Cutting your loses
Discussion
Afternoon all,
I recently commissioned a website build for an online game of sorts. A bit of background available on this thread: https://www.pistonheads.com/gassing/topic.asp?h=0&... I will keep some of the details slightly vague. This may turn into a bit of rambling as this has been pretty tough at times.
The website has been in development for the past 5 months, and was scheduled (and agreed) to launch this month. It's now been pushed back until at best September. So far I have invested circa 10-15k into the project. With another 10-15k set aside for it.
I am considering cutting my loses and ending the development for a few reasons.
- 2 months after commissioning the website, one of the major websites in the community released their own version of the game on their website. Their new games has an active user base of 10,000 every week. They hadn't hinted at this being something they were working on previously. If they had I wouldn't have started. (Proves the idea was right, timing not so much)
With them now having my target audience, my costs now increase to advertise and prove why my website would be better. I've not got the simple task of offering the community something they would have wanted, but have now got to convince them this product is better. I'm not sure I have the budget to do this, or the time. (this was supposed to be a side project to run alongside my day job until it generated enough to go it alone.)
- Missing the agreed deadline, means we have missed a major event happening in the community. This event would have generated the most interest in the game, and some early revenue. It also meant less advertising needed. Missing it means I will have to double the advertising costs and see little return against it for the next 6 months. All whilst the website will have high running costs of £500+ a month.
- The developers lack of updates concerns me. I went 1 month without any contact from him, basically every time they wanted the next installment. I could have been proactive in chasing him but the launch of the competitors game combined with this completely dampened my drive.
- There's been some other set backs in regards to influencer concerns. The website isn't related to gambling but they aren't keen to get involved until that is proven. Unfortunately, this then puts the timescales for hitting the audiences back further as it has less exposure.
In summary:
I'm not sure I have the time, nor the money to push this website to where it has the potential to be. I'm not sure I want to take the risk either.
Is it a complete waste of money to call it a day now? Life lessons have been learnt and I'm not going to be in financial trouble by not seeing a return on the money again.
Where do I stand in regards to my contract with the developers? If I have paid them for the work they have done then am I required to fulfill the rest?
The other option is I continue the development of the website till it is completed then scale down the running costs of it and run it on the side but on a very small scale. This would still require a further investment of 10k with no guarantee of a return.
Happy to fill in gaps if needed. Head isn't in the right place completely at the moment so apologies if this is a bit wishy washy.
I recently commissioned a website build for an online game of sorts. A bit of background available on this thread: https://www.pistonheads.com/gassing/topic.asp?h=0&... I will keep some of the details slightly vague. This may turn into a bit of rambling as this has been pretty tough at times.
The website has been in development for the past 5 months, and was scheduled (and agreed) to launch this month. It's now been pushed back until at best September. So far I have invested circa 10-15k into the project. With another 10-15k set aside for it.
I am considering cutting my loses and ending the development for a few reasons.
- 2 months after commissioning the website, one of the major websites in the community released their own version of the game on their website. Their new games has an active user base of 10,000 every week. They hadn't hinted at this being something they were working on previously. If they had I wouldn't have started. (Proves the idea was right, timing not so much)
With them now having my target audience, my costs now increase to advertise and prove why my website would be better. I've not got the simple task of offering the community something they would have wanted, but have now got to convince them this product is better. I'm not sure I have the budget to do this, or the time. (this was supposed to be a side project to run alongside my day job until it generated enough to go it alone.)
- Missing the agreed deadline, means we have missed a major event happening in the community. This event would have generated the most interest in the game, and some early revenue. It also meant less advertising needed. Missing it means I will have to double the advertising costs and see little return against it for the next 6 months. All whilst the website will have high running costs of £500+ a month.
- The developers lack of updates concerns me. I went 1 month without any contact from him, basically every time they wanted the next installment. I could have been proactive in chasing him but the launch of the competitors game combined with this completely dampened my drive.
- There's been some other set backs in regards to influencer concerns. The website isn't related to gambling but they aren't keen to get involved until that is proven. Unfortunately, this then puts the timescales for hitting the audiences back further as it has less exposure.
In summary:
I'm not sure I have the time, nor the money to push this website to where it has the potential to be. I'm not sure I want to take the risk either.
Is it a complete waste of money to call it a day now? Life lessons have been learnt and I'm not going to be in financial trouble by not seeing a return on the money again.
