The last eight months have been a whirlwind for Tom Murphy. In July 2012, Murphy, founder of boards.ie, set up mobile games company Gone Gaming. Now he and business partner Karl Hutson are planning the worldwide launch of their first title, The Jump, in Austin or Los Angeles. The game, which features DJ Poet from pop group Black Eyed Peas, has won app of the month on Eircom and Meteor. Murphy has secured a place for the game – a free download for Android and iOS – on Google Store Play. The game also has a Playboy tie-in.
“Karl and I look back at everything that’s happened and think, ‘Wow’. Last July feels like a lifetime ago. We’ve learned so much and come so far from our original squiggles on a piece of paper. It’s been a rollercoaster.”
Despite the gloomy economic climate, it’s a healthy time to fund and develop a games company. “Recession causes entrepreneurship,” continues Murphy. “People say, ‘I lost my job, I’ve been forced out of my cosy environment’, or ‘I can’t get a job, so I might as well just make my own’. Traditionally, recession is a good time for entrepreneurs. When you get booted out of your job by redundancy, you have nothing to lose.”
The industry is not only seeing an increasing amount of business veterans establishing start-up software companies, but college-leavers are also considering entrepreneurship as a valid career choice. This marks a welcome change, according to Gary Leyden, director at National Digital Research Centre’s (NDRC) LaunchPad programme.
“Building a scalable business is so much cheaper with web technologies and storage. There’s a real buzz in Dublin at the moment: a really strong underground start-up scene. On two or three nights a week, you can go out to a meet up around start-up. It’s a community that helps each other out. In NDRC, we’re seeing more and more people coming out of college into entrepreneurship.
Step 1: Connect with the community and develop your Idea
Dublin’s vibrant start-up community allows budding developers to explore options and business viability before looking for funding.
Gamedevelopers.ie hosts indie meets in Dublin city centre, organised via the forums – informal events to share knowledge with like-minded small game companies. A group in Galway, with their own thread on the forums, also meets regularly. There are a number of relevant groups on LinkedIn, including Irish Game Developers, and Gamepreneurs for founders of games companies. These groups allow you to network with people who have relevant experience.
The National Digital Research Centre (NDRC), which works out of a warehouse building in Dublin 8, behind the Guinness Brewery, operates a number of programmes that allow software developers to road test ideas. These include their Open Mic Idea Jam, in which developers pitch ideas. See www.ndrc.ie/category/events
Once an idea is in place, the next step is to explore the target market and develop a business plan. Enterprise Ireland (EI) provides two programmes of relevance: New Frontiers and feasibility funding.
A team pitches at NDRC
EI – New Frontiers
Linda Coyle, Development Advisor at Enterprise Ireland (EI), describes EI’s New Frontiers Entrepreneur Development Programme, as an ideal resource for game developers in the early stages of setting up a business. “Pretty much at the idea stage,” she explains. “We get a lot of companies in the Competitive Start Fund (CSF) that were on New Frontiers. It’s a means for them to validate models and put a competitive business plan in place.”
The New Frontiers programme, delivered locally by Ireland’s Institutes of Technology, offers training modules in areas such as financial management, market research, business process, patenting, product development, and sales training.
Applicants – who receive mentoring, office and incubation facilities, and a €15,000 scholarship to cover the six month course – are assessed on a number of criteria. These include: “capability and commitment needed to develop a sustainable business”; a plan to achieve “turnover greater than €500,000 and create more than five jobs in three to five years time”; and evidence of a commercial market for the proposed product.
See http://www.enterprise-ireland.com/en/Start-a-Business-in-Ireland/Supports-for-High-Potential-Start-Ups/New-Frontiers-Entrepreneur-Development-Programme.html
New Frontiers: Seán Sherlock T.D. Minister for Research & Innovation and Dr. Lisa Keating, Enterprise Ireland, launching the New Frontiers entrepreneur development programme in Dublin February 2012.
