The perils of being an indie with a fulltime job

[Valen]

A lot has been said about the pros and cons of having a fulltime job until you can live from your business earnings, but I'd like to throw another con on the fire. :) As you might know, I already have one game that I'm selling. As I've been improving it, working on marketing, advertising, registration incentives, web site, and so on, I found that I have very little time left to spend on the next project.

The progression seems very clear to me -- the more products you have, the more time you'll need to spend improving them and marketing them, handling customer support, etc., while your personal coping resources will remain static. In my case I found that I need to spend so much time on the many parts of the business and sales/marketing areas (as well as learning new things in those areas) that I can't even create a second product at the same time.

[edit] I just re-read my post and realized that I didn't really say what I'm getting at. :) Basically, I already decided that I will be quitting my job to go into business fulltime, but I'm just wondering how you guys are doing in a similar situation.

[Jonas]

Well at some point you have to manage people or things to do some or all aspects of these tasks. You can only grow so far by yourself.

You can be a victim of your own success: More orders to proccess, more support, more promotion, more improvements, more developement.

It's not a bad thing, but you do have to think of how to streamline and offload some of work to other people or services. This is the same for most businesses, at what point does it grow beyond your current resources, and how do you accomodate that.

One downside to having others do things for you is it's easy to lose touch with them, so make sure they can do it better than you :)

[Valen]

What you're saying is true, and I'm reading "The E-Myth" right now so I know exactly what you mean. :) I was just talking about having a fulltime job in addition to trying to get your business off the ground. I find it to be a huge distraction.

[robleong]

I'm in the same boat, but I just can't leave my full-time job - too much to lose for me... However, I'm happy to develop games during my spare time, and consider it just as an enjoyable hobby and no more. Since I'm not spending any time on marketing my present game (which I should), I have time to program another game. Of course, apart from the job, there are also the demands of the wife if you're married, and possibly kids to contend with.

[Jack Norton]

Well all depends on which country you live in... :)
For real... if the average salary in your country is 500-600$ you could get that with one single game (if is good) and continue making more.
Anyway I went fulltime since February and I can't really regret it. No more stupid bosses, no more driving to work, I am FREE :cool:

[princec]

I found that we "wasted" the best part of 6 months on Alien Flux, listening to people's suggestions, tweaking, fiddling, fettling, and adjusting, along with a fair few press releases and lots of contact with the online press, and much web site dickery.

What I'm left with is a game that converts around 1%-ish, that more or less took a year to get to that state from its initial inception. It is highly unlikely it will ever pay for itself now - I expect that would take about 5,000 sales, which is over twice what I optimistically aimed for when I started out. I think over its entire lifetime the game may shift about 1,000 units.

But all is not lost! No, because we now have such a good idea of what does and what doesn't work and what to implement straight away, that we will probably only need to spend a couple of weeks tweaking our next couple of games. In fact the next game has only taken about 2 months' total development time so far - one of the lessons we learned was that ROI is increasingly difficult to achieve the longer you spend on development.

The other things we've learned are website design to sell, how to write press releases (and of course we've now got a big list of contacts), we've learned all about difficulty tuning, we've got our technology so sorted it nearly always works, etc. etc. In other words, it's plain sailing from here...

...no need to rest on our laurels though. We have an extremely cunning plan which we're going to share with you all when the game is released. I think you'll like it. A lot.

<edit> Actually it's such a cunning plan I'll let on at the weekend and write a little article on it.

Cas :)

[HairyTroll]

Well all depends on which country you live in... :)
For real... if the average salary in your country is 500-600$ you could get that with one single game (if is good) and continue making more.
Anyway I went fulltime since February and I can't really regret it. No more stupid bosses, no more driving to work, I am FREE :cool:

Yup. I live in Los Angeles. A mortgage + wife + 2 children means that I have to earn > $75k (before taxes) a year just to break even - around $4000 a month after tax. If I quit my fulltime job I would need to be making upwards of $80K just to cover the increased costs of medical insurance of which currently the company pays a huge chunk of.

Yay for California.

[Jonas]

Maybe you should move :)

Really though, that is the beauty of running your own homebrew company is that while it's small, you can get away with living just about anywhere.

the pinch comes if you need inhouse staff, and lots of them. I'd image can be a little hard to find coders in Nome Alaska. But thats why us smart monkeys created the net.

