Peter Thiel’s 10 Lessons on Startups (Game Design Edition)

3D and UX Design for Games, VR and Animation

Peter Thiel’s 10 Lessons on Startups (Game Design Edition)

June 13, 2012 Uncategorized 9

This year Peter Thiel, co-founder of PayPal and early Facebook investor, delivered a course on startups to a class of Stanford computer science majors. Here we apply the 10 brutally honest core lessons of that course to going indie and making great games.

Since trading in my wacom pen for a spreadsheet and an obsession with sustainable development I’ve consumed every highly reviewed piece of business content Amazon and the pin-striped natives of the blogosphere recommend.

And like most people who take a “I will read EVERYTHING and test all of it!” approach to learning – I found 95% of this content said pretty much the same thing (most of them end up quoting the same sources – kind of like major news portals!).

Since then I’ve been on a biz dev information diet – more testing and validating in the field, less consumption of information – very little has been worth more than a quick skim, few have been worth recommending to startup indie game devs.

But when Jonathan Blow starts referencing a Stanford class on tech startups in an article on game design, I get curious.

And when that same Stanford Class (Peter Thiel’s Computer Science 183: Startup) continues to show up in the RSS feeds of bloggers I follow and admire – I go from curious to damn intrigued.

Sure enough – you know that 5% of biz dev content that’s worth remembering and recommending? Peter Thiel, the same man who put a twist in academic knickers with his  “20 Under 20” fellowship program (in which he pays selected students $100,000 apiece to forgo college and devote their time to working on their inventions), has turned that 5% of value into a single semester course. Which, as Thiel puts it, should be “the last class you’ll ever have to take.”

Leave it to entrepreneurial Stanford student, Blake Masters, to take that semester worth of content and distill it down into a 4 page article to share with the rest of us.

And since I read it from the perspective of the entrepreneurial game designer, that’s how I’ll share it with you. The lessons we’re translating across are:

  1. Globalization is not (all there is to) progress.
  2. It is better to be right than to be contrarian.
  3. Secrets exist.
  4. Capitalism and competition are antonyms, not synonyms.
  5. People lie.
  6. Much of life is a power law.
  7. A bad plan is better than no plan (A good plan is even better).
  8. Foundations matter (Thiel’s Law: A startup messed up at its foundation cannot be fixed).
  9. Founders are different.
  10. Find a frontier and go for it.

WARNING! This is probably one of the longest articles I’ve written here at IndieBits. There’s a lot of ground to cover and I didn’t want to just trickle this content out in drips and drabs. Part way through writing I realised I’m trying to summarise and share 4 years worth of what I’ve learned since going indie to focus on sustainable game development. Going to keep it brief for now, I’ll be getting into of these concepts in more detail as part of the Opportunities for Game Developers series (otherwise we’d have have a small book on our hands here!).

Thiel’s 10 Lessons on Startups Applied to Game Development


1. Globalization is not (all there is to) progress.


Taking what other people have done and making an online version or porting it to new hardware is not progress. That’s distribution.

Figuring out how to go from startup to published developer is deceptively easy – just keep an eye out for game devs success stories on GamasutraKotaku and IGN – shortly after you’ll find copycat games hitting the market from devs trying to emulate their “overnight success” (an overnight success which seems to take, on average, anywhere between 5 and 15 years. Easy to overlook that detail when you come into their story during the third act).

I say deceptively easy because what these independent developers did after starting is only part of the story. The really interesting bits all happen at the beginning. You’ve got to hook the reader in the first few paragraphs with something different, something new – and that’s exactly what got us reading about Minecraft, Braid, Flower (and now Journey), Super Meat Boy, Bastion.

Each of these games started differently, introducing us to a new approach to tech, workflow, game design – each unique and nothing like what the rest of our industry was doing at the time.

Google their origin stories (research is fun and learning is good for you!): Notch getting feedback on early builds of Minecraft from folks at TIGSource at a time when developers supposedly NEVER shared what they’re working on before release. The crew at Supergiant Games shifting their game design to fully complement voice actor Logan Cunningham enigmatic narrative – as opposed to capturing the few lines of dialogue their GDD bible calls for and sending him on his way.


2. It is better to be right than to be contrarian.


You want people saying “Damnit, you were right all along”. Not “Oh you’re just saying that to be different”. It’s a fine distinction but a powerful one.

You’ll find it in how people conduct themselves in interviews and online. Folks who are putting themselves out there to say something new are taking the hits – and yet they keep pushing forward and providing value. That guy who posts something to be contrarian gives in after getting shouted down.

If you give in at the first sign of discord then what you’re saying must not mean very much to you.

But if you’re going to fight (and starting an indie company to make games is going to be a fight) then why not fight for something you believe in? Create experiences no one is making because they SHOULD be made.

Thiel asks “What important truth do very few people agree with you on?”

We should be asking each other “What valuable experience is no one else making?


3. Secrets exist.


Everything worth making has been made. There are no new stories. That market is saturated. That platform is dead. PC is dead. Consoles are dead. No one plays those kinds of games anymore.

Then an independent developer releases a game that completely defies conventional commercial wisdom. Like: “You can’t go indie and make AAA quality games”.

