Soccer Live fantasy manager by 89Bits

Post-mortem: What I would do different if I could build my startup now

In 2012 I built a videogame startup, 89bits, with one of my best friends after I finished my executive MBA. We closed it down in 2016 after 5 small games and 2 big games. There is no better experience for an engineer to become a PM that the combo: MBA + Startup CEO (In a later post, I will write about possibilities to become/gain experience PM)

I want to share my insights with you, just in case you are now where I was 6 and a half years ago:

1. We didn’t have any experience in the gaming industry. So, we learn about the industry in our first developments instead of delivering value right away. This is a waste of time and money. You should be part of the industry to learn about it and only then create a startup.
2. Find the product market fit without overspending. Let’s be lean! We incorporate the company in Spain committing to bureaucratic monthly expenses that we could save otherwise. Besides, our first employee was with a regular contract (contracts in UE ties employee-company much more than US) instead of project based one. Ideal scenario, do not incorporate (in Spain) until you reach product market fit.
3. Focus on monetization and engagement at the same time. I always thought all the time in the engagement (gameplay in videogames industry), our hardest challenge, instead of game monetization. As a result, we increased the engagement game by game BUT not the monetization. Once that we overcome industry engagement KPI’s (D1/D7/D30) our monetization KPI’s (DARPU) was still too low to be able to be funded. Work on both things at the same time: Engagement & Monetization. Suppose that every part is going to be successful to design the other part. Do not work waterfall, do not wait until one assumption works to work in the next one.
4. Don’t overlook the acquisition funnel: We didn’t have the resources to acquire customers, so we partner and rely on a media company (Diario AS — Second largest sport newspaper in Spain) to launch together with a revenue share model. We were confident on the ability of a partner like Diario AS to attract customers, but the figure barely reached 8% of the objective in worst case scenario.
5. A couple of things about Business angels and VC: a) The first rule of any game is to know that you’re in one (Sandra Lerner co-founder and kicked out by Cisco Systems). b) You need to probe that your product / company is a black box that if you introduce 1$ the box give you more than 2–3$. And no matter the input is, the output is multiplied by x2–3 factor (scalability). c) You need to approach the right investor, the one that know your industry, the one that you feel comfortable with. Otherwise it is a waste of money and energy. By the way, don’t position yourself in the middle of two industries (we were in between media and entertainment -> Big mistake)
6. Ambition: We reach kind of success after 3 years of hard work and 7 games. At that time, we knock at NBA door to deploy our live fantasy manager with them. They saw the work we have been doing with soccer and they loved it. The game would perfectly match their portfolio. After we were negotiating for a couple of months, they asked for an annual license fee to launch a NBA game (fair one). But we were running out of cash (we were almost 100% bootstrapping) and we couldn’t raise money at that time. Was it a problem of lack of ambition the first 2 years? Should we call NBA guys in advance?
7. Shareholder agreement between partners: we were lucky not having any trouble, but this is a must even if you start something casual. We feel the pain of not having it even in a no-problem scenario.
8. Tech decisions: We chose Marmalade over other cross-platforms as Unity because our lead developer really feels comfortable in that environment. Marmalade is great when you want to reach performance and access to low-level mobile instances. But, for our 4 guys gaming startup, Unity would be much better, because you can focus in the game-play itself. You need to balance short-term and long-term decisions. We shift to Unity in the last development, I can’t imagine how far we could go if we started with unity since day one.

We close the startup having paid all our debt and the employees. Our upside was the experience, the vision and the knowledge. I came back to work for the company I left, and then I realized how much I grew up in those 3 years, much more than if I remain in the same position at the same company.

Bonus track: You can check some of our games gameplay on youtube