How We Developed A $40K/Month Game-Based Learning Platform

$40K
revenue/mo
3
Founders
15
Employees
product
Games for Business
from Pécs, Magyarország
started January 2016
$40,000
revenue/mo
3
Founders
15
Employees
2.16M
alexa rank
355
followers
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Hello! Who are you and what business did you start?

Together with my team, we develop a game-based learning platform, and our goal is to make learning loveable for as many large organizations as possible. Our clients are mostly multinational organizations in knowledge-intensive industries, like finance, engineering, telecommunications, IT, or consultancy.

This is our latest product video:

I started Games for Business in 2016, and very quickly, within only 3 years we managed to do projects on 3 continents. Based on our professional and business success, Austria’s largest private education group has acquired the company. When I started Games for Business, I planned to establish a company with which I can achieve international professional recognition, and which will establish my total existential independence. By selling the company, I achieved both of my goals.

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The current login page of our demo system

What's your backstory and how did you come up with the idea?

I have a biology teacher degree, but I started my first business already while at university. My company was a digital marketing agency that delivered creative solutions for 10 years and started the first gamification-based projects in 2006.

In a market that expressed huge interest in gamification, but had lots of questions and uncertainties, with our credibility we managed to convince clients rather quickly, while many competitors had rather vague propositions to offer.

By 2012, the agency overcame the economic crisis, which was an extremely stressful period. I was completely burned out of my job as the company manager and owner, and I was thinking about what kind of professional work I would like to do in which I could find my motivation again. I was looking at the projects of the marketing agency and realized that it was the gamification-based solutions that really interested me.

All I knew was that I really enjoyed working on those projects, and my motivation was to do something that I love. I had the belief that those are the types of projects with which we could enter the international market, and I could significantly scale up the quality and volume of my business.

The success of our game-based projects proved that we were offering something unique to the market. We just had to find out how to take this abroad and how to scale up the business. Around the same time, gamification became a defining market trend, which was consistent with our approach, and strengthened my belief that we could use this wave to help us achieve our professional and business goals.

By that time I had already gathered over 13 years of business management and leadership experience and managed to accumulate private capital, which I could dedicate to this new business endeavor. This allowed me to start realizing my idea on my own, with my own resources and experience, without having to convince others. These, I believe, are 2 crucial success criteria of this project.

Take us through the process of designing, prototyping, and manufacturing your first product.

Our start was unique in the way that our marketing agency background provided 6 years of experience with game-based developments. One project came after the other, and this allowed us to continuously and gradually develop a platform. After the second year, we tried to do these projects based on the existing code, to avoid having to start from scratch all the time. Back then, we were not thinking of a product, but rather a software base that makes individual project executions easier.

Our software was developed rather organically for 6 years based on client needs and user experiences, and not planned on a drawing board. The innovative idea was to take the existing software used for marketing projects and change the application area to support HR goals. This allowed us to provide a standard product for internal uses, rather than fully unique marketing solutions. We shifted from external to internal corporate communications, but this was not a technological innovation, but a novel business model, as our tool was extremely innovative in the HR tech market.

After this decision to shift our target market, we quickly signed 3 big clients, which validated the business model behind a technologically proven tool. There was huge interest in the HR tech market due not only to the hype around gamification but also to the labor market situation, which generated the need for tools that put employee experience into focus.

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Screenshots of earlier versions of our learning platform

Describe the process of launching the business.

It’s important to consider that I was already running an established marketing agency. Its marketing projects were the basis for the development of our platform both financially and from the perspective of the needs. Before I decided to take this product out of the marketing agency and go to international markets with it, I assigned 2 dedicated colleagues from our team to start establishing the product in the HR tech market.

We started entering professional international HR and learning competitions, we accepted all invitations to present our projects and our approach, and our goal was to present ourselves on all possible channels to the market in a very transparent way. We published all information about our projects that our clients approved in case studies, articles, presentations, webinars, blogs, videos, etc. Forbes.com has written about our projects 3 times. In a market that expressed huge interest in gamification, but had lots of questions and uncertainties, with our credibility we managed to convince clients rather quickly, while many competitors had rather vague propositions to offer.

Our sales activities were handled by a small team very efficiently. We focused almost exclusively on clients that are globally recognized brands, multinational corporations because their names provided value to support our messages everywhere we appeared.

There was a very critical point around the establishment of Games for Business when clients had already started to express their strong interest in our product. I took the product, detached it from the marketing agency, and left the company, which provided a secure income, behind.

Games for Business inherited 50% of the operating costs along with about 5-6% of the income of the agency. I risked making up for the difference from my own capital, which would have covered about 6-7 months of operating costs, should the new company not generate enough revenue.

We realized early on that we do not want to carry out our international expansion on our own, but rather through establishing a partnership network.

This decision not only put pressure on the team but also made organizational goals a lot clearer. Everyone in the spinoff team was working to make this product successful. Within only a few months after the break, Games for Business was able to generate enough revenue to break even its operating costs.

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Our team in 2019

Since launch, what has worked to attract and retain customers?

Our organization has always been quite small and compact managing few resources, as we were burning my founder’s capital. With an initial team of 10, our goal was to quickly sign projects in the international market. It was crucial to establish the key USP for which clients will choose us: to create an engaging, gamified learning experience. We were focusing on the software development and methodological aspects of this USP.

We planned to outsource all other things needed to sell our product, and we started to establish a partnership network, which can manage their client, provide content development and support to them locally. To reach this point, however, we needed to gather hands-on experience first.

Our initial sales efforts were based on established client contacts and market communication of our marketing agency, and Games for Business was established when the first client deals were signed.

