Hello! Who are you and what business did you start?
Hello everyone! My name is Thomas Gullen and I’m the co-founder of Construct 3 along with my brother Ashley. Construct 3 is a game engine that allows anyone to make games without needing to know how to code - “Powerpoint for games”. We feel a lot of other low-code/no-code engines slip into cookie-cutter-style game engines, and a primary focus for Construct has always been not to fall into this trap and allow users to have complete control over every aspect of their games. We’ve recently celebrated our 10 years anniversary of starting the business, and it’s a little unnerving how quickly that time has flown by looking back!
It feels like a privilege to be invited to write our story for Starter Story, and looking back I feel personally exceptionally lucky to have been able to be part of this business and grow it to where it is today.
We’re currently generating in the region of $100k per month in revenue - a number if you’d told me and Ashley 10 years ago we’d be generating I don’t think either of us would've believed it. We’ve gone through some major transitions in the business, not only the technology choices but also how we charge customers (moving from a pay-once model to subscription-based) and we’ve learned a huge amount along the way which I’m happy to share. I’ve always thought the most important thing when running a business is to minimize the mistakes you could make, and looking back I feel like this is a pretty large part of why we are where we are today.
What's your backstory and how did you come up with the idea?
Since we were children, I and Ashley have always loved playing computer games. In our early teenage years we picked up a copy of The Games Factory (who interestingly are still going and are one of our competitors) and we set to work trying to build our games. This is where my and Ashley’s paths diverged - he dedicated himself to building his dream Real-Time Strategy (RTS) game heavily inspired by the work of art that is Total Annihilation and learning to program in C++, and I became increasingly interested in building websites and learned Classic ASP by writing mods for the WebWiz forum software. Looking back, I was likely young and annoying back then (only one of those things now) and patient and well-meaning members of these communities encouraged me and helped me to grow my skills.
We’re currently generating in the region of $100k per month in revenue - a number if you’d told me and Ashley 10 years ago we’d be generating I don’t think either of us would've believed it.
Ashley ran into problems building his RTS game, he was too ambitious and the software he was using to build the game simply wasn’t up to the task. So, he did what any game developer would tell you nowadays to not do and wrote his general-purpose game engine in C++ which was to be known as Construct Classic. It was a success, and attracted lots of users - the game Iconoclasts was initially developed with this engine. This was more than enough validation for our future business.
We then set our minds to launch Construct 2 as a commercial product but with a key difference in that, it exported games exclusively to the HTML5 format which was a little controversial at the time due to the prevalence of Flash. It seemed obvious back then to us that the technology was heading towards HTML5 - and we were a little stunned at how anti HTML5 and stubborn some Flash advocates were. Perhaps it was a lucky guess or maybe we did have a vision, but for whatever reason, this gamble paid off. We were both working and living at her home during this period in our bedrooms (thanks mum!). We didn’t have much money at all, but fortunately running a web-based software business doesn’t come with many expenses, Scotch Eggs are cheap and one of the Construct Classic users offered us ~$20,000 in angel funding. Our skills complemented each other well, Ashley was product-focused and I was focused on the administration of the business along with all the web-based services.
To start we charged an Early Adopters license as a $15 one-off payment. Over the coming months and years we slowly ramped up the price and my naivety in selling software made me privately incredulous that people were willing to pay these amounts (which in retrospect were more than fair but felt like a king's ransom for a young 20-year-old). The great thing about this period looking back is some of those early adopter customers are still using our software and are active in the community - we are very grateful for those early customers who supported us at such an early stage.
He’s not one to toot his own trumpet but Ashley in his early twenties developed Construct 2 on his own, writing a quarter of a million lines of C++. It’s a breathtaking achievement.
Whatever you’re building doesn’t need to be perfect, it doesn’t even need to look good - it’s just imperative to get something out the door as quickly as possible and start selling it. Small incremental improvements quickly add up over the months.
We were fortunate in that we had few extraneous pressures at that point in our life due to the generosity of our mum allowing us to live at home longer than we perhaps should have, no careers, and the nature of the business was cheap to run and get going. If any of these were different, it would have been a lot more stressful and risky to get going.
Take us through the process of designing, prototyping, and manufacturing your first product.
We had a big focus on keeping things cheap as possible back then - truly bootstrapping as far as possible. Just about everything we built we did in-house, from the product to the website. Our focus was on releasing early and often, rapidly writing and deploying new code and features not only on the product but the website as well. We weren't afraid of breaking things as long as we could fix them in a reasonable timeframe. The early versions of Construct 2 were quite limited - perhaps not a true MVP as we had to follow in the footsteps of Construct Classic.
We knew a gap in our skillset was graphic design (I’m semi-competent but can’t do anything fancy). Fortunately, our user base includes creatives and artists so after browsing some profiles I landed on Paulo who lives in Brazil and has done and continues to do some amazing work for us.
