Business Model Activity #3: Contracts

Last activity after Sponsoring and Licensing and Collaboration Projects in this Business Model series. Contracts were our last and most revenue generating activity. Our contract works went from small to huge (so huge that none of the bigger projects as yet been released) and from bad to great. Contracts start with a prospect client, someone that approaches us with a project. We analyse and present a price based on the following:

1. We determine cost, scope and time frame. Only once we were given a budget and it worked alright, but we prefer to determine the cost ourselves.
2. Cost to the prospect client is directly related with scope and time frame. If we assume we do the contract it is because we have the skill to do it and it is not our content, this is purely engineering/design work, nothing else. This means that any other related factor is irrelevant for us. We don’t care what is the content or entertaining value, we don’t care if we are considered cheap or expensive and we don’t care if anyone thinks we are having too much profit.
3. We care about the end result and will not charge extra if any requested change or additional feature is within scope and time frame.
4. Larger projects will be paid by milestone while smaller projects will be paid on delivery.
5. Payments on delivery are not dependent of anything, like developers getting their game sponsored. We delivered, if it is accepted we expect immediate payment.

Sounds a bit harsh doesn’t it? That’s because our core business is creating our own games. A client-centric company needs the clients to survive since they are dependent of contracts. A flash game developer creates (or should be able to create) its own content, therefor its own value. If we have an agreement, we will do the project as if it was our own, the client is not treated as a client (in a bad way), but as a partner, unless of course they treat us as supplier (in a bad way also). The problem with a couple of contracts or contract discussions was exactly this: some clients (or prospect clients) tend to consider flash game developers as a lesser entity, like they were amateurs. Our experience says that this is more evident in the flash game space where prospect clients started the discussion by saying “I don’t think you are good enough”. Great, find someone else that is…

Bottom line is that contracts, if not done with the right people are problematic. The right people are the ones that are don’t consider to be in a higher position because they pay but that consider hiring us as an added value to their project. These are the clients we want to deal with, the ones that the points raised above are “nothing special”.

Still the worst part of contracts is getting started. We feel that announcements (blog and forums mostly) served very little for getting new contracts. On the other hand, word of mouth was what brought us more contracts. I think I won’t be far from truth if I say that all contracts started by either our games being known which led to good collabs or by speaking with people directly thus creating network. I can recall a couple of emails we got from our forums, but those never left the proposal stage.

Now you know how the activities of our business model work to us. I’ll finish this series by wrapping it all up, drawing some conclusions and babbling on how you can adapt your own reality to your own business model.