Sent on September 11th 2020.
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I’ve started working on a new angel investor program for Elite Game Developers, which I hope to roll out at the end of the year. The core of the idea would be to bring people from gaming, especially founders, who would angel invest in early-stage companies’ founders. This idea came to my mind as I was writing ten questions to start angel investing in gaming.
I will keep you in the loop with the developments in this program. But now, let’s get into the news.
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👩🎓 Elevating people to another level
Games company building should be about elevating people to a different level.
In a sense, a company culture that puts learning up front, and center can move mountains. It’s about what the people would take away from working at the company. To go to another level as human beings.
How about not having revenue goals, but having other kinds of goals? The goal should be that every person in a company would be leveled up.
- How they learn new things,
- How smart they become,
- How they develop systems that work for them,
- How they build better mental tools and models for surfacing ideas,
- Working on things that they’re passionate about.
That would be the takeaway for the person, their reward from the company. A person in the company would go to another level. That’s a tremendous reward.
👍 Pitching is a sales process
Execution matters more than anything else, and it’s often problematic for people to understand. As Derek Sivers said, great execution is worth $1,000,000, but the great idea itself only has a 15x multiplier.
Money coming in from investors should be considered as fuel for execution. Ask yourself, “How much fuel do we need to get to the next stage?”
In gaming, you could think about bootstrap stages, post-angel round, and post-seed round in the following ways:
- Bootstrapping: put together a team and a system where everyone is aligned
- Post-angel: start with N amount of tries at finding a game with great KPIs. But don’t work backward from” ok these are great KPIs, what kind of games would have great KPIs?” You’ll get lost or stuck. Instead, work on figuring out voids in the market where some great core mechanics could work.
- Post-seed: focus on the game with great KPIs. That’s what the company is about. There are countless examples of one-game focusing companies; in Finland, we have Reworks and Traplight, who raised several rounds with one game. And they are committed to running long soft launches.
Seeking approval doesn’t work. It needs to be a selling activity. Sell benefits, why this company is an excellent investment. Great questions to think about are “Why it’s not likely that we will fail?” or “How can we be exatcly the kind of company they’d want to be investing in.” Last spring I wrote 9 lessons on understanding gaming investors, which should help you to think about more questions.
🤞 Day-1 mobile soft launch metrics
I recently wrote on Twitter:
Day-1 retention numbers on a pitch deck: > 60% (These devs are geniuses)
> 50% (They got something)
> 40% (Needs more work)
> 30% (It might never work)
> 20% (Why did you launch? What was hard to uncover in playtesting?)
I’m being lenient here. I don’t believe that less than 40% will ever become a real business for any company. Why?
You can’t rely on a platform featuring your game in the 2020s, so you need to rely on user acquisition. With a game that has Day-1 of less than 40% needs to have superior monetization. When you start running UA, the numbers will anyways begin to go down with scale. Your first players are the best, so the quality and retention will eventually deteriorate with future cohorts.
How to salvage the situation?
You could have a highly monetizing hardcore game, and you might retain players well in the long-term. At Day-7, you might have 20% of your players coming back. But if you plan to build a casual game, and Day-1 is less than 40%, it will be a challenging exercise.
How to mitigate these risks at the start of a project?
- Work on a product strategy
- Make sure you have enough budget to try out several games
- Explore early validation options, like soft-launching a prototype with Unity Asset Store graphics
- Kill the game if Day-1 is below 40%
If you’re developing a game for the western markets, soft launch in western market countries. It’s no use to look at metrics from non-western markets, yielding metrics that are the opposite of where your core audience lives.
If you want more thoughts on the subject, I recently wrote more on retention metrics.
📄 Gaming Investors on EGD Podcast
This week I curated a list of all the investors who have been on the Elite Game Developers Podcast so far. There’s more episodes coming all the time, and I’ll be updating this list on a regular basis.
🎙 Audience-first game development
I did a webinar in August of 2020 titled “Audience-first game development”, where my guest was Mitchell Smallman, Co-founder and Chief Product from Netspeak Games, based out of London UK. We talked about game development where you’ve first made a decision on an audience that you’re game will target, and not the other way around.
Check out the presentations from both me and Mitchell and the main takeways by going here 👇
📹 Webinar recording
Just this week, I had a webinar with Julia Palatovska, the Co-Founder and CEO of Dorian, and we will be talking about “How To Raise A Seed Round From VCs In Gaming”.
Previously, Julia was an investor at London Venture Partners, and before LVP, Julia was Head of Biz Dev at G5 Games. In August, Julia announced Dorian’s seed round of $3.35m.
🗓 Last week
If you missed out on the EGD news last week, I talked about games investing insights in InvestGame.net, survival in the gaming startup trenches, and more.
📃 Articles worth reading
+ Does Your Game Idea Suck? — “Game Concept Testing by running ads is, in my mind, the most powerful tool a game developer has in maximizing the chance of success. It doesn’t tell you whether players will retain or whether they’ll spend, but it does tell you how appealing your game is and that’s directly linked to CPI.”
+ Build Better Game Products By Asking Why Not What — “A well defined why (and additional hows) will lead to a much more cohesive product, where the team better understand and are better focused. I believe this is true not only of a game but also of other physical and digital products.”
+ This virtual influencer might be the next League of Legends champion — “[This] fits into a long-running trend of virtual influencers, which occasionally cross over with the world of gaming. Recently, CG characters have released music videos at Lollaplooza and partnered with Ikea on installations, while in the past Final Fantasy characters have appeared as fashion models and in the pages of Maxim.”
💬 Quote that I’m thinking about
“Life’s three best teachers: heartbreaks, empty pockets and failures.” — Buddhist proverb
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