What a sobering time! Begging people to pay pennies on the dollar for years of work. Begging people to hire away your best people. And then failing, and calling people who had given so much to this company to tell them I had to stop paying them, and soon they'd have no paid health insurance.
Starting a company is stressful, running a company is stressful, winding down a failed company is stressful. We needed a break, but we were broke.
So we cashed in airline miles and spent on our credit cards to finally take a honeymoon, 18 months after our wedding. December 2009, three weeks of inexpensive tropical luxury on an island in Thailand. January, we returned to the San Francisco area to seek our fortune and pay down our debt.
By February 2010, M got a job as a Producer at Playfish, a social game company. M hired one of the remaining GameLayers engineers to work at Playfish: Alex Friedman, a persistent gamer/programmer who we hired out of college based on his combination of game design and engineering chops.
I helped our tireless engineer Marc Adams find work with Facebook-game maker Turpitude Design. In March 2010, I got a job as a Producer at Ngmoco, a mobile social games company, working with an old friend Alan Yu. Ngmoco soon hired our community manager Joe Wagner.
Alex, Joe, Justin - GameLayers SF Social Game Making Reunion - photo from June 2010
In mid-March 2010, I presented a version of this story at the Game Developers Conference, announcing that we were going to open-source our multiplayer client and server software. Six months later the code emerged in the public domain. Maybe it can be of use to some budding online social play experiments!
Terry Thurlow was our consulting finance director. She was recommended to us by OATV when we raised our first round -- paying her an hourly rate would ensure that we had all our paperwork in order for future financial events. Having a consulting finance director was a great aid, from day one until the day the lights went dark in our bank account. Terry had experience at Industrial Light & Magic and CollabNet, an open source framework, plus Foxmarks -- she was well versed in the many various trauma of business operations and it was always entertaining to run numbers with her. Plus I really didn't have to worry about the books throughout.
Terry delivers new employee paperwork to Kristin and Brian, September 2008
M and I decided to get divorced in October 2010. I would suggest to anyone that if you're in love with someone, the feeling is mutual, and you decided to go into serious business together, you should immediately commit to ongoing couples counseling with a quality therapist. You're going to need professional third party help to calibrate and prioritize your relationship through the stresses of business. Holy smokes, it's intense.
Founding a company and developing a business was a wild, fast education. By comparison, grad school was a relaxing time to explore ideas and make art. Running a startup was constant adrenaline: you must learn while doing. I'm grateful to my business partners for their patience during my learning time; I'll share my takeaways here to maybe help fast-forward another entrepreneur.
In 1994, I worked at HotWired, launching one of the world's first commercial content web sites. We had to build everything. One of my co-workers there was Brian Behlendorf, who was helping to write the popular web server Apache in tandem with launching hotwired.com. We helped determine the initial size for ad banners on the web. We drove business to Organic, one of the very first web advertising companies. Everything from scratch, on expensive Silicon Graphics server hardware. Hah!
Sixteen years later you can borrow social infrastructure from Facebook, rent a scaling number of machines from Amazon Web Services. Use Google to host your corporate email, documents, spreadsheets, presentations for free. House your corporate memory banks on Highrise for a small monthly fee. There's a plugin or social service for nearly any human interaction you might want to run; you just need to provide a new sort of glue: mixing and matching web services to come up with compelling new ways for people to express themselves, to spend their time and their money.
We started building PMOG in 2006, launched GameLayers in 2007 -- that was just two years before Facebook became the dominant social plumbing for casual online entertainment. We built everything for ourselves -- user profiles, friend connections, message boards, invitation systems. That took up a lot of our time -- if we had started in 2009, we would have used Facebook as plumbing for our social graph and focused on what made our game fun.
Also, cloud computing emerged in 2008-2009. Perhaps the cloud could have saved us from our huge hosting fees and worrying about how many servers to commit to. But we were committed to a non-cloud architecture and that seriously chewed into our budget.
I feel like online service-building has gotten so much easier since 2007 when we started GameLayers; it's fun to imagine this tech being even more accessible in another few years! Hurrah!
Being CEO taught me to focus on a few key priorities. I learned to be ready to present a focused summary of our biggest opportunities at a moment's notice: here's who we are, here's our big vision, and here's how we're building to succeed.