Where do I stand in regards to my contract with the developers? If I have paid them for the work they have done then am I required to fulfill the rest?
The other option is I continue the development of the website till it is completed then scale down the running costs of it and run it on the side but on a very small scale. This would still require a further investment of 10k with no guarantee of a return.
Happy to fill in gaps if needed. Head isn't in the right place completely at the moment so apologies if this is a bit wishy washy.
If you cut your losses now it is £15k down the drain, however if you continue to a finished product and it doesn't gain traction then it is £30k or more gone.
I think you're looking at this from the wrong angle. Presumably you know your costs and you've estimated your income from the previous thread. Now, if you assume your growth rate is halved (thanks to your new competition) now long will it take you to break even? Is it still financially viable? Can you bridge this with additional marketing?
Is the idea so niche that it can only support one player or even though the idea is the same van you execute it in a way which gives you an advantage over the current provider?
I think you're looking at this from the wrong angle. Presumably you know your costs and you've estimated your income from the previous thread. Now, if you assume your growth rate is halved (thanks to your new competition) now long will it take you to break even? Is it still financially viable? Can you bridge this with additional marketing?
Is the idea so niche that it can only support one player or even though the idea is the same van you execute it in a way which gives you an advantage over the current provider?
Not a helpful opening to the post, but instead of investing £30k in a website with no customers lined up, you should have created a quick and dirty website just to market the game you were creating and take pre-orders. This would have helped you gauge the level of interest, given you some cash up front to help fund development AND given you a captive audience of early-adopters to use for feedback to help drive development in the right direction.
It amazes me still, how many people plow tens of thousands into ventures without any forethought of going to their potential customer base right from the get-go.
I do agree that you're maybe looking at this all relatively negatively. Take the launch of the competitor's game as an opportunity. It's unlikely they've nailed every aspect of their game, so talk to their users and find out what can be improved - then nail those aspects with your game. You've also just had someone validate your idea for you, which is a MASSIVE step in the right direction (how would you feel at launch after spending £30k if you got relatively few customers).
It's rarely the case that a market can only sustain one product and it's even rarer that even if you are first to market that you won't then get competition from other companies.
Suck up the fact that you weren't first to market, maybe just soft launch over the next 10 months, perfecting your game, ironing out the initial bugs (because there will be some, probably many) and make sure your product is as good as it can be in time for the major event next year.
It amazes me still, how many people plow tens of thousands into ventures without any forethought of going to their potential customer base right from the get-go.
I do agree that you're maybe looking at this all relatively negatively. Take the launch of the competitor's game as an opportunity. It's unlikely they've nailed every aspect of their game, so talk to their users and find out what can be improved - then nail those aspects with your game. You've also just had someone validate your idea for you, which is a MASSIVE step in the right direction (how would you feel at launch after spending £30k if you got relatively few customers).
It's rarely the case that a market can only sustain one product and it's even rarer that even if you are first to market that you won't then get competition from other companies.
Suck up the fact that you weren't first to market, maybe just soft launch over the next 10 months, perfecting your game, ironing out the initial bugs (because there will be some, probably many) and make sure your product is as good as it can be in time for the major event next year.
Is the operator of the other version of the game running it as if it was a gambling set up? For instance, does the other operator have a Gambling Commission licence number shown on their site?
If so and you haven't even begun a journey towards a licence, I would say forget it immediately - the last thing you want is the other operator asking for the Gambling Commission to adjudicate whether your game needs a licence or not.
If there was any inkling that it might need a licence, then spending even one copper coin before clearing the situation with the Gambling Commission was, imo, a mistake.
That said, I agree with others that there are rarely markets that the second entrant can't get a toehold in. If the idea is good and if you believe that you can attract customers with your offer, it may very well still have legs. That someone else has launched a product so similar can be seen to be validation that you are thinking along the right lines.
If so and you haven't even begun a journey towards a licence, I would say forget it immediately - the last thing you want is the other operator asking for the Gambling Commission to adjudicate whether your game needs a licence or not.
If there was any inkling that it might need a licence, then spending even one copper coin before clearing the situation with the Gambling Commission was, imo, a mistake.
That said, I agree with others that there are rarely markets that the second entrant can't get a toehold in. If the idea is good and if you believe that you can attract customers with your offer, it may very well still have legs. That someone else has launched a product so similar can be seen to be validation that you are thinking along the right lines.
Very sorry to hear of the problems. It can be very stressful trying to balance all of this stuff out. More so if you are doing it alongside a day job.
