[MUD-Dev] Evolutionary Design

[rgabbard at swbell.net]

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Original message: http://www.kanga.nu/archives/MUD-Dev-L/2002Q2/msg01314.php

"Derek Licciardi" <kressilac at insightBB.com> wrote:
> From: Ron Gabbard
 
>> The Japanese have a principle in doing business.  'I will sell to
>> you in your language but will buy from you in my language.'  The
>> same applies when dealing with VCs.  The entrepreneurial designer
>> is 'selling' their project to the VC and needs to learn the VC's
>> language.  That's the language of the 'suit and tie financial
>> type'.

> The selling portion is the precise problem we have been having.
> The question remains, "How do we pitch a product to the uninformed
> that is such an obvious opportunity to us?"  Seems like many of us
> haven't been able to figure it out yet which would explain the
> failing to find funding portion of Raph's reply.

This is exactly my point.  There are a few VCs that have specialized
in games and have learned the market and industry.  These people are
most comfortable investing in games as it's a relatively known
commodity for them.  However, these people control just a tiny % of
the total VC money available.  You're right that the other VCs will
have to be educated on the game market and industry.  However, it's
the game development companies that are going to have to do that as
waiting for game development to become anything more than a 'fringe'
investment area could take a lifetime and a half.

They are going to have to put their game development into a format
that the non-game VC can understand -- fixed and variable costs,
payback periods, ROI, total market size,
pessimistic/realistic/optimistic market penetration projections,
strategic (and some tactical) marketing plans, market research,
competitive analysis, risk analysis, etc.  The purpose of the
business plan is to educate the VC/decision-maker on the environment
in which the company is proposing to compete and why this company
would be successful in that environment.

Note: It also doesn't hurt to show that the development company has
a global perspective.  For example, relying on credit cards for
payment is extremely 'American' as credit cards are second to prepay
as a preferred payment method in some areas of the world and are
virtually non-existant in other viable markets.

Anyhow, the money is out there waiting on a high-growth opportunity.
It's just a matter of beating on the right door with the right
message.  I agree with you that the 'higher risk' technology VCs may
still be reeling from the dotcom bubble burst.  However, interactive
entertainment has enough documented growth where it no longer has to
be the red-headed step-child of the technology sector.

Cheers,

Ron
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