I learned that companies are started by ordinary humans with big ideas -- who then convince other humans who have money to support that dream for a finite amount of time. I learned that people with money also have ideas, and its important to understand accepting money means you're going to be spending time aligning yourself with them.
Being accountable to my board of directors on a monthly basis was helpful: I had to pull my head up to look at the business objectives and present them to a discerning crew.
I learned that the more of your idea you can build without financial support, the more leverage you'll have when it comes to raising money and attracting interest.
I learned that $300 / day is a great "lifestyle business" -- $300 / day supports one or two folks making something they believe in, catering to a particular market. But $300 / day is death for a five to nine person startup. If you've raised venture capital, you're aiming for $3,000 / day, and $30,000, and beyond. Sometimes it seemed like maybe PMOG would have been a better "lifestyle business", meaning if we had prototyped and then started making money off the bat, we would have pulled down maybe enough to support the three founders at a smaller scale with something manageable. We could have grown PMOG organically, gradually, at a breathable pace! But we decided to go for an amazing accelerated roller coaster ride instead, to pour gasoline on a small campfire.
I learned that you can prototype an incredible viable product with people in far-away places -- but it's hard to move truly fast when you're not in the same time zone. Ultimately being in the same room with people is a profound accelerator for collaboration and productivity.
I learned that engineers are the most important part of software startups, and hiring a lot of engineers is a good way to ensure you can evolve fast and increase the value of your organization. I learned there's a metric shit-ton of competition for engineer hiring; it's laughable. Every startup that has a web site with a jobs section with "engineer" positions listed. Fierce competition!
I learned to value the chance to meet with CEOs from other software startups. I would drive to Palo Alto or Mountain View to talk to these people facing similar struggles. It felt like community; I got great wisdom. Usually I tracked them down because we shared an investor or a common friend. Several OATV companies were funded at the same time (Get Satisfaction and Instructables) and we ended up having group OATV-funded executive dinners every few months -- great camaraderie with people as busy as we were.
Alan Yu was a friend of ours; he was working at Electronic Arts at the time. He listened to us describe PMOG over sushi one night in SOMA. Alan suggested that between gameplay, theme and platform, it's advisable to limit innovation to one of those three when making a new game. With PMOG, we were doing an unusual game (leaving information tools on web sites for other people) with an unusual theme (steampunk was not mainstream) and we were building a massively multiplayer online game for a platform that had never really seen much of a game on it before (Firefox only had a few very basic arcade games, and one attempt to build multiplayer Pong). Now I think more about focusing innovation, creating a more approachable experience for game players.
I didn't have much time for reading while I was in the midst of this software startup, but I read Jessica Livingston's book Founders at Work. Founders at Work was hugely comforting to me, as I read of all manner of small software business permutations; people who succeeded and failed and pivoted and dealt with all the complexities that were so a part of my life.
Daniel James was actually part of my education from an early stage -- because he shared his data year after year with the audience at the Game Developers Conference, and then on the web through his site The Flogging Will Continue Until Morale Improves. Here's a sample presentation: "Metrics for a Brave New Whirled" -- transparent about data most companies guard.
I've learned to see more of the entire ecology of media/software innovation: from the limited partners LPs who fund the Venture Capitalists VCs, funding and prodding the founders and executives. I've been a disgruntled employee who doesn't understand why a company doesn't hew closer to its ideals; now I see so much nested economic activity that I tend to bite my tongue before critiquing corporate actors.
I learned that distracting employees should be laid off immediately. Firing people is hard, but if you're a startup founder debating whether someone should be fired, they should be fired. There's such a limited amount of time with a focused team; in a company under 10 people, one underperformer brings everyone down and ties up invaluable time. I learned to think of firing someone as "helping them find a more suitable opportunity", because if they aren't thriving at your company, no one wins.
Laying off people was a fucking serious painful thing because these people were doing important work to drive the company forward -- but we just didn't have the money to survive. It's a sobering, terrible thing to have to say "goodbye, farewell" to someone who you've asked to give up other opportunities to join your crazy mission that could be a great success for everyone involved, if only we weren't months from cash-related asphyxiation.
First I developed the reflex to test "I have a cool idea" against "I wonder if it would pay for itself?", and then "I wonder if that's just a lifestyle business or a real company?"