Survive, Sustain, Grow: The three stages of entrepreneurship - MCV

Survive, Sustain, Grow: The three stages of entrepreneurship

Marketing consultant Taylor Bair offers insight to help indies identify what stage their business is in, and how they can move forward
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I write about games for a living, which means I interview developers and develop my own games on the side. And for the longest time something puzzled me about indie game developers.

I would pick up familiar phrases in interviews. Things like: “We realised the concept was getting watered down, so we needed to reconvene and find what the essence of the idea was”, and “we thought we would chuck in in-app purchases and become millionaires – as the process has gone on though, we’ve obviously become more realistic”.

These developers, I thought, have an eerie similarity to another group of people I’ve spent the last year and half studying. These developers are business entrepreneurs.

Why Entrepreneurship Matters: A Crash Course

So why all this talk of business when all you want to do is get back to game development? The truth is, game development is a business, and a business that many people walk into unarmed.

Don’t believe me? We turn to Exhibit A: ask any indie developer what they are concerned with outside programming, art, and actually producing a game, and they will rattle off a list that looks something like the following image.

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How many of these do you think are unique to the video game development industry? None, really. In fact, they correlate precisely with the five core functions of business development.

And what are the five core areas?

  • First, you’ve got Strategy & Business Development, concerned with long-term goals and what you as an enterprise wish to stand for.
  • Then there’s Sales and Marketing, or the branch that questions what product people would pay for and how to show them that they should try your particular version of it.
  • Human Resources is all about team dynamics, ensuring you are getting the most out of the talent you’ve got.
  • Operations is the down and dirty daily grind – both how to increase efficiency and to improve the quality of products produced.
  • And finally, we’ve got Accounting and Finance, or the understanding of cash inflows, outflows, and predicting what needs you will have under different growth targets.

Overwhelmed? Don’t be. They actually correlate nicely with our Exhibit A, as you can see below. 

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Yep, no difference whatsoever. But there are unique facets of the indie world that affect how you approach each of these core functions. That is the purpose of this article: to give some basic tools that can be built on, with more in-depth analysis in later articles.

So as to not belabor the point, indie developers are entrepreneurs. They might be entrepreneurs in a field not often considered, but they are entrepreneurs none-the-less. And, just like entrepreneurs, indie developers experience their business ventures in stages. Three stages, to be exact. We will call them: Survive, Sustain, and Grow. Each has general traits that can be an asset to indie devs, and pitfalls that you should look out for. 

Stages of Entrepreneurship

So what are the stages, to be exact? Well, in a nutshell they break down as follows:

Stage 1: Survive – making or have released games, but no steady income stream

Stage 2: Sustain – released a game with steady income, though not enough to go full-time

Stage 3: Grow – a full-time developer, or extremely close to it

Each of these stages has significant challenges for the indie developer. After all, no one ever said trying to launch a product and making money would be easy. But there are benefits in knowing where you exist in the process, and knowledge can help inform action. In a few days I'd like to look at each stage in a bit more depth, give some advice for each of the five core business functions at that stage, and profile actual developers still struggling through the stages. The lessons they have learned are applicable across the board, and it’s helpful to see the particular challenges of each stage from flesh-and-blood eyes.

Stage 1: Survive

Joe Williamson has been out of college a little over a year now. His friends describe him as a jack of all trades and a master of most. Programming, pixel art, music composition – the guy does it all. And he does most of it solo. He’s worked on multiple small projects in very confined time limits.

He even had a period where he pumped out a game a week, but he hasn’t made much money from anything. In fact, when I met him in December 2014, he had raked in a whopping… wait for it… wait for it… £15 from in-game advertisements. And the fact is, he won’t see that. Google doesn’t consider it worth their time to cut a check for £15. He probably wishes they would, though, because that’s like two burritos.

And he’s not alone. Making money from games, or monetisation in business jargon, is a constant struggle for the fledgling developer. Different avenues exist, whether they be ad, subscription, micro-transaction, or crowd funding based, but understanding which suits your particular game best isn’t always clear.

And that’s just one of the hurdles particularly pressing at this stage. A few of the most common:

Pitfalls

Uncharted Territory: Marketing, monetisation, finances, team meetings – these aren’t even on the radar for an indie dev starting out. Overarching strategy is difficult to maintain when you’re struggling in the trenches, which is why it’s sometimes best to learn through trial and error at this stage. It might feel unproductive putting out a game with ads that are buggy or starting a website that no one visits, but be thankful for the screw-ups. We learn very little from success.

