Kickstarter Lesson #218: Do You Choose Profit?

27 February 2017 | 15 Comments

This morning I received my company’s annual statement from our accountant. I knew from my monthly bookkeeping that Stonemaier Games had a good year, but the final result was even better than I thought.

Making a profit isn’t what drives me to design and publish games; rather, it’s what sustains my goal to bring joy to tabletops worldwide. It’s why almost every decision I make is a cost/benefit analysis seeking a return on investment.

This was the case when I ran Kickstarter campaigns, and it’s still the case now. On Kickstarter, the profit per unit was geared towards three goals:

  1. Provide a buffer when things don’t go as planned.
  2. Generate the capital to increase the size of the print run to include retail products for distribution.
  3. Contribute to sustaining the business throughout the process of production and fulfillment.

Perhaps it seems obvious that you’d focus on profit, but I think it’s easy to get caught up in other numbers like Kickstarter funding totals, revenue, employees, page views, or valuation. The value you place on those numbers is up to you, but for me, I choose profit.

I recently read an excellent article that perfectly sums up my thoughts on profit. I’ll share my favorite points from the article below:

“Profit buys you time and flexibility. Profit is the ultimate flexibility because it buys you the ultimate luxury: time. As long as you remain profitable, you can go in any direction you want and take as much time as you need.”

My Thoughts: I love when profit buys me time. I wouldn’t be able to spend 16 months working on Charterstone if our other games weren’t continually generating profit. I’d rather deliver the best possible version of the game than to rush it to market. Profit gives us room to create, experiment, and make mistakes.

Profit protects you from your ego. One of the easiest things to do in business is get ahead of yourself. To feel so grand! To be obsessed with growth and potential and “if only…”. To hire too many people, to take on too much rent, to do one too many things, to complicate your business by tying strings around your money. The list goes on.

“But when you set out to be a profitable company, you watch your costs. You don’t hire that extra person if you can’t afford them. You don’t get into an office space that’s too big for you. You don’t sign a long-term lease that you can’t afford. You don’t sink a pile of money into things just because you can, you consider your spends more carefully.”

My Thoughts: I love that profit makes me smarter about expenses, especially for big decisions like hiring (I only hired myself after we had cleared a profit on Euphoria, months after it successfully funded), office space (I work from home), and manufacturing (I’m risk averse to over-producing). It’s also crucially important during a Kickstarter campaign–it’s not all about the funding total. If you make a million dollars but your stretch goals push expenses up to $1.1 million, you’re in trouble.

Profit enables generosity. This is my addition–it’s not in the article. If you’re profitable, you can afford to be generous, especially to those who give more than they take. You can give an illustrator or employee a bonus if they did an amazing job. You can add a special component to the product. You can send fancy chocolates to important partners. You can run an annual charity event to benefit content creators and the causes they believe in. And so on.

My Thoughts: Those are my thoughts. :)

Do you choose profit? If so, how has that approach been beneficial?

Also read:

15 Comments on “Kickstarter Lesson #218: Do You Choose Profit?

  1. I know I am in it or will be in it for the love of games. With that said I do desire to do this as a living. So profit will be a key driver but not the sole driver.

    Yes, I am aware of the many articles advising against this as a career. However I see many people doing it, like yourself, so I know it can be done. It just a matter of patience, planning and obviously delivering a stellar product and experience.

    Thanks for your guidance via the blog, videos, interviews, etc.

  2. Thanks for posting this! I think profit is very important, and something that we should always keep an eye on, but I believe that when our main goal is making money we don’t create nearly as high-quality products, AND we don’t make as much profits as we do when our main goal is quality or good games and the money is secondary.
    Besides that, I think you’ve identified some very important principles, because even though it might not be good to create games for the profits, as we create good things and gain profits we will still need to be frugal and careful with what we earn in order to grow.
    Thanks again for this and for all your great posts!

    1. Jared: I agree 100%. My goal isn’t to make money–you can see it in my games that we overspend on the components to create the best possible experience, even if it impacts margins. But the margins are always a consideration, because we can’t stay in business without them. I think you’re saying the same thing. :)

  3. Jamey,

    I especially appreciated the comment that profit affords you time and flexibility…the profit is a means to an end…not the end. I’ve worked as a developer for several designers who were so focused on the bottom line that a) I couldn’t work with them and b) their obsession diverted attention away from that which they should have had much greater passion…the game! I enjoy what I do in the board game space and I’m blessed to have a full time job that allows me to pursue my passion without the fear of losing the capacity to feed, clothe, and shelter myself. However, when I do work with folks, such as MIke and Stan Strickland, they have a healthy relationship with money as a medium by which we transact business, and by extension, pouring some amount of profit back into the business to provide the best possible games. In the end, they remain focused and committed to the craft of designing and producing great games!

    Cheers,
    Joe

    1. Joe: I like the way you said it: “the profit is a means to an end…not the end.” I’ve found that a healthy relationship with money often comes down to a few big choices each month or year that enable me to not be burdened on a daily basis so I can focus on more important things.

  4. The question to me is, “Profit versus what?” At my job, my team’s is focusing on growth over profit. Yet I think it’s good that you consciously chose something rather than letting circumstance decide. Like the article said, the alternatives range from reinvesting in your business, growth, going public, and more. Different people have different goals.

  5. Profit can also be used to build a war chest for when you do decide to expand rapidly. There’s nothing wrong with leaping ahead of the market when you see an opportunity. But opportunity can be costly to sieze. Nothing like having money in the proverbial mattress to weather the challenge! :-)

  6. Fantastic article as always! Your mindset is exactly tuned towards the way I see things. I am not doing this to become rich (only a few do actually), but I am looking for freedom do develop and design games I like to create by making enough profits to give me that freedom. We are a small company, working with other paid projects as well, but we aim to be able to have the freedom to explore the potentials of our many ideas! Who knows, there might be a gem among them somewhere!

  7. These points really focus the mind: on how you can make boardgame design a living but also on a personal level to money. These apply to life as much as they do to running a company and I definitely was not choosing profit in the past. I look at my monthly income and costs and am planning out when it will make sense to shift careers. Hopefully, saving up will give the time and flexibility to work on my dream projects!

    Thanks for the post Jamey!

  8. It’s good to have a plan for profit for growth and generosity, and not just profit for profit sake.
    For me, I’d rather have thousands of people get my game and make a little profit than for hundreds to get it and make a lot of profit. Even if I don’t make a profit, this is my hobby and what I love, so I will die a happy man if the world loves what spent time money and sweat on.

  9. I love how you describe profit as freeing. In any creative field, money isn’t necessarily the goal but rather a good “product” – a fantastic game, a phenomenal movie, an awesome concert… For me, profit allows for freedom and flexibility. If you aren’t worried about how you’re going to pay your bills and aren’t chasing money just to make those ends meet, you have so much more ability to be creative and put forth your best work.

  10. I LOVE YOUR LAST POINT!
    Generosity — the little unexpected treat — goes a long way in business. If you do something above and beyond for someone when they don’t expect it, in many ways you’ll see returns in tangible and intangible ways. Word of mouth, extra future business, referrals, the possibility of working with you again . . . everyone loves being taken care of, and generosity affords you the ability to take care of the people you want on your side.

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