Taking an indie business full-time certainly entails risk, and everyone's situation is different. For some I think going full-time is the best option; for others it may be best to go part-time only.

Often people only look at one side of the risk picture when making this decision -- the risk of loss. But there's another side that needs to be considered too.

Here's an analogy... when most people play blackjack in a casino, they lose money. But most of the loss comes not from being too aggressive, but rather from being too conservative. People hit when they should double down or split. Or they split a pair and then fail to re-split or to double down after splitting. They fail to put more money on the table when the odds are in their favor, since they're afraid to lose. They don't realize that a $10 bet with a 60% chance of winning is superior to a $5 bet with a 75% chance of winning. So in the long run, these players lose money largely by missing opportunities -- they underplay their winning hands.

I think people often bring the same thinking to new business ventures as well. They focus too heavily on the risk of loss, missing out entirely on the equally important risk of missing opportunities. If you fail to make the bet that would have won, you've lost money.

But in order to tackle these opportunities, you have to be willing for your bet to lose. And most people just aren't willing to do that. So they play too conservatively and miss key opportunities. By overprotecting themselves from small losses, they miss out on the big wins. Very few big wins are possible without at least some risk... to the point where you will feel a sting if you lose.

If you want to build a profitable company from scratch, I think you have to be willing for a good percentage of your bets to lose. You have to develop a thick skin that can handle being stung again and again. You have to be willing to split your 9s against a dealer's 9, then get a 2 on one hand and double down, and another 9 on the second hand and split again, turning your $5 bet into a $20 bet and throwing away your seemingly safe 18. And you have to be prepared for the dealer to hit 21 anyway despite your best efforts.

So one way of looking at this is, "Would you be willing to risk going bankrupt for a chance at becoming a millionaire?" If so, how risk-tolerant are you? Could you handle a 1% chance of bankruptcy? 10%? 25%? 50%? More?

Now you don't necessarily have to risk bankruptcy to build a successful business. But you're not likely to get very far without taking some risks that initially turn your stomach, especially in the area of product development. If you always play it safe and only release "safe" games in "safe" genres that already have a proven following, you may get some sales, but you'll lose by failing to create those games that could have become real hits.

I had the same thought before i started to work on Goose Chase (http://www.gilzu.com/). I had a bad experience with the previus project from every possible aspect. Thing is, that only made me more ambitius. I hired a top notch graphic artist with my saving and spent days and nights working on the game. These days i spend my time & money on Goose Chase's promotion and on a new game.

I can tell you that regradless of the outcome, I'm pleased with my bet. If i'll take Steve's analogy on poker, no matter if I won or lost on the first game - I'll try again with better experience. Also, this analogy missing one important element. In shareware, its not a win-lose deal, or at least, you cant tell it right away. In the first month I published Goose Chase, my CR was near 0.001%. I've improved it over and over again in the last 3 months and my CR grew significantly to almost 0.2%!.

I could of used steve analogy for the first 2 months. I would have said that ive lost and went to the next bet. I did, and didnt. I'm working on a new game, and meanwhile, improving my last bet's odds.

Originally posted by Dexterity
[...] in the area of product development. If you always play it safe and only release "safe" games in "safe" genres that already have a proven following, you may get some sales, but you'll lose by failing to create those games that could have become real hits.

this is not the point of the post, I know, but one thing I think is great about being indie is... being indie. i just don't care about "real hits". I have many game ideas and a few games I really want to play myself. if i manage to develop one of those it is a real hit for me.

bussiness wise to become a millionaire or "smashing" a hit on history of video games is just not one of my goals. i want to get my software biz up n running as a part time thing and combine this with a part time job. doing either one of those full-time is to boring for me. with this goals/lifestyle I can't see this poker analogy working for me, where is my risk?

