Wednesday, October 30, 2013

How A "Hippie" Idea Made Me a Business "Dictator"

Whew, this is actually a pretty emotional and cathartic dev blog - be warned. Before Fixer Studios was formed I discussed with business owners and lawyers my ideas for how we'd function cooperatively, without expressed power rolls and how whatever little profits we earned would be shared on the basis of friendly meritocracy. You see, nobody on the team wanted the hassle or risk of becoming partial owners so I wasn't able to do "sweat equity" or stock options.

The responses from my business mentors ranged from "That's adorable" to "You hippie". The lawyer's response was more sobering. The compensation structure I'd cooked up was "neat and came from the right place inside", but technically it would involve issuing "securities" to colleagues. That's a big deal that'd require one of four things...
  1. Register with the US Securities Exchange Commission ($20,000+ and a mountain of paperwork, the sort of thing you do when you go public or sell for missions), or...
  2. File an exemption with the SEC based on a team size of less than five or proof that we all have $2,000,000 liquid and we're professional investors (uh, nope), or...
  3. Get a more expensive lawyer with securities insurance and file complicated exemption ($8,000+, a week of writing paperwork), or...
  4. Form as a "Benevolent Dictatorship" whereby everyone signs documents saying they get paid peanuts to work a lot with no firm legal promise of ever getting their fair share of profits from their game.
I was pretty upset. Clearly, number three was the only option - but that was going to cut short the number of months I could pay my mortgage without taking another job, plus it'd cost me a week where I should be working on the game instead of legal paperwork. Why can't we just run businesses like a happy, collaborative group of equals?

After a few weeks, several members of the team sort of staged a coup. One at a time they approached me and said something along the lines of, 'We're all working on this project because we want to, not because of the money. We're here because the team is awesome and the game is going to be awesome. We trust you not to screw us if we get lucky and make some cash with it. We want you to cowboy up and be benevolent dictator.'

I was really uncomfortable with it, but after two weeks I agreed and we moved forward. That was back in August, and I've felt uneasy ever since. I wanted my colleagues to have it in black and white writing: they'd get a fair share... but getting that written down correctly is really expensive and difficult. 

Yesterday, a friend and successful studio owner alleviated some of my concerns. He was generous enough with his time to share lunch and some advice with me, since he had co-founded a business with some of the same ideals. He, too, was uncomfortable being in a position where he could screw over colleagues, and he won't let anyone call him "boss". However, over the years he learned that this kind of company structure allowed the studio to make fast decisions, cut down on bad compromises, and still treat his colleagues well.

He said something along the lines of, 'For a business like this sometimes a dictator is best, and I'm glad it's a guy who clearly doesn't want to be a dictator. If you wanted to be a dictator then you'd be awful. Reluctant dictators can get it done right.' I know it doesn't apply well to politics, and I know he didn't say it was easy, but it did made me feel a lot better. Thank you, sir. And thank you, team, for trusting that I won't screw you over.


Aside: I know I didn't share much about the compensation model we worked out, but that's only because I'm not sure if that'd be legally a no-no, not because I think it's a trade secret or something. Also, I simplified the business structure options and rules a bit for the blog post, apologies if I over-simplified.


  1. Avery, while I understand the dictator metaphor, I'd lean more toward "battle General/Colonel/Captain/etc". A military leader lives and breathes risk of the life-or-death kind and has to take risks with other peoples lives. In a way, that's you. Someone who came up the ranks doing, leads from the front, and has the trust of his soldiers not to screw them over. The General gives orders that in younger days he'd be expected to follow, even if they were risky. Even if they might fail, the soldier will obey and try to see the grand plans through.

    Plans never survive contact with the enemy, but planning is essential. The tactical prowess of the soldiers/programmers on the front lines is just as critical.

    I'm rooting for you.

    1. Wow, thank you for the faith that description places in me. I'm not sure I've earned that kind of trust but I'm going to try to act in a way that will get me there.