EI – Feasibility funding
When Tom Murphy decided to start a mobile games company, a few people initially worked with him for equity. Others were happy to invest in the company. Murphy also poured his savings into the venture.
The team then secured a feasibility study grant through Enterprise Ireland. This involved an online submission of around nine pages and a face to face meeting, resulting in a grant of €15,000, which Gone Gaming matched with their own €15,000.
According to Linda Coyle, Enterprise Ireland offer feasibility studies grants on a selective basis. Applicants must not have secured feasibility funding elsewhere – through the New Frontiers programme or NDRC’s LaunchPad, for example.
Nevertheless, the grant was enough to get Gone Gaming in motion. “I wouldn’t say it was enough to get a games company off the ground, but it’s certainly seed capital,” explains Murphy. “It can happily keep one person at the coalface working on a project, but €30,000 or €40,000 isn’t going to get you much of a game these days. We were aiming somewhat bigger.
We knew we needed a second round of funding.”
Step 2: Develop your idea and get initial equity investment
If you don’t have sufficient funds but think you have a valid idea, concept, and target market, further investment will be required. Potential options include the NDRC and EI. Most of these programmes are designed to provide office space, mentorship and investment, often in return for an equity stake in the company.
NDRC – LaunchPad accelerator programme
Six weeks after forming bitSmith Games, Owen Harris, Basil Lim, Ralph Croly and Paul Conway, pitched their idea for Ku: Shroud of the Morrigan, a touch-based adventure game for iPad, centered around Irish mythology, in front of a panel at Dublin’s National Digital Research Centre (NDRC).
NDRC’s LaunchPad accelerator programme is geared toward software development companies in their early stages. “We invest in or around the idea stage,” explains NDRC director Gary Leyden. “We offer the opportunity to validate your idea. We invest a small amount of money – up to about €20,000 – in teams of up to three people. They enter our programme for three months to validate and craft a model for scaling their business.”
LaunchPad puts out a call for applications twice a year and runs programmes that commence in February and September. Out of around 100 pitches, the best 15 are selected.
“The first port of call is one of NDRC’s many social events, where you can have a chat about the programme,” says Harris. “NDRC is very involved in the start-up world in general. The first stage is a paper submission; the second stage is a pitch.”
Applicants submit a form via the NDRC website: outlining the idea, the team, and the project’s stage of development. Leyden continues: “We hold a lot of workshops and open information sessions beforehand so people understand what we’re looking for. Then we try and get as many people as possible to pitch. It’s important to meet them.”
Equity is negotiable for developers who receive LaunchPad funding; the average share is around 8% of the business. Harris advises new game developers not to be overly precious about handing over a chunk of the company to an investor.
Ku Shroud of the Morrigan, BitSmith. Available via the App store.
“I strongly believe you have to be flexible in terms of giving away some equity – you can’t throw it every which way, but it’s important you’re willing to give some away,” he says. “Some companies doggedly hold on to all their shares. As the old saying goes, ‘100% of nothing is nothing’. Before LaunchPad we were just a few dudes sitting around with laptops, tinkering away. NDRC forces you to get your act together pretty quickly. It’s a real sink or swim programme. They can be slightly brutal in terms of their feedback. Rightly so.”
LaunchPad offers mentoring and workshops alongside investment. Games companies tend to benefit from NDRC’s peer-to-peer environment, in which they work alongside 14 other start ups. This working environment was crucial to bitSmith’s development.
“A lot of technical teams are happy to work out of their bedroom or kitchen,” says Harris. “For me, it’s important psychologically and productively that we have a space to go to. There’s a barrage of mentoring. Sometimes about 50% of your day is made up of one to one workshops and mentoring.”
Although LaunchPad is geared toward generalised digital start-ups, a number of games companies make it through each round. In the last LaunchPad VI, NDRC invested in middleware business Conker.io, and PowWow, whose point and click game The World of ShipAntics is launching on PC/MAC and iOS.
