Tuesday, 27 November 2012

Asymmetrical business plans.

In 2006 everybody was saying that free is the future. If you can still find them, lots of articles said that free would be the new price point. I said that was bull and I often became unpopular and labeled an idiot in talks about the matter. 

Well, it's still bull for one simple reason: in order to make money you need to charge something. I understand the allure. Companies need a way to differentiate themselves and if somebody gives something away for free when others are charging they can find a unique business model that works for them. They get a lot of traction and other people hop on the bandwagon. Then for some reason this new business model is "the future" and it will always be like that.

What ever happened to just charging somebody money for a product. Let's look at the oil industry or the fashion industry.

Get the oil out of the ground -> sell it -> profit -> repeat
Design and produce the clothes -> sell it -> profit -> repeat

Let's look at an app model

Produce the app -> give it away for free -> hope to make money on ads -> get users to sign up and build a list -> sell another product on your website -> ??? -> profit? -> sell your company and retire to cancun.

Perhaps I have embellished the plan a little and yes there are ways to make money with ads, and selling lists and raising notoriety. However, as a business it's nice to have a steady cash flow at the end of the month and all of this other motion is unnecessary and frankly a waste of time.

On top of this is kickstarter. Why do you need money upfront. A lot of people on kickstarter just have an idea. Wouldn't it be better to produce a product on your own and make money from that? It makes sense that if you have a game idea then you should just make it and profit from it. But the problem with that is that everybody is giving games away for free and when you charge one measly dollar you are suddenly the worst person to exist on the face of the earth. 

I think there needs to be some awareness when it comes to software and symmetrical business models. How about something like this

Make the software -> sell it -> profit -> repeat

This way more small business can exist. With asymmetrical business models the money tends to concentrate. There are other factors such as saturation and piracy but in the end what you need to do is make money and the best way to do that is to charge it upfront.

Friday, 16 November 2012

The value of a game

There is always so much chatter about how much a game is worth. Gamers seem to like to debate to the dollar how much a game is worth. If it is overpriced or underpriced. This is one thing that I would like to see go away. You have a range from free to about 60 dollars as a developer setting a price. Frankly the price of the game is really up to the developer.

Really for most indie developers you need a price point of about 10 - 20 dollars. Now instantly people are going to hate that but from a business standpoint, you really need to charge more rather than less. I know that people will say well if you sell 1 million units....

First of all as a small business you need to be profitable with less customers. Even getting 50k people to buy your product is challenging. For whatever reason if you market and advertise your product geting a person to pay 1 dollar, 10 dollars or 30 dollars isn't that hard to do. It's getting the person's wallet out which is the most important part. So if somebody is going to pay 1 dollar they might as well pay.

In other industries it is common place for boutique businesses to charge more money for their niche product. Why can't this work in games. Let's say I am a developer who produces a very unique platformer game. As a consumer, sure you can find a free platformer to play. There are tons out there but my platformer is unique. It is not like the free ones. It's different. There is a reason why you pay money for mario games versus just going to find a free platformer.

This isn't my idea. I stole it from the fashion industry. By the way the fashion industry is worth 1.25 trillion while the game industry is only worth 74 billion. The game industry could take a page from this. Boutique studios could make better games and be more profitable if we did this.

The hard part is changing people's attitudes on the subject. Next time you see an indie studio charging more money for their game. Perhaps it is not because they are evil and money hungry. Perhaps they are just wanting to pay the bills because they know they are only going to get 30k sales from the game. If anything the indie studio people are less money hungry than the big studios. The few extra dollars goes a long way to support somebody with passion. Think of the few extra dollars as a tip. Next time you go out for dinner look what you spend on your meal and tip. Perhaps you could tip the indie studio as well. After all in order to make a game you have to be intelligent and productive. Don't you want to support this kind of behavior?

Thursday, 15 November 2012

Why 4 years is really enough education

It seems like everybody in their 20s has 2, 3 even 4 degrees. That's a lot of education. While I love learning I'm such a stereotypical entrepreneur and hate school. And as a full disclaimer school is awesome and everybody should go if you haven't gone then what the hell are you doing?

But now you can learn more efficiently. So you can get a 4 year degree in less time. Especially since most college institutions only have 13-16 week semesters. That gives the student a lot of down time. In the past I suppose you could have got a low end job in your industry or internship. But now students fight to be slaves at un paid internships instead of paying jobs. 