[Jack Norton]

If I quit my fulltime job I would need to be making upwards of $80K just to cover the increased costs of medical insurance of which currently the company pays a huge chunk of
Then if you want to stay in california forget about indie development :D
No way you can reach that amount even after 5 years of tough work...!

[ggambett]

Another "peril" : your day job keeps getting duller, more boring, more unbearable each day :(

[Valen]

Another "peril" : your day job keeps getting duller, more boring, more unbearable each day :(

That's one of the reasons I decided to leave. I guess it depends on where you work, but if your job is "an exercise in futility" (quote from a Dilbert strip, where his boss then tells him "exercise is good for you") it can only hurt your business efforts even more by demoralizing you. I did have some good reasons for getting a job (this is my first job out of college) but now I already accomplished what I wanted and it's time to move on.

As far as expenses go, I can see that's holding back many people. I personally need about $1000 monthly to cover my living costs, without medical insurance. It includes rent ($750), internet, electric bill, liability car insurance (which sadly costs me $1000 a year for a 12 year old car, yay for New Jersey). I've saved up enough to live for over a year if I keep my expenses to a bare minimum. Having no wife and kids helps too.

[Mark Fassett]

Heh - in my case, having a wife helps, since she works. A wife can be beneficial, unless your idea of a wife is someone who stays home and takes care of the kids.

[papillon]

... some of us have to look after lazy shiftless husbands who sit around playing MMORPGS all day! :)

At least he cooks.

[HairyTroll]

Heh - in my case, having a wife helps, since she works.

I think it depends on the situation. In our case, all the grandparents live almost exactly on the other side of the planet. If she went back to work, the amount of money she would bring home (after taxes) would go to daycare. So she can either look after both kids, or we can pay someone to look after the kids. At the end of the day the finances remain the same. And I would rather have my wife looking after my children than some stranger.

[Mark Fassett]

Well, yeah - it does depend on how much she makes, and whether you're working the dreaded day job or not. I was referring to Valen's choice to leave the day job, in which case having a working wife is a good thing. I feel lucky in that I get to stay home and watch my son grow up. Of course, it means I sometimes don't get alot of work done during the day, but that's what evenings and night times are for. Doesn't work as well if you can't live on five hours of sleep, I guess :)

[Chris Evans]

Exactly Mark...

My wife stayed at home while I worked full-time at my day job. But once I quit my day job, she started working. There's no need for a babysitter because I'm at home. As Mark said, sometimes you don't get as much work done as you would like, but that's a small price to pay to see your kid grow up. :)


Yup. I live in Los Angeles. A mortgage + wife + 2 children means that I have to earn > $75k (before taxes) a year just to break even - around $4000 a month after tax. If I quit my fulltime job I would need to be making upwards of $80K just to cover the increased costs of medical insurance of which currently the company pays a huge chunk of.

Yay for California.


Well, I also live in California with a wife, kid, and mortgage and it would take me less than half that to break even. California is expensive, but Californians also have a habit of wanting to live expensive lifestyles. Many people have an expensive BMW or a gas guzzling SUV. They have expensive digital cable or satellite TV. Eat out a lot. They have 2-3 cell phones and etc. I could go on.

Hairytroll, I'm not saying you have all those things. I'm just saying many Californians like to live a very comfortable lifestyle, so it makes it seem more expensive to live here than it really is.

I always say, having a high salary at your day job is a dangerous thing if you ever want to start your own business. You get used to the comfortable lifestyle and you won't want to leave your day job unless you're almost guaranteed that your new business will be able to sustain that comfortable lifestyle. Of course, there are no such guarantees.

Hairytroll I'd say you're actually in a decent position to go Indie if you wanted to. Since your wife currently doesn't work, your house is not relying on dual income like so many households. You could essentially switch roles while you start your business. Your break even point wouldn't be $75K. It would be $75K minus whatever income your wife brings in. If you make any spending or lifestyle adjustments, it could be even less.

With that said, it's still a risk and a big jump and your spouse would obviously have to support you 100%. But it just depends how bad you want to be an Indie. :) How bad do you want to be free.