And Supergiant Games comes out with Bastion and everyone asks “What was their secret?!?”

A Secret, as Jonathan Blow puts it, is “unpopular or unconventional. If everyone knew these things and believed them, they wouldn’t be secrets”.

The best and biggest secret of all? There are many more secrets out there to be discovered!

Players ignored by commercial game developers. Traditional industries full of brilliant artists and scientists who are keen to explore what they can do in a digital space of play.

Start with you: What fascinates you? What questions do you want answered? What problems do you want to solve? Find people online and offline who feel the same. Then ask yourself how you as a game developer can bring something new, something of value to that discussion.

You’ll know you’ve found your secret when you get that shivery feeling of excitement in your belly that tells you you’re onto something good.


4. Capitalism and Competition are Antonyms, not Synonyms.


cap·i·tal·ism (Noun):

An economic and political system in which a country’s trade and industry are controlled by private owners for profit.

com·pe·ti·tion (Noun):

The activity or condition of competing: “there is fierce competition between banks”.

An event or contest in which people compete.

Frankly, both of these definitions take us away from the point of going indie and game design – making great games worth sharing.

Artists in other mediums share their experiences through a lens, canvas, headphones, page, etc.

We create the experience SOMEONE ELSE HAS. Experiences they’ll share with others. How cool is that? The social and cultural implications of that are just…heh, well, that’s a philosophy discussion for another time.

Earlier this year Neil Gaiman addressed a crowd of art graduates all wondering how they’re going to afford to make ends meet while paying back university loans:

“Nothing I ever did, where the only reason for doing it was for the money, was ever worth it…except as bitter experience. Usually I didn’t wind up getting the money either! The things I did because I was excited about them, because I wanted them to exist in reality, have never let me down and I have never regretted the time I spent on any of them”.

I’m not saying don’t make games about blades, babes, dragons and zombies – there will always be a market for that (and don’t worry, AAA commercial studios have got that market covered!).

But you’re in a position to do something totally new, explore something that fascinates you, bring a traditional experience into a brand new medium!

What’s the bigger risk? Competing in a saturated market where commercial devs have more money, bigger teams and an established reputation? Or creating an entirely NEW market by designing experiences around what fascinates you, for people who have previously been ignored by other developers.


5. People lie & 6. Much of life is a power law.


You are going to sit across the table from people who have been playing this game for much longer than you have. They know all the rules. They know exactly how to maneuver their pieces and the grand majority of them are quite happy to take advantage of your lack of experience.

I don’t say this to put you off. But it is a reality. You are going to be dealing with people who know it’s a good move to let you think that they have your best interests at heart.

But when everyone else is playing dirty politics the greatest advantage you have is your authenticity and the genuine value you create for others.

Don’t learn the rules to play the game. Learn the rules to defend yourself and preserve what you’ve gone indie to do.

Question motives, especially your own. Think about what moves can be made three or four turns from now, not the pieces on the board immediately in front of you. They present a tempting offer – but what happens if you walk into it? What happens in a year? Two? Where are the loopholes? What conditions does this deal come with?

Don’t let upfront cash buy you.

Trust your gut. If you wouldn’t trust this person with your bank account details, don’t trust them with your game, your image or your company.


7. A bad plan is better than no plan. A good plan is even better.


We’ve shifted away from the strictly structured waterfall production model where the Game Design Document bible is fixed and immutable, the E3 show floor is king and console release schedules our reigning pantheon.

Now wholly iterative creativity without bounds is revered! Burn the spreadsheets! Scrum is Sacrament!

…and now we have unending development cycles, blown budgets and an entire generation of designers releasing games with no idea how they’re going to engage players (“how do I get people to notice my game on the appstore?” they ask, AFTER spending however long developing it).

Starting each week with “How are we going to improve the player experience?” is so important, don’t stop doing that. And the Friday afternoon playtesting with my indie teams has probably been the most effective thing I’ve introduced as a producer to get games finished and shipped.

But we still need to know when we’re going to hit Alpha. What we’re going to have to show at GCAP, GDC and PAX. Why?

Because at some point you need to bring cash in to keep the lights on. Not to become filthy rich (there are easier and faster ways to do that than designing games) but to enable you to keep making games.

Find your niche, the experiences you can create better than anyone else because of your unique mix of passions and skills. Find people who also want those experiences to exist. Work out your financial expiry date, how long you have before the money runs out. Halfway between now and then you need to get a great experience into the hands of people you know will enjoy it (and make it VERY easy for them to share it).

Why halfway? Because you’ll need time for word to get out as people tell their friends and family about how great your game is.

Prerequisite: You need to make a game worth sharing. How do you do that? Scroll back up to points 1 through 4.


8. Foundations matter.

Thiel’s Law: “A startup messed up at its foundation cannot be fixed.”

I focus all of my biz dev coaching on the start of a project. When folks sign up for my incubator, attend my coaching sessions or ask for advice they often want help building a business around a specific game they’ve already made.

But if you can’t tell me what need your game fills, what kind of person would enjoy it, where they are and what value you bring to them – then I can’t help you. We’re better off starting with a new project and developing out from a core idea to a complete experience (and you want to be more than just a “one game” developer, don’t you?)