NDRC will recruit for LaunchPad VIII in summer 2013. “The only caveat is that idea needs the potential to scale up,” says Leyden. “We’ll only invest in something that’s innovative and has the potential to scale internationally.”
www.ndrc.ie/launchpad
launchpad@ndrc.ie
Conker. Winner of NDRC Launchpad 6, 2012.
EI – Competitive Start Fund
After securing feasibility funding, Gone Gaming started to look at other options in order to create a prototype for The Jump. First port of call? Enterprise Ireland’s Competitive Start Fund (CSF). CSF was initially modelled on programmes such as Y Combinator, an American seed-stage start-up funding firm, and through consultation with Irish industry specialists.
“Originally the Competitive Start Fund was aimed at Internet and games companies but then it spread across sectors to give them access to funding that might be a stepping stone to HPSU (High Potential Start Up) funding,” explains EI’s Linda Coyle. “For a number of those companies, CSF is sufficient. A lot of games companies are applying and are successful. It suits smaller companies where the plan is one game per year.”
Successful applicants receive €50,000 for 10% equity of the business. The investment is delivered into two packages of €25,000 with an evaluation before the second €25,000 is released. The business must provide a corresponding €5,000 input.
Although EI are ideally looking for first-time entrepreneurs or younger entrepreneurs, CSF’s initial evaluation is not for the faint hearted. The business is initially evaluated on a number of key areas: company and promoter profile; product and market opportunity; business plan execution; product innovation, and ability to deliver key commercial and technical milestones. After evaluation, the top 30 scoring businesses are forwarded to the next round: a presentation before a panel of internal EI executives and external industry experts.
Of the top 30, 15 are selected for investment.
“There was a lot more work required [than for feasibility funding],” remarks Tom Murphy of Gone Gaming. “It was thorough. We did several rounds of pitching. A web submission first of all. Then web video interview. At the end, when we got down to the last 30 for the 15 slots, you do a face to face pitch for five minutes.”
Successful applicants are assigned a development advisor and a range of supports, including: a business mentor; access to workshops, training and buyer events; and access to EI’s overseas offices for events such as trade shows.
Like Owen Harris in bitSmith, Murphy was not worried about giving up a percentage of the business – in this case 10%. “We felt we were valued a little higher, but then you think, ‘In five months I’ve gone from scratching my eyes in my bed to having a €500,000 company’. We were delighted with the investment and what it allows us to do. Our main shareholders still own 90%. CSF is really well set up with great people behind it. For an experienced business person, it’s not a difficult decision to make. Some people might say, ‘I don’t want to give away any of my business’. But that’s an inexperienced business person.”
EI puts out an open call for CSF four times a year. Of the 100 or so applicants, around 10% are games companies.
www.enterprise-ireland.com/en/funding-supports/Company/HPSU-Funding/Competitive-Start-Fund-CSF-.html
E-mail: csf@enterprise-ireland.com
Tel: + 353 1 727 2202 (9am – 5pm)
Pictured (l-r): Mark Dunne, 2SaaS, Richard Bruton TD, Minister for Jobs, Enterprise and Innovation and Peter Van den Bossche, 2SaaS, at Sept 2012 announcement of CSF investments
EI – Internet Growth Acceleration Programme
Funding a business is only the first step to long term viability. Any games developer worth their salt has to continually grow the business and upskill the team. Fortunately, the Internet Growth Acceleration Programme (iGAP) is ideally placed to do just that.
iGAP – developed by Enterprise Ireland and the Internet Growth Alliance – gives high potential internet companies the opportunity to take training modules with world class serial entrepreneurs, on practical topics such as business strategy, product-market-fit, designing the customer experience, funding strategies. Participants are partnered with experienced coaches, given access to seasoned industry experts, and wroth through a business growth plan. The full cost is €10,000 for two participants, but EI provides 70% (€7,000).
