From Bungie to Bootstrapping
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Transcript of From Bungie to Bootstrapping
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STARTING AN INDEPENDENT DEVELOPER
MAX HOBERMAN, PRESIDENT/FOUNDERCERTAIN AFFINITY, INC.
From Bungie to Bootstrapping
March 25 , 2009
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Bootstrapping
bootstrapping [ büt stràpping ] Building a business out of very little or virtually nothing.
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My Background
Mid-90’s – tried to start a game company in college
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Goblin Games (R.I.P.)
Summer between college semestersMe and one of my roommatesInvested $3,000 of my own savingsPaid ourselves hourly minimum wageArcade-style space combat game for the MacLasted just a couple monthsCreated the shell interface, one 3D model,
and a broken audio systemDecided I had to get a real job
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My Background
Mid-90’s – tried to start a game company in collegeHelped Aspyr get startedGot hired by Bungie
Hired as Webmaster and Graphic Designer Experienced all aspects of marketing and publishing Started designing interface for Myth games Managed Bungie.net online community Acquired by Microsoft Founded Bungie’s Community team Multiplayer and online lead for Halo 2 and Halo 3
Founded Certain Affinity
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Mission Statement
“Create a hybrid Halo/WoW killer, sell it to the mafia, retire to a villa in the Swiss Alps.”
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Mission Statement
“Become an independent developer with a reputation for creating high quality games and original IP.”
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Certain Affinity
2.5 years old Founded in October, 2006 Austin, Texas
Independently owned S Corporation $80,000 initial investment
29 full time employees Started with 9 developers
4 credited releases 1 multiplayer map pack 1 downloadable title for XBLA, PSN, and Windows Contributed to 2 full retail titles
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Certain Affinity’s Game Credits
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Accomplished Work in Progress
Independent developer
Strong business relationships
Reputation for quality work and delivery
Intellectual property ownership
Financial independence
Success Metrics
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Lessons Learned and Unexpected Challenges
We’ve done a lot of things right, but…We have not yet achieved financial
independence!Work for hire business model makes this
difficultWe’ve learned the most lessons about team
building and business relationshipsEconomy also poses challenges
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Business Sense
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Profit Potential Profit Consumption
Publishers are generally happy if you’re making 20% profit
Not all staff engagedDowntime between
projectsSick leave, vacation
and comp timeDevelopment of own
IP and pitch materials
Work for Hire Business Model
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Not Enough Margin
Breaking even with “20% profit” is doing well!
Bootstrappers need a lucky break in order to have financial reserves Long term steady work Bonus or royalties Outside investment Lottery proceeds
Cost control is absolutely essential Keep your overhead low Focus on doing what you do best
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Certain Affinity 2008 Expense Breakdown
Overhead Expenses10%
ContractorExpenses
9%
Employee Expenses81%
Cost control. Just 10% of our total expenses are for operating costs.
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Development & Support Staff Over Time
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 300
5
10
15
20
25
30
35
Keeping it lean. Majority of our employees are development staff.
