Not many businesses take on entertainment giants such as Hasbro and win, fewer still have their head office in Australia and flirt with bankruptcy. But Imagination Entertainment is the exception to the rule.
The business, started by Shane Yeend and Kevin McLean, was founded back in 1984 with start-up costs under $100,000.
Based in Adelaide, the company initially produced videos before moving into the world of games, distributing the wildly popular Battle of the Sexes game that briefly outsold Monopoly in Australia.
The business withstood a market collapse in 2001, with the firm having just 21 days worth of money left. It was then that Yeend and McLean moved into the world of DVD games, sparking success at home and abroad, with Imagination Entertainment beating Hasbro to a worldwide Disney licence for their games.
The business is now a global player in the games market but the wildly fluctuating fortunes of the business in getting to this point leaves Yeend in reflective mood.
“Challenges faced included geographical position, launching and continuing to run a global entertainment company from a head office in Australia, and competing with no cash in the bank against global games giants that have been in business for 100 years (with significant marketing budgets and control of the retail shelves),” he says.
Other challenges included “often having orders worth millions and no way to fund them. Cash-flow has been one of the major issues every year.”
“It’s been a David and Goliath struggle with a great deal of blood, sweat and tears. The dotcom crash was the single biggest hurdle for Imagination, but also the milestone that inspired me to build a world class, award-winning organisation. Imagination was close to losing everything; after all, 90% of companies in the sector did. With only 21 days of cash in the bank, I looked closely at Imagination’s key strengths and identified new challenges, namely the innovation to launch DVD games.”
So what are the lessons for fellow entrepreneurs? “The need to be more determined and never let anyone tell you ‘no’ or ‘can’t’, but above all think smarter than the competitors,” he says.