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A Story Of GameLayers, Inc.

November 10, 2011 Article Start Previous Page 2 of 8 Next
 

First Round of Funding

Joi Ito was our first investor, an angel who agreed to come on if we could find other investors. Joi was a high velocity digital citizen and investor in a number of innovative fun projects. I had helped Joi set up his weblog when I lived in Japan in 2002, so we had some history of working online together.

In 2007 Joi was an active World of Warcraft player: he inspired us to make a game that could involve players as much as WoW involved him. Having Joi signed on first set us up to find other folks.

Joi introduced us to Richard Wolpert, another angel investor with a history of work with Disney Online, Apple, Real Networks -- AAA quality companies. He pushed us to make the experience more accessible and appealing to a broader audience.

Bryce Roberts at O'Reilly AlphaTech Ventures was interested. OATV was a relatively new seed-stage fund; they were looking for companies that might be disruptive or challenging to existing markets.

We believed we were opening the conventional massively multiplayer online game experience to broader audiences, and we appreciated OATV's roots in open source and hacker culture. Plus Bryce had great internet literacy and a fun punk-rock attitude.

I remember sitting in his beautiful conference room with a view of the San Francisco Bay, and him asking: "How much do you think GameLayers is worth?" (theoretically, after investment). I had somehow forgotten to plan that answer, so I winged it: "$3 million." Bryce replied, "How about $2 million?" and I said, without much hesitation, "Okay." So there we raised $500k on a post-money valuation of $2 million - $50k from each of the angels and $400k from OATV. OATV pledged millions more in reserve, if we showed promise.


GameLayers investor Bryce Roberts in his 2007 OATV office - photo by Scott Beale / LaughingSquid.

I graduated with my MFA in June 2007 and turned down a well-paying offer from Yahoo! Games to architect a metagame of badges and points across their service. The deal to fund GameLayers, Inc. closed in July 2007. M graduated with her undergraduate english degree in May, and joined J.J. Abrams' production company Bad Robot as a receptionist, training to use the 3D printer. M left that job after a few months to be chief creative officer of GameLayers. Duncan, our play prototyper, became our CTO, I was the producer and CEO -- we were now three co-founders making a new online experience!

M and I were living in Culver City, near Los Angeles California. Mark Jacobsen and Bryce at OATV strongly encouraged us to move the business from Los Angeles to San Francisco, to be near more developer talent and to be near other internet companies for collaboration.


Bryce, M and Richard one month after the money landed, at a party in the OATV office, on the eve of the October 2007 Web 2.0 conference.

The money didn't actually arrive until September; one of the first great lessons: securing funds takes longer than any prediction or arrangement. That month we packed ourselves and our dog Pixley Wigglebottom into a U-Haul and drove north to a large cheap loft in East Oakland, near San Francisco, where so many other internet startups lived.

Now we were charged with building out our company. We spent $5,000 to buy pmog.com. During fundraising I remember hearing that you could estimate the costs of running an internet startup at about $10k per full-time employee per month. That includes everything -- overhead, salary, technology -- and it actually works pretty well as a formula. So we went up to about six people, burning about $60k a month, which meant that we had a little less than eight months to prove PMOG could be a viable business and GameLayers could be a viable company.


Here's how we were spending our first round of money - mostly salaries!

In reality, we spent the money slower than we predicted. It was harder to hire people than we expected. We saved money by working out of our home. We recruited folks we knew; our first employee, web designer Cap Watkins, was M's friend from USC; he slept in our East Oakland loft with us and our dog until he found his own place.


Cap and M work in the GameLayers loft in East Oakland while Carl Dreyer's Passion of Joan of Arc plays on the landlord's plasma TV - photo from December 2007

Duncan remembers "when we secured funding from OATV and had a conference call with [an] extension-building company, where we almost gave up a large chunk of the company in order to have them build our extension." It seemed like a fast way to get our game running, but we realized we wouldn't be able to iterate our own product if someone else built it. So we decided to hire up a team instead. As Duncan put it, that "was a real challenge, and a test of our self-confidence."

One of our first advisors was Ben Cerveny, a well-connected digital nomad who had worked between the web and gaming for years. Ben helped us find a playful contract artist/programmer Mark "heavysixer" Daggett in Kansas, we reworked our basic sidebar version of PMOG to have a more integrated HUD and a gourmet steampunk look. We chose steampunk because we felt like the genre was on the rise, and it was appealing to internet early adopters. We thought steampunk would also help to distinguish us in the broader games marketplace -- stylish, playful nerdery.


Article Start Previous Page 2 of 8 Next

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