Category: Marketing/Business

I’ve read through the SCORE information on writing a business plan, but now I need to start making one.

Unfortunately, I’ve found that the resources provided by SCORE were very general. Parts of it were not relevant to an online software company, let alone to an indie game development company. Also, most indie game companies are privately owned; there isn’t a lot of publicly available information on them. For the most part, actual developers don’t feel comfortable giving out real stats and numbers, and some would argue that the information is worthless anyway. So now what?

I did what any good technical-minded person would do: I searched online for information. I found this post from the Dexterity archives on Indie Gamer. It’s cool because it has the words of Steve Pavlina along with Thomas Warfield. They liken indie game development to turning a flywheel: the more you work at it, the easier it becomes to stick with it. Both were making a few hundred dollars per month at first, but when they are working consistently at it, the sales just keep increasing. It isn’t a get rich quick method, and I never thought it would be, but it is good to know how long it took to make significant and regular sales. Pavlina also touches on the need to stop thinking like a hobbyist if you expect to actually make money from the business. Definitely good advice, especially since I catch myself thinking too small sometimes. While it does provide some information, it doesn’t delve too deeply in what it takes to create a business plan.

I also thought to check out Steve Pavlina’s articles on Dexterity. I credit those articles and the Dexterity forums with the inspiration that got me thinking about starting up my own game company, and I like to read through them every few months. To Plan or Not to Plan is especially relevant. When I first read it, I thought it was good, but I am seeing it in a new light now. “Failing to plan is planning to fail” was a nice saying a year ago, but I now see how effectively it reiterates the importance of planning for my business. The article also goes into what should be covered, such as sales, cashflow, product development, marketing, and customer service among other items. There’s more to it, but suffice it to say that I’ve found the first solid resource on forming an indie game development company in this article.

The article mentions that the business plan should be two to five pages long, which goes with my feeling that it shouldn’t be a monstrous, formal document. I should be able to write a rough outline and draft within the week. Well, I should be able to dedicate an afternoon or two to the task, but I’ll need to schedule the time when I can.

EDIT: Thanks to Troy Hepfner on the ASP newsgroups, I remembered that I own the book Game Development Business and Legal Guide and that I would probably do well to pull it off the shelf, dust it off, and read it now that it applies to my situation a lot better.

For some time I’ve been reading the words of naysayers who believe that the golden age of indie game development has passed and that there is too much competition. When you were the only one around, it was “easy” to make a living from your games. Now there is too much competition and it is hard to get your name out there. Blah blah blah.

Seth Godin wrote about the proximity effect. It basically describes how most products actually sell well when they are part of a category. Books sell next to other books. Fish sells next to other fish. No one is complaining about how there is too much competition in a bookstore because it is exactly where the sales occur.

Steve Pavlina’s article on how to create successful shareware games mentioned the idea of selling the sizzle instead of the steak. The difference between your freely available demo and your full version is what you are selling. Don’t tell me that I’ll get the five levels from the demo. I already have them. Tell me about the 100 levels I’ll get if I pay for the game. Of course, if you go to a higher altitude and compare your offerings with your competitors, what are you selling now? You may offer 105 levels, but if the other game can run on an operating system of the player’s choice, will it matter?

At a bar, you don’t have to sell vodka. You should have to sell why your vodka tells a better story than the other guy’s vodka.

You should be concerned about how your potential customers will perceive the benefits of paying for the full version, but you should also think about how paying for your full version compares to paying for someone else’s full version. Why should I buy Flatspace 2 when I could buy Gish or Tribal Trouble? Why should I pay for Darwinia when I could pay for Geneforge 3? Why Alien Flux instead of any of the above?

Of course, no one wants to get into a silly cold war by claiming to have one more feature than the competition. Mainstream game developers and publishers already do so when they make a sequel to a game that has more graphics, more sound, more controller buttons, more more more more more…

Still, there is more to worry about than how your game competes with itself. Indie game portals may make it easier to get an audience, and obviously competition is a concern, but you basically have to convince the potential customer that your game is well worth the money AND worth more than an offering from another developer.

I’ve had a chance to read through some of the materials I’ve received from my visit to SCORE. For the most part, I know about the different things involved in running a business, but I’ve never dealt with the details. I haven’t asked the hard questions.

For example, “What business am I in?” How I answer this question will pretty much dictate how I run my business, so I can’t just blow it off. Perhaps while I write my business plan, I’ll change or refine the answer. Still, it is a very good question that I’ve never answered. I will need to describe my business in terms of how it works, how I plan on making it profitable, and should also identify clear goals. I already know why I want to be in business, but I will need to clarify the how and what.