Development
Operations
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Internal Functions External Functions
Software developmentDev support and ITOutsourcing
managementRecruitingSelf promotionCommunity
managementVendor management
PublishingBusiness developmentBenefits and HR
consultingAccounting and payrollRetirement planningInsurance agentAttorneyReal estate agent
Business Support Relationships
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Finding Good Support
Learn what to do in-house vs. external Unless you’re an expert in employment law, income
tax, etc., get help from someone who isAsk other developers for referencesBusiness people know business people
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Team Building
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Lessons learned What we’ve done well
Not everyone is fit for a startup
Don’t take shortcuts in hiring
Watch group dynamics
Know when to let go
Maintain high quality standards
Hire experienced developers
No communication barriers
Team Building
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Team Building: Lesson #1
Not everyone is fit for a startup Talent doesn’t equal business maturity Previous startup experience is a definite plus People willing to take personal risk can help you get
off to a good start Look for people that always give 100%
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Team Building: Lesson #2
Don’t take shortcuts in hiring Establish a strong process for screening candidates Don’t bypass process due to existing relationships Don’t lower quality standards due to pressing needs
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Team Building: Lesson #3
Watch group dynamics Smaller the team more critical the dynamics Leadership team dynamics are especially important Get leads on the same page before communicating
with team Trusted advisors can convey the feelings of the team
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Team Building: Lesson #4
Know when to let go Recognize when the risks of retaining a problem
employee outweigh the benefits Act quickly and decisively to remedy this situation Make sure the company is protected Communicate with the team so the lessons aren’t lost
and you’re not sowing fear
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Team Building: What We’ve Done Well
Maintain high quality standards Set a high bar for candidates from day one Communicate quality bar to everyone involved Expect high standards regardless of role Personally meet and approve all hires Trust your gut
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Team Building: What We’ve Done Well
Hire experienced developers Need a good mix of experience and fresh perspective Lean towards experience early on Fill leadership positions with experienced people Experience with failure and success are both valuable
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CA Developer Experience
Less than 5 years 5-9 years 10-14 years 15+ years0
1
2
3
4
5
6
7
8
9
All Staff Leads
Development Experience
Empl
oyee
s
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Team Building: What We’ve Done Well
No communication barriers Everyone’s voice matters Pay careful attention to who’s sitting where and next
to whom Open office layout solves problems for you Don’t separate yourself from the team
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Open Office Layout
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Business Relationships
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Lessons learned What we’ve done well
Myth of long term relationships
The speed of business
Your own best representative
Follow through on commitments
Don’t waste other people’s money
Don’t put all your eggs in one basket
Business Relationships
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Business Relationships: Lesson #1
Myth of long term relationships Hard to get steady work from even the best partners Publisher interest waxes and wanes based on their
own circumstances and priorities Factors external to your relationship can stall decision
making (budget cuts, reorganization, mergers, etc.)
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Business Relationships: Lesson #2
The speed of business Contracts and negotiations take a very long time to
complete Likely you’ll start working without a full contract in
place Don’t rely on getting paid on time; have a backup plan
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Business Relationships: Lesson #3
Your own best representative Early on expect to spend half your time running the
company Expect to spend the other half generating new
business Avoid being critical path on development Know when it’s time to get help Hire people that you can delegate to with confidence
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Business Relationships: What We’ve Done Well
Follow through on commitments Don’t commit without consent from your leads Diligently work towards meeting deadlines Always meet or exceed the expected quality bar Communicate frequently and proactively with
partners Admit when you make mistakes and remedy them,
even if it’s on your own dime
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Business Relationships: What We’ve Done Well
Don’t waste other people’s money Publishers want to work with stable developers Even the most well-off partners respect tight cost
control Everything makes an impression, from office space to
your personal automobile
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First Office, Exterior
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First Office, Server Room/Kitchen
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First Office, Security Guard
Whew, security is sure hard
work!
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Business Relationships: What We’ve Done Well
Don’t put all your eggs in one basket Even the best partners can disappear at crucial times Multiple projects can be a lifeline, but are difficult to
manage Multiple projects require stellar production
management and enough leads to go around
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CHALLENGES AND OPPORTUNITIES
The New Economy
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Challenges in The New Economy
Increased competition More developers willing to do work for hire Developers willing to work for less Startups forming from layed-off employees Publishers offloading games and even entire teams
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Challenges in The New Economy
Everyone is trying to reduce risk Budgets are tight Most publishers are cutting back external spending Publishers more likely to cut losses, cancel projects Fewer publishers taking chances on new IP
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Benefits of the New Economy
Best time to be hiring Lots of great talent looking for a home Fewer illusions about stability of large corporations
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Benefits of the New Economy
Natural selection Those that survive will be stronger for it Better business practices will make the industry
stronger
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Benefits of the New Economy
New IP for the win Entertainment can’t be solely sequel-driven Strong new IP will be valuable in the future
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PLEASE INTRODUCE YOURSELF
Q&A