Another power user Julien who was using Construct also joined our team to help with support - he’s been equally invaluable in assisting users.
We quickly of course brought in external help for our accounting which has been a significant pain point over the years in terms of time spent doing VAT which can be excruciatingly complex. Tooling around handling VAT nowadays is a lot better than it was 10 years ago.
We quickly found ourselves in a position with some extra cash and debated at length if it was worth getting our own office - it turned out to be one of the best financial decisions we made in that it gave us true work-life separation.
We have however come full circle due to Covid, and most of us are working happily from home now!
Describe the process of launching the business.
Back in 2011 this website looked pretty swanky, and I think it would almost pass as half-decent today:
As we had a good following from Construct Classic at the start it helped catalyze our launch of Construct 2 which was a very valuable asset - allowing us to be profitable from day 1 which I imagine is quite rare in the startup world especially if launching cold.
The biggest lessons we learned from starting were that running a business can be a long grind at times and you have to have the motivation and tenacity to overcome these periods.
It’s important to listen to your customers and use their feedback to help gently steer the ship in the right direction but you should never lose vision or compromise significantly on your end destination. Customers always want more features, and it’s difficult to communicate to them sometimes that something that’s an easy-add is actually far more complex to implement.
An interesting observation we learned over the years is that customers are often far more excited about an upcoming feature than the feature itself! As an example, for many years customers were requesting better multiplayer functionality for their games - our announcements for this upcoming feature were met with much fanfare by the customers but usage was relatively low when it was deployed. I imagine this is because marketing a feature allows customers to use their imaginations to fill in the information gaps with their ideal execution of the feature - the reality is often different and more complex.
Launching Construct 3 after Construct 2 was an experience. We went from pay once to pay monthly/annually, and not only that but we went from Windows-based software to browser-based software. We planned this transition meticulously due to our expectation that the pricing changes would not be generally well-received by our current user base as at the end of the day we’re asking them for more money. A very vocal segment of our audience put immense pressure on us to change our pricing model, but for the most part, the majority of users appear to have transitioned without much fuss. We expected to lose customers during this period - but sometimes this is just a pain point you have to go through. We went through a similar but toned-down version of this with Construct 2’s launch as our customer base was previously using open-source software. Our planning and forecasts allowed us to hold firm during these pressures with Construct 3 and emerge out the other end as a much healthier business.
It annoys customers to no end, but on rare occasions, you have to recognize that you do not want some customers - a luxury you can afford when you have grown to a certain level. Over the years there have been some customers who were such a drain on our time and resources you have to just tell them, no, and perhaps they’d like to try a competitor's software. This is better in the long run for everyone (except perhaps your competitors!).
The last lesson I’ve learned is that if you respond quickly to an email (within a few minutes) this is brilliant from the customer's point of view, but you then set an expectation that the customer will receive equally as fast responses which are impossible to meet - and it can lead to more conversational and long-winded emails that ultimately aren’t a good use of your time. It’s important to be aware of this and ensure you avoid the email conversations going this way - always try to end the conversation with each email you send.
Since launch, what has worked to attract and retain customers?
Our main objective was to always practice good white-hat SEO and be in it for the long run. Writing interesting blog posts was a core part of this strategy for us, unfortunately, less so now as writing a good post can take up an entire day. Submitting these posts to HackerNews has often brought in large amounts of traffic and elevated our standing in the wider tech community. It’s a lot harder to get attention on HackerNews now as it’s grown in popularity.
Writing blog posts is in my opinion a piece of advice that is often misinterpreted by startup founders. If you’ve got something interesting to write - write it and spend a good time on it. Quality over quantity - there’s nothing more off-putting for me personally than looking at a product online and the website is overflowing with low-effort blog spam. Bad quality blogs might bring in traffic from Google if you’re lucky but that’s a terrible first impression for a potential customer who might land on it. Remember you’re writing something you want people to read.
We’ve attempted a few marketing campaigns in the past, perhaps the most fun one we did was a giant billboard advertising Construct 2 designed in MsPaint:
The idea behind it wasn’t to entice people into the software who happened to be driving past it (because that would be ridiculous) but to do something nonsensical in the hopes it would be covered online by larger publications. It was picked up by ArsTechnica and the comments are a good read if you want a chuckle! Ultimately though it was a success, our billboard may have been viewed a few thousand times in real life but online it reached hundreds of thousands of people.
We’ve always relied on word of mouth and slow organic growth to promote Construct - the main reason being neither I or Ashley had any marketing background so often struggled here. Going all with this has served us well as we’ve built a solid reputation and web presence - all for a very low cost.