Last year, Gone Gaming’s Tom Murphy mentored on iGAP. This year, the self-confessed poacher-turned-gamekeeper hopes to land a place on the course in order to grow his new business. What does iGAP offer a fledgling company? “It’s a boot camp for entrepreneurs,” says Murphy. “Maybe you’re an inexperienced business leader. You need to polish up on those skills, or learn those skills. iGap marries people in the industry with new entrepreneurs. Each company gets individual coaching for a day. Top names come in and help – that’s invaluable. It’s very rewarding.”
Michelle Lawlor, Enterprise Ireland,
01 7272317
igap@enterprise-ireland.com
Ray Walsh, Enterprise Ireland,
01 727 2118,
ray.walsh@enterprise-ireland.com
Room to roam
Finding office space to facilitate a development team is one of the tougher challenges facing any new business. Thankfully, there are options available. As part of its LaunchPad accelerator programme, the NDRC offers an open plan office in a warehouse building in Dublin 8. There are 15 pods, each with three desks, presentation space and meeting space.
“The environment is pretty unique,” says Gary Leyden, LaunchPad director. “You work alongside people doing the same things as you: not just games companies, but digital technology companies. There’s a huge amount of peer to peer interaction.”
Games Ireland, in association with EI, has just announced (28 February, 2013) its GamesSpace project in the IFSC in Dublin, featuring office space for start-up companies. The space will provide “hotdesks” for up to thirty companies as well as individual offices for anchor game companies, including the first start-up tenants of the incubator: Powwow Studios, Six Minute, bitSmith Games and Batcat Games (the last two are co-located with Digit). The space will also have meeting rooms. If you are interested in registering for a hotdesk, email mark@gamesireland.ie
Powwow’s transmedia project The World of Ship Antics (coming soon)
“A co-working space is hugely beneficial,” says Leyden, who is involved in the Games Ireland initiative. “The [game development] business model depends on pulling in a lot of resource: art, game design, coding. Rather than building one big team, lending and borrowing skills from other companies is of huge benefit. An environment in which you can share resources. Hopefully we can plug in some of the third level colleges and give them a dedicated place they can go for experience.”
www.gamesireland.ie
Games Ireland held the second Games Ireland Gathering (GIG 2013) at the Aviva Stadium on February 28th from 4-8pm.
Step 3 – Moving On
EI – High Potential Start Up (HPSU)
Tom Murphy of Gone Gaming describes Enterprise Ireland’s HPSU fund as a step up from the Competitive Start Fund. This investment scheme caters toward companies with long term business models. Typical investments can reach €250,000. However, the selection criteria is even more onerous than CSF. Not many game developers make the grade.
EI’s Linda Coyle explains: “The criteria is a business with a projected 10 employees and €1m turnover. We’re looking for a longer sustainable business model. It’s not just about the developers and artists. There has to be a strong commercial element and a business model we believe in. We look at the requirements of the business plan and see who else is investing. We require a minimum matching investment.”
Alongside financial investment, HPSU-funded businesses receive advice and training around their ccommercial and growth strategy, and cCapability building within the start-up team. There is access to EI events, mentoring, R&D linkages, international contacts, introductions to angel investors, etc.
Gone Gaming has set its sights on HPSU funding. “There are normally 15 places and 120 companies apply,” says Murphy. “With HPSU we need some traction, so we’re releasing The Jump this month. We’ll see how sales go. We hope it works out well.”
Gone Gaming is also exploring research and development (R&D) tax credits. “Research and development covers a much broader area than people think,” says Murphy. “People think of R&D as guys in clean suits in an Intel lab. It’s not necessarily that at all.”
www.enterprise-ireland.com/en/funding-supports/Company/HPSU-Funding
No business like show business
If the industry specialists and game developers we spoke to had any uniform advice, it’s this: approach any application for funding or developing in a professional manner.