Unpaid internships are the worst. I have never done this and I will never do this at my company. 

So there are several possibilities. Perhaps you can get two degrees at once. That is a 2 year college degree and a 4 year university degree. That way at the end of your 4 years you have your two degrees. Or you could even get 2 college degrees and a 4 year university degree. Then you have 3 degrees huzzah! But some institutions won't let you study with another institution. Im sure there is an academically bad reason for this but whatever. 

Anyway, education methods evolve and improve just like everything else. Maybe not as fast as computers but education can be done faster and cheaper so why aren't we doing this? 

Not having a good job for some people is really devastating. It used tob e that universities guaranteed you a better life, now it just generally gives you a better life. When will educational institutions learn that just because you spend more time in their walls doesn't mean you will actually be a better person. So let's just focus on people learning instead of all the other hot air associated with universities. 

Wednesday, 14 November 2012

Why are schools against self publishing?

When I was growing up publishing anything was an ordeal. You had to go to a publisher and wait. It was really long process and you got screwed in the end. The publisher took too much and it took 6 months to close a deal.

Now you can self publish pretty much anything. So why don't schools promote this? What if it was mandatory that you release a book on amazon in order to graduate highschool. If you don't want to publish a book, what about an app or a game. The bottom line is that you have to self publish something before you leave highschool. Some people think highschool might be a little young. But what about college or university? What if in order to graduate you had to publish a book. It could be a fictional book.

Whenever I talk to educators on the subject they always look at me and say it's a horrible idea. Perhaps it is  a horrible idea. We wouldn't want the students to outshine the teachers now would we.

When I was 17, I felt this too, some students were amazing and they progressed quickly. To be honest I felt a little defensive. How could this student who was with me for 6 months be this good? That was when I was 17, when I was 22, I just said screw it. I want you to become the best person possible.

So why is self publishing such a bad thing? If anything it gets the students motivated. What would be wrong about saying to a bunch of grade 10s that by the end of high school you should have published a book. What would be even better is if they published an educational book such as how to teach math. 

We should teach kids at an early age to produce and release. It should be a habit for them. It wasn't always a habit for me. I had to unlearn so many years of school and not listen to people in order to get to where I am today. Ask any successful person who has released a project that the most important thing about releasing a project is releasing it. You don't fully learn from the project until you push the release button.

Perhaps one day schools will be a beacon for productivity. That day is certainly not today. 

Tuesday, 13 November 2012

Looking on the bright side

The last blog article was a little bit negative. I don't like to be negative so let's talk about something positive. Your career is completely in your control. If you want to work at something you have the power to change something. If you want to change something in your life you can just go out and do it. The only ingredient you need is time. It can be hard especially if you have a full time job and possibly other people to support.

This article sums up how you can change your life. It is a little outdated and for musicians but the theme is still true.

http://sivers.org/was-10-now-90

So what do you need to do in order to change your life. First of all asses what needs changing. Then assess and action plan. Stick to that action plan. Eventually your new life will slowly come to be.

The keyword is slowly. There is a saying in business: "Over night successes take 10 years to happen". If you quit your job on Friday don't expect money on Monday. For me part time work was always the answer you could work two jobs. One is your dream job and the other is your day job. Always make sure that your commute time is as short as possible. Walking distance is best but you want your commute to be no more than 30 minutes. Preferably 15 minutes is the best. Even if you have to pay more it's worth it. When you want to change your life you need time more than anything. Remember when you start a business you want to spend a little money as possible. For me it was roughly 3k a year and most of that was going to computer equipment and licenses.

If you want to change you life start today. It's as simple as that.

Sunday, 4 November 2012

The real consequences about not having a job

If you are a 20 something you are probably having a hard time finding a job. If you are a 30 something and have lost your job you are probably having a hard time finding a job. Bottom line: it's really hard to find a job especially if you turned 18 before 2008. Life is harder, jobs are harder to find and it doesn't seem to be getting better. But what are the real consequences about not having a job.

Disclaimer: I know how hard it is to find a job and I sympathize with everybody who wants to work and cannot find work.

If you do not have a job in your field you are potentially missing out on 2 things.
  1. Money
  2. Experience
The average college graduate makes 40k a year. That's 110 dollars a day or 770 a week. You can make this amount in another job such as a retail manager but I suspect if you went to school you don't want a retail management job. Perhaps you want to make more money. Well the more money you don't make you lose out on.

