I'm feeling depressed. This is what happens when you run out of money and your project still demands more from you. This is a hard entry to write because there is so much struggle right now.
Last month I ran out of money. I had less than $1,000 in my bank account, and my monthly costs to stay in business are around $8,000. The expenses are as follows:
$4,000 - artist wages (+/- 100 depending on the days in month)
$800 - office rent ($400 / desk)
$2,500 - my living expenses (which are my wages paid to self)
$300 - misc bills
In order to pay the bills, I've been relying on my girlfriend to help with the finances. We've been getting income from watching dogs in my apartment. This... has been really annoying and rough. At one point, we had twelve dogs in there. We've been watching dogs for around 10 months in her old apartment, but in order to save money, we moved in together, so the dogs now stay in my apartment. Each dog brings in about $45 per day, so with 12 dogs, we were making about $540 / day before taxes. Let me tell you something about dogs... they bark. They shit. They have to be taken out to go poop and pee every few hours, or they will relieve themselves inside... which happens a lot anyways. They're hairy mongrel beasts which shed everywhere. They get into everything, especially garbage. They damage walls and claw at doors. They chew things up and shred furniture. If they're puppies, they have super high energy. The absolute WORST dogs to watch are black labs which are 1-3 years old. The barking and whining not only keeps me awake at 4am, but it also bothers the neighbors. Just a few days ago, I got a 10 day notice on my door from the apartment manager saying that we're not allowed to have dogs anymore or run a business from there, and if we continue to do so, we'll get evicted. Great.
My girlfriend also operates a bed and breakfast ranch an hour outside of Seattle. We've been renting out 60 acres near a river for almost a year. We began in August 2015, which was kind of bad timing in terms of seasons. So, my girlfriend wanted to staff the ranch with inn keepers to take care of the daily operations of it and she would do the management of it. Her friend from Portland was getting evicted and needed help, so we offered them a place to stay for free and a job with a revenue share agreement. I was completely against the idea because I didn't like her friend and her family. This was a family with two children who were about as skeezy as you get. They were a pair of Portland hippie tweakers / druggies. So, they moved all of their junk from Portland to the ranch house an hour east of Seattle, nestled in the cascade mountain range. We started running three separate operations simultaneously. First, was the bed and breakfast. We have 5 different bedrooms which are fully furnished in a large, beautiful ranch style house. Second, we host dogs as a part of the dog sitting side business. The dogs can run around in the fenced in area and play all day. Third, my girlfriend is passionate about horses and operates a horse rescue and trail riding business. I'm against this because of the financial burden, but it doesn't seem to matter. As I predicted, the inn keepers were terrible. They did nothing but complain and bicker and were a nightmare to deal with. A few months in, we discovered that they were doing meth and there were several incidences of domestic violence and knife stand offs. I immediately came in and fired them on the spot, but... you can't just throw a family out on the spot. This was in early November, so winter was setting in. They begged for a second chance, and Christmas was right around the corner, so I relented and gave them a probationary period. We had no staff and needed to have someone running the place. They both complained that they were broke and over worked, and despite the house being a dream property, they said it was no place to raise a family. Their biggest gripe was the amount of work they were both putting in to care for dogs and take care of guests, saying they were putting in 14 hour days, 7 days per week. Based on other accounts from temp workers, they were actually spending 12 hours per day fighting and arguing with each other, and maybe two hours working. It would literally take two hours to argue about who would take out the trash, which is a two minute job. Everyone looked to me to be the stoic, respected leader to arbitrate these petty squabbles, but I wanted as little to do with this as possible. I just don't have the time or the interest to get involved, I've got a game to build. Yet, I had to step in and be the force to be reckoned with. Immediately after Christmas, there were more incidents and reports of meth and pills being used, so I finally stepped in and fired them and meant it this time. A day later, I had a moving truck ready for them, paid them $4,000 for their time (after much arguing), and sent them back to Portland. They can go back to working for Walmart, collecting welfare, and living off of food stamps. As a consequence of working at our ranch, we received many bad reviews which hurt the business. At the same time, we found a young girl to replace these two nut jobs. I interviewed her and immediately liked her and pretty much hired her on the spot. The bar was set super low: Do you do meth? do you argue all day? do you hate working? no, no, and no? great! you're hired! really though, she was presentable to customers, looked capable and willing, and was eager to get started. She was living with her mother but the mothers landlord said she couldn't stay there, so we invited her to live at the ranch. She has been a dream employee. We both love her. Me and my girlfriend want to take care of her like she's family.