It’s obviously a project you are passionate about, otherwise you wouldn’t have jumped in like you did. I do not see why you wouldn’t want to see it through though.
Maybe just put the brakes on a bit and take stock of where you are and what your potential new release could be.
There are some advantages in looking at what the competitor has launched and adapt your own project as its still in development. 2nd to the market obviously has that advantage.
You are more than welcome to pm me, I am happy to listen and offer you my experience to help you make a decision.
Andy
It’s obviously a project you are passionate about, otherwise you wouldn’t have jumped in like you did. I do not see why you wouldn’t want to see it through though.
Maybe just put the brakes on a bit and take stock of where you are and what your potential new release could be.
There are some advantages in looking at what the competitor has launched and adapt your own project as its still in development. 2nd to the market obviously has that advantage.
You are more than welcome to pm me, I am happy to listen and offer you my experience to help you make a decision.
Andy
One of the advantages of a competitor launching a similar product has the hidden benefit of them doing your market testing for you. Watching how their site/game performs, reading the user comments on forums picking out common threads of dissatisfaction and the like enables you to refine your offer and launch with a better product. You may also find that they appeal to a slightly different demographic enabling you to shift your offer to appeal to those not targeted by your competitor.
There is of course the risk that they get everything absolutely right.
So instead of bailing out, why not just take your foot off the gas for a while to see how they do, then make make the decision.
There is of course the risk that they get everything absolutely right.
So instead of bailing out, why not just take your foot off the gas for a while to see how they do, then make make the decision.
StevieBee said:
One of the advantages of a competitor launching a similar product has the hidden benefit of them doing your market testing for you. Watching how their site/game performs, reading the user comments on forums picking out common threads of dissatisfaction and the like enables you to refine your offer and launch with a better product. You may also find that they appeal to a slightly different demographic enabling you to shift your offer to appeal to those not targeted by your competitor.
There is of course the risk that they get everything absolutely right.
So instead of bailing out, why not just take your foot off the gas for a while to see how they do, then make make the decision.
This is a good point. First mover advantage can be massive, but smart follower also works well - particularly in tech. Watching how the competitor operates, gives you lots of free options and you can learn from their mistakes NOT yoru own. There is of course the risk that they get everything absolutely right.
So instead of bailing out, why not just take your foot off the gas for a while to see how they do, then make make the decision.
We followed exactly this principle for our tech product. Unlike our comeptitors we do not advertise / make grandiose claims. We are now the market leader in our sector and charge up to 4 times our closest competitor for the same service. There are a huge amount of variables involved in this (can you access the clients - fortunately we could); knowing you can scale and meet client expectations is key. Going up a against a larger competitor might be tough - but if you can generate a better product / client experience its not a lost cause.
tty smell of this your never going to get a finished website to spec as you’ve chosen the wrong developer. JPJPJP said:
Is the operator of the other version of the game running it as if it was a gambling set up? For instance, does the other operator have a Gambling Commission licence number shown on their site?
If so and you haven't even begun a journey towards a licence, I would say forget it immediately - the last thing you want is the other operator asking for the Gambling Commission to adjudicate whether your game needs a licence or not.
If there was any inkling that it might need a licence, then spending even one copper coin before clearing the situation with the Gambling Commission was, imo, a mistake.
That said, I agree with others that there are rarely markets that the second entrant can't get a toehold in. If the idea is good and if you believe that you can attract customers with your offer, it may very well still have legs. That someone else has launched a product so similar can be seen to be validation that you are thinking along the right lines.
No, nothing to do with gambling. The issue arises that their are some major websites within the main game that are based on gambling. Influencers are concerned that there might be advertising on my website which links this. If so and you haven't even begun a journey towards a licence, I would say forget it immediately - the last thing you want is the other operator asking for the Gambling Commission to adjudicate whether your game needs a licence or not.
If there was any inkling that it might need a licence, then spending even one copper coin before clearing the situation with the Gambling Commission was, imo, a mistake.
That said, I agree with others that there are rarely markets that the second entrant can't get a toehold in. If the idea is good and if you believe that you can attract customers with your offer, it may very well still have legs. That someone else has launched a product so similar can be seen to be validation that you are thinking along the right lines.
jammy-git said:
Not a helpful opening to the post, but instead of investing £30k in a website with no customers lined up, you should have created a quick and dirty website just to market the game you were creating and take pre-orders. This would have helped you gauge the level of interest, given you some cash up front to help fund development AND given you a captive audience of early-adopters to use for feedback to help drive development in the right direction.
