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Starting a business... with nothing

Started by February 18, 2006 01:12 PM
35 comments, last by jolyqr 18 years, 11 months ago
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Edit: This is a financial question only. How to get the money to do it.

Have lots of savings (including cash from friends/family) which can be matched with a grant/business loan/private investment.

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business administration and entrepreneurship student

This sounds somewhat similar to what I completed in 2002. We had some cash, a very strong business plan attached with a very good idea (at the time) and marketing plan. We managed to get some students interested in our development idea and then convinced investors and local government grants people to match funding with our cash to start up a business.

Hope this helps :)
Thanks to all of you for your posts and suggestions.

tsloper, you brought out some good points. However, where I live, almost EVERY venture is brought up from grants (edit: and loans). The government, quite often, gives out grants to people who have good business plans that might help the economy. These grants range from around $100 (very rare) to over $500,000 (very common). I am eligible to receive $5,000 at this moment in the form of a loan but I don't accept loans. I guess it all depends on where you live because maaaaaaaaaany entrepreneurs around here, even the most educated/experienced/have worked a lot do not even have the pocket change to start their own venture. It's all about chance and your own skills and dedication, with borrowed or granted money, here, that helps you get along in a venture life. I assume it's very different where you live. Very different indeed. Thank you for your advice though, you helped me.

That goes with the rest of you as well. I've learned a bit more just from reading. I'd post more but I have to leave immediately.
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Original post by Professor420
This is a bit skewed. For you, your game project is the greatest thing in the world, and you are full of enthusiasm. But it may not be to your friends. You have to understand their point of view. Once they get bored of doing it, they have no reason to keep at it. 'Motiviation' does not exist in the ether. You are motivated because you think it will help you get into a better school or get a job or even improve your skills. But why would someone who draws no benefit (and gets no pleasure from game production) keep at your project? Money is less of a primary motivator and more of a last resort. It ensures that even when things suck, you'll still get some benefit (money) and stick around (motivation). Which is why people always tell you to do what you love instead of what gives you the most money. Money is really a poor motivator (except large amounts of money for minimal work, as in illegal stuff. I'm talking more about legit things).


Now I can post again. About that comment, well, the people who were working with me greatly enjoyed the project. In fact, they were partially in head of it. The artist's style was the style of the game. The only person who stayed dedicated was the programmer... and the ironic thing is he wasn't the most into the idea (although he did like it a lot). The artist loved it and she still quit. It can't be helped, sadly. When I interviewed some workers at HB Studios they said that doing projects such as this are very common and they did them all when they were in college. It just grows experience. I do want to start this when I have graduated, however. I have done hobbyist projects for years and it is growing very tiring to have people who say they're motivated and enjoy working with you just give up because they're too lazy to do a bit of work.
Canada might be easier than the US, as far as governmental grants goes. However, you can never really start a business on "nothing". I don't have 100% good advice for you, but it's free advice. It's not even advice, actually, I'm outlining for you how I and some friends are doing exactly what you want to do. Keep in mind I'm in New Jersey, USA, whose business fees motto seems to be "Hey, at least we're less expensive than New York City!"

Here's how we're going about our Quixotic Quest of making an MMORPG when none of us have worked in the game industry before. (We have run a MUSH for 4 years, though, so that counts for the player psychology end.)

1) Start with a frustrated joke. "Argh, I'm tired of this. Kill, loot, level. *grumble* We should make our own game, dangit."
2) Get a reply from the really good programmer you happen to be married to. "Hmm, yeah. Let's try it."

3) After telling the husband he's nuts, do actual research. Go to sloperama.com, igda.org, gamasutra, devmaster, and Google everything you can find on what it takes to make the kind of game you are making. Slog through forums and thread after thread after thread. Spend 3-6 days simply reading.

4) Buy Richard Bartles "Designing Virtual Worlds", Jessica Mulligan and Bridgette Patrovsky's "Designing Online Games", Raph Koster's book on "Theory of Fun", and Thor Alexander's "Massively Multiplayer Game Development" books. (Substitute books for your type of Tetris game. I don't know what they are, since I obviously have my hands full :) )
Buy books on the different programming languages, if you don't have them, that you will need.

5) Get Openoffice.org (free) and use their spreadsheet to create a budget for the game.

6) I happen to have 7 programmers of various specialty (some in C++/C#/Python, some in database languages) who are volunteering. Important: Do nothing until you do the next thing.

7) Look up how to incorporate a business. I don't know how it goes in Canada, but in the US, you either hire a lawyer or you can do mycorporation.com. It takes money, but you are now protected from liability and more importantly, you can now make the agreements your volunteers will sign.