However, the neighbors of the ranch have complained because they have nothing else to do. They are perpetual complainers who find fault with anything and anyone. They run a diary farm with something like a hundred cattle. From what we can tell, the source of the ire is from the wife. She makes life miserable for her husband and adult son, and they take it out on everyone else. Regardless, they put in a complaint with the county and said that our horses are starving, miserable, and uncared for. And the dog business is "illegal". More annoyance. My girlfriend went and spoke with animal control, who came and inspected the ranch. Seeing as how we were running a horse rescue, saving abused and neglected horses from being sent to a slaughterhouse and being turned into dog food, we would take in horses which were severely neglected and unhealthy. The worst horse was this eighteen year old white horse with a liver problem. You could literally count every one of his ribs when he came in. We've since nursed him back to health and he's made a full recovery. We have seven horses which are being taken care of and used for trail rides (to pay for their care taking). The dog business was a different story. We discovered that the county is full of red tape and bureaucrats. If the dogs even set foot on the porch, we have to submit a "certificate of occupancy" and that requires the fire Marshall to certify the building. And for some technicality, they weren't going to do this. So, we looked into building dog houses. But, that too requires a separate permit and each shelter needs to be certified by the fire marshall, and would need sprinkler systems and fire alarms... in dog houses... located in a yard... At the same time, we discovered that the zoning for the property was an agricultural zoning, so running a commercial enterprise was not in compliance with the zoning laws. And you can't just easily rezone something. If a county rezones an area, it is legally obligated to provide zone specific services for that zone, such as paved roads, plumbing, sewage, etc. which costs the county a lot of money. So, if you want to watch a few dogs on a ranch, the county doesn't want to let you do that because they would have to pave a road. How does any of this make any sense?! Dogs don't care if a road is paved! They just want to run in the grass and play all day!
On top of that, the land is in a flood zone. In the winter time, the river floods and two thirds of the sixty acres is under water. The land is also a designated wetlands. And our landlord for the ranch runs an asphalt and paving company and stores his equipment in a barn. There are a lot of legal and permit based problems, and what he's doing is probably illegal, so he absolutely doesn't want any county officials nosing around his property, lest he gets discovered. So, he hates that we have horses and dogs on in an agriculturally zoned property. Last week, he decided that he doesn't want to renew our lease, which expires in August. Probably due to the recent attention by county officials. So, that means we have four months to find another suitable ranch. We have to find a place to store seven horses and a fenced in enclosure for dogs, and find enough space for nice trail rides and a house nice enough to host guests from around the world. In four months. It's nuts. It's a huge source of new stress. How are we going to find a good home for these horses, with everything we need? Here's a lesson I learned from this: Do NOT rent land from someone and try to operate a business off of it. Your business operations are dependent on you having a place to operate your business from. If you're renting with a one year lease, you're at the mercy of your landlord. If you invest any money, time or effort into developing your business, it can legally be ripped away from you by simply not renewing the lease. And, if your landlord is a two faced liar, you have no legal recourse. ANY promises made should be written down, signed and dated. Don't do ANYTHING without a written agreement which can be used in court. A paper trail is your best friend. I can't stress enough how important it is to identify potential risks and look at the mitigation steps and their feasibility. It's much better to perform a risk analysis before making any sort of commitment because it is much easier to turn back and say "no thanks".
A few weeks ago, I went on a trail ride with one of the horses. We went out into the woods and along the river. The whole time, I could tell that the horse just wanted to stretch its legs out and run. We got to a large field, and I gave the horse a light kick. That was all the 'go ahead' it needed and I could feel the surge of pure joy as it just bolted at a full run. Normally when you sit in a saddle, you're sitting nice and comfortable. When the horse is running as fast as it was, you are bouncing out of the saddle with each gallop. I had to stand in the stirrups and lean forward in order to not fall off. I'm generally a pretty reserved and stoic person, but I couldn't help but grin from ear to ear. I've only ridden a horse about six times in my life and never been on top of a beast running at 35mph, so it was one of the most exhilarating and scary experiences I've done lately. I still want to do it again.
