Hutch Games, the mobile racing game company launched in 2011 with no funding and sold for $375m less than decade later. Shaun Rutland, one its co-founders, explains how a former PlayStation team struck out on their own and how picking the right investors can help a business flourish.
How did Hutch Games start?
It was really tough at PlayStation – five years and three cancelled projects. PlayStation wanted you to build billion-dollar games but it’s the games you don’t think will be a success that often become the big winners. No one thought its SingStar karaoke game would become a billion-dollar game – no one cared about it and no one wanted to join the team. It but became a huge hit – and then everyone wanted to join the team. I always thought we could build a mobile games business and when the five of us were made redundant we decided to create Hutch – although we didn’t know how feasible it would be, given we started without any funding at all.
How did you approach launching Hutch with no funding?
I felt it would be very difficult for us to raise money because of our experience of PlayStation, so we gave ourselves six to seven months to make a game. I did some contract work while setting up Hutch and we used a number of credit cards, hoping our first game would be able to pay it back. We developed a paid for game for $3, which was quite expensive at the time. However, we did some games’ press and I suspect that’s where Apple picked it up for its App Store. The game made about a million dollars in six months.
Was that the next step?
We used the money from our first product to grow the team, while we needed to secure some angel / seed investment. I came across entrepreneurial investors like Chris Lee and Jasper Smith, who I liked and trusted. This was very important to me and the team – finding people you like and trust.
How important are the roles of angel and seed investors?
Picking the right investor is extremely important. They will start connecting you with other like-minded people that you can like and trust as well. It is also the belief they give you. It’s something that I didn’t get while I worked at Sony. One prospective investor was more interested in refurbishing our office and wanted to get too involved in the day-to-day workings of the business. Angel investors like Jasper and Chris give you belief and they are able to talk problems through with you – you feel really supported. Jasper, for instance, is an experienced entrepreneur and so he’s been through a number of different phases in his life. He is a great listener but being able to hear his stories about when things went right – and when things went wrong – was very reassuring.
What makes a good pitch document?
Your pitch document has to have some madness to it – that your pitch become a miracle investment. Our big pitch was that car or racing games on mobile hadn’t really taken off. Yet there was TV shows and films like Fast and Furious and Top Gear, which had huge audiences, but mobile racing games themselves weren’t very successful. We thought that if racing was as big on mobile as it was on TV and consoles, we could really make a huge return on it. The pitch is laying out the problem you’re trying to solve and the size of the marketplace. It’s also backing up the pitch doc with how your experience and team qualifies for you to tackle that problem.
What were the early challenges of building the business?
Making a million dollars was obviously a great start but it was made off the back of a dying business model. Paid products were being overtaken by the freemium model. The mindset for freemium product was a very different than a paid upfront product – it was very challenging and stressful. Our next two games, which were free, completely failed.
How do you overcome challenges and reassure investors?
You need to be really clear about what you do. When those two first freemium games failed, we remained focused on racing games. Everything we did after that was another shot at goal – but every shot at goal got easier and closer to the target. Businesses in our sector that tend to struggle are those that are pivoting wildly to different games. There’s no inherent learning, no stacking up of technology or content that you can reuse. There has to be a focus so when you fail you refocus on what made it fail – this increases your odds of success next time around.
How did your previous experience shape Hutch’s corporate culture?
We wanted to empower people to be creative. There were lots of secret meetings at PlayStation – you didn’t know who was in the meetings and who was discussing your project. At Hutch, we’re very transparent and share Board packs with staff. Project teams decide whether they keep moving ahead with the games or not – it is not a leadership decision. It was very important to create a sense of ownership among everyone – everything single employee received something when we sold the business to MTG, even the recent joiners.
What was your biggest mistake?
We built a game in isolation over three years Race Kings with our biggest-ever budget behind it but didn’t test it. It was a massive $4m flop. Weirdly, while this was clearly our biggest mistake, it was also a game-changing moment. It taught us a lot about how the marketplace changes and about speed to market. It also taught us about using players to figure out whether a game is right or not. Race Kings was very much driven by the management team, rather than the actual players that played the game. Every game we have made since is tested in the marketplace within eight weeks. It allows the team freedom to experiment and gives us hints on whether the game is worth working on, with the final green light coming from the consumer not the leadership team.
What are top takeaways for startup founders?
Focus on something that no one else does – but have the instinct think that something is there, that could return something big. Be humble. I was a producer at PlayStation, but at Hutch I had to hire producers. The first producer I came across was better than me at it, which I found really deeply uncomfortable at first, but it was the right thing to do. Be more of a coach rather than telling them how to solve problems – trust your team, allow them to do their jobs.