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Posted in Developer's corner

FC Sunnyvale Premium small (Bubbles) StaffCrew 13 February 2020, 15:28
I thought I'd write down some thoughts I've had on finance, marketing and development because many people have expressed interest in it both here and in the Danish forum, and have come up with questions and suggestions, especially since my last blog post.

Topics such as increased marketing, more staff, and whether or not I would consider seeking investment have come up.

First some background. As you know, I am now the happy sole owner of Playonic, through a holding company, which I was advised to create for this purpose. For those who don't know, a holding company is just a company whose sole purpose is to own other companies. This means that I own the holding company and the holding company owns Playonic. The advantage of this is that the holding company is a layer between me and Playonic, which helps to reduce certain financial risks, which could otherwise be quite large if I was personal owner of Playonic. A holding company is also often used as a kind of money tank where the proceeds from the operating business can sit safe and sound until you want to reinvest them.

When I needed to find financing for my acquisition, I was advised to raise as much money I could myself, and then let the holding company borrow the rest. This would help reduce the financial risk. But, the bank was unwilling to lend money to the holding company - they'd only lend it to me personally - and then the holding company would have to borrow all the money from me. This means that I'm personally liable for the whole amount until the holding company repays its debt to me. So there are going to be a number years where there needs to be a certain amount of profit to be used to pay off the debt.

However, the profits for 2019 will be very modest. It looks like it will end up just about half of what it was in 2018. That may sound pretty severe, but it's actually not that bad.

Firstly, in 2019 we did not really get to see the effect of all the savings I introduced. It wasn't until August that we moved to the new and cheaper servers, and several of the services I terminated had a notice period of 3-6 months.

In addition, I spent a lot of money buying hours from Rasmus, which can run up very quickly and swallow the savings. Freelancers have no job security, get no paid holidays or sick days, so in return they demand a high hourly wage, and Rasmus actually has a higher hourly wage than myself.

Another major item was a regulation made in connection with the acquisition, which I have introduced as a permanent practice in the future. When you buy premium, you pay in advance - sometimes far in advance. The new practice means that we only count the money as being earned when we've fully delivered the goods, so to speak. That is, at the end of each month, I make an inventory of how many prepaid premium days we owe you all, which is then counted as a debt item that is continually regulated.

This will make for a healthier financial situation in the future because we will always have "money in stock" corresponding to all the premium you have prepaid, but in connection with the first regulation it meant that, on paper, the company actually had a small deficit for the first half year.

Some have asked if I would consider finding an investor to put money towards development, which I don't think is as realistic or desirable as the situation is now. Right now I have a plan and a series of ideas that I am convinced have huge potential. But that's not enough for a serious investor. What most people don't understand is that ideas are worthless. The only thing that matters is whether you can bring them to life. Every person on the planet has a hundred brilliant ideas that will never turn into anything.

Therefore, it is quite inconceivable that a serious investor would look at Virtual Manager as it is now, and be willing to throw enough money into it that it would make any real difference, based solely on my own belief that I have a bunch of brilliant ideas. And programmers are incredibly expensive. All inclusive, a single programmer for a year could easily cost around 5-600,000 DKR (Danish crowns), so it wouldn't help if someone came along and offered 100,000 for a stake. It would only be a hindrance.

As for me, I spent everything I have buying out the previous owners, so I also don't have any more money to invest.

So the conclusion is that Virtual Manager still has to finance itself. There's no rich uncle coming with a huge stack of cash to hire a bunch of programmers with. If we hire more people, it will have to be because the company itself is able to fund it.

But I'm actually fine with that, because there are also benefits to being a small company!

The job is now to bring the plan to life, and that can only be done through a hard slog - it's not something that can be solved by just throwing money at it.

My focus in 2019 was on making the business and operations much simpler and trimming all the fat. And that has definitely been accomplished. The next step is to take advantage of the benefits this provides and start coding a bunch of cool things, bring life and happy days to the game, get new users in, lure the old ones back, and step by step build a sustainable business that can hire more employees.

As for marketing, we are currently spending a fixed amount per month. As it is now, our advertising is making a small loss - ie. we pay more to get a new user than we can expect to earn from them. This is mainly due to the large dropout rate during the first minutes after signup, which I mentioned in the blog post. Therefore, it is currently not a good idea to increase the marketing budget as the money will be wasted. However, as new user retention hopefully increases, I will also continuously increase the marketing budget.

So the conclusion is, I intend to embrace the fact that Playonic has again become a small business, spend the money wisely where it'll give the most bang-for-the-buck, grow the business in a sustainable way, and be prepared for the fact that, financially, it may have to get worse before it gets better. smiley

Coptic Titans Premium small (Papyrus Skeptical) 13 February 2020, 21:13
Hello Bubbles , Congratulations are in order it takes real balls to invest all your savings and time into this game it must be a real labour of love and hopefully rewards your efforts in keeping this game alive .Top job Bro

SuDoku AFC Premium small (Howard Garns) StaffCrew 14 February 2020, 02:08
Thanks Dennis for this update on the business state.
IMO the more we managers know, the more we are likely to stick with and invest time and real money in the game.
As you well know I spend half my life on this, (the other half I'm asleep or AFK smiley ).
I do also play other games - and I have tried and binned several more.
The good news is that VM is streets ahead of everything else I've found,
most of them are either too "slow", or uninteresting for other reasons.

