My good friend, Steve Baer, is a co-founder of The Game Agency, a company that seeks to improve the marketing and brand efforts of its clients by tapping the gaming community through original content. Steve is one of the most creative and hard-working people I know. He's my go-to guy when I have a knew idea that needs an honest smell test. I am extraordinarily lucky to have him in my life, and feel honored that he was willing to have me interview him for this guest blog about how he started his own business. Drumroll please...
1.) Could you talk a bit about what motivated you and gave you the confidence to start your own company so soon out of business school?
It takes a fire in your belly to start a business and this is something I have been talking about doing ever since college. So, while I am only four years out of business school, my desire to build my own business has been 10+ years in the making. I come from a family who couldn't work for other people. I don't mean that in a negative way, it's just that my parents and grandparents were entrepreneurs... from regional pharmacies, to national grocery chains to consulting firms to law firms. While it often easier to get a job with a company than to start your own business most people who strike out on their own have a direct example of a parent to look to and that definitely is the case within my family. Sometimes the motivation to start a new venture comes from having reached the top of the pile where you are, looking around, and saying, "What's next?" The drive to build something new can also come from deciding that you're stuck in the middle instead of at the top. Fear of stagnation can be a powerful motivator, especially if you have an idea for something that could be at least more interesting and potentially more lucrative. This was my situation. I am passionate about my business model and I tried to execute it for my former employer but they simply weren't able to look beyond the way they did business for the past 30 years. So I said "it's finally time to open up my own shop".
2.) Of all of the industries out there, why did you choose to build your business around gaming?
In 2007 the U.S. video game industry experienced over 40% growth and achieved a record-shattering $17.94 billion in revenue. As the music industry declines and the movie industry stays stagnant the video game industry is growing leaps and bounds.
If you don't know much about video games you might be thinking "how many games can men 18-34 really play?" Well, there's definitely a limit but that's not the only demo playing video games any more. The average gamer is 33 but gamers come in all shapes and sizes. 31% are under 18 years old, 44% are 18-49 years and 25% are 50+ years old. Interestingly enough, the fastest growing demographic of gamers is women 50+. If that's not surprising maybe some of the facts and figures will be.
- 31% of children under 3 are already using a computer
- 78.1% of 6-11 year olds report they play online games - by far the largest percentage performing any online activity
- 8-10 year olds play interactive games for an average of 1½ hours per day- 9 out of the 10 most popular websites for boys 9–10 years, and 6 out of the 10 most popular websites for boys 11–12 years feature advergames
- Teens spend 7.4 hours per week playing games
- 62% of teenagers play games at least one hour a week and 34% play over 6 hours per week- Playing games is the number 1 computer activity for 8-18 year old, beating out IM and e-mail
- More than 25% of teens do more gaming than homework- 19% of men play games more than they watch television
- 50% of males play games more than they read books
- Women make up 50.4% of the online game market
- 41% of adult women are daily gamers, using it to relieve stress, increase skills and inspire social interaction
- Women over 40 spend more time gaming online than any other demographic –averaging 9.1 hrs / week - 35% of Senior Execs Play Casual Video games at Work
In short, every demographic is gaming and my company is focused on reaching each and every gamer with content that they would find interesting. Whether creating new intellectual property, developing branded games or increasing the reach of existing content our goal is to expand the footprint of the video game industry.
3.) Could you talk a bit about raising capital - how you went about it, what sources you looked into, why you decided to go the path you've gone when considering all of the capital raising options?
Starting a business is tough. You have to a write a business plan, build a client base, hire employees, find office space, etc. There are plenty of challenges, but the one that many entrepreneurs find most daunting is raising start-up capital. Fund raising has been one of the more educational steps over the past year. My partner and I have spoken with Banks, VCs, corporations, high net worth individuals, family, friends co-workers, etc about funding us. We received a few offers but non of them seemed quite right. Raising capital is a catch 22. Funding insures security but it reduces one's equity. We've been told over and over again, our most tangible asset is our equity. So for the time being we have dug deep into our own pockets, hunkered down and started the battle to start up and stay alive.
4.) There's a lot of talk about developing a business plan with any one of the cookie cutter models out there and having all of the answers before starting a business. For you, how important was it to have a solid business plan - a mission statement, a value prop, etc. - and to have all of the answers before diving in?
There's no question that writing a business plan is a key step to starting a company. There are all sorts of models out there. My partner and I started off by buying a software program and typing away. In our first 6 months our plan changed 7 or 8 times. In retrospect it changed based on the desires of our prospective funders. Ultimately we returned to our original plan. While this was definitely a journey it showed that our initial concept, industry insights and mission statement were on target.
5.) There's a lot of fear among entrepreneurship - figuring out taxes, building a client base, generating cash flow, leaving a job and a steady paycheck. Did you have any fear in starting your business and if so how did you overcome it?
Starting your own business is definitely a roller coaster ride but since taking the leap of faith I followed a few key steps.
No. 1 - Market and Sell – The more potential customers/clients you can find and sign up, the more money you will make. And more importantly, the more bills you can pay. You have to market and sell every way otherwise you will fail. Remember, nothing else in business matters except customers – paying customers. Not the best mouse-trap, not the best technology, not the smartest guys in the room, not intellectual property, only customers.
No. 2 - Have A Sense Of Urgency – Treat every day and every dime like it is your last, right at day one of opening your doors.
No. 3 - Take Nothing For Granted – Never take a potential sale for granted. When a potential customer or client says; “Let’s do the deal.” Don’t get overly excited right away.Don’t go out on a spending spree, start immediately paying bills, thinking that the check will soon be forthcoming. Only get excited after you receive the check.
No. 4 - Exercise Every Day – Starting and building a company from scratch takes a lot of energy. Entrepreneurs need to build some form of exercise, no matter how small every day.This is especially helpful when facing a problem. Some of my best solutions to problems came during short jogs around the neighborhood.
No. 5 - Stay Away From Negative People - Time is precious for new entrepreneurs. Don’t be around people who are negative and will try to bring you down. You still need to stay positive and optimistic.
No. 6 - Have A Daily Business Plan - In business, you have to know what you are doing and then do it. Having and executing your daily business plan will be your road map to success. It will force you to understand what you are doing and why you are doing it. Time is very precious for entrepreneurs.
No. 7 - Visualize Success - Entrepreneurs need to visualize success at all times, not failure. Your mind needs to know that although there will be many ups and downs, a light does exist at the end of the tunnel and it is bright. By visualizing success, your actions will become more confident. And increased confidence breeds success.
No. 8 - Remember The Alternative - You need to keep telling your mind, especially during the down times, why you are doing this in the first place. Remember, you are trying to create a better future for you and your family.
No. 9 - Maker sure your family is on board - Without the support of my partner's and my wives we wouldn't be doing this. It takes everyone's encouragement. When you can't be up the person next to you needs to be. Luckily my wife encourages me to follow my passions.
No. 10 - See No. 1 Again! - Starting a business from scratch, totally on a shoestring, is not for the faint of heart. Buckle in and get ready for one heck of an emotional roller coaster ride.
6.) Did you or do you encounter any naysayers when you talk about your business to others? If so, how do you deal with them?
Yes, Yes and Yes... It's easy to find flaws and thank goodness for everyone that people have pointed out. Sometimes they are valid, sometimes they are way off but each piece of feedback helps us think and rethink our approach. I am open to any and all feedback.