Last Monday our new game, Hatchlings Match, hit 100,000 users. Now, a week later and one month after launch we welcome our 500,000th user!
I’m also happy to announce that Hatchlings Match has officially passed Hatchlings 2 in terms of number of users. Yesterday it had about 15x as many players sign on as Hatchlings 2.
With these milestones in mind, I wanted to take the opportunity to reflect on where we are as a company, where we’ve been, and where we’re going. (Hatchlings users: please be sure to read the final section.)
For the first few years of its existence, Hatchlings was a very profitable endeavor. I was pretty successful at building up a solid userbase and decently successful at keeping costs extremely low.
Hatchlings was a startup that, while growing rapidly, was being treated by its founder like a small business. I should have been hiring like crazy with focus on building something for the long-term.
But, because I had it in my mind that Hatchlings was just a fad that was going to implode at any minute, I played it safe and didn’t hire anyone at all.
Throughout the adolescence of Hatchlings I watched our major competitors raise hundreds of millions in venture capital. I remember decrying them for taking so much investment with — seemingly — no need for it.
At the same time, I was watching my own business being crippled by a lack of investment in the future. The constraint to growth was completely self-inflicted. At the time I didn’t see the contradiction.
The tipping point for me was when I saw one of our direct competitors go public at a multi-billion dollar valuation. It was at this time that, while still unsure of its future, I decided to give Hatchlings a shot at being successful. I hired our first employee a few weeks later and we were on our way.
By this time Hatchlings was on a downward trajectory. The original game was built on old technology and an old platform that was slated for deprecation. The game had been designed for a Facebook that no longer existed.
Through a long series of evolutionary changes, the game had become stale and confusing.
We were (and still are) very lucky to have a traunch of highly devoted and engaged users who stuck with the game through thick and thin who were supporting the game financially.
Our first step, we decided, was to build a new game to solve the problems of our most vocal users. We wanted to incorporate the gameplay strategies they were making into the core gameplay and make it much less of a hassle to be a hardcore user.
That’s what Hatchlings 2 is: a reimagining of what Hatchlings 1 would have been for our power users in an ideal world.
We succeeded in building just that. The Hatchlings 1 power user experience is now at the heart of Hatchlings 2. And many of our Hatchlings 1 players love it!
Unfortunately what we found as time went on was that, without the context of Hatchlings 1, it was hard for new users to understand why many of these features were useful. Furthermore, the new game that we had created had a relatively long period of grind before you discovered why it was fun.
The fun parts of Hatchlings revolve around the community. It’s the gifting, trading, helping, competing, chatting, and friendships that make the game compelling. But what we found was that the vast majority of new users were giving up before they started to understand what makes Hatchlings fun and different.
We spent the year or so after Hatchlings 2’s launch trying to balance our efforts between making the game more engaging and easier to understand for new users and keeping the game fresh for existing users.
Unfortunately, all the while, our core metrics kept drifting on a downward trajectory. In hiring people I had made a conscious decision to invest in the future knowing that we would have to go through a period of unprofitability before we would start to see the investments pay off.
When your expenses go up and, no matter what you do, you can’t seem to move the needle on any of your key metrics, it’s a very scary feeling. We knew we were doing something right because we still had a lot of people paying for their premium memberships each month, but we still couldn’t crack the growth code.
Every business has a user lifecycle. Your customers are never going to be with you forever. If you don’t have a stream of new customers to replace them, your business will die too.
For us, what it all boiled down to is that we were churning long-term users faster than we were able to convert new users into paying customers. That’s the recipe for the long walk into obscurity.
The First Step Is…
It’s oftentimes hard to admit to yourself when there is something wrong. Deep down in your gut you know it, but it’s easier to just ignore that feeling and keep plodding along than to confront it.
The day to day job of the company as a whole is to execute on the plan. At Hatchlings, we were doing an awesome job of that. Everything I asked of the team they delivered on flawlessly. Unfortunately, even perfect execution on a bad plan leads to failure.
As the CEO, my job is to decide what the plan should be. And the first step towards changing the plan is to admit to yourself that your current plan isn’t working.
With that in mind, we had a team meeting this summer where we enumerated all of the things that were wrong with Hatchlings 2. Sometimes honesty is brutal. We ended up with a full page front and back of all the problems, major and minor, that we had identified.
There were several commonalities, but we kept coming back to one thing: most people don’t find the actual collection of eggs in Hatchlings fun. The best parts are in the community and social interactions between players.
With our kimono opened we could finally have a frank discussion about what we should be focusing on. What we decided was that we needed to start from scratch and make a few simple games to test our theories on what would make Hatchlings more fun.
The first of those games is Hatchlings Match.
The recent success of Hatchlings Match doesn’t mean Hatchlings 2 is over. Quite the contrary, actually. We want to eventually bring what we’ve learned from our spin-off games back into the core game.
We have some innovative ideas about how to do this but that revelation will have to wait for another day.
From a company perspective, if we can keep the momentum of Hatchlings Match going, October will probably be our first profitable month in a long while. The new plan seems to be working, but we’re not out of the woods yet. We need to keep executing. At least now I have some confidence that we are executing on a solid plan.