I’m going to dig in to a great talk by in-the-trenches Flash game developer Andy Moore as an example of top-notch MVP selection and risk-validation. His history in a nutshell is that he accidentally made a million bucks with his first game, which motivated him to quit his job and take up games full-time. His next year was a series of non-stop flops that earned him below minimum wage.
He then made a series of sharp moves. First, he picked his big dream back up off the shelf (a massively multiplayer 2d shooter) and got passionate again. It required wholly new (ie risky) gameplay mechanics plus all the infrastructure of a virtual world, which means 18 months development time in the absolute best case. Needless to say, this is an impossible first target for someone who’s been diligently burning his savings for a year.
As far as I can tell, he was up against 3 major risks, which are the same as those faced by web startups and are so big as to become almost meaningless as goals:
- Can I scrape together enough money to fund the development?
- Will the core user experience be compelling?
- Will it make enough money justify my investment?
Instead of either giving up or chasing unlikely VC to fund his vision, he built a mini-game called Steambirds which is nothing more than the core game mechanic demonstrated in about a dozen simple situations.
Now, here comes the hubris that makes him an entrepreneur instead of a developer: he sold that prototype for $40,000.
Let’s back up a step. Worst case, no one buys it and nobody plays it. That would be disappointing news, sure, but it would also save him a year and a half of fruitless fundraising and hacking by refuting risk #3 or #2, respectively.
Best case (which is what happened) is that he learns his new game mechanic has legs, plus sponsors are salivating with anticipation for his upcoming “games” which are actually nothing more than gameplay prototypes and/or funding infusions. Meanwhile, he’s building up a fan-base he can leverage for his ultimate product launch, which will occur on his own site and which he will retain sole ownership over (no sponsors). Let’s call that +1 for bootstrapping.
To bring this conversation somewhat circuitously back to startups: consulting is generally discouraged for startup founders. Once you start relying on consulting money, it’s very hard to disengage from it and re-focus on your product. It’s also unlikely to help unless the world shifts in a way that suddenly enables your business (like if you were 4sq just before the advent of the smartphone). 37signals springs to mind (as always) as a potential counter-example, but I don’t think they’re a terribly good one since they were happy to remain a consultancy indefinitely, whereas most founders aren’t.
However, Andy’s case shows how well it can work if you’re able to take contracts that are essentially a chance to get paid while you move forward with your core technology and ultimate vision. It’s also important that you keep your IP and that you’re able to make a clean break from them.
There’s a lot more gold in the interview, which I strongly recommend watching if you’re interested in the business of play. One of my favourite tidbits is that he did no direct sales — he just uploaded to a game licensing site and gave them 10%. He saved a ton of time, reached impossible contacts, and ended up with a much higher final price. Also, he built the game for players but very consciously built the promotional material for sponsors. Knowing they look at hundreds of games a day and are too busy to properly play demos, he gave them a video with sweet music, crisp editing and great menu graphics (silly right?) that looked like something a brand would be proud to advertise on.
Moral of the story? Huge visions are terrific when you can break them into small chunks that people actually care enough about to engage with and pay for. If you get it right, your product milestones can fund your business.
- If your MVP isn’t making money, it’s time to get honest with yourself: is your MVP still too minimal, or might your ultimate vision be undesirable?
- Knowing the distinction between your channel partners, your customers, and your users allows you to tailor the right parts of the experience to the right person.
- Breaking a big set of risks into smaller ones can turn an impossible fantasy into a revenue-generating reality.
The Risk Validation Pyramid Next Post:
Cheaper bootstrapping with transitional business models