The second thing you are missing out on is experience. It's roughly 8 hours a day, 40 hours a week or 2000 hours a year (50 weeks a year). On top of this you are missing out meeting successful people in the field. 

These are two big items you are missing out on if you have a job. It gets compounded if you are in debt. So essentially you are losing 8 hours of experience, 110 dollars of income and most importantly the chance to be around competitive successful people. 

You really have to treat this as a loss. I sure did. 

Now what do you do about this. Well most people just go to school but you if you go to school you are losing more money and you are for sure not getting any experience. If you haven't noticed school is all about attending lectures and not gaining experience (for the most part). As I have said before, in a CS degree you do not make any products you just sit in class and do assignments.

The average cost of education in the states is 20k a year plus expenses so let's just say that every year you are in school you are losing out on 60k a year + 2000 hours of experience. School would be better if you could get real world experience instead of lectures. If I were in the position of employment I would almost pay 20k to go and get real world experience.

Another option is to start is to start your own business. This way you do get real world experience and you have the possibility of making money. It may not happen right away but if you work a 40 hour work week, you release good products and you learn from your mistakes you will not only get the experience but the money as well. 

But there is one big problem with this route and that is you cannot get credit for your work as an entrepreneur. This will change eventually and the sooner the better. So if we mix all of these elements together...
  • Super ambitious person
  • Intelligent and adaptable
  • Has a college degree
  • Cannot find a job
  • Starts own business to make up the financial and experience loss
... all of these elements equal something but currently equal nothing. Public perception on this issue needs to change. In fact in 1st year college this should be presented on day one: be prepared to be an entrepreneur because most of you won't be able to find jobs. 

And really the true litmus test to see if somebody want a career is that they will work on their craft in their spare time. If you don't want to spend your spare time working at your career then perhaps it isn't the career for you. 

Friday, 2 November 2012

Technical skills.

I often read resumes from people and I also get questions from people looking to get into software. Something that people tend to highlight are their technical skills (and to be honest I would probably highlight them too if I was a applying to a job).

But let me ask you a question: would you highlight your math skills? Of course not. Programming is the new math.

Being able to program and other technical skills are a must. Even if you are an artist, graphic designer or musician, you need to know how to program. Seriously.

So if you don't know how to program start with HTML, CSS then move to javascript. Learn these and you will get hired next time you apply for a job.

Thursday, 1 November 2012

Private school versus public school a new devide

We all know that private schools and public schools operate a little differently. But now with the rise of online education will there be a fundamental difference between the way private and public school teach?

Public schools are very much by the book and they want teachers to fall in line with their philosophy of teaching. That means you have to go through the education path they set out. So you have to get an undergraduate and get a teaching degree afterward. Private schools however, judge you more on experience and teaching ability. So this means if you are an awesome teacher without certification you have to teach at a private school because the public sector wants nothing to do with you unless you jump through their hoops.

Private schools are more about education versus the teaching philosophy. With the rise of computer education what a private school could do is fire half of their staff and buy software that will teach children. A public schoolboard would never do that especially in most schoolboards once you have been teaching there for a certain amount of time you can't get fired. The only way you can get fired is if you beat a kid down with a 2x4.

So private education is all about the student learning and the public system is about a teaching philosophy. If the public system was about student learning they would evolve much quicker than they do.

What happens if your kid goes through the Khan academy and then goes to a public school. Basically, the kid will go from a hyper learning environment to slow classical lectures. If you put your kid through online training then you might have to fork over the money to go to private school because that's where the kid will experience the same learning style.

The public system will not adopt the style of the khan academy and it's a shame that they won't. They could teach kids faster and better. But it goes against philosophy which is more important to them than students learning. It's odd that in that in every other business if you find a better faster way to do a task you are rewarded but in the public system you are shackled by their philosophy of teaching.

The new teacher gives a lecture once and teaches thousands. The traditional teacher will become obsolete. I know the debate between private versus public for kids has always been a matter of preference  But now with online education private versus public can be a matter of quality and style. If a kid learns with his iPad since age 3 there will be friction when you force the kid to sit, shut up and listen to a teacher. All schools have to do is put their lectures online.

The pipe dream would be that as soon as you enter kindergarten you have all of the video lectures and assignments from k12 to complete at your own pace and the major point to go to school is to learn social interactions and to collaborate.

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