One-Man Army: Creative control is always difficult to give up, and at this stage it is tempting to do everything yourself. It’s true, of course, that some of the best entrepreneurs are jack-of-all-trade sorts, but there comes a time when it’s necessary to specialise. Branch out and give some of the reigns to other people; share your vision but prepare to take other people’s as well. Don’t get stuck as a one-man army for long. It’s a tough, lonely road for those people.

Empty Purse: Money. There’s just never enough. Especially at this stage. I know developers that have been living off savings, hoping to catch a break that will pay their bills. Unfortunately, raising funds takes time and exposure, two assets that there just aren’t enough of for the surviving developer. More on this dilemma in the recommendations section.

Benefits

Of course, it’s not all bad. For starters, Survival Devs still have that bright-eyed fascination with game development. The fact of the matter is the further one trudges into business territory – and the more your days are consumed with the minutia of budgets and marketing – the harder it is to enjoy the artistry of it all.

So make use of that fascination. Dive into the aspects of game design you love while time is still available and soak up as much as you can. This is the stage where exposure, skill building, and developing a game that can start to make some money should be your top priority. Which leads to some basic recommendations.

Recommendations

If this is you, consider holding down a full-time job with something you’re still interested in, but that doesn’t consume your after-work hours. It might not be what you want to do full time, but it will give you a safety net and wider experience to draw from when setting up a full-fledged business. Take part in game jams, in-person if possible, to build a network and meet people locally that have similar interests. You may find the perfect group and then hit upon a concept that is both fun to play and substantial enough that you can begin making money. Basically, learn, save money, and make friends. It is, arguably, the most terrifyingly new and incomparably fun stage, so don’t rush to get through.

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Stage 2: Sustain

Square Gamez, a three-man group scattered throughout south England, have a game, full-time jobs, and they have a problem. There are variables – lots of variables – coming their way now that their game has released.

Then there’s the matter of exposure. People don’t just scour the cellar of game releases and try everything that comes along. They have to hear about a game, and studies show that people won’t even take action on something until they’ve been exposed to it from multiple angles multiple times, which means some major marketing chops are needed going forward.

And how do you satisfy customers who shelled out money for your game? These, among other things, were the concerns Simon and his friends at Square Gamez were dealing with, and their game was only out there for two weeks.

Life at this stage is about juggling a lot of balls in the air at once. It’s called Sustain for a reason: the balls are already up there; your job now is to make sure they all stay in motion. And that, my friends, takes energy and wise delegation skills.

Here are the most common issues developers face in the sustain phase.

Pitfalls

Exhaustion: Yep, that’s right. Just straight-up tired. This is the stage where being a One-Man Army will get you peppered full of holes. Try holding down a full-time job, releasing a game, and juggling marketing, finances, bug fixes, feature additions, multiple platform releases, slamming tequila shots, crying in the shower – you get the point. Delegating these tasks amongst the group is essential.

Business Savvy: There were things you probably didn’t learn in school that suddenly, with the release of a game, you’ve got to become an expert on. This catches some people off guard – that your life can so quickly turn from what you enjoy doing to something you’ve never done, namely business. And which university teaches programmers how to be marketers? Which teaches artists the basics of bookkeeping? Not many – but now you’ve got to start learning, and learning fast.

Burning Holes in Pockets: You’ve got a little bit of cash. Not much, really, but just enough to be dangerous. What to spend it on when so much seems pressing? Should you put out ads, hire another freelance artist, or get some fat stacks and make it rain? The truth is, you should be as frugal as possible at this stage. Do whatever you can for free, and never pull money out of the business. The name of the game here is reinvestment. 

Benefits

Okay, so that’s the bad, but what, you may be asking, is the upside of juggling all these balls? First off, you get damn good at juggling. Your first major release is the greatest crash course in business management you’ll probably ever have, and even if you don’t make it through, you’ll be better off than the developers who don’t make it out of the gate.

And then there’s the sweet taste of personal accomplishment on your lips. It’s an endorphin high that’s well deserved when you and your team are fighting in the trenches and get your first savor of success. But instead of getting carried away, focus on the following recommendations and put that energy burst to good use.

