Source: Fast Company
Jessica Rovello is frustrated. The CEO and cofounder of Arkadium, the gaming company that works with publishers such as Time, Gannett, CNN, and TMZ among others, says, “This moniker of disruptor is considered highest form of praise [in the tech industry].” Yet everywhere she looks, Rovello sees companies that pursue cookie-cutter templates of growth. “If I had a dime for every time I heard, ‘I met my cofounder in B school,’” who then go on to detail a laundry list of predictable goals including securing funding from VCs, Rovello observes, “I don’t feel like there are a lot of alternatives presented.”
That’s why she and her cofounder and husband Kenny Rosenblatt are flipping the script. Five years after taking Series A funding from Edison Ventures (and 17 years after starting the business) the couple has decided to buy out their investors and continue growing the business themselves.
Of course, it’s not as simple as writing a check and sending the VCs packing, although Rovello maintains that while she can’t divulge the terms of the deal, Edison Ventures did “get a positive return on their investment.” However, while she underscores her appreciation for their initial trust, Rovello does say that there was a “divergence in values” between Arkadium and Edison Partners.
“We are building a people-first long-term business,” she explains, and VCs–not just their investors, but all of them–are in business to make money which typically comes from profitable exits. “Not that there’s anything wrong with being in business to make money,” Rovello adds. But, she says, “I totally take offense to the notion that funding is a measure of the seriousness or impact of your business.”
Rovello points out that Arkadium has hit some rough patches, including two recessions and back in 2014 during the war in Crimea when both the conflict and the political sanctions decimated their studio staff, who are based there. Overnight, she says, the workforce went from 150 down to 75.
The staff is now back up around 100 and continues to grow at a steady pace, she says, noting that 40% of management roles are held by women and 30% of the entire staff is female. “Since we went through the trauma of Crimea for the past four years, we have been growing anywhere from 15% to 25% year over year revenue and profits,” Rovello says. “We’ve been steadily growing at a pace that makes sense.” She continues to reinforce this as her mantra for the company, which stands in opposition to what she sees as other VC-backed companies that revere growth for growth’s sake. “It is very surprising to me in so many other areas of society we have evolved to take a long-term view of things, like the environment, I don’t understand why that hasn’t translated to business and why this short-sighted, short term, high growth, high burnout scenario is considered the ultimate calling for a company.”
Rovello doesn’t believe it’s going to stay that way. She points to the influx of millennials and Gen Z workers wanting to be part of purpose-driven companies and notes that one of Arkadium’s three core values is living a full life. That means encouraging employees’ career development and their intellectual pursuits outside the office. Again, she says, this is the marker of a long-term view, not just measured in quarterly results.
For her part, she models work/life balance by being present with her three children after the workday ends at 6:30. “I picked a life partner who I knew was going to shoulder half the burden in work and life,” she explains, “we colead the business and colead at home.” Yet she adds, “You don’t just have to model it, you have to support it.” Rovello is proud of the fact that a small business like there’s has always offered benefits like paternity leave.
Grooming the culture and keeping an eye on smart growth, says Rovello, can only be facilitated by this transaction. She says she’s often heard CEOs of Fortune 500 companies opine that they can’t take their companies private to have more autonomous leadership. While it’s good to have checks and balances, Rovello says, she feels strongly about pursuing a vision for Arkadium unencumbered by investors. And she points out, “We are taking a leadership position, and letting [other startup founders] know this is a possibility.”