Since marketing is an important aspect of any business, it deserves its own section of the business plan. It’s tough, but I’ll need to be able to identify who my customers are. “Gamers” isn’t good enough, but am I going to be targetting casual game players? Interstitial gamers? Hardcore gamers bored of the mainstream offerings? How about people who would otherwise be hardcore game players but can’t overcome their fear of a complicated interface? Whose life do I want to change? What’s my pricing strategy? Is the market for my kind of games growing?

It will be a lot easier to direct and control my own business if I have an idea of the resources I’ll have to use. I can’t make good decisions if I am not sure how much money I’ll have to work with from one month to the next. I’ll need to specify a startup budget as well as an operating budget.

Who is my competition? And not just other indie game developers, either. What other products and services are competing with me? People don’t watch television as much, but it still poses an alternative if I don’t make my offerings compelling enough. For that matter, people might prefer using instant messenger clients and talking with their friends rather than play my game. Identifying the competition allows me to try to enhance my own offerings.

I’ve never addressed these questions in detail, but I can already see how doing so will go a long way towards improving my chances of succeding.

It’s one thing to tell people, “Yeah, I am planning on starting my own business.”

It’s another thing, you know, to start.

Almost two weeks ago, I made an appointment with SCORE, which is a resource partner of the Small Business Administration. SCORE stands for Service Corps of Retired Executives, and it is made up of volunteers who help existing and emerging small businesses. A few people had suggested I talk to the SBA to get free information about starting and running my own business. It was slightly frustrating since their websites don’t make it easy to find the information you want. Some of it is outdated, as SCORE lists Triton College as a location. When I called, I was told that office closed two years ago. Whoops. I made the appointment for the office located in downtown Chicago. It turns out that it is also in the same building that the train station is in, which is convenient.

Usually a meeting is for an hour, and the mentor will provide feedback on what it is you want to do. In my case, I wanted advice on what I needed to do to form my own company. I had read articles on the subject of legal entities, such as subchapter S Corporations and Limited Liability Companies, but they were always generalized for the United States and not Illinois. It’s good general informationt to know, but I needed specifics. I wanted to know what I would have to do to incorporate GBGames. I can fill out forms and even pay another business to do it for me, but what then? Does GBGames have any obligations as a business? Do I have to prove that I am trying to make money? Do I have to actually show revenue within so many years? Profit? Can my business be revoked if I don’t meet some simple requirement? Taxes? Startup costs? What can I write-off as an expense?

The mentor said that he was surprised that I had as much knowledge about the subject as I did. Apparently most people come in with an idea for a business. The mentor usually provides guidance in the form of “Well, did you think about this aspect?” and otherwise points out potential pitfalls. Still, he did give me a bit to think about. He handed me a number of pamphlets, articles, and government tax form instructions.

For some reason I haven’t written out a business plan yet. Part of it is probably because I only recently decided to actually start my company, and so I am finding a lot of thought processes that need to be changed. I find I am still in the mindset of “someday” on some issues.

A budget should be written out. I have some money in the bank, and I have some idea of what my expenses will be, but I really should try to get the details. I only have so much money in total, and some of it will have to go to non-business expenses. I’ll need to worry about food and rent among other expenses, and so knowing how much I can dedicate to my business will be very important.

In any case, it is good to know that I can get free information on the subject. SCORE allows walk-ins as well as appointments for after-hours. My mentor said that I seemed very enthusiastic and that I appeared knowledgeable at least in the types of issues I might have to deal with as a business owner. That’s much better than finding that I am seriously lacking. B-)

I have a few more things to read, but it seems that forming a business won’t be very difficult. If I ask for professional assistance it might just be to verify that the forms are filled out correctly. I’ll likely make another appointment for next month. Nearly unlimited, free, and professional advice is a great deal.

The Social Customer Manifesto has a post about Lego(R) putting up a notice if you go to legos.com that the name that people have commonly referred to its products might not be preserving the brand. We are not supposed to call them Legos. They are Lego bricks or Lego toys.

The comments also mention that the use of the word Google as a verb also apparently dilutes the Google brand.

Hah. Hahahahahaha.

Come on. It isn’t like someone will call a competing product legos (lowercase). It isn’t like I will tell someone to Google something and watch them bring up Yahoo! or MSN without a second thought. How does it dilute your brand when they use the name for YOUR products?

When people say want to eat Chef Boyardee, are we going to go find them and teach them to not dilute the brand because they are really eating a Chef Boyardee food product? What about when someone says “Check out my new Nikes” when they are referring to their Nike shoes? Doesn’t “Dude, you’re getting a Dell” dilute the Dell brand since you are really getting a Dell PC?

Of course, there are some concerns. People DO call competing products Legos even though Lego doesn’t make them. People do refer to all tissue paper as Kleenax. People xerox copies of paper on non-Xerox copiers. So maybe it isn’t so funny.

But I still think of them as Legos and I’ll still google.