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Hi Ken,
I grew up as a super avid Sierra gamer. The games taught me so many basic skills about problem solving, logical reasoning, and cultural phenomona. Today, I am a successful leader in the software industry, with an interest in the business side of it. The software interest originally stemmed from the programming of the Sierra games on the Apple IIe, specially getting the colors on there.
Now, as I emerse myself more into the business side of the industry, I would have to ask, what do you think is the biggest mistake you made at Sierra? It’s an interesting insight to learn from other people’s experiences.
Thanks. Manish -
(re: Biggest mistake) what do you think is the biggest mistake you made at Sierra?
I had a major problem dealing with being a public company. As a public company, there are people who track and predict your quarterly revenues. A huge portion of our revenue came from new products. If a product shipped late, this could skew a huge amount of revenue from one quarter to the next one. Missing a quarterly profit goal meant the stock price would slide, demotivating employees.
The right answer is to finish products six months before release, like the film industry does. I never had that luxury. I did try to leave time in the schedule, but products always shipped later than we thought.
Time after time, we would let the street (financial community) know when we thought products would ship, we would spend 100’s of thousands of dollars on marketing, and the product wouldn’t be there.
My biggest mistake was sometimes shipping a product I knew wasn’t ready. There were times I folded to the pressure, and shipped a product that I shouldn’t have.
This happened because of all the pressure from lots of directions.
The street – we had our quarterly revenue goals to hit
Marketing – product slippage sometimes means the marketing runs months before the product is in the stores. With a game called Outpost, we ran several different campaigns, some a year before the game shipped – because we kept thinking the game was months from shipping (for years)
Budget – late products are also over budget products. If the budget for a game is $2 million, and the team is burning $200,000 per month – a six month delay means an additional $1.2 million on the budget. This may exceed the original profit projection for the game.
Add all this together, and you see why I spent 20 years stressed out.
On those occasions where I shipped a product because of all this pressure — I paid for it later.
I used to always talk about customer acquisition costs. It was how I thought of our business. All customers I fit into one of three categories:
people that hadn’t bought from us
people that bought from us, and liked us
people that bought from us, and had a poor experience
For each game, I would think about what it costs, per unit sold, to reach each of these three offices. Reaching a new buyer might cost $4, an existing buyer $2, and bringing someone back into the family who had bought from us, and had a poor experience, $20. In other words, you can’t make money no matter what you do, attempting to sell products to people who don’t like you.Obviously, we made a lot more people happy than unhappy – but, I can’t say that our record was perfect. If I had it to do over again, I would not have shipped some products until later, and some I would have never shipped.
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(re: re: Biggest mistake)
Ken,
Thanks for the quick reply. The comments are definitely interesting coming from a respectable executive in the software industry. My only few questions are:
Isn’t software deadlines a stigma in the software industry as a whole tho? Isn’t the ultimate question is “When is software truly done?”.
Also, since the industry moves fast
, isn’t 6 months too long of a time period besides the software becomes obsolete? I find these issues quite interesting, and it may be a path I may take in the future. It seems like large corporations like IBM, Microsoft, and Apple all seem to have similar issues. I’m sure Sierra had problems dealing with buggy O/S’s during the days of game development.
The history software and computers in general has been quite interesting, if anything… what if plumbing had bugs in it? What a mess that would be…
Manish
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(re: re: re: Biggest mistake) I have no idea what is happening in the industry today. My sense is that it’s a different world.
The money today, in games, is in the video game space. It’s a world where the target platform isn’t changing every six months. As you said, some of our product slippage came from problems dealing with the changing market.
Generally though, our problem, was in managing creative people. They don’t like having tight schedules. Some groups, like the artists, don’t even relate to the concept. Telling an artist you need one pencil sketch every two hours just doesn’t work. Creative people hate budgeting their time. I’m over generalizing, and being a bit unfair – but, in the big picture, what I’ve said is true. Imagine what it is like to tell Roberta Williams or Al Lowe, I need your game design by the end of March. They don’t think that way. They try, but creativity doesn’t happen on a schedule. Having a schedule sometimes slows things down.
I do believe that Sierra succeeded because we managed the balance between creative needs and schedule needs better than our competitors. We succeeded because we were awesome at building great software. But, we were far from perfect.
There is already a lot that I’ve posted on this site about managing developers, so I don’t want to bore anyone through being repetitious.
-Ken W -
(re: re: re: re: Biggest mistake) It must be way easier for game software companies to produce games for console systems. They don’t have to deal with buggy O/S and ever-changing hardware. Well, they do but not in a 6month range….since some consoles live for 6-7 years sometimes. I would have to guess that’s the case since Nintendo continues to drive the market since 1985.
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(re: re: re: re: re: Biggest mistake) I don’t agree with this at all. There are certainly more variations in the PC market but they cannot necessarily be deemed as more buggy than a console. A PC developer writes a piece of source code to operate with an expectation of what’s available on the platform – certain class of gfx card or similar. He then probably wouldn’t test it fully on anything other than his local PC (which is probably the same as everyone else’s in the dev team!). Come to the testing phase, the developer/publisher would try the software on different configurations and it never quite works as expected, so changes would have to be made to suit. Consoles have the luxury of being a static technology platform – that doesn’t mean to say that there are less bugs, just probably/hopefully known in advance!
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