Originally posted by gilzu
I had the same thought before i started to work on Goose Chase (http://www.gilzu.com/). I hired a top notch graphic artist with my saving and spent days and nights working on the game.

this is what impressed me much when i checked out your website. everything is polished and of a quality substance rarely seen. and you managed to build a functioning team. i think it is good work to get a team working and produce something without seeing each other physically.

This is a lesson I'm still learning. Three years ago, I was gainfully employed making AAA games in California. For years before then, my wife had wanted to move back to Michigan and build a home there, and we finally agreed we would do it in 2001, but doing so put me well outside my "comfort zone." To make it more palatable to me, we decided that I'd get a job and keep an apartment in California after we finished building the house (which was another project that put me outside my comfort zone). A year later, we finished the house, the sky hadn't fallen and I found I had no desire to go back to California, so I started my own company. At first I tried to do it part-time while keeping a full-time job, because, again, I wasn't comfortable with taking the plunge. And, when I did finally take the plunge, I initially started work on a project that I thought was new and fun, but I chickened out and went back to playing it safe, producing a puzzle game instead.

After releasing Vault Vex, I took some time off to think about where I was going and decided to follow my instincts and stick with doing something different. I've had enough of wondering what could have been if I'd only taken the dark, scary path (sorry, I don't know blackjack well enough to make an appropriate analogy to it :) ). So have I finally learned to fully exploit my winning hands? Probably not, but I think I'm moving in the right direction. Every step I've taken so far has shown me that my fear of taking that step has always been worse than what actually happened as a result.

<hears strains of Kenny Rogers The Gambler>

...you gotta know when to hold 'em,
know when to fold 'em.
Know when to walk away.
Know when to run.
You never count your money
When you're sittin' at the table.
There'll be tiime enough for countin'
When the dealin's done...

:)

Originally posted by formfarbeminze
this is what impressed me much when i checked out your website. everything is polished and of a quality substance rarely seen. and you managed to build a functioning team. i think it is good work to get a team working and produce something without seeing each other physically.

Thanks for the kind words!

In addition to looking at a bet from a financial perspective, you could also look at it from a social perspective. You could ask yourself "Am I willing to appear foolish in front of others by doing _____?"

Originally posted by glassjoe
In addition to looking at a bet from a financial perspective, you could also look at it from a social perspective. You could ask yourself "Am I willing to appear foolish in front of others by doing _____?"

Absolutely. What you consider a "big win" or a "real hit" is enitrely up to you.

For me, Steve's poker analogy fully applies.

This is why I've actually decided to take the plunge and be a full-time Indie. Taking a part-time job might be less of a risk for financial hardship, but I also think it reduces my chances for financial success with my Indie business as well as having the game turn out the way I want it to. When I schedule deadlines and milestones, I'll still have to factor in my part-time job and all the variables that come with it (granted it would be easier than dealing with a full-time job).

I prefer to spend 6-8 months 5-6 days a week with the hours of my choosing totally devoted to my game and making it the best it can be rather than 12 - 16 months 2-3 days a week while having a part-time job doing my game on off-hours and days off.

In the first scenario, I'll burn through my savings faster in the 6-8 months and there's a real financial risk if my game gets delayed. But I also have the belief, there's a greater potential for a bigger reward. I'll have more time and patience to better polish my game and handle the necessary marketing, additionally deadlines are more likely to be met.

In the second scenario taking a part-time job, I'll go through my savings a lot slower, so there's less of a financial risk. I could probably do this for awhile before facing financial hardship. But according to my estimates my game could take almost twice as long to complete and then market. This is probably why a lot of Indies veer towards puzzlers because you can develop a puzzle game while working at a part-time job and still complete the game in a reasonable amount of time (.ie < 6-8 months). But if you want to work on a bigger game like a platformer, adventure game, RPG, FPS, and etc, even having a part-time job will most likely put your development time over 12-14 months and more.

So while I am choosing the first scenario, this is not to say I won't get a part-time job in the future if the games aren't bringing in enough. But for my first game, I want to devote myself fully to it and if I'm still financially okay, my second game. While there's a greater risk and also believe if I do suceed there's a greater chance to achieve the type of success I'm looking for (note. my definition of success is not purely monetary).