8) Either get a lawyer to make Independent Subcontractor agreements or lawdepot.com or whatever Canada does. I don't know about IP in Canada, but even if you aren't paying them, or if you intend to pay them X amount after the game is sold, you need to have them sign over the rights to their works to Your Company, Inc. If you do not do this, you could be in a giant bath of hot water later, and the costs of the lawyers will be huge.

9) Once the company is formed, and the agreements are signed, you may now start actual work on the game. Any expense that it costs to make the game (a computer, software needed, etc) are considered business expenses and are tax-deductible in the US. I don't know the equivalent in Canada, but Quickbooks and Turbotax do nicely for teeny-weeny small business accounting.

Now, we are ready to start making the game.

If all of that above looks like "too much work", then you should not consider starting a business at this time. Use this time in school to learn and save up money, build up your credit rating and research how to form a business in Canada. I wish I could be more help to you, but this is how it is, at least in NJ.
The best way to start a business with nothing is to provide a unique service. Service is the key words- the "input cost" is your time :)

You don't need to hire people to start out, in fact, I reccomend against it. You probably don't realize how hard people management is, its a lot harder than programming will be. In the first stages of a business the only one you can rely on to do a good enough job is you ;-)- so don't go beyond that.

Ergo, make an indpendent game by yourself. Add artwork nearer to completion, this will likely be your first attempt to people manage and it will be a great experience why I am absolutely right :)

Make sure it is a simple game. Clone an existing game if you have to, but aim for a 3 month development cycle, 5 months at most. If you are unexperienced in developing or in designing you will find that your 3 - 5 month project is going to take you 6-10 months.

When that is done there is a 95% chance your first game will fail outright for a million reasons. Expect it to fail (though don't do it half-assed because you don't believe in it!), but plan for it to succeed. When you are done and your 6-10 months of hard work produced nearly no results you can then look back and say:

Ok, now I understand how to manage people better. I know how to create a game that will sell better to a target market. I know how to plan my development time better. I learned about ways to increase the speed at which I program ect. ect.

And best of all, you now have something to show others to demonstrate your abilitiy.

College is about learning. Plan to be able to use your talent and passion for profit WHEN YOU GRADUATE; until then concentrate on learning as much as possible from trying to start a business.

I used the same process to launch my company- My first year in business I probably made a couple hundred dollars. My second year (senior year in college) I was making about 5-6k/year. When I graduated I made 19k that year. The next year I anticipate earnings in excess of 36k.

A lot? No :) But its a good trend.
-Joe
Great advice from the lot of you, thanks to you as well.

All of what each of you have said I've already done. Well, most of what you have said I've already done. Although, I see now what I should do and how I should go about doing it. All of your advice has helped me.

ellis, your steps are similar to what I have done. I even have OpenOffice and everything and made schedules and lists and such. The people who seemed interested in the game and working with me just couldn't handle keeping motivation. I expect that will change in the future though.

Thank you all again.
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Excellent. I wish you much luck. :)

Edit: Oh one thing I forgot, and not sure again if Canada has it, but in the US, when someone starts a company, they sell shares to raise money. Grants and loans are very hard to come by here, although if you're a minority, you can sometimes get them easier.
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Original post by ellis1138
Excellent. I wish you much luck. :)

Edit: Oh one thing I forgot, and not sure again if Canada has it, but in the US, when someone starts a company, they sell shares to raise money. Grants and loans are very hard to come by here, although if you're a minority, you can sometimes get them easier.


They do that here but I figured it was only for large businesses/corporations.
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Original post by Falkon Valkyrie
They do that here but I figured it was only for large businesses/corporations.
Its not the size but the likelihood of success/rapid growth that is important.

When you set up a company you issue shares to yourself/the directors. If you wish you can sell a % of the company to an investor by selling a % of your shares at an agreed price. Of course to do this your company has to be worth something, or there must be a good chance that it will be worth something in the near future.

Game developers are a very poor investment. The risk that a project will not get finished is high. The risk that it will be finished but fail to sell is also high - in short, even if the company is well run, with experienced staff and experienced management there is still a high risk of failure.

If the people running the company have no experience running a business, no experience developing successful games and no experience selling games that risk reaches astronomical proportions. The likelihood of success is so small that investors simply won't go near it and the likelihood that the company will grown in value any time soon is close to zero. In a situation like that the only people who might invest would be fff (friends, family or fools).
Dan Marchant - Business Development Consultant
www.obscure.co.uk
Stop making excuses. So far you've blamed your lack of time, your lazy friends, and the fact that people aren't lining up to hand you cash to develop something you haven't begun to plan. If you can really get grants in Canada that way, perhaps I'll consider moving there.

IMO, vgsmart had the soundest advice: go solo and simple. It takes a lot of work to develop even a simple game, and the only person you can count on being as passionate about it as you is, well, you.

Good luck.

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