Game Design, Programming and running a one-man games business…

Startup mania, oh how I hate thee.

cliffski

I regularly read the ‘silicon alley insider’ web site. I have a love hate relationship with it. I do it partly to remind me how inward looking and narrow peoples focus can be. To the writers on SAI, the only big thing happening in the world is the battle between smartphone companies, and the biggest news in the universe is if a silicon valley startup orders new office chairs. It is incredibly inward-looking. As someone who doesn’t even own a ‘smart phone’ (my phone doesn’t even have a camera) and isn’t even sure where his phone is  right now, I feel like I’m watching aliens through a telescope.

What I find most awkward about that silcon-valley-mania, is the obsession with venture capital and startups. it seems there is only one possible way to be in business:

  1. Start up a new company. Must be NEW! nothing older than a week, or you are yesterdays news!
  2. Employ young people. They must be young. The younger the better. Nobody with any experience at all. if they are good looking, much the better!
  3. Spend a fortune on flash offices and furniture. Have ‘zany’ stuff such as slides and table football in the office to show just how totally crazy you are! (Also helps scare off older people).
  4. Don’t worry about making a profit. profits are for losers. Spend any money that would have been profits on a superbowl ad, especially a hip one that doesn’t even mention your product.
  5. Smooth talk venture capitalists into lending you hundreds of millions of dollars, which you will spend on bonuses for the CEO and CTO, despite not earning a cent in profit yet.
  6. Sell to google or facebook, and then goto 1).

This is probably a smart move, if all you want from life is money, but there is only so much money can buy. once your strategy earned you $10million, whats the point? what are you doing?I have a strategy for what to do with my life if I ever have $10 million, and it’s not about making more.

Sometimes I feel like a dinosaur schmuck because I run my company this way:

  1. Make a game, using savings to finance it.
  2. Make profit from sales of the game
  3. Stash some aside for a rainy day
  4. Make the next game, financed by last games profits.

Schmuck or not… I sleep safely at night knowing positech is 100% privately owned and 100% debt free and influence-free. No bank, no investor, no business partner can turn the lights off tomorrow. In an increasingly debt-laden world, with every possibility of future economic wobbles and debt-financing squeezes, maybe I’m not the dumb schmuck plodding along, but the wiley old tortoise who will still be here after the startup kids are locked out the office because the creditors demand their money back?

Ha! who am I kidding, I bet lots of them sleep on a pile of gold on their own private islands already :D

8 thoughts on Startup mania, oh how I hate thee.

  1. I would think so too, but then wouldn’t they feel inadequate when they meet someone “worth” $20 million? Then when they get to $20 million, they have to go for $40 million. A lot of upper-middle class people could semi-retire in their early 30s (to a SEA country) if they live below their means in their 20s. It could be the same for the upper class. There seems to be plenty of people like Doerr and Soros running around when they can just sell everything and do nothing for decades.

    Maybe the majority of people in each class has their own concept of “wealthy”? Their own version of “keeping up with the Jones”. http://en.wikipedia.org/wiki/Keeping_up_with_the_Joneses

  2. I like the idea of growing a company organically and not relying on investment from people who have their own direction (money). However I have high hopes / a great vision for my future tech and software company. I believe in honestly making good products that fill a need. Making them well, to last longer than anybody would expect from another product in the area (why do our phones still break when we drop them?). Sell them for an honest cost. How much did it cost the company to make? How much do we think is reasonable to pay people for their contributions to this? How much is reasonable to continue to grow the company? Without having investors to please with doubling every few weeks or years, I believe you can create a new company that people recognize as making worthy things and trusts.

    I spent this past summer working for start-ups, almost all of which sought venture capital but many of which were still intent on changing the world for good. This start-up environment may attract close-minded thought, but it also enables people to grow technology or save the world, and if only 5% of companies do this, the start-up sector will still be worth it in my mind.

  3. What you do with you company is perfectly fine. You and you alone own it.

    You manage your company money as you manage your personnal money. The only thing is, you can’t scale with that kind of structure.

    You don’t seem to want to, so KISS as they say.

    VC’s want to invest in startups that will make 100X their investments, so the performance metrics assume that you will make it there. 99% of startup aren’t backed by VC’s though, and such revenu and profit are more important to them.

    Some startup go overboard, yes. Most of the time, they have a adequate financial structure, with some private equity, some debt, some upfront capital and government grants.

    Dept can actually increase a company value if managed properly (because interest reduce taxes among other things).

    But then, one guy alone don’t have the time to do all that. Design your life.

  4. You’re a one man game company though. Don’t get me wrong, I would love to be self employed, but your company doesn’t have the same problems a business that employs other people. Right now, it’s only your income at stake. You could probably go work elsewhere if your company fails, but it becomes a different game when you are responsible for other peoples’ livelihoods. Ultimately, it’s very difficult to expand your business without taking on some debt at some point.

    That being said, I don’t want to slight your accomplishments in any way.

    Besides, it’s easy to find news about extravagant businesses when you visit a website dedicated to them. Most small businesses are not run by such children with no concept of finances, and the ones that are (that you often hear about), rarely stay in business long. It’s the frugal business owner that strives for return on investment (which investment may mean debt) that survives the long haul.

  5. Neither Google nor Facebook are stupid. If they buy your startup, then you’ve got a product or idea they like.

    Executed ideas are worth quite a bit, no matter whether you are “zany” or “old-school”.

  6. I’m sure a high percentage of these entrepreneurs starting up new businesses aren’t in it for the money, otherwise they wouldn’t constantly be betting on new businesses, they’d just expand the successful one they already have. I saw a program on Danish television a few years ago about these exact people, and they just loved starting something from the ground, creating a new business where one previously didn’t exist. That’s why they’d lose interest in it when it started running smoothly and reached ‘stability’, and they’d cast their interest on a new venture.

  7. I totally hear you though! In a way I’m also a dinosaur. I couldn’t care less about the hype going on in the IT world. I give a fuck if your app or game has a facebook or twitter button. I do what I like and what I have passion for. Maybe I will not earn $10 mill. by not following what hip but again, I couldn’t care less. I do my own thing and I do it my way!

  8. It’s a decision if you wanna make a living from what you love to do or if you want to get rich using unnatural fast growth. The latter is the economic cancer we’re facing today and will rip off white-collar heads tomorrow.

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