[MUD-Dev] Evolutionary Design

Richard A. Bartle richard at mud.co.uk
Thu Jun 20 20:03:39 New Zealand Standard Time 2002


I've just noticed this discussion has switched to talking about
raising money from VCs. The following is an article I wrote for one
of the MUD2 webzines in response to an article the previous issue
that suggested I was remiss in not trying to do a graphical MUD3.

	http://www.muddled-times.com/article.fod?IssueId=15&ArticleId=1314

is the original source.

		Richard

--------8<---------------- 
Issue: Issue 16, June 2002 
Section: Articles 
Author: Richard 


MUD3 - Richard's Response
In issue 15 of Muddled Times, Jericho outlined how a MUD3 could
conquer the world. This is my response.

I tried it last year.

To write a graphical MUD requires money. To get from the point at
which a company is founded to the point at which it goes live (to
paying customers) you need about ?10,000,000. You don't need it all
at once, but you do need to know you'll get it. The way it works is
that you set up your company using seed capital, and develop enough
of a product to persuade first-round investors to drip-feed you
money at regular intervals until you have something that looks like
a good investment. Assuming all goes to plan, you then approach
second-round investors (whom you've lined up already) and tap them
for the rest of the money that you need. Then you finish your
product and go to launch.

Now I did manage to get about ?2,000,000 promised from first-round
investors. However, not unreasonably they weren't going to give me
the seed capital unless I could persuade other people to come in on
the project too.  This proved to be quite difficult. The reason is,
investors want an "exit strategy" which allows them to recoup their
initial investment (and then some) after at most 5 years. This is
problematical for two reasons: there's no guarantee that they'll be
able to turn their interest in the company into cash (it means
either a stock market listing or a buy-out by a larger investor);
the break-even point isn't until 6 years after company launch.

In other words, to get the money I'd need to lie.

Money isn't the least of the problems, though. To develop a MUD3
would mean setting up a company with the following individuals in
place:

  Chairman 
  Managing Director 
  Finance Director 
  Creative Director 
  Technical Director 
  Producer
 
Getting these people is non-trivial. Good folk are hard to find, and
when you've found them are hard to persuade they should leave their
current job and work in Colchester (or, more likely, London). I
wouldn't even know where to start looking for a Finance Director,
for example - it's not like the computer games jobs agencies have
them on file.

As it happens, some of the positions were filled by default when
Gameplay collapsed. I asked one person if he was interested, and
although he wasn't he asked another in such a way that this second
person thought I was inviting him in, and then a third arrived the
same way. I'm not a businessman, though, and neither do I know any,
so initially I was grateful for what I thought at the time was a
slice of good luck.

Let's take a closer look at the above-listed roles.

The Chairman is some well-respected industry name who will, for 15%
of the company, keep it on track and interface with other
companies. I had someone lined up to be the chairman who was
thoroughly excellent and whom I'd ask again like a shot if I ever
tried this again. Sadly, he's signed up with someone else now so I
can't.

The Managing Director is the person who runs the company day to
day. The role can be combined with another role, eg. Finance
Director. I had an MD who would also have been the producer, but he
was working for another company of his own doing Gameboy Advance
software and it suddenly took off.  He couldn't do any of the
MD-like things he was supposed to be doing, although he was
reluctant to give up the position so someone else could do it. In
the end, I had to do it myself while saying all the while that he
was in charge. This made the other companies we were trying to
partner with more than a little suspicious.

The Finance Director is the person who raises the money. This can be
a part-time job for the first few years. I had a Finance Director,
but he didn't actually DO a great deal. We were waiting for weeks
for the financials, and when they arrived they were in vast,
recycled Gameplay spreadsheets that had been sewn together and
contained alarmingly trivial errors. For example, the most important
information potential backers need to know is how much it is going
to cost them. Our headline figures had amounts in dollars added to
amounts in pounds, which made us look absolute amateurs. There were
other areas where a more committed Finance Director might have been
useful, too. Contacts given to our guy by the initial backers so he
could find more backers went uncontacted. It took me a while to
discover all this, by which time it was too late to do much about
it.  I'd want serious assurances from this person that he was going
to do what he said he'd do before I ever considered going into
business with him again.