I was talking about the horse trail rides with my girlfriend. We realize that riding horses is kinda fun, but we need a bigger "draw" to make it compelling for people. The first iteration of our idea was to not offer "horse" rides, but to offer "unicorn" rides. Anyone can say they road a horse, but who can say they rode a unicorn? That's something interesting to talk about, right? I thought about it for a bit longer and thought it was a bit gimmicky. Then I had an epiphany. I'm a virtual reality game developer. I create experiences. Why not combine virtual reality with horse riding? What if we could develop an augmented reality horse riding experience? You sit on the back of a horse, go on a trail ride through the forest, and you're wearing AR goggles. When you look at your horse, you see a unicorn. When you look around the forest, you see mythical forest creatures such as fairies, elves, dryads, and nymphs. Some of them may come and interact with you as you ride through the forest. When you look at the foliage, you can identify the plant and read about it and learn about nature. If we do it right, it can be the most magical experience in the world. It would be something that people from around the world would want to come and try, and it would be an experience of a life time. I'm super inspired by this idea, but realistically, I can't make this happen any time soon so I have to keep it on the back burner. I need to finish my current VR game and build up my team and talent before we tackle anything bigger and harder. If we got investment or sponsorship, we could make this happen faster, but that's unlikely.
Last weekend, my girlfriend and I went to Astoria, Oregon to work a booth at the crab and wine festival. We've been going to fairs and selling these hair combs with beads. This was probably my tenth fair. I can say that manning a booth and selling this product has been a huge, huge learning experience for me and reinforced the importance of sales. I was working as the "closer", which means I take everyone's money and try to upsell them on a better offer. "You're getting two hair clips for $20? For another ten dollars, you could get two more! Would you like to do that?" I suck at upselling, but I have no problem taking and counting money from people. My girlfriend is the sales opener, and can sell product to about 80% of people who stop by. My conversion rate is about 5%. Yes, I really suck at sales. I'd love to be better at it. I learned that to be a good sales person, you are pretty much acting for people. You put on a persona, you entertain, you woo, you draw people in, you get them interested, you show them your product and tell them how amazing it is, all while being as truthful as you can, you make them want it, then you take their money and give it to them. This is what you do in sales. I realized it doesn't matter whether you're selling hair clips, bottle openers, or video games, selling is a universal skill which works the same for every product but requires a knack for understanding people. I'm a programmer, and traditionally, programmers and sales people don't get along (which is stupid!). But damn, what if you got the sales people and programmers to have a super cozy relationship to build exactly what people need and want? How can I use the principles of sales to maximize the selling potential of my games? If my girlfriend can sell product to 80% of the people she exposes it to, how can I get the same sales rates and how do I maximize the exposure of my pitch? Is there a systematic way to do this on a massive scale? Is the "social media" angle right, or are there better channels?
Overall though, we didn't do very well. While we sold around $1,500 in hair clips, our profits were eaten up by the costs. $675 for a booth fee. $300 for lodging. $150 for food. $80 for gas. $300 for product costs. We barely broke even, despite selling so much. Was it worth it? Could I have been more productive if I spent the weekend working on my game instead? I'm not sure. But, that does get me thinking a bit about fairs, festivals, and events in general. Translate this to the game industry and think about PAX, E3 and CES or any other game related expo. Running a booth costs money. Lots of money. Somehow, you have to get your money back, or else you lose money. And, if you keep losing money without making it back... well, good luck staying in business. That means you need to think very carefully about where and why you are setting up a booth and what you're trying to get out of it. Are you trying to do marketing and create brand awareness? Are you trying to get press coverage? Get player feedback on a game prototype? Woo possible investors? Make a name for yourself in the industry? Whatever it is, at the end of the day it has to translate into increasing your bank account. When the sales don't happen immediately after a pitch, it's hard to measure the effectiveness of your effort. I suspect that 95% of the time, people will completely forget about your product the moment they walk away. Yay, 5% sales rate, just like with me and the hair clips. A battle is won in the planning phase, so if this is a risk I anticipate, then I need to plan for it and account for it. Remember the ranch fiasco I wrote about above? If we are going to run a booth at a gaming expo, we want to at least break even with the costs of operating the booth by coming up with a plan to do so and somehow measure the effectiveness of it. Plan, plan, plan, then plan some more. While battles are all chaotic and plans quickly fall apart, it's better to enter into battle with a plan than no plan at all. At least you know what your strategic objectives are and you can loosely achieve them and recognize the moments of opportunity and seize them.