There’s plenty of articles out there on A/B testing and fine-tuning sales funnels. We’ve never really done this past a few small tweaks here and there - I’ve always felt that adding new features and iteratively improving the website/product guided mainly by common sense and the overall aim of simplifying things for the customers was a much better spend of our time. As a technical founder, it’s very tempting to put small aspects of your business under a microscope and try to perfect them - it’s fun to do but you can lose sight of the bigger picture.
How are you doing today and what does the future look like?
Transitioning from pay once to a subscription product can leave a temporary hole in your finances, so during this transition period we did anticipate and prepare for 6 figure losses but fortunately, this contingency wasn’t required. Today we’re profitable - we’re not growing as fast as we’d like but revenues are still growing at ~30-40% YoY. 100%+ YoY growth you hear about in tech would be incredible, but I think we’re perhaps starting to understand that our market is busy and this growth rate is probably rather good in our industry. Fortunately, the niche of browser-based lowcode/nocode software is a solid niche we’ve carved out that insulates us from a lot of downward pressures.
Construct 3 being subscription-based often comes up as a negative when potential customers consider our product, or Youtubers will compare game engines. I’m perfectly happy with this though - if the number one reported downside of your software is the pricing model (not even the price!) I think you’re doing well.
We’ve grown our team since the launch of Construct 2, and now have a managing director and a social media manager. We’re a small but well-formed team!
Our traffic is what I’d consider very healthy today:
When looking at your Google Analytics data, it’s important to compare them to another HTTP based source such as Cloudflare analytics - this shows a roughly ~1.4x difference in visitors which can likely be explained by ad blockers. If you ever need to present your data to investors it’s important to take this into account as otherwise you can be significantly underselling your business.
We distribute almost exclusively through our website via a custom-built checkout process (these are very hard to build but we get full control and avoid skimming from other integrations). We have an educational partnership with StemFuse who distribute curriculum based around Construct in the USA along with licenses for our software. As we are a SaaS product, I feel it’s especially important to have ownership of the revenue as much as possible.
Since we have written our checkout process, it allows us to do smart things to help our revenue grow. For example, we can charge different amounts in different billing cycles in different countries. As an example, we analyzed sales in Ukraine where we were only offering annual plans and found the uptake was almost nil. We experimented by offering monthly discounted plans in Ukraine and found it significantly helped uptake in that territory which helped guide our strategy into offering monthly plans globally (we initially launched as annual only).
Construct 3 will always be our flagship product and improvements and additions will continue to flow into Construct 3 - however, we are considering taking a fairly significant step for a business our size of adding a new product into the family. I can’t talk too much about what this might be right now.
Through starting the business, have you learned anything particularly helpful or advantageous?
Construct 2 was a pay-one license, and Construct 3 transitioned into SaaS. This was a painful and difficult transition for us. We anticipated negativity from the community but the pressure put on us was significant. It was clear to us though that if we wanted to grow the business, we needed to change our pricing model so we struck through the storm and got through the other side. What was especially valuable during this transition was having a vision and sticking to it.
You will run into problems that seem impossible - but there’s usually a way to solve them if you keep getting up every morning with fresh resolve to chip away at it.
The worst thing we could have done was change our minds - we planned extensively and believed in our plan and any changes from outside pressure would have significantly jeopardized our business and also looked weak to our user base. You have to plan well for significant changes such as this to ensure you don’t end up in a position where you have to shoot yourself in the foot.
Outside forces have always apparently aligned themselves well with our technology and goals, fortunately - Barack Obama at one point was lauding the benefits of learning to code through game making. We picked HTML5 early as a technology to base our product on, and although it’s been a little bumpy we couldn’t be happier with our choice as the HTML5 world is going from strength to strength and we’re ahead of the game. Perhaps we were blindsided by our evangelism of HTML5 at the time, but I’m quite surprised a lot of our competitors didn’t leverage this technology more and a lot of them are suffering from it now due to sticking with old technology such as Flash to the bitter end.
On the same note, we’re betting on the browser being the new operating system - we get the same buzz of excitement inside us when we think about the potential of the browser to serve complex software such as ours and can’t see any reason why this isn’t going to be the future and everyone else will be playing catchup - but hey perhaps we’re wrong this time!
Burnout is something you want to avoid - when we were planning on launching Construct 3 I developed a brand new website for the product which would be hosted at our current home, Construct.net. I spent a good 10 months developing this website then discovered through my inexperience that it simply would not be compatible with cloud hosting. It was a painful moment, and one where I decided to start over, and in a few months of working 7 days a week I’d managed to redevelop it all ready for launch and hosted in the cloud which was crucial for our long term growth and success.
These few months of work hit me hard, and it’s only when you stop working that it catches up with you. I think it took me a good 6 months to recover from it fully. Better planning and thought rather than steaming ahead would have likely avoided this - but at the time I was very gung-ho on pushing things out the door. Nowadays, I take a slightly more cautious approach when developing larger features.