But we'll see. Hopefully two years from now I won't be making my posts to Dexterity from a cardboard box. :)

Originally posted by Chris_Evans
But we'll see. Hopefully two years from now I won't be making my posts to Dexterity from a cardboard box. :)
__________________
Outside the Box Software
http://outsidethebox-soft.com/

Not sure if your pun was intentional, but "Outside the Box Software" sounds like the perfect name for your company. :)

Originally posted by glassjoe
Not sure if your pun was intentional, but "Outside the Box Software" sounds like the perfect name for your company. :)

ROFL.... that's really funny!

There's an assumption made here I want to point out, particularly with the gambling analogy. The assumption is that the person making the judgement call is able to make an educated assessment of the risks and benefits from his actions.

If you were to ask me if I was willing to chance bankruptcy on the chance of becoming a billionaire, I'd want to know the odds. If the chance of becoming a billionaire was less than 1%, and the chance of going bankrupt was 95%+, I'd say, "Forget it."

I assume most people here would too, which is why we've not invested our entire life's savings into the lottery.

Sometimes these things are difficult to assess - and even educated assessments can be wrong. The experts are often wrong. Some things you just need to find out for yourself.

An example - I used to be involved in fencing. The sword kind, not the post-hole-digger kind. In fencing, any time you make an attack, you are leaving yourself open and vulnerable. You are taking a risk. However, if you don't attack, you are guaranteed to lose --- eventually someone's going to break through your defense, especially since they don't have to fear a counter-attack from you.

So - you HAVE to expose yourself to risk to win. When you are facing a new opponent that you haven't fought or observed closely before, the last thing you want to do is an all-out gangbuster attack. Unless you are facing a beginner, your opponent is going to shred you with his counter-attacks. Instead, what you do (and what your opponent does) is to probe him (or her) a bit. Give him an opening - a minimal risk you think you can handle - and see how he takes it. Dance with him a little bit. Try out some of your favorite tricks and see if they work. See if he's got any tricks that are working against you. Test his weaknesses.

THEN you go for the throat. Well, not literally (at least not in foil fencing, where it's not a legal targetl). You have to be bold and aggressive to score, but you have a better idea of what sort of risks are foolish or useless, versus which have the greatest chance of bearing fruit or running against you.

An old manager of mine had a sign in his cubical that listed the seven "P's"... "Proper Planning Prevents Piss-Poor Performance." If you are going to play the game, you'd better make sure you know the rules well enough to stack the odds in your own favor.

Yeah if things go really badly, I'll have to rename the company to "Inside the Cardboard Box Software." :) But let's not dwell on such things...

Steve, your point is well taken, but I wouldn't use a gambling analogy. Gambling is a purely a game of chance - no matter what people tell you about "systems" - whereas you have much more control over a business venture. Otherwise I'd spend my nights in a casino rather than in front of a computer. :)

And just to be a geek:

They don't realize that a $10 bet with a 60% chance of winning is superior to a $5 bet with a 75% chance of winning.

Could be the lack of coffee and/or sleep, but I actually think that's not the case.

A $10 bet with a 60% chance of winning has an expected profit of (.6)(10)+(.4)(-10) = $2.

Whereas a $5 bet with a 75% chance has an expected profit of
(.75)(5)+(.25)(-5) = $2.50

I'd play the 75% chance game anytime. :)

Of course, for that matter, I'd pay any double-or-nothing game with a winning chance of over 50%. :)

The risk assessment is much more severe than I think most people realize.

Indie game development is a business just like any other and the vast majority of new businesses fail within their first year and more than half of those remaining will die within the next 3 years. That is regardless of the type of business, the expertise of the owner or the current economic / market conditions.

