Scrabulous – Indian startup in the midst of FaceBook controversy

ScrabulousScrabulous is a startup by Kolkata based Rajat and Jayant Agarwalla, both in their early 20s. The duo launched Scrabulous FaceBook app, which allows FB users to play Scrabble with their contacts. The app, within few months of launch became FB’s most popular games and boasts of ~600,000 daily active users.
What’s the problem then?
Scrabble game is copyright of toy maker Hasbro and Mattel, which jointly own the rights to the game abroad and in the U.S./Canada, respectively.

The toy makers asked FaceBook to pull off the game, citing infringement of copyright.
Biggest Mistake?
Scrabulous founders went public with the amount of money they were making by selling ad space in the app – $25,000 a month!

What does this mean for Hasbro? Perceived loss of ~10X revenue

As one of the FB user puts it

” “I was going to purchase the dvd scrabble but now i decided not. This is much more fun playing.”
What’s next?
46000 FB users have joined the “Save Scrabulous” group protesting the Hasbro move, but looks like Hasbro is trying to get Scrabulous to sell itself, or else shut down completely. [TC]
Lesson learnt
Unless you are a public company and have to disclose your earnings, DO NOT go about blabbering the money you are making – especially when you are “recreating” something very popular (and copyrighted)

Put yourself in the shoes of Scrabulous founders.You are in an interesting situation and have only few options:

  1. Sell Scrabulous to Hasbro (with not much of bargaining power)
  2. Wait for FB to shut down/block your app (which they will even if you have 46K signed petition) – You loose all your users/all the money and are back to square one.
  3. Live a martyr life (i.e. only option 2), think of a new idea, bank on the instant fame and get VCs to fund that idea.

Time is running out and you don’t have any “life line”.

You’ve got to decide FAST. What will you do?

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