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Why a gaming startup is a good idea

By on May 9, 2013
FlickrCC Stacie
FlickrCC Stacie
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Vlambeer’s Rami Ismail wrote an excellent series of Tweets (summarised here) on what takes to start a games business.

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TL;DR: JFDI

He says you start. Get on with it. Make the best game you know how to. Contact people even though you don’t know them. Take some risks. Don’t assume how things work, find out, preferably by doing.

There is only one bit I take issue with. Rami says, “You’re making a game? Good, you’re a developer. Trying to sell them to stay afloat? Well, now you’re a company. What the hell is a startup?”

To my mind, a startup is a very useful mental model. It is particularly useful if you have come out of a large corporation and trying to bootstrap a tiny little studio, which is very common in these days of declining console developer employment.

So, some axioms:

  • A startup is not a little corporation. If you run it the same way you experienced life in a big corporation you will probably fail.
  • Eric Ries, writer of The Lean Startup, defines a startup as “a human institution designing a product or service under conditions of extreme uncertainty”. Yep, everyone in the game industry works in a startup.
  • Steve Blank, professor at Stanford, defines a startup as a “temporary organisation created to search for a repeatable and scalable business model.”

 

Search for a repeatable, scalable business model

I like Blank’s definition. When you set up your small game business, you have no idea how to succeed. Should you be on iOS or browser, mobile or tablet, Android or Steam. You start making educated guesses and assumptions about where the market is for the product that you want to make. (Many businesses identify the market first and the product second; I guess few developers do that). You decide to go premium or F2P or paymium or whatever, on iOS or Steam or Kongregate or whatever. You experiment, you learn, hopefully you make some money.

But a startup’s success is not about making money. It is about learning fast. Money matters. It matters a lot. It’s what lets you keep making games and keeping learning. The key is to make sure that you can afford to make mistakes. That you can learn by doing. That you keep the costs low (hence “lean”) while you figure out what you can do for your audience and what they want to pay for. The most depressing thing for a Lean Startup person to see is a talented team executing flawlessly on a flawed business plan.

A corporation will spend three years following the business plan it wrote at the beginning without adapting as it learns and wonders why it went bust. A startup will plan to learn, adapt and change rapidly during those three years until what finally emerges bears no resemblance to the original idea for the business.

Be a startup, not a corporation.

 

(And go and buy Eric Ries’ marvellous book, The Lean Startup. If you work in games, you work in a startup, even if your bosses don’t know it yet.)

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • Andreas

    Stating the obvious. Whining as usual:)

  • Rami, I’m mystified by the point you’re trying to make. You seem to be conflating the term “startup” with some sort of boom & bust dotcom business model. Which is certainly not the model advocated and outlined above.

    The tortured artiste “we make games so we don’t starve” shtick is very romantic, but I if you became as successful as Supercell or Mojang, I assume you wouldn’t complain. Or are you trying to say indies should operate as not-for-profit, but even then you need some sort of scaleable business model. Please explain.

  • You are arguing with me, not against me. Your definition of startup is just different from mine (and you somehow involve corporations, which is slightly weird). Let me add one short message: if you’re a corporation, please leave your business to your MBA-person. I never said ‘be a corporation’. I said be a developer or a company.

    Be someone that make no assumptions, uses no dotcom mental model aimed at growth or money, but check your situation and create your own model aimed at making good games first and foremost and getting the game out there for people to see second. Arguing that startups are focused on learning (and thus implying other models are not) is almost borderline hurtful to people reading this blog – contrary to your implications any way of *doing* something is going to teach you new things.

    Sure, if you want to be a startup, please go ahead & be a startup. I’m not telling you that the model is wrong. I’m telling you a startup in the indie scene is only slightly less rare to me than a golden unicorn is to horse breeders. Indies don’t tend to search for scalable or repeatable business models – they don’t tend to be looking for growth or expansion. We look at games and how to make them without starving. That’s really all.

    In summary, be neither of the things Lovell mentioned – be one of the things I mentioned. Please just be a developer or try to stay afloat selling your games. If you’re doing the latter, you’re a company. And if you just happen to use the 1990’s dotcom ‘startup’ model, that’s when you’re a startup.

  • Couldn’t agree more, actually chimes with a blog post I wrote about what I’ve learned after 6 months in a games startup

    http://iainhunter.wordpress.com/2013/05/08/startups-the-importance-of-momentum/