It's just statistical fact - odds are, you WILL fail. So when you consider a quote like:

"If the chance of becoming a billionaire was less than 1%, and the chance of going bankrupt was 95%+, I'd say, "Forget it."

You have to realize that a 95% chance of failure is pretty accurate! And it has nothing to do with how great your game is or how marketable you think a product may be. It's virtually impossible to go from $0 to millionaire without going bankrupt or failing at some point in your life. It's part of business and everyone goes through it - I've gone broke once (a book store I owned failed) and my first shareware game was far (far!) from a best seller.

So, with full knowledge that your game is most likely (95 - 99%) going to "fail" (read: not going to sell enough in it's first year to reimburse development costs/time) regardless of how well you produce it or how original it is, are you willing to still go ahead and make that game? If and when your game fails are you willing to solider on and make another?

That's the test of your character. No how many successes you have but how quickly you can recover from a "failure".

I'm prepared to take risks on game design. I'm prepared to risk doing loads and loads of hard work for little reward. I'm prepared to risk going crazy.

But I'm not prepared to risk quitting my job or losing lots of money. Not now at any rate. Only bet what you can afford to lose...

Originally posted by Midnight
Steve, your point is well taken, but I wouldn't use a gambling analogy. Gambling is a purely a game of chance - no matter what people tell you about "systems" - whereas you have much more control over a business venture. Otherwise I'd spend my nights in a casino rather than in front of a computer. :)


I was thinking in terms of beatable games like blackjack or poker. While there is a random element of course, with enough skill it's possible to have a positive expectation in the long run. This is one reason you often see the same poker pros winning tournaments or reaching the final tables. Despite having a great deal of control over one's business, there's still a significant element of random chance that cannot be controlled. If you look at many financially successful shareware businesses, you'll often find they had one or more lucky breaks that helped catapult them ahead a bit further. But you'll also likely find the reverse too... some unlucky setbacks. Luck tends to even out in the long run, but if you're prepared, you can bet bigger on the opportunities and hedge your bets on the bad lucks. A blackjack analogy for the latter would be to use the "surrender" option, which lets you give up only half your bet if you get a bad hand where you're extremely likely to lose.

Originally posted by Midnight
Could be the lack of coffee and/or sleep, but I actually think that's not the case.

A $10 bet with a 60% chance of winning has an expected profit of (.6)(10)+(.4)(-10) = $2.

Whereas a $5 bet with a 75% chance has an expected profit of
(.75)(5)+(.25)(-5) = $2.50

I'd play the 75% chance game anytime. :)

Of course, for that matter, I'd pay any double-or-nothing game with a winning chance of over 50%. :) [/B]

My mistake. Should have used 65% for the latter figure... wasn't thinking clearly.

Just to give a clearer example of what I mean by betting bigger on your wins....

Once Dweep had been selling for a while, it helped me build a reasonable customer base. That was a small win. But by taking a risk on publishing other developers' games to sell to this same customer base, I was aiming to parlay this asset into something much more lucrative by being able to sell more and more games to each customer.

The downside was having a lot less control over each licensed game as opposed to those games developed internally. I also had to pay out royalties for licensed games. So each individual licensed game is a lot less profitable than Dweep per copy sold, but it helped me increase the value of our customer base. Now every new customer we gain is worth a lot more to us in the long run, since we have a lot more games to offer them.

You could also "bet bigger" by parlaying a successful product into a bigger and better hit, such as with expansion packs, gold versions, etc. I think The Sims is an outstanding example of a game that parlayed a big win into a gigantic win using this approach. One huge win like this can make up for a lot of medium-sized losses.

I agree with Anthony :)
While I was about to get mad when I was working at USM, I think I found a good compromise now, doing part-time job and indie.
If I look back at those days, I wonder what misterious inner force let me work in that way: working in a office for 8h (1h of driving to get there), in a heat place with over 35°C and 60/70% humidity, then get back and around at 8-9pm start working on USM until 1-2am !
I realized that I couldn't do that for long, since I started also to have some health problems...!
So what were the solutions? going fulltime or keep my partime job as a "backup".
I choosed the second option, because I couldn't make a living with my indie game yet. WHEN I'll reach my goal (that is really small, get about 1000$/monthly) I'll have no esitation and I'll quit my daily job: but I'll remain open to contract works and so on.