What platform/tools do you use for your business?
We always aim for shallow stacks of technology as far as possible. For example on the website, I use ASP.net/C# in Visual Studio with an MSSQL database, with source control. I take great joy and pride in writing as much as possible from scratch - this helps develop my skill set in the early years.
Initially, we did try to write our email delivery system using Amazon SES - the benefit is it’s very cheap, the downside is that it’s much harder to implement than you might think! We’ve since moved to Sendgrid for delivery, which takes a lot of pain out of the process but it is expensive.
Our accounting has evolved, spreadsheets worked well at first but after a long transition period we’re now fully moved onto Xero which has taken the pain out of the process. Looking back I wouldn’t say doing these things yourself is necessarily a mistake, but you do build up administrative debt when you outgrow them and need to transition.
For payments, we use Stripe and Paypal. Integrating Paypal into a sophisticated custom online store is a royal pain - Stripe is leaps and bounds ahead of Paypal in tools to help developers. However, it’s important to offer Paypal as it’s so popular globally. Our revenue is split pretty evenly between both platforms.
Compared to other businesses, I expect we’re pretty barebones in the tools we use!
What have been the most influential books, podcasts, or other resources?
I’m not one to read many books or listen to podcasts, but I did benefit a lot from attending the HackerNews London meetups years ago - they were great places to hear fascinating talks from other people in the same boat as you. Although I’d struggle to identify any actionable or direct benefit from attending, it was very beneficial to have real contact with people going through similar life experiences and trials as you are in a place where you can all relax and get away from your desks.
I have always loved reading the often enlightening comments on HackerNews, as well as a host of other online forums/boards focussed around startups and running your own business. However, I feel it’s important to keep most of them at arm's length - over the years I’ve seen plenty of bad advice from people who are good at looking like they know what they are talking about.
Advice for other entrepreneurs who want to get started or are just starting?
Traditional wisdom says fail fast and often - failing fast is important but you shouldn’t of course set out to fail! I would add to this as well it’s important to fail cheaply (if you’re using your own money at least!). Whatever you’re building doesn’t need to be perfect, it doesn’t even need to look good - it’s just imperative to get something out the door as quickly as possible and start selling it. Small incremental improvements quickly add up over the months.
One thing that stuck out to me when we started was the wisdom of finding a niche - our niche is accessible game development through a visual style of programming. I never truly appreciated how important this is until now - the game development tool marketplace is getting crowded. We’re seeing competitors being acquired by large companies who can afford to reduce the price to gain market share, and we’re seeing more open source engines gaining traction. As our approach is uncommon (and unique in that we allow a hybrid of visual and text-based coding) we’re fairly well protected and our business is not suffering and continues to grow. I would be having many sleepless nights if this were not the case and there would be a strong chance we’d be squeezed out of the market.
I do sometimes see new startups that appear to address feature gaps in well-known products (EG soft services around Twitter). I feel this would be an extremely stressful and high-risk business to start - you could be wiped out if the underlying product implements the feature gaps you’re covering and your only true way of realizing value would be through some sort of acquihire.
Running a business for the long haul can be a grind - you need to have grit, stubbornness, and some form of underlying high motivation to get you through the difficult spells. You will run into problems that seem impossible - but there’s usually a way to solve them if you keep getting up every morning with fresh resolve to chip away at it.
We’ve seen competitors become complacent with their position in the market, and consequently, their lights slowly fade out. If you’re fortunate enough to be in a position of strength I think it’s key to not fall into this trap if you want to build something that lasts.
In poker, there’s a saying “money saved is money earned”. This has always been in the back of my mind and has helped us build up good reserves. As an example, we host all our infrastructure on Azure, and I’ll regularly have a look to see if I can scale down any of the machines. If I can make a $50 saving per month, that’d be the equivalent of making a $600 sale per year - not at all insignificant and worth spending some time now and then on reviewing! It’s important not to go overboard though and savings such as these should never impact the experience for the customer - you just want to cut wastage.
Have tight purse strings when buying things that are largely unimportant (go for that second-hand coffee table over a custom mahogany one cut into the shape of your face) but don’t be afraid to spend money on the things you need such as upgrades to your computer to help reduce friction whilst working, or an expensive chair that will make working long hours more comfortable.
Where can we go to learn more?
If you want to get hands-on with Construct 3 right now try making a game in your browser right now with our guided tour.
You can learn more about us and Construct 3 on our website, and we’re also around on Twitter. I’m always interested in talking about starting your own business, feel free to drop me an email directly on [email protected] if you have any questions and I’ll do my best to reply to everyone I can!
If you have any questions or comments, drop a comment below! I hope you enjoyed reading our story.
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