I took the software version of our first project and approached HR leaders to show them a novel solution and collect their feedback about our approach, as a sort of interview. This worked because I was not trying to sell them anything, they were open to the discussions and provided lots of feedback on how our tool can be applied, and these discussions led to very active sales leads. This active communication kickstarted our sales in the beginning.

We used social media very actively in our marketing with organic communication, personal branding, establishing a personal professional network, and we shared lots of quality content. We did not spend on paid advertisements at all. As we were publishing relevant and interesting content, we received lots of conference invitations to give presentations, and we accepted all of them. Our approach was to educate the market as much as possible without any direct costs. Our expenses were only our work and travel expenses.

We did not enter any startup competitions, only professional contests, as we wanted to position ourselves as a professional provider and not a startup for the enterprise market. Our Awards have also generated a lot of organic reaches and market credibility. This approach was so efficient during the first 3 years that we did not need to invest in our sales, as our continuous visibility has generated one request after the other to tenders, which we have all won.

This efficiency, our transparency, and the lack of many competitors have allowed us to stand out in the Central Eastern European market. We have also realized early on that we do not want to carry out our international expansion on our own, but rather through establishing a partnership network.

We share everything we can with our partners, while they bring their client network, sales, and marketing tools. We provide our constantly developed technology, and our partners provide local support and additional services to the clients, which is reflected in our revenue share model. Our international client portfolio, credibility, and recognitions have helped us to find partners quickly and start selling abroad.

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Early version of our website

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An example for a social media post creative

How are you doing today and what does the future look like?

In the first 3 years, Games for Business managed to double its revenue year after year. Last year, our profit rate was close to 50%, when the Covid pandemic started. The global crisis has affected our business in 2 different ways. On the one hand, due to a sudden widespread need for a home office, the interest in our digital learning platform has significantly increased. On the other hand, the market primarily needs instantly applicable solutions. Our gamified platform is always tailored to the processes of our clients, therefore its implementation requires significant resources.

Overall, the Covid crisis has resulted in a decline in revenues, which caused a financial loss for the company. To offset this trend, we started a content development and product development strategy, the goal of which is to drastically reduce the implementation time of our platform through automatization and integration of ready-made training contents. These developments are in progress, we managed to gain market experience already, and feedback is generally very positive.

Through starting the business, have you learned anything particularly helpful or advantageous?

I believe the fast rate of growth that Games for Business has seen is mostly a result of the maturity of my 15-year business experience, my financial situation that provided our full independence and autonomy, and my ability to dream big enough to create excitement and motivation for my colleagues as well.

When I started Games for Business, I said to myself that everything I did wrong in my earlier entrepreneurial life, I would like to do well here. One aspect of this was to have a clear strategy for realizing the dream I envisioned, and it needed to be put into a concrete plan. I broke my 5-year long plan down into key metrics, which made it all very black and white.

Another aspect was to have the right team with proper involvement. I started the company with colleagues I’d worked with for over 10 years, and I gave them the necessary authority.

What was also crucial is that I believed with my heart and soul in what I was doing. This helped overcome the difficulties in the beginning: How will the product be? Will clients like it? Will we have enough income? How will we finance our operation?

Besides the capital that I risked, I had the persistence to hold onto my belief. What’s really interesting is that the company has managed to meet all the KPIs I put into my original spreadsheet almost precisely, with a maximum of 10% deviation.

Keeping these KPIs in focus and seeing how we managed to meet them has not only motivated me but made the entire team also believe that we are doing something really great and shall keep pushing forward.

What platform/tools do you use for your business?

As our team is a rather small, compact organization (even today we are less than 20), and before Covid, we have mostly worked together in one small building, our internal communication is a fairly simple process. We don’t like to overcomplicate things. We like using Trello for internal task management because of its simplicity. We also use Google Apps for internal file sharing. We prefer easily accessible solutions for our everyday needs, like Skype and Zoom for communication or webinars.

What have been the most influential books, podcasts, or other resources?

15 years ago, I used to work and make our living from the local market of our mid-size European city, Pécs. I was facing very similar challenges to the other company leaders around me: high workload, struggling for new business, near-burnout conditions. What provided the biggest inspiration for me was the conversations I had with these leaders and the example of those few who managed to enter international markets after tough struggles. Not with software and not the same way as we did, but some managed to build businesses that produce a result that is visible even from a European perspective.

Another noteworthy trend was the success of several gamification evangelists around 2012-2013, like Yu-Kai Chou, Mario Herger, or An Coppens. By following their activities, I managed to gain more insights into the latest market trends.

Advice for other entrepreneurs who want to get started or are just starting?

I know I will not be popular with my statement, nevertheless, I strongly believe that the best product developer and best investor is the market. Let’s be honest. You might have a great mission and honorable goals, but in the end, running a company is about generating profit, otherwise, you will probably establish an NGO. I had gained experience with a business angel and the consequences of a formalized investor in my company.

A CEO or managing director will mostly try to meet the expectations of where the money comes from. Leaders who consider receiving money from an investor or an investment fund will focus on the aspects and conditions set by the investors. If you want to meet market expectations, you will need to focus on the market. From the very beginning, we have financed our entire product and business development from the market. We dedicated all our resources to meet these market needs, instead of delivering pitches and business plans.

This focus and very sensitive and open attention to the market resulted in a product and company that gained momentum in the market. If you have the choice, I recommend that you grow a little slower, but, by focusing on and selling in the market, you will be able to deliver the best results. This will most definitely not be the quickest and easiest solution, but that is what I believe in.

Are you looking to hire for certain positions right now?

Currently, we are not looking, but it’s worth following our channels, as we are experiencing extremely unpredictable market dynamics.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Balázs Vendler,   Founder of Games for Business
Pat Walls,  Founder of Starter Story

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