And just so you know there are a few free souls even here in California ;)

[Cuculain]

Well,

why not take the plunge and move to Bali - fantastic climate, great diving and ridiculously low living expenses - average monthly salary is about $40, even if need more as a foreigner. :D

[Mike Wiering]

the more products you have, the more time you'll need to spend improving them and marketing them, handling customer support, etc., while your personal coping resources will remain static.
Besides, my experience is that each following game (at least, if it is of a similar type) takes much longer to create than the previous, simply because you want it to be larger, better, and more fun than the last one. For example, I wrote the original Charlie the Duck in less than a year, Charlie II in about 2.5 years and for Charlie III, I've already spent over a year on the engine alone, so who knows how long that will take! But I can't simply aim for a new game to be 'just as good' as the last one, that would be boring.

[HairyTroll]

Well, I also live in California with a wife, kid, and mortgage and it would take me less than half that to break even.

Okay, while not exactly fighting words, I do feel compelled to respond. :)

We just bought a townhouse a few months ago. The payments + homeowners fees are around $1,900. FYI, LA County just passed the bay area for property values, that's how bad it is here. In the three months we were looking until we actually bought, property values increased at an amazing rate. In fact, we put in a bid on a townhouse in our current complex and were outbid at $410k. Six weeks later we were bidding for another townhouse in the same complex for $450k. Ok, sob story over.

We have no car payments. This leaves around $2k a month. So:

$500 (property tax)
$250 (preschool) (two days a week, 9-3)
$220 (insurance, car/house)
$40 (phone)
$60 (cellphone x 2)
$60 (cable)
$80 (electricity)
$30 (gas)
== $1,240

Which leaves less than $800 a month for food, clothes (two kids - I just spent $80 on two pairs of Stride-Rite shoes), baby formulae (this is expensive) diapers (wow), repairs (car/house etc.), maybe buying a DVD or two, perhaps getting take-out etc.

And that's where the money goes. Is San Diego that much cheaper than LA? :confused:


Hairytroll I'd say you're actually in a decent position to go Indie if you wanted to. Since your wife currently doesn't work, your house is not relying on dual income like so many households.


I very much agree with you here. Actually I was consulting for about 12 months - almost a year ago - so I did get to see my first grow from 2 to 3.

-Luke

[Chris Evans]

And that's where the money goes. Is San Diego that much cheaper than LA?

Nope, San Diego isn't much cheaper at all. Though it depends where you live in the county.

My expenses are close to yours however, I pay about 45% less on my monthly mortgage. I was fortunate to get my house before the prices skyrocketed. The value of our house has increased by nearly 30% just in a year's time.

I don't have pre-school costs and my insurance is a little less than yours. My total monthly costs including mortgage is about $2000 - 2200. So before taxes, I would need to make about $3,000 a month. However since my wife is working, the business only needs to make about half that for us to break even and be self-sustaining.

[HairyTroll]

My expenses are close to yours however, I pay about 45% less on my monthly mortgage.

Timing is everything. That 45% less certainly helps a lot - I feel a little relieved knowing that our expenses (apart from the mortgage) seem to be comparable.

OK, back to the topic.

When quiting a full-time job (and you are in the US) one must also consider losing the company matching 401k. That works out to around $5,000 free money that the company gives me for retirement. Contributions to a 401k come from pre-taxed earnings, which lowers my tax bracket. So if I started out on my own and managed to earn the same amount, I would actually be paying more tax, and I would still need to contribute to a Roth or some other investment vehicle out of my post-tax dollars.

What this means is that working for yourself in the US is really, really expensive. Health insurance is expensive and in addition is paid for from post-tax dollars - and the coverage is not as comprehensive (I pay $80 a month for a PPO + vision + dental at the moment). No 401k with the free cash for retirement. And then there's that self employment tax which bit me in the ass last year. Hooray for owing the IRS an extra $3,100 this past April.

I think the developers who do not live in the states but are still able to charge in USD for their wares have a great advantage.

Perhaps the answer is to continue to work full time in the US, and use the spare change each month to pay a developer and a graphics artist in another country to write the game for you.

