Coding on a Budget

The death of a company..

Not my business, at least not yet. Maybe I should say the death of a good idea because the business in question is more likely more funded than ever now. The spirit is gone, the original mission scrapped, the original members moved on to bigger and better things. What is left is a shell of a company motivated by shareholder approval and the requirement to generate large profits. The company in question is GarageGames.com and the situation is big corporate buyout lovin'.

It's really amazing any company survives at all. According to the U.S. Small Business Administration, over 50% of small businesses fail in the first year and 95% fail within the first five years.

I'm torn. I've been on the wrong side of two buyouts and I've seen first hand how great it can be. The formula is the same:

The owners start acting weird, you know weird when you see it.

They start asking for inventory numbers, how many servers do we have, etc etc.

A group of people you've never seen before hang around and start calculating how much the company is actually worth.

Management tells you there's nothing to worry about.

People start resigning left and right, you start hearing jokes about how the rats are the first to jump off a sinking ship.

You interview for your own job.

People panic and start choosing sides.

The new regime starts identifying those who still hold loyalty to old management and eliminates you.

The new regime starts identifying those who had problems with old management and promotes them.

There's a reason I watch Office Space at least twice a year. It reminds me to work harder to avoid this cycle again. I'm the loyal guy, I don't really chose to be - it's just my personality. Here's what it looks like from an owner's point of view:

At the start of every week, you know that by Friday you need X amount of money to meet payroll.

You're worried about billing and your credit line at the bank eating any and all profits you may have had.

You're bothered by employees wanting raises and new equipment you can't afford.

Management is busy making power point presentations that depicts everything is fine and the company is strong.

Employees are busily reading Slashdot.org and planning their afternoon StarCraft session wondering why management doesn't have a clue.

It's a non-stop stress fest on both sides and all the sudden here comes mega-corp with an offer you can't refuse. Here's the dirty little secret - businesses want to be eaten within 7 years. The idea is to build up your business to attract the attention of a larger entity. The larger entity will take the best of what you have, get rid of the rest, and try to make as much money as they can before liquidating whats left at the end.

There are very few small businesses who intentionally wants to stay small. You have your auto mechanics, dentists, dry cleaning, barber shops, service oriented in general who will never get past the one location mark. If they're lucky and in the right area, they can make a decent life out of it, but they would have made more money working for someone else in the long run.

The owners, now presented with a buyout offer now usually jump on it. It's a chance for them to cash out, take a break, and do neat things they always wanted to do before trying it all over again. The funny thing is, the stress is addictive, the attempt attractive, the gamble exhilarating. Being a business owner is nothing more than legalized gambling and the ups and downs feel the same. So now the owners go on a shopping spree buying up all the expensive toys they've always wanted. It may be a bookstore, it may be a farm, but it's not long before they're right at it again trying for the buyout again.

So let's take a look at the history of GarageGames:

Ex-Dynamix employees see the writing on the wall, negotiate to buy the engine they've been working on away from the company and bail.

Take the engine, sell copies + source for $100, call it indie and sell it anyone who wants it.

From the start it's cross-platform and works pretty well.

Form community around said engine, accept patches, repackage them and sell them back to new customers as new versions.

Just looking at the publicly available Torque Owner tags and crawling the site, it appears engine sales generated over a million dollars alone.

They gain enough status to get console developer licenses and port the engine over. Of course selling that version of the engine for a much higher cost.

Microsoft gains interest, GarageGames now a xbox ,xbox360 ,xna partner. Die hard c++ programmers are talking about how cool c# is. Linux support all the sudden becomes purely community driven.

TorqueX is the first GarageGames product to hit the market on time, no doubt some sort of bonus money from Microsoft. Jeff now questions Mac development and Linux development drops off the planet.

Things are quiet, promises of documentation and transparent development are made. Opengl continues to take a back seat to directx.

IAC offers big corporate buyout lovin'.

GarageGames assures its community that everything is cool and this just means more money to do more cool things.

GarageGames founders and superstars jump ship, the B team takes over.

Website takes on a web 2.0 look, engine price triples, and community functions are crippled.

Founders and superstars make new company, new engine, and back on the market to do it all over again.

Yes, it's sad to see something gutted like this. Yes, I was attached to the idea of GarageGames. Yes, I'll more than likely do business with PushButtonGames (even though I'm a complete Flash virgin). Yes, I hope to be bought out by big corp buyout lovin'. No, I don't like change nor how the process needs to happen this way to turn a real profit. This is just how the world works and it beats the alternative - your company fails, you go bankrupt, you feel like a failure and you just can't wait to do it all over again.

Rest in Peace GarageGames.com

2001-2008