelKings.com. Angel Kings is an investing platform that provides accredited angel investors the opportunity to invest in top startups and companies in sectors like cybersecurity, biotech, mobile, data and financial services. Angel Kings provides both venture capital funds for startup investing as well as private equity funding for early and middle-stage investments. Ross Blankenship has successfully founded several companies and now manages a Venture Capital fund focused on early stage, high growth startups in sectors such as mobile, cybersecurity, cloud computing and biotechnology. Learn more about Ross Blankenship, and how to become a successful, early investor at http://AngelKings.com.