A Joint Adventure – DICE
At ustwo we’re incredibly proud of the products we’ve conceived, built in-house and taken to market. We’ve always 100% funded and owned our IP. Our recent success with Monument Valley proves that a focus on building an environment for creative and entrepreneurial people can be commercially viable.
Our newest venture, DICE, a smart music ticketing app with No Booking Fees, is different in that we’ve worked directly with a partner to start a new business and raise funding. The DICE proposition came to us through a close friend, Phil Hutcheon – founder of music management company Deadly Management. Phil and his team have an in-depth understanding of the inner workings of the music industry, along with a black book to match.
Seeing an opportunity to work together, we put together a joint team for six months in exchange for equal equity. For ustwo, DICE is the first of many businesses we plan to launch over the coming years, and our aim is to create successful products and businesses with great partners, culture and mindset to succeed.
As this was my first time working on a project like this and having been involved at the coal-face, I thought it would be useful to share some of things that struck me as interesting from both a personal and ustwo perspective during this experience.
1. ustwo as a partner
Seeking investment for a company where one of the partners (ustwo) is an established business instead of a founding member seemed to be an unusual concept for some investors, especially when our cost is far greater than that of a startup. However due to the product, size of market and sheer determination of Phil and the team, we gave the investors all the confidence they needed.
One of the key strengths with having ustwo as a partner is that you automatically have contributions from a 200+ person studio with a strong track record in taking products to market, as well as a unique culture and working environment. It’s because of this that we’re able to quickly assemble and support teams, with all the facilities, hookups and connections in place. We’re also able to recruit, help structure and grow a business quickly.
2. Work ethic
We’ve always believed in investing back into ustwo and our people as part of our vision. These investments have been long term, and carefully planned, to the point where we can consciously reduce our profit in order to work towards achieving these goals. This mindset is fundamentally different compared to that of a startup with a different focus and vision. The early stages of a startup normally require the team to be entirely focused on the product so this takes some managing and balancing on our side to make this work until we can make the team fully independent.
3. Incentivising people
We have experience in setting up new studios around the world, but DICE was the first time we’ve been part of launching a new business (apart from, obviously, when we started ustwo almost 10 years ago). The people joining DICE were joining a startup with a package to match, but with one very important addition - equity. DICE was always going be a great product to work on, but with the addition of equity and true sense of ownership, I’ve seen a very high level of engagement and teamwork.
4. Learning and sharing
A question I seem to get asked regularly is how we’re going to balance client work and ventures together and my answer is always the same - we’re simply getting better and better at what we do, i.e. we’re building better products and we’re building them more efficiently.
For example ever since we started creating games we’ve seen the benefits, from opening doors and winning business, to using what we’ve learnt and insights across our client projects. We believe that the better we are at building products and launching businesses – the better we can help our clients do the same.
5. Team and independence
We have no shortage of ustwobies wanting to work on DICE as it’s a product that we co-own and which offers freedom and opportunity in a very exciting industry. But it was only after several months and many meetings with investors that we understood the importance of the team becoming independent. Investors were investing in the DICE core team, not just the founders, and as they weren’t investing in ustwo they didn’t want DICE to be reliant on us in the longer term.
Initially we hadn’t planned on people moving to DICE, but started considering the options fairly quickly. Having key positions covered by ustwo employees simply wasn’t an option. So we began discussing what it would look like if people moved to DICE, and if they were interested, how we’d do it. Actively encouraging people to move on and be part of a new company was a pretty significant step for us, but it was essential in order to give the product the best chance of success.
Moving to a venture isn’t for everyone and we’ve been clear to highlight the associated risks and rewards as there are no guarantees. What makes the decision harder for people is that ustwo is a brilliant place to work and obviously we’d like to keep it that way. We’ve had five ustwo people move over to DICE now, but they are still very much part of the ustwo extended family. Our long term goal is to have people move between ventures and studios, with everyone adding new experiences and skills into the mix.
Strategically we are not interested in growing in size for its own sake. The traditional agency model dictates you add headcount in response to client work requirements, but our model is a blend of fees for hours and more venture-oriented commercials, so we are more interested in growing people in the core and moving people into ventures as they evolve, thereby keeping the core team essentially the same. That growth in experience and giving people flexibility to move into multiple things really excites us.
We do see ustwo as a family of entrepreneurs, running a balanced range of products embracing client work, games and ventures. We are a studio, not a traditional agency. We approach the product design and development challenge for all three areas in the same way - a passionate product team, rapid experimentation and iteration, hyper-creativity and an entrepreneurial and deeply commercial mindset. We want these products launched, in the hands of happy people, and hopefully making a tangible difference.