The Creative Director is in charge of design. That would be me,
then. As I mentioned earlier, I also ended up doing MD stuff like
running the company newsletter, buying domain names, printing the
business plan and so on. I am utterly hopeless at this. I did do a
design, though (set in the world of "Arabian Nights" - pretty
inspired, at least before September 11th came along).

The Technical Director is in charge of the hardware, the networking,
the support, the maintenance - things that actually matter. The one
I found was top-notch and I'd ask him to play a leading role if I
ever got a second chance to do this project. He'd make a great MD,
too. He's running his own company now, however, so it seems unlikely
I could get him on board again.

The Producer is the project manager, who makes sure the work gets
done. As I said, our producer was going to double up as MD but got
distracted. I'd go for a different producer next time unless the
original one could actually do some pre-launch work (and didn't
insist we based the company in Oxford). Strictly speaking, each
product needs its own Producer, so this position should really be
Development Director. We only had the one product planned initially,
though.

I also arranged for a Programming Director, in charge of the coding.
Normally, this would fall under the auspices of the Technical and
Development Directors, however the person I had in mind was someone
rather special whom I was very keen be involved. He was all too
happy to agree.  It was even better as I was told that his presence
would be very attractive to potential investors, but as the Finance
Director didn't ever get in touch with any we never found out
whether that was indeed the case or not.

In addition to the above personnel, a start-up company also needs:

  Art Lead 
  Server Programming Lead 
  Client Programming Lead 
  These, you can get from jobs agencies.

About a year prior to launch, some more directors are required, too:

  Customer Service Director 
  Marketing Director 

These, you can't.

Once all the necessary people are nominally signed up, you can begin
work on the business plan. This is a document that explains what the
company is about, how it will make money, who the directors are (and
their great track records), and how much money is needed. And about
40 other things you have to fit in 20 pages. Most of this work was
done by ex-Gameplay employees who would have formed the core of the
new company but not have been directors; it far exceeded in quality
anything written by anyone else for the business plan, although it's
a little out of date now.

So what happened that caused it all to fail?

Nothing.

Nothing happened, when things should have been happening.

For 6 months, things did happen. Then, nothing happened. I wrote
emails, got promises and assurances, but no-one actually did
anything. Eventually, one of the backers said that actually he could
think of better things to do with his money than just sit around
with it in the bank, and asked to be released from his
committment. It signalled the end, and we all went our separate
ways.

Mind you, I sold the domain name immersivestudios.com last week for
more than I paid for it, so it wasn't all bad.

In his article, Jericho said: "The hard part is finding the backing
for such a venture. If it's been tried already, try harder." Finding
the backing is just one hard part; finding the people is the other.

Different people have different skills. Mine are creative, not
financial.  I'm about as likely to get a venture capitalist to give
me money as a financier is to design a virtual world. If any of you
lot have an MBA and would like to give it a shot, get in touch; I'm
willing to try again. If you know someone whose experience in
computer games production will look good in the business plan and
you can get them to come aboard, so much the better.

Jericho also suggested, "Take it to those large gaming companies who
aren't running an online game, show them the money that can be made
and the success that can be enjoyed.". This was an option I
considered, but when I spoke with the owner of such a company I was
informed that they already knew there was money to be made. Their
plan was to let venture capitalists fund start-ups, wait two or
three years for them to get established, then buy a failing one at a
knock-down price. It's so much less of a risk, and you know what
you're getting.

Most publishers don't know who I am anyway. They're not even going
to answer my emails, let alone be impressed by my vast knowledge of
virtual world design... If they were going to splash out ?10,000,000
on a new game, why not give it to a proven computer game company
rather than someone who's spent 20 years on a game that fewer than
500 people play?

To conclude, it's all well and good to sit and think about
developing a world-beating product, but the practice is somewhat
different.

This is the real world, not a virtual one.
--------8<---------------- 

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