This summer, I plan to show our game at PAX Prime. Probably at the indie mega booth, with whatever money I can scrape together with my girlfriend by selling hair clips. The sales experiences I've had with hair clips helps to think about how I want to sell my own product during PAX. The question is, how do you get people to come and see your booth, get excited about your product, and buy it? Obviously, the longer the time period between sales pitch and purchase, the lower the chances are of getting a purchase. I'd rather do "buy it right now!" vs. "hey, go home and remember to buy it tonight or next week". How do you do that with digital purchases? How does that work with VR? What if your product isn't available for purchase? I have no idea.
Anyways, finances are going to be very tough for a while. I can't have dogs in my apartment (which is a relief), our ranch lease is not being renewed in three months, my game isn't ready for sale yet. From the comments other people left in my last post, I think I'm going to reconsider doing early access for our game and will aim to have an early access version of the game online. It's the beginning of May. I think I can have a pretty playable version of the game available for purchase by the end of May. If I put my game up by May 30th, I can get paid by the end of July, which is two months later. If I wait until June 1st, I get paid at the end of August instead. Jesus, is this okay?! What if game sales absolutely suck? What if I only sell 100 copies? What if nobody wants to be an investor? What if no bank wants to give me a business loan? What if nothing works out? Fuck... I have to believe in myself, that's all I got. If I don't believe in myself, nobody else will either. I have to work hard. I have to make this work. Nobody else is going to do this. If I give up... well, then my fate is sealed and nobody cares about the "coulda-shoulda-woulda" types of people. If I give up, there is no future, no great company or great product. I can't rob the future of my contributions to it by giving up today.
My artist is planning on quitting now that he's not getting paid. That's a disappointment to me. I don't know if that's good or bad. He hasn't been coming to work for almost a week now. I've been thinking about this quite a bit lately. We're a two person team. I've been a bad boss because I'm not acting like a boss. Early on, I decided to take the "Valve" approach to management where I don't manage at all and just trust that people work hard and diligently. I've learned that it doesn't work very well with everyone. My artist likes to chat and hang out with other freelancers in the office for an hour or so every day. I don't like this. The fact that I rarely come down on him for it is proof that I'm a bad boss. I just want to say, "why the fuck aren't you working right now? I'm not paying you to shoot the shit with people." It needs to be said, but if I say that, then I'm a mean boss, but I suppose I have to be a mean boss or else people will take advantage of me. God damn, I just want to write code and make games with people, not babysit them. Anyways, my artist is actively looking for work elsewhere now. The downside to losing him is that I lose out on the investment of time and nurturing of his talent over two years. But, is that an assumption I'm making to justify in retaining him as an employee? It seems that an artist is somewhat of a fungible asset, where I can replace an artist with another, so long as they're decent and maintain the art style/direction. I was looking on the unreal asset store and it has really filled out lately. There are LOTS of high quality art assets I can purchase. I had my artist create and animate a skeleton for me. That took him about two weeks. If I pay him $24/hour and he worked 80 hours to create a skeleton, then I paid 80 * 24 = $1,920 for the skeleton model. I found a skeleton as a part of a fantasy character package online for $39.99. Wow, I paid so much more for a skeleton than I should have!! So, I've wasted a lot of money I didn't have to waste. To be fair to myself though, the art asset wasn't available on the asset store when I asked him to model it, and the requirements I had are a bit unique. But anyways, the point is that in the practical sense, even if I purchase a $100 asset package and can only use one or two assets from it, That is equivalent to four artist hours, which would be a minimum of what it takes to produce those same assets anyways, so spending $100 is much cheaper than having an employee. My girlfriend tells me that I should contract out any unique art requirements as well, so... yeah, I'm dumb and a bad boss. If my artist does quit however, my production costs sink from $6,000 per month to about $400/month, and that is equal to selling 20 hair clips, which can be done in about an hour at a decent fair. That would mean that operating my business would become very sustainable because my operating costs are so low. However, I would still have to spend money on things like voice actors, contracted talent, and miscellaneous expenses such as booth fees and asset purchases. When I explained this to my girlfriend, she said "Now you're thinking lean!".
