EGD News #88 — Bullets, then cannonball
Sent on June 25th 2021.
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It’s Joakim here. Greetings from Helsinki!
The Elite Game Developers podcast had it’s 2-year anniversary on June 4th and I decided to celebrate the anniversary here on the newsletter a bit.
Here are a few episodes that I often go back to, but might have escaped most of you readers here.
How to raise from angel investors — I keep sending founders to listen to this episode. In this episode, I unpack so many questions that founders are constantly asking about fundraising, especially when it comes to angel investors.
Tower of Want — I recorded this with Ethan Levy, whose concept, the Tower of Want, is a tool for modeling a player’s needs in a video game. Especially if you’re thinking about having players in your game for months and years, you want to model out how they graduate from one stage to another.
Long Term Game first chapter — Last year, when my book The Long Term Game came out, I published the first chapter of the audiobook version on the podcast. If you like the chapter, you can get the full book from Amazon, in paperback, audiobook or Kindle.
Now, onto the news.
💪 Bullets, then cannonball
Every week, I chat with founders of early-stage gaming companies. On a recent Tuesday, I had back-to-back calls with two mobile game startups, both bootstrapping, with about one and a half years of the journey behind them. Both were working with hyper-casual publishers, who were paying for their expenses as they developed new games. Both companies had a few co-founders, and they were seeking to raise a pre-seed round soon and had some traction with their games. But that’s where the differences started to emerge.
The first one had progressed to having a team of almost twenty people, and they’d managed to negotiate a multi-game deal, which meant that they could work on parallel projects and the developer would cover their costs. Their next step is to build self-publishing internally and to expand into more hybrid casual / casual games.
This approach is quite similar to the one that Bigger Games from Istanbul is doing, which recently raised a Series A round from Index Ventures. The CEO Hakan Ulvan talked about their strategy on my podcast recently.
Now, how about the other startup that I was talking about?
The second startup was working on one game with a smaller team. This game was in the arcade genre (Archero, Mr. Autofire, Headball 2, etc.), so it had more depth than a hyper-casual game. Working on an arcade genre game requires more work on long-term retention. Usually, it also means more core gameplay depth (focus on what you are learning on Day-7, Day-30, Day-90).
The developers of the second startup need to have more focus on this one particular game. More iterations to make it work. Startup one has the luxury to spend only a few weeks to create a hyper-casual loop to see if the gameplay has enough traction for the publisher to proceed in scaling up the game.
The second startup is building a games company, as is the first startup. But the first startup has a more predictable business: it can generate several dozens of games in twelve months, whereas the second startup will be spending months on one game to see if it will work.
Jim Collins, the author of Good To Great and Built to Last, talks about a concept called bullets, then cannonballs, in his book Great by Choice. For the book, Collins and his team researched companies that beat their industry peers by 10X, and they sustained great results for at least fifteen years, compared to the stock market. Through analysis of this data, they distinguished why these companies did ten times better than the competitors.
One concept they identified is something Jim Collins calls “Fire bullets, then cannonballs.” The idea is to fire small bullets (test new products, technologies, services, and processes) to see what works and what doesn’t. Only after new ideas have been tested and proven should the organization fire a cannonball. Bullets don’t sink the ship, but a cannonball can. Organizations should fire cannonballs (put large amounts of organizational resources and energy into ideas) only after they’ve fired lots of small bullets (testing new ideas to prove whether or not they will work).
The concept applies perfectly to the first startup mentioned earlier. They focus on building hyper-casual games with the funding of a publisher, meaning they fire bullets. They do this consistently for an extended period of time. They are aligning their ship to fire the cannonball, but they wait for the right time. They build up a highly experienced team of game developers, bring in their self-publishing operations, they meet with investors to build relationships.
Once the ship is aligned, they fire the cannonball by soft-launching their first self-published game, initiating the development of deeper free-to-play mobile games than hyper-casual, and raising venture capital funding.
The second startup is doing things in a way that many others are doing, they come to the scene and start firing their cannonball, but it’s based on luck if the cannonball is calibrated and uncalibrated. The 10X don’t become 10X because of luck. They build their own luck moments and fiercely take advantage of these luck moments.
🎙 Ask Me Anything #2
This week I published my second Ask Me Anything podcast episode, where I answer people’s questions related to game studios, fundraising, and all other entrepreneurship related stuff. I will be recording another episode quite soon, so please submit your questions by filling out this form.
Here are some of the questions that I answered on the episode
- You have this co-founder equity split tool. How do I explain this to my co-founders?
- With a good presentation, website, a playable demo and a good team, are these enough to get an investment?
- How should a hyper-casual studio start building a merge game?
- What is your practical advice on building a good team culture?
You can go and listen to my answers or read the full transcript, which includes links to content that I mention in the episode, by going here.
📃 Articles worth reading
+ What if Remote Work Didn’t Mean Working from Home? — “Historically, writing was one of only a small number of professions that required demanding cognitive work outside the context of an office or workshop. The coronavirus pandemic has radically increased the amount of knowledge work that will be conducted at home, with one recent survey of hiring managers predicting that more than twenty-five per cent of the United States workforce will remain remote next fall.”
+ NFTs and a Thousand True Fans — “Kelly’s vision was that the internet was the ultimate matchmaker, enabling 21st century patronage. Creators, no matter how seemingly niche, could now discover their true fans, who would in turn demonstrate their enthusiasm through direct financial support.”
+ Anatomy of a Steam game launch — “Broken Arms revealed they “launched with around 60,000 wishlists – we grew the last 10,000 wishlists in 6 days when we entered the ‘Popular Upcoming’ chart [on Steam].” Looking at the game’s follower data, that means it had around a 7.2 follower to wishlist ration before it hit Popular Upcoming, which is on the low side if you look at our surveys.”
💬 Quote that I’ve been thinking about
“Take our 20 best people away and I tell you that Microsoft would become an unimportant company.” — Bill Gates
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I hope you have a great weekend!