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From Bungie to Bootstrapping. Starting an Independent Developer Max Hoberman, President/Founder Certain Affinity, Inc. March 25, 2009. Bootstrapping. bootstrapping [ büt stràpping ] Building a business out of very little or virtually nothing. My Background.

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from bungie to bootstrapping

From Bungie to Bootstrapping

Starting an Independent Developer

Max Hoberman, President/Founder

Certain Affinity, Inc.

March 25, 2009

bootstrapping
Bootstrapping

bootstrapping [ bütstràpping ] Building a business out of very little or virtually nothing.

my background
My Background

Mid-90’s – tried to start a game company in college

goblin games r i p
Goblin Games (R.I.P.)

Summer between college semesters

Me and one of my roommates

Invested $3,000 of my own savings

Paid ourselves hourly minimum wage

Arcade-style space combat game for the Mac

Lasted just a couple months

Created the shell interface, one 3D model, and a broken audio system

Decided I had to get a real job

my background1
My Background
  • Mid-90’s – tried to start a game company in college
  • Helped Aspyr get started
  • Got 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
certain affinity
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
success metrics
Success Metrics

Accomplished

Work in Progress

  • Independent developer
  • Strong business relationships
  • Reputation for quality work and delivery
  • Intellectual property ownership
  • Financial independence
lessons learned and unexpected challenges
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 difficult

We’ve learned the most lessons about team building and business relationships

Economy also poses challenges

work for hire business model
Work for Hire Business Model

Profit Potential

Profit Consumption

Publishers are generally happy if you’re making 20% profit

Not all staff engaged

Downtime between projects

Sick leave, vacation and comp time

Development of own IP and pitch materials

not enough margin
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
certain affinity 2008 expense breakdown
Certain Affinity 2008 Expense Breakdown

Cost control. Just 10% of our total expenses are for operating costs.

development support staff over time
Development & Support Staff Over Time

Operations

Development

Keeping it lean. Majority of our employees are development staff.

business support relationships
Business Support Relationships

Internal Functions

External Functions

Software development

Dev support and IT

Outsourcing management

Recruiting

Self promotion

Community management

Vendor management

Publishing

Business development

Benefits and HR consulting

Accounting and payroll

Retirement planning

Insurance agent

Attorney

Real estate agent

finding good support
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 is
  • Ask other developers for references
  • Business people know business people
team building1
Team Building

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 lesson 1
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%
team building lesson 2
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
team building lesson 3
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
team building lesson 4
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
team building what we ve done well
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
team building what we ve done well1
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
team building what we ve done well2
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
business relationships1
Business Relationships

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 lesson 1
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.)
business relationships lesson 2
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
business relationships lesson 3
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
business relationships what we ve done well
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
business relationships what we ve done well1
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
first office security guard
First Office, Security Guard

Whew, security is sure hard work!

business relationships what we ve done well2
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
the new economy
The New Economy

Challenges and opportunities

challenges in the new economy
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
challenges in the new economy1
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
benefits of the new economy
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
benefits of the new economy1
Benefits of the New Economy
  • Natural selection
    • Those that survive will be stronger for it
    • Better business practices will make the industry stronger
benefits of the new economy2
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
slide48
Q&A

Please introduce yourself