The Secrets to Start-up Success

Media Molecule, nDreams and Mind Candy. All successful companies in a new era for the video game business, creating successful and innovative products for targeted markets, and each with a very different path to success.

Speaking exclusively to GamesIndustry.biz, all three shared their experiences and advice to developers looking to form their own start-ups, where a great idea is just the beginning in the ever-changing and disruptive new games economy.

Mark Healey and Kareem Ettouney are two of the four founding members of Media Molecule, creators of the ground breaking title LittleBigPlanet. The game has been massively successful, with players using the franchise's tools to create and upload over four million levels over the past three years. Media Molecule was acquired by Sony in 2010.

Both men were actually with Lionhead when they decided to form their own studio, which was originally called Brain Fluff. At the time, Healey was already developing his own, one man project – Rag Doll Kung Fu - in his spare time.

"If I was starting out today I would make my first project quite small, just to go through the process," said Healey, who admits part of the driving force behind Rag Doll Kung Fu was a desire to annoy his programmer colleagues.

"I know Alex [Evans] would probably say something different," he admits. "Alex would probably be like 'no, f*** it, just dive in and aim big.' Personally I would do it with something small first, just so you get the experience of starting and finishing, localising and doing all the stuff that you probably aren't aware of."

Ettouney meanwhile suggested looking after the more creative members of staff was essential to a productive team. "A big part of the investment, in my opinion, other than doing the good work and the creative work, is understanding how to work with creative people."

"It's kind of like an entertainer by craft, a person who does something and gets their kicks from the happiness that comes as a result. So if they're not getting that their cycle is broken and they get weaker and weaker. So it's important to remember these things and not just be completely objective."

You should also expect and prepare to handle disagreements. Healey especially remembered times when the close team struggled to get along.

"If you're going to do a start up with a bunch of other people take it for granted that you are going to hate those people at some point," he warned.

"A lot of start-ups probably fail at that point, they'll have disagreements and then go their separate ways, but if you can accept that that's actually just part of the process, and you work through it, that's what separates the men from the boys."

While Media Molecule had the support of Sony, neither Healey and Ettouney believed that the backing of a big publisher was essential to a start up's success, but did suggest finding someone with a business mind to help with commercial matters.

"It's something as game developers we're pretty useless at, I think," Healey admitted.

Media Molecule eventually signed up with Sony and received their support with some of the more corporate processes, but at first worked with [FreeStyleGames founder] Chris Lee, who helped with both the economic and business realities of setting up a studio.

"That's very useful, because they can be responsible for making sure that you don't have to think about that side of things."

Ettouney stressed the importance of house keeping and paper work too. "If you don't have that side well looked after the company gets vulnerable as well. So more important than having the support of a publisher is having a complete band that has a sort of drive and craft."

"It is hard because you need somebody to finance it and you need some kind of real world scenario to be able to survive," he admits. "But we know a lot of people that managed to last for a long time in a very independent set up."

Perhaps surprisingly for a company that has spawned a thousand bedroom developers with its game's innovative tools, both spoke about the importance of a background in game development with bigger studios, learning the process and improving your skills. All of the team already had a strong foundation after years of work in the industry.

"I like independent culture but I don't want everything to become like The X Factor," explains Ettouney.

"It's like 'I'm not going to do anything, I just want to hang out with my friends and find a deal! Sony, come on, can you finance us?' That's a bit wishful. You've got the odd genius that's 15 and unbelievable, but most of the time I would recommend actually to somebody young to go and work somewhere. Learn a bit."

There are other approaches to teaming up with a big publisher. Hampshire studio nDreams also signed a deal with Sony, and launched PlayStation Home's very own ARG, Xi in 2009. It attracted 600,000 users, and nDreams continues to create spaces, items and games for the virtual world, recently launching Aurora on the platform. CEO Patrick O'Luanaigh believes there's never been a better time to form a new studio.

"There are lots of new start-ups at the moment, I've had meetings with a few people, developers, and they sound quite big and you go and meet them and it's one person and a couple of freelancers helping them out," he said.

"If I can see a single person who hasn't got any experience but they've got passion and some brilliant ideas, and they're really willing to put the effort in and work, then I think we'd work with them."

He suggested starting small, finding the right rather than fashionable platforms, and keeping a tight rein on expenditure.

"Keeping your costs low means you don't have to sell 100,000 copies just to break even, or a million copies, or five million copies in the case of console games."

"Join TIGA as well. There's lots of small new publisher, new developer forums and casual game groups where we go and share idea and talk about stuff. Or just meet up with other developers doing similar things, you might find that that makes sense. As a UK industry we need to spend more time sharing information and helping each other out."

O'Luanaigh also spoke about the importance of finding a niche like table tennis or football management, as a surprising recipe for success. He pointed to Railsimulator.com, the creators of RailWorks as an example of catering to a dedicated audience.

"It's not terribly glamorous but you know what? These guys have got a captive audience, EA aren't going to come in and pee all over them, they're in a great position and they're making a lot of money. So I think either in a genre or a platform, find your niche."

Mind Candy is definitely a company that has found its niche. It's founder, Michael Acton Smith, a charismatic entrepreneur in snakeskin boots, jumped from online retailer Firebox, to ARG Perplex City before creating Moshi Monsters, an MMO for children that Acton Smith describes as "Tamagotchi meets Facebook." In June it announced it had reached 50 million registered users.

Despite the fact that at one point Mind Candy teetered on the very edge of bankruptcy, Acton Smith has nothing but encouraging news for new studios, and argues that you don't need your hand held by the big publishers or platform holders any more.

"I think this is an amazing time for indie developers to be building and experimenting," he told GamesIndustry.biz.

"The broadcasters and the film studios, the games publishers, the historical gatekeepers – their power is diminished. No longer do you need to get their seal of approval to get mass distribution. You can come up with an amazing idea with a relatively small amount of money, put it out with Apple on iOS or launch it as a mini Flash game and wait to see if there's an instant connect. If there is then you can raise money."

Moshi Monsters has expanded from a browser game to an entertainment brand that produces books, toys, a Nintendo DS game, and soon, television and live events. It's now worth around £125 million, and was originally funded by investors, something else that Acton Smith says new indie developers should feel confident about too.

"I've never seen a better time to raise money either. There's a lot of people wanting to invest in exciting internet properties and I still think there's tons of opportunity in gaming. Particularly the more sophisticated investors, they've seen how well Zynga has done and they've seen this freemium model work so well in non gaming websites."

So the message for developers looking to go it alone seems to be start small, make sure you pay equal attention to your creative team and the vital business part of the start-up, and don't be afraid to seek out new investors to help fund your projects.