Recommendations

Learn the strengths of the team. The people you work with will make or break a company, so it pays in spades to evaluate what each person brings to the table. Perhaps your programmer is shy but rocks at research. Have someone else man the PR function while you delegate monetization channels to him instead. Teams work best when everyone works in their optimal areas.

And invest wisely. Choose to spend money in areas that will likely return that investment. Time and money are the two variables that matter most, so invest them in your weakest links. Bring them up to a serviceable standard, because it is the weakest chain in the process that always limits businesses the most.

Then you will find, almost naturally, that you flow into the final stage.

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Stage 3: Grow

Force of Habit, the developers of Toast Time and the upcoming Timmy Bibble’s Friendship Club, probably didn’t think that back when they met at a game jam in 2011 they would be working alongside an animation and design firm (Clockwork Cuckoo), going on team building retreats, and hiring an accountant two blocks from their rented office space. But such is the life of developers in the growth stage.

Often, this is the hardest stage to spot. It sneaks up like a slow alcohol until you know, beyond the shadow of a doubt, that you’re stone cold drunk. And that’s precisely why it’s the most dangerous stage.

In fact, growth is more dangerous to a business than decline. No joke. Think about it simply from a time standpoint. It takes very little time to sack someone, but try hiring a fresh-faced college kid to keep up with growth and you’ve got weeks if not months of training on your hands before they can do what your current programmer can do. Not to mention the inter-team squabbles and financial constraints that can bring a business to its knees. It’s no surprise that growth is a minefield most businesses don’t navigate without consultants.

That is precisely why Force of Habit spent a week in a 300-year-old Cornwall cottage with some collaborators to reorient when it seemed the full-time game development grind was wearing on their vision. But that’s not the only problem devs in this stage face, so we’ll consider a few.

Pitfalls

Team Dynamics: People are hard to manage. Ask any married couple and they’ll tell you: it ain’t easy being tied to another person. We all have quirks and personalities that create strains, and these strains are like cracks that only grow larger with time. The dangerous approach is unfortunately the most common: neglect. But, as entrepreneurs, this is the stage where you cannot afford to be careless with your team.

Lost Spark: Does it feel like the things you were once passionate about only leave you apathetic? That is not an uncommon concern amongst people at this stage. If you once loved graphic design, you might be less enthusiastic when you need twelve more anime-eyed magical girls sprited by noon tomorrow. Doing something for a living takes some of the spark from it. That doesn’t mean it’s gone for good, but it does mean you must learn to wade through a lot of crap before you find it.

Haste Makes Waste: Trying to hurry growth is the greatest mistake you can make. It is the most dangerous stage for a reason: everything that increases at this stage does so exponentially. That means you better have done your research before making any new hires or dropping cash on an untested marketing channel. And those are largely financial considerations – they barely even begin to touch on strategy, operations, or team dynamics. Use the mistakes you’ve made in less-costly stages to inform this one.

Benefits

And here too, there is much to be thankful for. The benefits of the Growth stage are legion, but they all tend to revolve around security. First, you are making enough money to cushion the development in case of unexpected emergencies. Now, you may not think so, but if you consider the periods of famine you’ve likely had leading up to this point, what you make now might not be a feast, but it’s certainly enough to stretch if worse came to it.

But more importantly, you have gained a wealth of practical security. Just to get to this point requires developers be flexible knowledge-sponges. The amount of experience you’ve gained by now comes with a set of skills that very few people have. Need to do some freelance work on the side? No problem. You’ve got both the talent and network that it shouldn’t be too difficult to find side projects to pull through the tough times.

And there will be tough times, but some general recommendations will go a long way to ease through them.

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Recommendations

Slow and steady wins this race. The essentials here are to research major decisions from multiple angles, considering what effect your choices will have on the five core areas of the business. If you feel like the natural leader of this operation, a partner, or a supporting member, find your niche and establish those things with the rest of the group.

A certain amount of hierarchy can do much to ease team tensions and set expectations of what each person is responsible for. Learn to see yourselves as an ecosystem, and fight the temptation to let ego enter the conversation. Rome wasn’t built in a day, and it certainly wasn’t built by one person – so remember the hard work you and others have put into this enterprise and respect that contribution. Take things carefully, thoughtfully, and as a team. That’s no guarantee of success, but it’s damn close.

You can read more insight from Bair at www.taylorbair.com

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