“People who have a great game – and that’s all they are thinking about – have no long term viability,” says Tom Murphy. “Enterprise Ireland couldn’t, wouldn’t and shouldn’t, invest money in companies that are not going to generate cash and jobs. They don’t want to hear, ‘I’ve got this great idea for a game. It’s going to be awesome. I’m going to sell loads of copies’. What they want to hear is: ‘My company can generate a lot of games, a lot of jobs and a lot of revenue. Just being a great developer and a great games designer doesn’t necessarily make you a great business person. Often, they are separate skills.”
In making his Competitive Start Fund application, Murphy took advice from a few people. Ultimately, though, a development team should make its own calls.
“It’s difficult because you can’t really afford to have experts in different areas,” says Murphy. “You’ll have to pay all those people and you’ll burn through your money three times as fast. You do need maybe one person who is a games designer or programmer, and another person dealing with the business side of things: sales, etc. Without that, nobody will let you make your favourite game. Show them they are investing in a long term project.”
NDRC’s Gary Leyden agrees: “You can pitch us an idea that is absolutely brilliant, but there’s so much more to a games company than just the idea. It’s also about how you get customers, which customers you’re targeting, how you get them cost effectively. The internal processes are important. A developer needs to build the game cost effectively.”
Alternatives: Crowdfunding
bitSmith Games emerged from the LaunchPad accelerator programme wondering how to take their company to the next stage of funding. After Enterprise Ireland’s Competitive Start Fund rejected their application, one option outweighed all others.
“Crowdfunding is an amazing win-win scenario,” says Owen Harris. “There’s literally no drawback. It’s so incredibly efficient. Crowdfunding means we can acquire customers, do market research, and advertise the game, while raising funds. All at the same time! It’s just incredible. My mind boggles that more people don’t go down this route.”
bitSmith placed a proposal on crowdfunding site Fundit.ie, setting a €2,000 target for Kú – episode 1. Amongst the deals offered to investors was the opportunity to be characters within the game. There were also offers of merchandise: stickers, posters, t-shirts, and copies of the game. The team advertised its venture through social media and word of mouth. Fund it also spread the word.
“We experimented with some Google adverts but they weren’t very successful. By far the best thing was talking about it on Facebook and Twitter,” adds Harris.
Within a few hours of posting the venture on Fundit.ie, bitSmith reached their €2,000 target. At the time of writing, the tally is up to €2,537. Harris continues: “We got what we needed and that led on to much better things. We were the second fastest ever Fund it campaign on the site, and the first ever game. It’s been one of the real success stories on Fund it.”
bitSmith are now exploring publisher routes, but the company plans to do more crowdfunding. In 2013, Harris plans to deputise investors as game designers: “We’ll build the game collaboratively together. I’ll be more of a curator than an architect. I’ll collect their ideas and bring them to fruition, rather than just present them with my own vision.”
bitSmith’s crowdfunding investment allowed the team to visit the Game Developers Conference (GDC) in San Francisco and fund development of the game. The company has since secured investment from the Competitive Start Fund.
www.fundit.ie
DIY
Despite the often onerous responsibilities facing game developers in applying for funding, no one should wait for permission to make a game in 2013.
Owen Harris of bitSmith reckons the first step is DIY: “There are lots of free resources and tools to do that. Pick a small simple game and go through the process of making it, and then repeat that. If you enjoy it, take it to the next step. Form a company. Release a free PC, Android or iPhone.”
There is no shortage of options for a budding developer when it’s time to graduate to the next step. Alongside the aforementioned funding and training avenues, Enterprise Ireland is hoping to set up an accelerator programme specifically designed for game developers.
“When I started [software development], trying to get a foot in the door to see anybody was impossible,” says Tom Murphy. “You couldn’t get the doors opened. Now you’re being led by absolute experts in their field. It’s a great time to be a game developer in Ireland.”