[Jim Buck]

.. or move to another country. :)

HairyTroll, you listed basically all the reasons that I, too, fear leaving my full-time job. Chris did it right by leaving before he was "locked in" - it's tough to walk away knowing what you are giving up.

[Valen]

When quiting a full-time job (and you are in the US) one must also consider losing the company matching 401k. That works out to around $5,000 free money that the company gives me for retirement. Contributions to a 401k come from pre-taxed earnings, which lowers my tax bracket. So if I started out on my own and managed to earn the same amount, I would actually be paying more tax, and I would still need to contribute to a Roth or some other investment vehicle out of my post-tax dollars.

If you create a company that has revenues of $1,000,000 a year and makes you $300,000 yearly in profits (just some random numbers to make a point) why the hell would you care about 401K plans and tax brackets? Think big, mon ami. :) Lose the employee mindset. You don't have to work for yourself, you don't have to work alone forever. I'm not busting my ass so that I can scrape by after years of hard work. Look at how much Steve Pavlina managed to achieve in 10 years. I bet he's a millionaire, and now he's moving on to even bigger things. Who knows, he might be the next Tony Robbins or Jack Canfield. The world is full of possibilities. You just have to dare to dream.

[Jonas]

You can't learn to swim if you don't let go of the side of the pool.

You can bet your ass that you'll think of something if you are just out there in the deep water without support. The more you have to lose, the more you'll fight to make it happen.

It's just too easy to give up if you have a lifeline and there is a whole world of people waiting with comforting messages like " well you gave it a good try".

Yoda- "No. Try not. Do... or do not. There is no try. "

At this point, I dont' know how I could ever hold a job working for someone else. It would just seem like an incredible waste of time. If I'm gonna waste it, I'd rather do it on my terms :)

[Coyote]

I think Cas might have some things to say about that... :rolleyes:

[EpicBoy]

I think quoting Yoda is the universal signal for "end of thread".

[Mithril Studios]

When quiting a full-time job (and you are in the US) one must also consider losing the company matching 401k. That works out to around $5,000 free money that the company gives me for retirement. Contributions to a 401k come from pre-taxed earnings, which lowers my tax bracket. So if I started out on my own and managed to earn the same amount, I would actually be paying more tax, and I would still need to contribute to a Roth or some other investment vehicle out of my post-tax dollars.

Actually, as a business owner (even sole prop.) I believe you can contribute pre-tax dollars to a retirement vehicle.


What this means is that working for yourself in the US is really, really expensive. Health insurance is expensive and in addition is paid for from post-tax dollars - and the coverage is not as comprehensive (I pay $80 a month for a PPO + vision + dental at the moment). No 401k with the free cash for retirement.

This too can be mitigated quite a bit as a business owner. Sole prop/LLC/S Corp owners can get 70% of the expenses deducted. C Corps can cover 100% of medical expenses (expenses mind you, not *just* insurance!)


And then there's that self employment tax which bit me in the ass last year. Hooray for owing the IRS an extra $3,100 this past April.

Yeah, this one really bites. But there are ways around it too.

You have valid points Luke, so I don't want to sound like I'm brusquely disregarding them. I am trying to point out, however, that there are quite a few ways around the system, to ease our tax burdens. The more digging I do, the more stuff I come up with.


Perhaps the answer is to continue to work full time in the US, and use the spare change each month to pay a developer and a graphics artist in another country to write the game for you.
This is a *very* interesting idea.... hmmm....

Anthony

[robleong]

I think the developers who do not live in the states but are still able to charge in USD for their wares have a great advantage.


I couldn't agree more. And California is an expensive state to live in. San Diego is generally no cheaper than LA. Would you consider moving to another country or another US state?

[HairyTroll]

Would you consider moving to another country or another US state?

After taking the time to think about this, my answer is No.

If a part-time business isn't making enough to support me financially simply because of my geographic location then I would never consider making the switch to full-time. I would also never consider moving to a different location where the businesses current revenue could support me.

[Jack Norton]

I think the developers who do not live in the states but are still able to charge in USD for their wares have a great advantage.
It depends... for example for europeans developers was a bad thing when the dollars to euro exchange rate was so POOR.
I could sell a 24.95$ game and get less than 20 euros... :(
now the dollar seems to be slowly getting back...