Justin Beck, Co-Founder and CEO of PerBlue, gave a session this year at GDC in San Francisco. Titled "Bootstrapping 101: How College Kids Built a Thriving Game Company in Under Three Years" the session highlights the key decision points and pivots made, and how other entrepreneurs can benefits from our lessons learned.

1. Bootstrapping 101:
How college kids built a thriving game
company in under 3 years
Justin Beck
Co-Founder and CEO
PerBlue, Inc
@PerBlue
@JustinKBeck

7. Virtual Goods Expenses
Purchase Swag
Level Up
Refine Oil
Customize Weapons
Change Skill

8. Our Revenue

9. Our Users
• 1 million user accounts
• 13,000 DAU
• 40,000 MAU
• 1,500 concurrent players
• 70% male, 30% female
• 85% Android, 15% iOS
• 75% USA, 25% rest of the world

11. How did this start?

22. We got offered really early money.

23. Take The Money or Bootstrap?

24. Why did we turn it down?

25. Terms That Stink
• Small investment
• 1 board seat out of 3
• 10% share of the company
• Preferred Stock – protective provisions

26. We didn’t trust them.

27. We’re officially Bootstrapping.

29. My life @ Microsoft
Sleep!

30. The real cost is not just time.
Stress
Focus

31. Microsoft offered me a great job.

32. Take M$ job or continue to bootstrap?

33. Why did I turn down the job offer?

34. Mobile Opportunity

35. Microsoft will always be around.

38. The real value isn’t the money.
Education
+100 XP
Experience +100 XP
+100 XP

39. Don’t let upfront cash buy you.

40. Assembling the team

41. Stock Options

42. How do stock options work?

43. Early Stage Employee Stock Options
• Really low price per share
• PT work .1% for a year
• FT work .4%-.8% for a year

44. Key to compensation:
Good outcomes for the company and employees.

45. Why did people choose this?

46. After 11 months of development…

47. We still weren't shipped.

49. We have to ship.

50. Kingdoms Spells Invites
Send Messages Water Cities
Crafting Event feed Global chat
Mines Alliances Quests
Caves Geotargetted marketing Giant turtles
Warp travel Ranged weapons Scrolls
Armories Magic Grove
Crystal Web view Rankings
Oil Tutorial Kill Monsters
Weather Customizable items Hats
Towers Item naming Research
Leveled Weapons Territory naming Academies
Ranged Weapons Sheep Armories
Pets Avatar customization Societies
Mini games Dungeons Oxen
Trading Collect Gold Sign Posts
Merchants Payment Flowers
Mingling Subscriptions Statuses
Female character Tradeposts Larva
Flags Claiming Land Plants

52. We launch!

54. Some Context

55. “Got a lot of potential.”

56. “I don’t have enough creatures in my circle.”

57. “I am sick of driving around.”

58. People don’t move.

59. “I hit my neighbor’s cat while driving
because I was playing PK.”

60. How do we make a location-based game
not so... location-based?

61. Sh*t.

62. There is more to location than just being there.

66. Bam

67. We adjusted our strategy.

68. We’re broke.

69. When you’re out of money, the ship stops.

70. Initial Revenue Model: Subscription Based

71. But we were scared of a pay wall.

72. This was before Virtual Goods
were pop culture.

74. Virtual Goods Expenses
Purchase Swag
Level Up
Refine Oil
Customize Weapons
Change Skill

75. Where players spend Food is important.

76. Tradeposts

77. We had the revenue model.

78. We needed money to launch.

79. How can we fund this?
Angel or Friends and Start doing
VC round Family round contract work

80. Friends and Family

81. Friends and Family: Important Things

82. Family and Friends Terms
• $72,000
• Common Stock
• 3.5% of the company

83. The night before launch…

84. It Worked!

86. Evaluating Acquisition Offers

87. What’s the price?

88. Is it strategic?

89. What is the opportunity cost?

90. Who’s in control?

91. M&A Broad Offer Terms
• Private Stock  Private Stock Swap
• Other company priced high
• $3M price, but re-vesting over 4 years
• Team Relocation

92. “Let me build you something
bigger and better.”

93. Raising Series A

94. Raising Series A
• We were profitable
• We employed 7 full time people
• Increasing cash flow
• Had a solid team

95. Many investors requested us to move to CA.

96. Perks of being in the Bay

97. Perks of not being in the Bay
Madison, WI

98. The Results
• Oversubscribed
• Looking for $300k, total of $800k raised
• Good investors that are trustworthy
• 50% West Coast, 50% Midwest

100. Scaling Revenue

101. Niche products have more legs than you think.

102. Stay Laser Focused

103. Starting multiple new products
with small teams didn’t work.

104. Things that worked
• Improving new player experience
• Optimizing profitable features
• Improving referral systems
• Improving payment flow
• Investing in ROI positive marketing

105. Scaling Customer Acquisition

106. Cost of Customer < LTV of customer

107. Cash flow growth is awesome.

108. We reused $800k to grow our team 3 times.
35
20
12
7
Employees Revenue

109. 2011 Results
• 3.4x revenue growth
• 2x DAU growth
• Record new accounts
• Record daily revenue

110. Player Graph

112. What are we working on now?

114. Benefits of this strategy
• Build a “Parallel” brand
• Shorter dev time
• Stick to our strength
• Stackable revenue streams

115. Go forth, bootstrap!

116. Justin Beck
justin@perblue.com
@PerBlue
@JustinKBeck