MyTurn - Bootstrapping 101: How To Make Your Virtual World Thrive In A Recession

My Turn is an op-ed feature at VirtualWorldsNews.com, solicited and unsolicited, from industry professionals. If we haven't reached out to you already and you feel like you have an insightful, argumentative opinion to publish, please get in touch with me at joey [at] showinitative [dot] dom. Last time we heard from Remy Malan, VP of Enterprise at Qwaq, on what it to takes to make a successful virtual team environment for work. This week begins a series on bootstrapping your virtual world from Cartoon Doll Emporium Founder and CEO Evan Bailyn.

A common thread among all of us in the virtual world business is the desire to delight the imagination, to enhance people's lives with  a new kind of freedom that facilitates socialization and enriches their entertainment experience.  In essence, we are given that iconic blank piece of paper and charged with creating the next big thing online.  And while idealism should be the driving force in our line of work, economic realities should be on our minds every day - especially now.  The good news is most of the principles that keep companies in sound financial shape are simple common sense.   

For those who are just starting out, or those who have been in it long enough to forget the basics, here are the fundamentals of bootstrapping:

Your Website Is Your Baby.  As a general rule, if you love something enough, you will find a way to keep it in good health.  You wouldn't let your child or pet go hungry, would you?  Apply similar dedication to your virtual world.  Sound extreme?  News flash: the Web is a place for obsessives; if this were "only a job," you’d never be able to compete!  

Be Starkly Honest With Yourself.  I of all people like to live in a world of happy things, but if I didn't confront reality from time to time, things would go whizzing downhill.  Here are some examples of honest realizations: "I have no idea what my programmers do"; "I don't carefully track my finances"; "I can't envision my company in 3 years."  If you've been ignoring some realities, it's time to confront them.  A simple thing like trusting that your programming team has everything handled - even though you can't tell a GIF from a GUI - can begin to affect your product and bottom line.  Feel free to bring in an expert to do a code review.  Better yet, spend some time demystifying your website yourself.  There is no replacement for your own good judgment.

Only Work With People You Really Like; Nurture Those People.  It's hard to find employees that care.  But they’re out there.  For every standard nine-to-fiver you hire, an opportunity to innovate has been lost.  These passionate people won’t show up at once.  But if you keep up the search, you can fill every position with someone who shares your enthusiasm.  A common rebuttal is that finding an employee with top-notch skills and experience is hard enough; add passion to the order and you're pushing it.  To that I say, "take someone who cares, with less skill and experience, and train them."

This has especially proven true in my own company.  Two of CDE’s most vital members weren’t exactly veterans when they came to us: one worked at Burger King and the other at a grocery store.  I hired both of them because of the chemistry I felt during the initial interview.  Now, the first is our senior artist, whose work is adored by millions of kids and displayed in retail stores across the country, and the second is our head of product development, one of our most reliable and competent employees.   

On the other side, sometimes it’s necessary to part ways with an employee.  As sensitive a scenario as this can be, keep in mind that nothing’s personal: this is the health of your baby we’re talking about.  If an employee’s productivity doesn’t justify his salary, try offering an alternative pay system based on performance.  If he can't meet his goals, he won't make enough money to stay.

Never Rely On Standards.  Standard pay, standard output, standard practices.  All should be understood, then disregarded.  The people who publish such standards are often the ones who receive their benefits.  Do what you consider fair in your heart of hearts.  You're bound to meet people that find your idea of fairness to be quite unjust - but others won’t.  Adhering to standards is a great way for a young company to go out of business, especially in a developing industry like virtual worlds. 

When CDE first began creating virtual items, one of our artists set the standard of making fifteen items per week.  About three months later, a new artist joined our team who did forty per week of the same quality.  This artist fundamentally changed our expectations - much to the chagrin of some of the others.  We raised the quota, and even though it caused two artists to quit indignantly, we knew our efficiency – and ultimately, our bottom line – depended on it. 

Keep Content Simple.  One of my favorite realizations is that the kids on my site love quizzes and polls.  As soon as I learned this, I moved some of our resources from game development to writing quizzes and polls, which only took a few minutes each.  It quickly became one of our most popular sections and increased our engagement metrics substantially.  Whatever content you are in the business of providing, keep in mind that people appreciate simple, fun content, especially in our age of micro-reading, micro-communication, and micro-play.

Advertise for free.  Standard advertising should only be purchased if you are getting a mathematically proven return.  If you’re not able to do that yet, focus on free methods of spreading your virtual world brand.  The social networks, including YouTube, are excellent ways to distribute content virally.  Equally valuable is search engine optimization.  With these methods, you can attract hundreds of thousands of new visitors per month.

Measure Your Results.  Since traffic and revenue metrics define your results, you should be analyzing these data points carefully.  Why did month X perform better than month Y?  Was it an outside factor, such as seasonality, or were visitors reacting to the content on your site?  And if the latter, what about that content changed from month to month?  Has any trend taken shape that may have had its seed sown at an earlier time?  Has your audience's size, makeup, and/or preferences changed during that time?  The best CEOs have figured out exactly who comes to their site, when they come, and what they come for.  When you have this data, you can use it to save time and money.

These are, of course, the macro rules.  The specifics must be assimilated with experience.     

Evan Bailyn is co-founder and CEO of Cartoon Doll Emporium, one of the most popular kids websites online, with over 8 million unique monthly visitors.  Mr. Bailyn has been featured on ABC News, Fox News, The New York Times, The Wall Street Journal Online, Crain's, and Advertising Age and was a member of the The New School Of Media panel at the Ypulse Tween Mashup Conference in New York in the summer of 2007.

Comments

[Tracy]

Nice insights, thanks Evan.

[Jay Tigorski]

Your point is well made about keeping content simple. I've seen virtual worlds burn through capital only to be out-competed by basic, creative and fun sites that sprung up almost over-night. Cartoon Doll Emporium is really a nice site though. My daughter loves it.

[Michelle Burns]

Evan, is Cartoon Doll venture backed?

[Ron Hakimi]

true true... all true. I work in finance and some of your principles would certainly apply to my business as well. We've found that challenging the standards--particularly when it comes to advertising models and software/hardware costs is important. Some people charge double or triple what others do for identicle product. The trick is to have a competent office manager to do these tasks. Good luck with your site.

[Evan Bailyn]

Thank you all for the comments. Michelle, we are not venture-backed. We do have a minority investment from Allen & Co.

[Ramsay Charkas]

The biggest expense most business owners endure is payroll. Even if we can find very dedicated employees, salaries still add up. It is best to be in an industry where less manpower is required. Of course, those are also the ones with the most competition.

[Anne Baker]

Thank you for making the point about advertising. I have been having trouble advertising my business, spending hoards on money online with little result. It is a great idea to make a youtube video about my business for free publicity. I'm definitely going to try that out. Thanks again for the great idea!

[Bob]

How do you MAKE a virtual world?