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Interview: How Joystick Labs Is Supporting Indie Entrepreneurship
by Leigh Alexander
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August 9, 2010
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Most in the game industry -- and those who'd like to be in it -- know that funding is the arguably the biggest challenge to an independent project. Now, a new Durham, North Carolina-based organization hopes to assist, but it's aiming beyond the traditional model of project-based funding -- Joystick Labs' aim is to provide support for entrepreneurs who want to build their own independent studios.
"The mission of Joystick Labs is quite simple -- we want to seek out and identify the next generation of young entrepreneurs," says Juan Benito, the incubator's creative director and co-founder. "We want to support and nurture their company and project and help them launch their own game studio as independent business."
Getting project funding is a viable avenue for many indies, but further support is what starts careers, asserts Benito, who began his career in the 1990s as co-founder of Ghost Recon house Red Storm, later purchased by Ubisoft.
"We're very, very focused on creating great IP and creating great games, but we're just as focused on helping developers really understand the businesses environment they're operating in."
This is all the more relevant with so many new platforms and business models emerging -- many independents will be getting their start in the lower-cost, booming young mobile and social space, and in a lot of those areas "the revenue model and marketing plans of those games is at least as important as the game design itself," Benito says. "So we want to help teams across the board, not only with having really solid development capability, but really with how to leverage that game in the market."
Joystick Labs began accepting its initial round of applications in June, and will continue until August 13. The initial focus has been on emerging platforms and web -- "We're very focused strictly on digitally-distributed games," says Benito. "We're not looking to do the traditional retail kind of space."
"That said, there's an incredible variety among the applicants we've received to date from the Northeast, the West coast, as well as as far away as Brazil and Argentina. We'll consider any game at all, so we've had of course Xbox 360, Xbox Live Arcade and PlayStation Network-type titles, as well as iPhone, Android and Facebook-type teams. There's been quite a diversity of applications to date."
"We imagine that our scope may grow and our focus may change in subsequent sessions," adds Benito. "We'll try to have another one run next year through the summer."
The program has a number of mentors on board prepared to collaborate with the teams -- the Triangle community in North Carolina, to where accepted teams will need to relocate, is tech-rich and plays home to strong programs in local schools like Raleigh's Wake Technical and N.C. State University's design program. It's also the headquarters of powerhouse Epic Games, and Joystick Labs counts the company's head, Dr. Mike Capps, as one of its many industry mentors. Having a development environment exposed to the school's students for internships and similar opportunities is a win-win for educators and teams alike.
"We've had some great partners and some really great investors helping us out over the last year and a half," enthuses Benito. "There's a tremendous amount of goodwill, especially in the Triangle area. All the other game companies have really stepped forward to help and offer their advice; mentors have promised to come in and chat with the teams and give them advice and help them network. That's something that's tremendously gratifying."
Specifically, teams are eligible for up to $6,000 per founder, or $18,000 in seed capital per full team. In return, Joystick Labs gets a "modest equity stake" in the new studio. So how can hopefuls get on board, aside from submitting an application at the website? "What we're looking for is teams of three to five developers that have a real passion about the project they want to make, and they also have the entrepreneurship necessary to create and run their own studios," Benito explains. "They also have to relocate to Durham and actually participate in the labs. It's a state-of-the-art facility, we've got legal and corporate and marketing and accounting resources that help them focus just on creating something really cool."
This kind of funding and resource support is geared at helping start-up devs weather the high challenges of the competitive game industry. "Teams that I see struggling in regards the these opportunities tend to exhibit similar traits," notes Benito. "They're not really coming up with an idea that's significantly different from anything out there. We're not very interested in sequels and clones -- we're looking for something really original. You've got to have a lot of brainstorming, you've got to come up with something that's going to stand above the crowd."
Benito and his team's vision for Joystick Labs involves developing a brand -- people will recognize projects associated with the incubator and know to expect a certain level of quality and creativity. "People will want to see what's coming out with each session," he hopes. "And we're also connecting with marketing organizations to help teams understand media strategy, and find creative ways to differentiate themselves and put the product out in front of the audience."
"Doing something new is always a challenge, I think. Changing people's expectations or preconceptions of how the market works is always a bit of a learning curve." says Benito. That's why it's so hard for indies to get traditional funding when they're pioneering ideas that are brand-new to the market: "That's why we think an incubator is such a good opportunity for developers. We can place bets on teams that are brand-new."
"I hope that it leads to the creation of more great game companies," says Benito. "It's really quite simple -- we want to see as many developers as possible unleash their full potential on the market and on their audience. Doing so will yield more great games, more jobs for developers, and benefit the industry overall with the creativity that we see from the independent developers... it's a big benefit to the game industry overall."
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Juan, I've been rallying my team for some things since we talked via email recently. I'm convinced that we should talk more about working together. I'm working on getting an application in soon. I guess we'll go from there.
To others on here that are like myself looking to start a game company, I recommend you look into this. I knew Juan previously and he's a great guy, plus he's got a lot of great RDU-area locals from the game industry organized for the mentoring!
I think they should take into account the need to compensate people for travel & lodging. That's a big concern for many people, especially since nothing is guaranteed.
First there's the craziness that it takes just to make your business legit in the eyes of the government at each step your company takes: incorporation, issuing stock to founders, employees and investors, going over publishing deals, hiring international employees, dealing with taxes, payroll, etc. Here in Seattle we have the Washington Interactive Networking organization hosting monthly Game Business Startup 101 classes, which gets young entrepreneurs in front of industry veterans, lawyers, investors, HR, and marketing people so you can get advice straight from the horses mouth. Being in the same office as someone who you can go to for support could be an ENORMOUS help that would save you a lot of freaking time and money.
Second, while a lot of indie companies can get started without any capital what-so-ever (like IPhone or XB Indie Games) and avoid giving up anything just to ship a game, others actually require capital just to get going. For example, my company EveryWare needed money to make games for the DSiWare platform: not only do the dev kits cost real money, being a licensed Nintendo developer requires having secure office space. We've seen some places require sub leasers to have workers comp or general liability insurance, and to actually ship your game most platform holders require you to have copyright insurance. We could have made facebook games or iphone games or flash games to make some money first, but that's not what my teams does and the whole reason you start a company is so you can do what you're good at.
All applicants should really question how this program valuates your company, understand the ratio of equity and royalties they'll be taking, and balance that against what resources they can really offer your team's unique needs. Someone wanting equity in your company in exchange for help means they want to really see you succeed; I would be more weary of the guy who helps you get a publishing deal but takes some percentage of your milestone payments. Of course it all depends on working with the right people and knowing who really has your back. And knowing your own short and long term business plans. I can guarantee that more and more incubation programs like this one are going to be popping up over the next few years. It has very low risk for the investors, great payoff potential for both parties, and allows a creatively driven industry to experiment with unique types of partnerships.