Just one thing though, > I do realise following previous Crew conversations that your decision on allowing us to have multiple clubs was to create the Youth Squads and stick with "one person - one cub", but I'm of the firm opinion that many of your longer standing customers would gladly pay a bit extra for second - or third - clubs, and I do think with a bit more work we could manage that in terms of preventing cheating.
That could be a quick short term "win" for the business finances with little or no further cost(?).

FC Viitorul Constanta Premium small (Adrian) 14 February 2020, 23:09
If you have some time on your hands, I've opened a thread a very short while after joining detailing the struggles of a beginner, where mostly everybody was against my suggestions/complaints (just ignore the comparison for non-premium users though it's where my analysis started), but I still stand by them:
https://www.virtualmanager.com/forums/topics/1204268-unbalanced-economy-and-flawed-training-system
Main ideas, in case you don't have the time to read the whole 5 pages :

- Not sure how the user base is evolving, but despite the apparent long life of the game, I could not say I see a way for it to appeal to more people as after a first few weeks it seems you hit a wall that you cannot see a way around.
- Also there seem to be no logic to the match engine, or at least no explanation for how it's working, which would be a major plus for this game. Just having some sort of imperfect 2/3D match graphics doesn't seem enough.

- there is no incentive to pay premium until you can get black TF.
- why shouldn't I be able to use a trainer with a lower level, payed less which can still be useful, let say training player until lvl 30, then needing a higher level trainer to get benefits to lvl 40 and so on?
- I'm asking for a way to make the lower level training facilities and trainers be useful in improving players in a cost effective way ( player salary+trainer salary, if any < player price increase while training).
- Indirectly incentivising the players to avoid paying the premium is a design error of the game. Because if there was an incentive to pay it most people wouldn't be that cheap. But if it is useless there is little incentive to pay for it.

Here is what other people said on this point:
Thorntondale Rovers wrote:
Adrianopol FC wrote:
Reignwølf wrote:
So you think newly formed clubs in the lowest leagues have top training facilities and trainers? Not sure why you think it lacks realism? If they made it all free, they wouldn't make any money Think if it as a demo until you get premium.
I already got premium! Why are you guys getting stuck at this level?
And that is the opposite of what I'm asking for. I'm asking for a way to make the lower level training facilities and trainers be useful in improving players in a cost effective way ( player salary+trainer salary, if any < player price increase while training). Is this too much to ask?
The problem is that at the lower end of the Leagues you will be advancing far quicker than the players you hire and will be upgrading/transfering the players before you would see any benefit from the trainers and or training facility.

A close friend of mine has just started the game, after a brief discussion he now knows how the game works and will stay clear of premium and upgrading training facilities etc until there would be a tangible benefit to him.
The paying membership for a beginner only gives around 300k more per season, which is considerable, but you could make that much in 3-4 extra transfers (at least for my budget).
But even with that money it will take 2 years to get to the level of facilities needed to actually start training and playing the game. Why should I pay and wait for two years just to bypass what I consider to be a flaw in the system.

I wouldn't be where I am if I wouldn't have put almost a part time job for some months trading players, which should not be the first focus of a beginner in any game that is supposed to be about managing stuff.
There is virtually no way for a beginner to effectively build up his club without putting 1+ hours/day trading, and I think this is a very high entry barrier.


Part 2, fixing it:

1: Limit the wages of players in clubs not having the membership. As the wage is based on the number of fans (if I understood correctly), and fans influence the attendance which in turn lead to higher revenue on bigger stadiums it's only fair to limit the wages to the same proportion as the cap on stadiums. Otherwise it's a penalty for non-paying members.

2: change the way training works.
a) disregard the facilities for skills under 30 or so, meaning all players train the same up to 30 regardless of facilities. Bonuses then apply.
b) increase the trainers role in training, balanced by increasing the wages. Instead of percentage add fixed increases so they can be useful on any training facilities balanced.
c) add 1-2 free youngsters to non-paying members, limited in potential to maybe the first few levels of talent, maybe 24 talent points. otherwise no new club can afford to buy a decent talent player


I don't think that making it easier on newbies will make older players quit, as it would only be easier until the 4th/3rd division. or around 50-60 ratings on player in the long term (on the short term until 30-40 rating). How will that impact the older managers who have players from 60-70 rating and above?
The real problem is the big difference between the 3rd, and 4th division, which for me at the moment seems insurmountable.

If you want I can debate with you on this topic as much as needed.
Also the first thing that made me want to quit is that on mobile when clicking on staff or other 'premium ' pages , if you don't have premium you're directly redirected to the payment page. It feels like a trap to make people pay. I urge you to add a landing page instead explaining the advantages to buy premium instead. Same thing happens even with Premium if you click on the buy tickets banner. Same suggestion there, redirect to a landing page as it is very very very annoying, especially due to misclicking on it! Or at least move it to the bottom of the page and not have it under the market button. Usability 0 on mobile when you have to click 3 times on back from the external payment provider to finally be able to click on the 'Market" link. Just by moving that link and redirecting to a landing page instead of seeing the payment page every 3 click will drop the percentage of users quitting the game by a lot.

