Storybricks is no more
This is a very short post mortem. The main reason for posting this is that every week I get CVs, business proposals and really want to move on. Storybricks has ceased all the activities and is no more.
After 5 years decided it was time to move on and wind down Storybricks. I was never able to finance the company the way I wanted, which meant defaulting to consulting to generate revenues and in the end a company which is 80% consulting and 20% software is not scalable nor VC-fundable.
I raised about $815,000 from external investors, we grew 100% y/y and we reinvested all the profits in R&D.
This was the situation at the end of 2013:
As you can see we were growing nicely and we had multiple (unannounced) publisher deals in the pipeline. Revenues were growing faster than headcount.
Despite our growth most of the investors I knew would not fund game companies (with only two exceptions most did lose their money when funding games). When pitching new technology their request was always about applications outside the game industry. Being consulting-heavy was not helping.
By mid-2014 realized I could not have maintained the growth rate without cloning me and Stéphane, so with no prospect of raising additional capital we started looking for a buyer but that did not produce any results. We ended up talking to all the MMO guys, all the game AI guys and everything in between.
This is what I posted back then about the M&A process:
I can’t really respond naming names but here’s the gist:
- In the game industry acqui-hires are not common so it was a long shot to start with
- Most of the team on our side was not in the US which would have meant paying for people for 6 months+ to wait for a visa with the risk of not getting one at all
- Revenues were mostly consulting-driven and not about software licensing so hard to scale
- There wasn’t enough IP in the company as we never finished the original Storybricks tech before switching to EQN
- Some of the companies we spoke to were very dysfunctional or made the most predatory F2P games you can possibly imagine so we walked away
- Some non-game companies did not want to consider acquiring a company with a history primarily in games
- Some could have taken 1 or 2 of us but not the whole team and we made it clear we were a package
- With some we made specific request to work on a game/team
- One was too small and they wanted to grow organically
and so on
mostly some companies were ok with our vision, but they were only really considering Storybricks as a nice add on and not central to their core games for the next 5–10 years, so in the end they were ok with offering us jobs but not willing to pay for our IP. This coupled with our desire of going beyond games and cut down travel made it natural to move on and start something new.
There was a company that we got close to having a deal with, and would have been perfect as they believed in AI and storytelling, were fully on board with our vision, we had been talking to them for years etc etc but in the end we could not cut a deal for a combination of the aforementioned reasons.
Our asking price for the entire company was $250,000 and mostly it was about paying off severance packages to former employees and few debts. It was very low compared to acqui-hires in the area this particular buyer was located in (startups go for $1m+ for each engineer usually) so we were not keen on negotiating it down. Also I think they balked at our salaries request (later we found out we asked roughly 2x what they were paying their own engineers.)
Everyone involved in the company has found new jobs and will not post code, art or anything else for a long time.
I’m sure someone else could have done better, but at this point I have lost an ungodly amount of time and money on this (and still losing more as we still have outstanding debts that will have to settle) and consider the chapter closed.
- Rodolfo Rosini, CEO & founder, Storybricks
RIP Storybricks, 2010–2015