It amazes me still, how many people plow tens of thousands into ventures without any forethought of going to their potential customer base right from the get-go.
I do agree that you're maybe looking at this all relatively negatively. Take the launch of the competitor's game as an opportunity. It's unlikely they've nailed every aspect of their game, so talk to their users and find out what can be improved - then nail those aspects with your game. You've also just had someone validate your idea for you, which is a MASSIVE step in the right direction (how would you feel at launch after spending £30k if you got relatively few customers).
It's rarely the case that a market can only sustain one product and it's even rarer that even if you are first to market that you won't then get competition from other companies.
Suck up the fact that you weren't first to market, maybe just soft launch over the next 10 months, perfecting your game, ironing out the initial bugs (because there will be some, probably many) and make sure your product is as good as it can be in time for the major event next year.
We currently have 200ish registered users on the website which is the landing page. We can't take pre-orders, it's not that sort of game. Think fantasy football, but for another market.It amazes me still, how many people plow tens of thousands into ventures without any forethought of going to their potential customer base right from the get-go.
I do agree that you're maybe looking at this all relatively negatively. Take the launch of the competitor's game as an opportunity. It's unlikely they've nailed every aspect of their game, so talk to their users and find out what can be improved - then nail those aspects with your game. You've also just had someone validate your idea for you, which is a MASSIVE step in the right direction (how would you feel at launch after spending £30k if you got relatively few customers).
It's rarely the case that a market can only sustain one product and it's even rarer that even if you are first to market that you won't then get competition from other companies.
Suck up the fact that you weren't first to market, maybe just soft launch over the next 10 months, perfecting your game, ironing out the initial bugs (because there will be some, probably many) and make sure your product is as good as it can be in time for the major event next year.
jammy-git said:
Not a helpful opening to the post, but instead of investing £30k in a website with no customers lined up, you should have created a quick and dirty website just to market the game you were creating and take pre-orders. This would have helped you gauge the level of interest, given you some cash up front to help fund development AND given you a captive audience of early-adopters to use for feedback to help drive development in the right direction.
It amazes me still, how many people plow tens of thousands into ventures without any forethought of going to their potential customer base right from the get-go.
I do agree that you're maybe looking at this all relatively negatively. Take the launch of the competitor's game as an opportunity. It's unlikely they've nailed every aspect of their game, so talk to their users and find out what can be improved - then nail those aspects with your game. You've also just had someone validate your idea for you, which is a MASSIVE step in the right direction (how would you feel at launch after spending £30k if you got relatively few customers).
It's rarely the case that a market can only sustain one product and it's even rarer that even if you are first to market that you won't then get competition from other companies.
Suck up the fact that you weren't first to market, maybe just soft launch over the next 10 months, perfecting your game, ironing out the initial bugs (because there will be some, probably many) and make sure your product is as good as it can be in time for the major event next year.
Well said. +1It amazes me still, how many people plow tens of thousands into ventures without any forethought of going to their potential customer base right from the get-go.
I do agree that you're maybe looking at this all relatively negatively. Take the launch of the competitor's game as an opportunity. It's unlikely they've nailed every aspect of their game, so talk to their users and find out what can be improved - then nail those aspects with your game. You've also just had someone validate your idea for you, which is a MASSIVE step in the right direction (how would you feel at launch after spending £30k if you got relatively few customers).
It's rarely the case that a market can only sustain one product and it's even rarer that even if you are first to market that you won't then get competition from other companies.
Suck up the fact that you weren't first to market, maybe just soft launch over the next 10 months, perfecting your game, ironing out the initial bugs (because there will be some, probably many) and make sure your product is as good as it can be in time for the major event next year.
48k said:
Don't be afraid to pull the plug, losing 15K is better than losing 30+K (and my spidey sense says it will be plus).
Some really positive responses that should lift your morale and give you hope should you proceed.However, I’m with 48k based upon what you’ve described: I’m sensing your heart is no longer in it; you’re not particularly a risk taker; you’re doing it on the side so maybe not investing the time and energy it really needs; and you seem to have picked a dud developer that you may be beholden upon as you look to develop the site further over time.
Purely based upon what you’ve provided, I’d bale now.
One question I do have, linked to an earlier question about pre-sales; did you consider crowd funding?
Do let us know what you decide.
Good luck!
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