After all, if you get 180euros for a website that you can do in 2-3h, why not do it? :D

After all, if you get 180euros for a website that you can do in 2-3h, why not do it?

Because (in a way) that time becomes dead-time. 60 Euros an hour is great - but you won't get any more earnings from that hour. Contrast that with a shareware program - initially you get no return for the time you spend. But in the long term, the more sales you make of the program, the more you earn for those hours that you put in. The hours keep providing value long after the work is done.

Don't misunderstand me, I understand your point and I'm in a similar situation right now (I work fulltime on my software, it doesn't provide a fulltime income [yet] and I have a casual job that enjoy on the side). I think it's an alternate viewpoint worth considering though. When I think back to the first two weeks I spent on my first program, over the long term they were probably the most lucrative two weeks I've ever had.

EDIT: Note to self, stop putting quotation marks around words that don't need them :)

The hours keep providing value long after the work is done.
Well, I think that this could be true, but 3-4 years ago, when there was no competition.
Nowadays things are really different. A lot different.
I don't believe I'll be able to go fulltime indie until I have at LEAST 4-5 GOOD games made. And even with 5 titles, I doubt I'll earn more than 1000$/month if I stop making new ones.
Since each game will take a minimum of one-two months (and if I want them to be good games probably will take a LOT more) I gladly take those 60euros/hours now, because when I'll get back my hours spent on shareware, at least 2-3 years will have passed.
Surely there are exceptions... but even games like Beezly Buzzwords (topsellers ones) won't sell for 100/day for more than 3-4 months, after they get out of the big portals like real or bigfish.
I really think that it is quite difficult nowadays just make ONE shareware game and be successfull... the probabilities of that happening are 1 on 10.000 (or even more :).

I may be just pessimistic of course :rolleyes:

Maybe I've been listening to a little too much Tony Robbins latley but I only Lose when I give up:)

I worked at a big art company a few years ago and my boss there became a millionaire a few times, but he also became completely broke a few times as well. He told me he didn't really care about if he had the money or not, it was a matter of him being happy with what he was doing.

This is a win/win situation for me no matter how it turns out because I'm living the life I've been dreaming about for years:)

Originally posted by SyneRyder
Because (in a way) that time becomes dead-time. 60 Euros an hour is great - but you won't get any more earnings from that hour.


That is not necesseraly true, if with that money , he buys graphics or sounds for the game he is making then the 60 euros are bringing more earnings.

pat

Originally posted by SpikeSpiegel

He told me he didn't really care about if he had the money or not, it was a matter of him being happy with what he was doing.

Maybe that's the reason he went broke over and over again ;)

That is not necesseraly true, if with that money , he buys graphics or sounds for the game he is making then the 60 euros are bringing more earnings.

Yeah, good point. And there's nothing wrong with doing work on the side if it makes you happy and brings a benefit etc. I was thinking more of if the work interferes with achieving your true goals... and reading the post again, I guess 2-3 hours doesn't really do that.

I guess my point was to consider the long term view, is it better to get 60 Euros an hour now, or could working on the program work out better in the long run? When you factor in savings interest rates, investing back into the business etc, I guess it's a no brainer :)

Originally posted by Jack_Norton
Well, I think that this could be true, but 3-4 years ago, when there was no competition.
Nowadays things are really different. A lot different.
I don't believe I'll be able to go fulltime indie until I have at LEAST 4-5 GOOD games made. And even with 5 titles, I doubt I'll earn more than 1000$/month if I stop making new ones.
I may be just pessimistic of course :rolleyes:

I think you are being a bit pessimistic. I can tell you that both Orbz (http://www.garagegames.com/pg/product/view.php?id=5) and Think Tanks (http://www.garagegames.com/pg/product/view.php?id=12) are making more than $1000 US a month. I think how much you will make depends greatly on how much you put into making and selling the game, whether that is innovation in game design, nice visuals, choosing good technology, choosing good distribution partners, or what-have-you.