FC Sunnyvale Premium small (Bubbles) StaffCrew 15 February 2020, 13:41
FC Viitorul Constanta wrote:
If you have some time on your hands, I've opened a thread a very short while after joining detailing the struggles of a beginner, where mostly everybody was against my suggestions/complaints (just ignore the comparison for non-premium users though it's where my analysis started), but I still stand by them:
https://www.virtualmanager.com/forums/topics/1204268-unbalanced-economy-and-flawed-training-system
Main ideas, in case you don't have the time to read the whole 5 pages :

- Not sure how the user base is evolving, but despite the apparent long life of the game, I could not say I see a way for it to appeal to more people as after a first few weeks it seems you hit a wall that you cannot see a way around.
- Also there seem to be no logic to the match engine, or at least no explanation for how it's working, which would be a major plus for this game. Just having some sort of imperfect 2/3D match graphics doesn't seem enough.

- there is no incentive to pay premium until you can get black TF.
- why shouldn't I be able to use a trainer with a lower level, payed less which can still be useful, let say training player until lvl 30, then needing a higher level trainer to get benefits to lvl 40 and so on?
- I'm asking for a way to make the lower level training facilities and trainers be useful in improving players in a cost effective way ( player salary+trainer salary, if any < player price increase while training).
- Indirectly incentivising the players to avoid paying the premium is a design error of the game. Because if there was an incentive to pay it most people wouldn't be that cheap. But if it is useless there is little incentive to pay for it.

Here is what other people said on this point:
Thorntondale Rovers wrote:
Adrianopol FC wrote:
Reignwølf wrote:
So you think newly formed clubs in the lowest leagues have top training facilities and trainers? Not sure why you think it lacks realism? If they made it all free, they wouldn't make any money Think if it as a demo until you get premium.
I already got premium! Why are you guys getting stuck at this level?
And that is the opposite of what I'm asking for. I'm asking for a way to make the lower level training facilities and trainers be useful in improving players in a cost effective way ( player salary+trainer salary, if any < player price increase while training). Is this too much to ask?
The problem is that at the lower end of the Leagues you will be advancing far quicker than the players you hire and will be upgrading/transfering the players before you would see any benefit from the trainers and or training facility.

A close friend of mine has just started the game, after a brief discussion he now knows how the game works and will stay clear of premium and upgrading training facilities etc until there would be a tangible benefit to him.
The paying membership for a beginner only gives around 300k more per season, which is considerable, but you could make that much in 3-4 extra transfers (at least for my budget).
But even with that money it will take 2 years to get to the level of facilities needed to actually start training and playing the game. Why should I pay and wait for two years just to bypass what I consider to be a flaw in the system.

I wouldn't be where I am if I wouldn't have put almost a part time job for some months trading players, which should not be the first focus of a beginner in any game that is supposed to be about managing stuff.
There is virtually no way for a beginner to effectively build up his club without putting 1+ hours/day trading, and I think this is a very high entry barrier.


Part 2, fixing it:

1: Limit the wages of players in clubs not having the membership. As the wage is based on the number of fans (if I understood correctly), and fans influence the attendance which in turn lead to higher revenue on bigger stadiums it's only fair to limit the wages to the same proportion as the cap on stadiums. Otherwise it's a penalty for non-paying members.

2: change the way training works.
a) disregard the facilities for skills under 30 or so, meaning all players train the same up to 30 regardless of facilities. Bonuses then apply.
b) increase the trainers role in training, balanced by increasing the wages. Instead of percentage add fixed increases so they can be useful on any training facilities balanced.
c) add 1-2 free youngsters to non-paying members, limited in potential to maybe the first few levels of talent, maybe 24 talent points. otherwise no new club can afford to buy a decent talent player


I don't think that making it easier on newbies will make older players quit, as it would only be easier until the 4th/3rd division. or around 50-60 ratings on player in the long term (on the short term until 30-40 rating). How will that impact the older managers who have players from 60-70 rating and above?
The real problem is the big difference between the 3rd, and 4th division, which for me at the moment seems insurmountable.

If you want I can debate with you on this topic as much as needed.
Also the first thing that made me want to quit is that on mobile when clicking on staff or other 'premium ' pages , if you don't have premium you're directly redirected to the payment page. It feels like a trap to make people pay. I urge you to add a landing page instead explaining the advantages to buy premium instead. Same thing happens even with Premium if you click on the buy tickets banner. Same suggestion there, redirect to a landing page as it is very very very annoying, especially due to misclicking on it! Or at least move it to the bottom of the page and not have it under the market button. Usability 0 on mobile when you have to click 3 times on back from the external payment provider to finally be able to click on the 'Market" link. Just by moving that link and redirecting to a landing page instead of seeing the payment page every 3 click will drop the percentage of users quitting the game by a lot.
Thanks for the highly detailed feedback. While I've still only read through some of it, you hit upon some important points. I've saved this post to my reading list and will be referencing it in the future.
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