So, I have to reconcile with the fact that in all likelihood, my artist is going to quit. That's going to suck and will be a bit of a blow to the project and my morale, but I have to bounce back and keep going. Nothing but a good attitude and positive thinking can help with this. I tend to seek the silver lining in everything and look for the opportunities in even the worst situations. It makes things a lot more palatable and, rather than wallowing in woe about past mistakes, I can look forward to the exciting opportunities which lie ahead and keep charging forward. So, my artist quits. Bummer. What's the positive side of this? My costs drop to nearly nothing. Even though I lose out on his developed skill set, I also have to recognize that *I* am the most irreplaceable person on this project. The project can go on without him, but not without me, and I'm not abandoning the project. Ever. So long as I'm working on this project and working hard on it every day, it will eventually get done. I am the one who moves this project forward. If it eventually starts to become profitable, I can hire more people to join my team and together we can make this game even better for our customers. I've always thought that it was really important to develop the skillset and talent of the team, but recognizing that the talent of an artist is somewhat fungible is important. When it comes to VR, the talent which is much harder to replace and more worthy of development & investment is the designer & programmers talent. Going forward, if I had to hire a new employee / partner, I'd bring on someone with strong programming skills with a keen sense for design. We can just shop out the art requirements to the market place or contractors. When the art requirements start becoming too unique and we're contracting too much out, it might be worth looking at hiring a full time artist.
One last thought -- While I was eating dinner in Astoria, I had an epiphany on the future of what I want for my company. This is influenced by my experiences with running the ranch as well as running my game company. The critical question to think about is how you look at and see the people who are working for you. I see people who are making sacrifices to help build our dream. To build something which we want to do for the rest of our lives, to do something which we enjoy. It's as much their dream as it is ours, right? I think of every employee as a person under my personal care, who I have to do my best to take care of as I would a family member. In a way, a company should be like a second family. Losing your job should feel horrible, like getting a divorce, if your company is doing business right. And firing someone should not be taken lightly, with all things considered. These days, I think companies expect loyalty out of their employees, but companies are not willing to show loyalty to their employees. As a result, employees are happy to hop from job to job and companies are happy to churn and burn through hundreds of employees per month. Nobody wins. If you think of a company as an institution of stability and providing for its members, then how can you have stability without a stable membership? You build stable, long lasting companies by treating employees right and creating an environment which they would want to spend 20-30 years at as an employee. You don't look towards profits as the end goal, you look at creating a flourishing company as the end goal and the profits are a means to that end. Profit would just be a natural side effect of running a business institution properly. I think... investors are going to have a problem with this view, especially if they're looking for short term profits. But hey, those are the types of investors you don't want to have as investors anyways. No, in this modern era of companies and employees, a proper company should bend over backwards to show loyalty to their employees in order to distinguish itself from the chaff of other horrible companies. A worthy company should be able to say to a new employee, "Welcome to our family, we will take care of you and we expect that you will be a great new addition to our prestigious membership.". I recently spoke with a recruiter for Amazon, and she said that Amazon spends TONS of time, effort and money to bring on new employees (about $40,000 per hire). Yet, the average employee retention rate is about 12 months. That blows my mind. Why do you spend so much time and effort finding the perfect fit for your hard to fill position, and then treat the staff like garbage so that they quit in less than a year?
Anyways, my artist is quitting and I will do everything in my limited power to make sure that he's well taken care of and lands on his feet at a new and rewarding job. It's okay, I'll survive and this game will get done. Some day, I'll look back on this, smile and think, "wow, what a defining moment that was."