Tue 7 Aug 2012
Wow, can’t believe nearly a full year has passed since I last posted about taking a new twist on incubator and accelerator programs. Well, persistence (and a whole lot of support and input from the community) has paid off, and we just confirmed our first round of funding. Now the lawyers are drafting the final legal documents for everyone to sign, and assuming all goes smoothly, we should be making official announcements and formally launching in September!
So, a ton of exciting stuff to do like shopping for hip office space in Montreal (fingers crossed that we find affordable loft space in the Old Port), building a website, implementing an operational environment, etc, etc. Most important, however, will be getting the right people on board for this wild adventure. And by people, I mean the brave men and women who call themselves game developers and have a fire to chase their own ideas.
The key to what we are doing is to combine the “make stuff” part with the “sell stuff” part under one roof. Meaning, developers get the resources and support to create their games, and then get more resources and support to actually bring their games to market, promote them, sell them, acquire users, etc. As is the normal stereotype, many developers want to focus on the dev part, and so we will largely fill the gaps on the business end and marketing side of things. But we’ll provide a ton of support during development too, which I’ll talk more about a little later.
Ultimately our purpose is to enable game developers to become true entrepreneurs and pursue their dream of creative independence.
A Few Good Men/Women
In terms of who we are looking for, the focus will be on small teams (2-5 members) that can create mobile/tablet games mainly for a core/mid-core audience. Ideally, teams would be pre-incorporation (meaning, you don’t yet technically exist as a company), and you wouldn’t necessarily need a game concept or demo if your background is very strong. (Actually, this is one of the unique things about our program, as most incubators require some sort of prototype just to get in the door.) Meaning, we’re looking for the right people, with a positive attitude and fire to succeed. It is less about finding that killer ninja pirates game concept. Of course, if you already have an amazing prototype, that’s great too!
At a meta level, the goal is to create a collaborative environment. Everyone will work in a shared space. Teams will share common code libraries and tools wherever appropriate. We’ll even build a large communal/café style area where indies not officially part of the program can hang out and jump on the wifi. Mentor lectures will be open to the community as well, just as another example. It will be important that the people we select mesh well with that kind of open, sharing and supportive environment.
Related, this implies that team members will be in Montreal and all working in the same space together, full time. We’ll be accepting applications from across Canada (we may open the doors to other folks a little down the road), but anyone chosen will have to commit to being in Montreal for the duration of the program.
What You Get
In regards to what teams get, the main thing is an environment where you can focus on development and get support for all the gaps you may have. More tangibly, this includes:
- World class roster of mentors (including folks like Jon Blow, Ed Fries, Eric Zimmerman, Kellee Santiago, Joel Auge, Randy Smith, Jason Bailey, Ken Seto and on and on…)
- $2k per month per team member of funding
- $10k minimum commitment of marketing and player acquisition spend per project
- PR support
- Shared working space (with desks, chairs, meeting rooms, maybe an office badger…)
- Free wifi, back up servers and so on
- Dev machines with basic software/tool setups and dev licenses
And, most importantly, teams maintain ownership and control of their IP! There will be sharing of proceeds from the IP (see below), but the IP will always belong to the developers.
For the funding part, it is important to note that the money will be paid direct to individual team members. It is meant as survival money/stipend. It is NOT a salary and is not meant to reflect what you’d normally get paid at a large studio. This is not a job. You are building your future as an independent creator and entrepreneur.
Also, part of what you get is all the support to bring your game to market and promote it. That means we’ll leverage all of our business and press connections, open doors, go to festivals, etc, etc, to ensure your game finds paying players. This also includes leveraging distribution and marketing muscle from a really cool strategic partner who we can’t talk about just yet.
A Phased Approach
To better understand the overall program, there are 4 phases. The first phase is the application process and everything related to pitching yourself, getting reviewed and interviewed by our selection committee, etc. We’ll outline the exact application process at a later date.
For those that get selected, the second phase is essentially your time in the development lab (i.e., you are making your game). We guarantee each team a minimum of 6 months in the dev lab. If your project scope is quite small, you could certainly be done before that. After the 6 month mark, there is a stay/go gate, where we evaluate your progress and based on objective metrics decide if you can stay and continue to receive funding and resources, or if we let you go.
Once you are done making your game, you enter the third phase, which is the go-to-market and iteration phase. (Again, whereas most incubators kick you out after a few months or just as you launch, we’re just getting started!) Your game is released to the relevant marketplace(s), and we’ll help you with analytics and updates/tweaks to find better traction and conversion. During this phase, you get at least 3 months to iterate and find traction. If you need longer than 3 months, the same stay/go gate decision takes place.
The fourth and final phase comes when you find success and you spin off. Your team formally creates a new startup. The IP transfers to that new company and the team members take ownership of the company. And we’ll be right alongside you making introductions to investors if you decide to go that route after your spin off. Importantly, a lot of the mentoring will be geared towards entrepreneurship, marketing, finance, and other business skills so that when it comes time to spin off, you’ll have received months of coaching (versus being a coder one day, and then a business owner the next).
(Or, if your game totally sucks, and no amount of tweaking can save it, and everyone bails on the project, team members could possibly re-apply to have another go, or join a team that did succeed and is ramping up.)
What You Give Up
The main thing you give up is a sense of safety and a steady paycheck. We’ll be handing you a parachute and a crash pad, but you still need to jump off the cliff!
More tangibly, what you are giving up to participate in the program is a mixture of revenue on the project and equity in your spin-off company.
Any revenue that is generated during the commercialization phase (i.e., before you spin out), is shared 70% for you and 30% for us (calculated after AppStore or equivalent platform “tax”). After a team/project spins out, we drop the rev share to 1% per $10k invested with a 1-year expiration (this was inspired by the IndieFund formula). For example, if you were a team of four developers who spent 6 months in the dev lab, plus another 3 months for commercialization and iterations, and we put in $10k for user acquisition and marketing, the post-spin rev share percent would be 8.2% for one year ($2k * 4 members * 9 months + $10k marketing / 10000).
For the equity piece, we accumulate a 5% share “on paper” for every three months a team is under our roof (i.e., dev lab phase and go-to-market phase), starting with a default amount of 10%. We say on paper, since teams came in pre-incorporation, so no real shares exist yet. Once a team builds enough traction/success and spins out, we trigger the accumulated share. So using the previous example, if a team took 6 months to dev and 3 months to iterate for a total of 9 months before spinning out, we would take a 15% ownership stake in the new studio.
The plan is to cap the stake at 25% so that teams are not demotivated by giving up too much ownership in their new company. And, that would simply mean you are sticking around too long and are likely just spinning your wheels.
The ownership stake ensures that all teams stay connected and we continue to work and help towards your success. This could mean helping to line up follow-on funding, opening doors with other publishers, or whatever makes the most sense for the long term success of each new studio.
Well, that’s the basic gist of things. Super exciting times ahead. And lots more to announce in terms of who my cofounders are, the full roster of mentors and advisors, our investors and strategic partners, and more detail on all the above stuff.
As noted at the start, the real key is to find the right game creators to join us on this journey (or rather, allow us to help them on their journey). Do not hesitate to contact me if you have questions and would like to discuss being part of this wild ride.