When we started making games we had the mentality that we'd crank out a few small casual games and rake in a lot of money. The competition is fierce in that market, obviously, and in the end we've chosen a bit different route. We are trying to make games no one else is making, or if there are competing products we are trying to at least do something revolutionary (if not evolutionary) with the game design.

I can tell you that both Orbz and Think Tanks are making more than $1000 US a month.
Ok I've been too much pessimistic then :)
But you have to split the revenues of the games between authors, so at the end you may get around 1000-1500$/monthly.
That sum would be good for me, as a start.
What I want to point out here is that ppl that quit a good job of 2000-2500k$ monthly can't forget about getting that money back easily after 1-2 years of indie dev, unless they are really lucky/skilled/etc etc :)

Originally posted by BarrySlisk
Maybe that's the reason he went broke over and over again ;)

Your right, he lost his money because he didn't really care about it and let other people take care of it. The biggest thing I remember about him was that he was the same person with and without the money, he just loved the art.

Originally posted by Dexterity

So one way of looking at this is, "Would you be willing to risk going bankrupt for a chance at becoming a millionaire

One of my brothers is now a millionaire (he's not a developer by the way) and he has gone through bankruptcy 3 times. It may therefore be that you have to consider the risk of bankruptcy more than once.


Alfie

I read that the average self-made millionaire has gone broke or nearly broke 3.2 times. So your brother's experience sounds typical.

At least in the USA, bankruptcy is certainly not the end of your financial life. About 1.6 million Americans file bankruptcy each year. Practically speaking, people can financially recover from bankruptcy in just a fraction of the time it stays on their credit report. Despite some abuses, the relatively lenient US bankruptcy laws encourage reasonable risk-taking. If you make a big gamble, you might fail and have to deal with having screwed up credit for a while, and you might lose some personal property (but you get to keep at least $30,000 worth, so you certainly won't lose the essentials). But if you succeed, you might create a successful business that creates jobs for other people and helps other businesses too (vendors, suppliers, etc), not to mention becoming very wealthy yourself and filling a need for your customers.

Some people seem so afraid of bankruptcy that it paralyzes them from taking risks even when the odds are greatly in their favor. Obviously it's something to be avoided, but it shouldn't be so paralyzing as to think of it as equivalent to financial death. It's just a temporary setback.

went broke a few times until you made it? offcourse this is the standard way these things work.
it is like shooting onto a target: you may miss the first shot, but if you only shoot often enough you almost have to score sooner or later.
offcourse shooting costs you time energy and bulets do cost money. so you better hit the black spot as soon as possible...

Originally posted by Dexterity
I read that the average self-made millionaire has gone broke or nearly broke 3.2 times. So your brother's experience sounds typical.


Hey, this sounds like me! (Not the millionaire part that is .. :))

I think this analogy works in many other respects as well. I spent a good five years practising hang-gliding and the ratio between hours spent in the air and hours spent on the hobby (sitting physically by or at the airfield) might be something like 1/800-1/1000. Success rate between bombing a launch and making a cross-country flight is somewhere in the 1/40-1/100 region. There are literally a thousand ways things can go wrong, and several of them includes you getting more or less hurt. And like anything good in life, take-off is optional while landing is mandatory. You have to see it through, there is no way to stop in the middle.

I love it. :)

There is magic when you hit a good day, gliding from invisible thermal to next. Grazing cloudbase at 5000ft, floating around the sky for hours while the countryside flows past. Totally relaxed, and still perfectly present and aware of the light, thin thread your life is hanging on.

It is pot luck, but for some reason the old pilots have a lot more luck in store .. :)