Tuesday, March 18, 2014

Gaming Startup Solutions In Search Of Problems

The Game Developers Conference is happening this week in San Francisco.  I couldn't get a free ticket, and I don't pay to attend business events when there's an option to attend for free.  I did attend a couple of social events yesterday where startups displayed their latest solutions in search of problems.  The problem I have with these solutions is that their creators won't find a problem they can solve.

I need to hear founders describe the really bad market problem they are solving before I can take them seriously.  I'm not convinced that the world's disorganized knowledge sources constitute a problem.  Search engines already do a pretty good job of sorting quality content.  Gamifying search will probably incentivize people who don't need to be incentivized.  

Entrepreneurs who dream of cracking some big market should break down their opportunity into the TAM / SAM / SOM chunks.  Startups who think they can bite the whole SAM within two years of getting funded need to reassess their scalability.  I think the structure of a game also determines its positioning in the market, just like engineering and design determine a physical product's positioning.  Games with really involved storylines are great for people who can sit focused for hours.  They are not great for mobile users who play furtively at bus stops or waiting in retail lines.  Short games with simple functions and many levels make more sense for mobile.  I've never seen anyone playing some epic multiplayer quest on mobile.  Maybe I don't hang out with enough hard-core gamers.

Use case data helps establish a customer's LTV.  Game startups without use case data might as well go get some.  Beta testing isn't just for working out bugs in the UX.  Testing means discovering whether a measured engagement generates enough revenue to make mass distribution worthwhile.  It also means A/B testing to see what UI the customer prefers.  

There is a gaping hole in enterprise computing for Big Data solutions addressing human resources and supply chain management.  The first startup to deploy something gamified for these two verticals will own a big chuck of enterprise IT for years.  I still see game developers pushing pure games on a culture that is already saturated with distractions.  Turning game knowledge into something that measures and enhances enterprise productivity solves a huge problem.  I can just see status-conscious employees collecting gold stars for turning in reports on time and collaborating with the maximum number of colleagues.  Those gold stars could be tickets to promotion.  

Programmers flock to gaming where compensation is lower than in enterprise solutions.  I am amazed that intelligent programmers willingly take pay cuts to work in crowded sectors just because they're more fun than solving business problems.  Even scientifically educated people can be irrational.  Gaming up HR and logistics is boring but probably very lucrative.  

Games and social apps are easy to make.  That's why so many unnecessary ones exist.  The success stories do the things I mentioned above plus a whole lot more.  The ones that fail contribute to the survivorship bias problem in the tech sector because they don't leave any trace of why they failed.  It wasn't just that they never solved a problem.  They never looked for the problem in the first place.