Growth

ncmaa·Feb 10, 2023

Hello, I'm Nicole Azachee. I am currently a technical co-founder of two small digital services (software, games, art) companies; Invisible Hand Inc (software-focused) and Game Revolution Technologies Incorporated (game-focused) based in Manila.

I left the corporate world back when COVID-19 first started. I was a Software Engineer for six years and an active contributor to research and innovations at Samsung R&D. Inventing things is my childhood hobby, Samsung saw this and allowed me to explore the space professionally.

During the pandemic, 2020 saw me pushing and developing a software company with five of my old friends. I joined as soon as they got a few big projects that were enough to sustain the company.

Fast forward to 2023, almost three years in the startup scene, I have realized, noticed, and learned a few things after collecting a sizable amount of projects locally (I am still learning). Among all the lessons, it all boils down to this; we were only earning enough to pay for everyone's payroll every year - the company has not yet been profitable for its founders. The chase went on and on, closing enough to survive. We were our own sales team.

The challenge started when our bigger corporate clients refused to pay on time, prolonging the billing schedule - and, coupled with the recurring cost of having a whole brigade of new employees for our game development division (around fifteen people) to focus on projects that were fully owned and funded by us, the cost of operations continued with a cumulative loss to profit. We first expanded to open our game development division after we closed a partnership with a reputable corporate investor group to develop an MMO game. Due to unforeseen events and conflict between management, our partnership was severed and we decided to opt out of the venture and branch out to push on our own.

Our software development department was the one department that was earning in a stable way throughout the three years. Last year has been a challenging but fruitful road (in terms of experience and projects). We are currently the development studio behind one of the largest local corporations in the Philippines. But we still have to cover recurring operational costs for our game development division.

I enjoy doing what I do but due to not being able to close the gap yet for our game development division, it has not been sustainable profit or income-wise.

So right now, I'm opening up to explore what may benefit me and or my company. We prioritize our employees first before us, the founders.

Has any of you been through this kind of experience before? How were you able to overcome this type of challenge in your business?

TL;DR - I am not earning enough from my business and I need to be able to sustain myself personally since I have a family. If I don't close any beneficial partnerships for my business, I'm thinking of looking to be employed again to keep my finances rolling but I am unsure how to get back and which position would be best to get back into.

Any kind of lead or help is appreciated. Thank you for reading my thoughts.

jennifercresswell·Feb 13, 2023

Hi Nicole - What's the model for your company? I look at this type of thing a lot for my clients. If you have all full-time employees on payroll, you may be able to see if they would be willing to be independent contractors instead, and offer them "gig" work, rather than a set monthly salary which will help through the ebbs and flows - and also allow them to take on other projects. A couple of other things to consider: 1 - Raising your prices on new projects on the software side (since that seems to be making money) 2 - Disbanding your gaming division (assuming that you don't have active projects). Often when you focus in one specific area and get that running smoothly and profitably, then you can go back into the gaming division. Hope this is at least a little helpful, but please message me if you'd like to chat further. Full disclosure - I am not familiar with labor laws/taxes/business entity structure in the Philippines, so talking generally.

melissajenkins·Feb 14, 2023

It sounds a bit like you have a software development consultancy that is subsidising the development of an in house product. Whilst they sound complimentary, and lots of people will talk about recurring revenue and owning the end customer and probably things like 'fly wheel' etc they are really two very different businesses with completely different customers and revenue models. Success in one has no bearing on the other apart from providing cash.Not many startups can run two totally different businesses successfully! Perhaps you need a clearer separation of function so that the gaming division is 100% focussed on succeeding as is the consultancy? The way it sounds there is little incentive for the gaming side to actually be a stand alone business.