Profile: Michael Acton Smith, the Moshi Monsters mogul
Moshi Monsters is a virtual pet and social networking game which has captured the minds - and pocket money - of children around the world. BBC technology correspondent Rory Cellan-Jones profiles the company's founder, Michael Acton Smith.
If you have young children, you might have heard a bit too much about Moshi Monsters, and will be fully aware of the trading cards, books, toys and computer games emblazoned with the Moshi Monsters logo.
An estimated 50 million people tend their virtual monsters on the Moshi website, and in 2012 there are plans for Moshi Music, Moshi TV and a live tour.
And while Moshi Monsters is very much a global phenomenon, the company's 37-year-old founder Michael Acton Smith is far from a household name.
"I think he will be recognised as a creator of a completely new concept," says investor Tom Teichman who has been putting his money into tech businesses for the last 20 years - including Mind Candy, Moshi Monsters' parent company.
"You haven't got that many people of his age, in their 30s, who are so seasoned, creating a new brand from nowhere."Entrepreneurial promise
Michael Acton Smith was born in Marlow in Buckinghamshire. His American father was a lecturer while his Irish-born mother was a chiropodist.
With other relatives overseas, they were a tight-knit family with a strong work ethic.
Michael's younger sister Anna says there were early signs of his future path:
"We'd go to car boot sales and sell things. He'd always put an interesting spin on something he was trying to sell somebody.
"He was always very confident on that front - always entrepreneurial."
End Quote Anna Acton Smith Sister
He was part of the chess club. And when you're a teenager there are some things that are cool, and chess club isn't one of them”
At school he was a high achiever both academically and in sports - but not in with the cool crowd.
"He was part of the chess club. And when you're a teenager there are some things that are cool, and chess club isn't one of them."
"He was a geek, but a lovely one," she laughs.
Then it was off to Birmingham University to study geography. At Freshers Week he met Matt Shone, who shared a passion for running.
"He did a marathon age 12 - clearly the steel and graft were evident in his running," says Matt.
After university, the two friends set off with their backpacks on a five-month trip around the world, but even as they travelled Michael was thinking of a future in business:
"He was jotting things down, doodling away and littering everywhere we stayed with Post-It notes," recalls Matt.
"He seemed to produce them from everywhere, with little diagrams, pictures and designs and early business and marketing plans he thought would eventually take over the world."First business venture
Michael Acton Smith started his first business while in his late 20s with another university friend, Tom Boardman.
The life of Michael Acton Smith
- 1974: Born in Marlow, Buckinghamshire
- 1993: Studies geography at Birmingham University
- 1998: Starts first business, the online gadget retailer Firebox.com
- 2004: Forms Mind Candy, the parent company of Moshi Monsters
- Hosts mini music festival 'Berwickstock' in his London flat, carpeting the rooms with fake grass
- 2011: voted 12th in Wired Magazine's Top 100 of Britain's Digital Power List
- 2011: Moshi Monsters announces it has 50 million users worldwide
Tom and Michael both had steady jobs at the time, but quit to start their business from Tom's parents' house in South Wales.
Their idea was an online gadget retailer, Firebox, aimed at the kind of people who read lads' magazines. And their first product certainly had a laddish quality to it:
"We came up with the idea of a shot glass chess set - a big glass chess board with shot glasses for people in different shapes, and the idea is you fill up your opponent's pieces with alcohol, and if you take their pieces you have to down the shot," says Mr Boardman.
"And so we made a prototype out of all the glasses in my parents' drinks cabinet and we tested it one Saturday night."
Once they had sobered up, the shot glass chess set proved a hit - but turning it into a business meant convincing investors that Firebox was going to be big.
Tom Teichman decided that Michael Acton Smith was worth backing - and sunk around £1m ($1.57m) into the business.
"I liked him and I liked his energy, and I thought he would be successful," says Mr Teichman.
"Because when you assess someone like him, you have to think about several things. How is he going down with suppliers? How is he going to go down with investors? Is he going to be able to take advice?
"Not all people tick all those boxes, but he did."Turbulent times
By the end of 1999, the novice businessman had a fast-growing online firm and a chunky sum in the bank - Michael Acton Smith's future seemed assured.
End Quote Mark Butcher Techcrunch Europe
The mark of a really successful entrepreneur is that they will walk through walls to make their vision happen”
Then came the dot com crash - and suddenly online retailers went right out of fashion.
Running out of money, Firebox had to cut back, shedding staff and the two founders stopped drawing salaries.
At one stage the company was close to insolvency and the founders were offered a modest sum to sell the business, but they did not want to work for somebody else.
Eventually Firebox stabilised - and in 2004 Michael went back Tom Teichman with another business proposition, a game called Perplex City.
"He had an idea for an online game, with quizzes and prizes aimed at the 18 to 30-year-old sector," recalls Mr Teichman.
"I couldn't answer the questions, a lot of the board members couldn't answer the questions. It was quite complex."
Perplex City failed to get off the ground.
But Mike Butcher, editor of the technology blog Techcrunch Europe, says what Michael Acton Smith did next shows what he is made of:
"The mark of a really successful entrepreneur is that they will walk through walls to make their vision happen.
"If it isn't happening they have enough presence of mind to put the supertanker into reverse and try and turn it around."Moshi Monsters begins
The young entrepreneur tried a different, simpler kind of game, aimed at children. He called it Moshi Monsters.
But when Moshi Monsters launched, sign-ups remained low and hardly anyone was playing it.
Still, the company created new characters, new features, new ways of communicating with other players and around 18 months later, in the summer of 2009, the company reached its tipping point, and Moshi Monsters exploded.
Today with millions chatting daily online about their monsters, an expanding Moshi team is filling up the company's east London office - a characteristically fun place, with astroturf flooring, ivy hanging everywhere and a tree house for meetings.
Every week three or four new people join the Moshi Monsters staff - but someone else is shown the door after failing to prove themselves during their probationary period.
There is steel behind Michael Acton Smith's nice guy exterior.
Find out more
Profile is on BBC Radio 4 on Saturday 31 December 2011 at 19:00 GMT.
And the company still faces plenty of challenges - such as when Lady Gaga won an injunction against the company after it developed a character called Lady Goo Goo.
The company was ordered to cease promoting the character and its accompanying "Moshi dance".
A more long-term challenge is whether Moshi Monsters' young audience will stay loyal.
The company already has a big rival in Club Penguin, which Disney bought from its Canadian founders for around $350m (£220m) in 2006.
Would Michael Acton Smith sell up if the right offer came in?
"I think Disney or a similar company might come and buy Moshi Monsters but we shouldn't cry into our beer about that," says Mike Butcher of Techcrunch Europe.
"Part of the reason for creating start-ups is to have an exit to go on and fund other businesses and take risk in the market place."
Recent history shows that British entrepreneurs are more likely to sell-up when the going is good rather than following in the footsteps of a Google or a Facebook and build into a global giant.
But who knows. Michael Acton Smith might just have the sheer ambition and self-belief to break the mould.