A game created in isolation, without a clear connection to the people who will most value it, needs a team of salesmen and LOTS of advertising dollars to convince the wide world that it’s worth playing.

Unless you have a few million to spend on a light show at E3 and can hire Blur Studios to make your trailer then you’ll be releasing with about as much potential for financial success as a backpacker working on commission at the base of a Ponzi scheme.


9. Founders are different.


Your average person is well rounded, content with the status quo, agreeable and conflict averse. As they should be. Because the majority of people need to work well together within a cohesive system for society work.

But when that system changes and no longer supports the average person – people don’t change. They continue to enforce the status quo and avoid conflict, which allows an ineffective system to further degenerate.

People who leave that system, who break away to try new things, are not going to be well rounded individuals. They won’t be comfortable perpetuating the status quo. They are just as likely to be charismatic as disagreeable, a polymath or an idiot savant, an insider or an outsider, rich or poor – these are folks who already edge towards the extreme of one end of the social spectrum or the other.

When you’re already on the outside, then breaking away from the group to try new things and take risks isn’t as unthinkable as it is for most folks. It’s still scary, and lonely, but it doesn’t evoke the same earth shattering fear as it does for those who feel like they have more to lose.

But mass layoffs, publisher contractions and studio shutdowns have made entrepreneurs of us all. As much as we’d like to stay comfortable with the status quo – for most of us it’s just no longer an option.

That’s why you, as the entrepreneurial game designer, will be so critically important to the future of our industry. If the culture of game development is going to change to include a wide variety of rich and more diverse experiences – then we need people to be different, be disagreeable and say “No, actually, what’s been done is not good enough. We can do better”.

If you aren’t polarising people then you aren’t saying anything worth having a strong opinion about.


10. Find a Frontier and Go for it.


This one doesn’t need translation, Blake Masters captures it beautifully:

There is something importantly singular about each new thing. There is a mini singularity whenever you start a company or make a key life decision. In a very real sense, the life of every person is a singularity.

The obvious question is what you should do with your singularity. The obvious answer, unfortunately, has been to follow the well-trodden path. You are constantly encouraged to play it safe and be conventional. The future, we are told, is just probabilities and statistics.You are a statistic.

But the obvious answer is wrong. That is selling yourself short. There are still many large white spaces on the map of human knowledge. You can go discover them. So do it. Get out there and fill in the blank spaces. Every single moment is a possibility to go to these new places and explore them.

There is perhaps no specific time that is necessarily right to start your company or start your life. But some times and some moments seem more auspicious than others. Now is such a moment. If we don’t take charge and usher in the future—if you don’t take charge of your life—there is the sense that no one else will.

Alright. Now tell us what you think.

[EDIT: Previously I had referenced Chris Hecker’s brilliant GDC rant: “Please Finish Your Game” under lesson #7. The rant is brilliant and you should watch it – but I feel like I referenced it in the wrong context. So, here it is for you in it’s OWN context to be enjoyed as something awesome – without getting confused with my ranting. If you’re going to listen to someone rant, listen to Chris]

9 Responses

  1. Ivan Beram says:

    I find that it is often the case that you are preaching to the convert (or is that perverted?). That people know whatever it is you’re trying to tell them already, even if it was only at some instinctual level of understanding that their talent and experience has given them. Telling them only reinforces what they already know, that is, if they aren’t busy just getting on with applying it and have time to hear what you’re saying.

    Then there are the others on the other side of the spectrum. Those you tell in order to inform, to help, who nod their heads like they understand with a dopey grin on their face, but really, they don’t understand a damn thing at all. They’ll keep on making the same mistakes, will even tell you how they are doing exactly as you say even though, you know, that they aren’t. And somehow, they will manage to convince someone to give them money every time to waste on churning out mediocrity at best.

    It must be that big dopey grin of theirs, it must make them rather likeable.

    And then there are those in the middle that want so much to be part of those in the first lot that they will try just about every gimmick in order to do so. Some make it with persistence, the development of hidden talents, and sometimes, with a hell of a lot of luck. The rest better not quit their day jobs or at least be willing to mark it up as a learning experience at best; and will usually come to that conclusion rather quickly not having the stomach for the reality of the game development game.

    For better of worse, that’s what I think ;).

    • Epona says:

      You’ve got to start with respect.

      Seriously. If you want to influence anyone at all you have to start with respect. We humans are REALLY GOOD at picking up when that respect is not there. And there’s no quicker way to shut someone off than giving them the impression that you don’t think they’re worth listening to.

      How some teachers and university professors don’t see this – I have no idea.

      If you want to be any kind of change maker I recommend Dan and Chip Heath’s “Switch: How to Change Things when Change is Hard”.

      Appealing to the hearts and minds of others is not enough. We are creatures of habit and when we’ve developed those habits it takes a LOT of time and effort to change (ever try to go on a diet?).

      Want to influence people to make a positive change? Make it easy. Show them the path. Create the conditions where they can develop new habits.

      EXACT same principle applies to game design. Want to influence positive player behavior? Give the player a path, make it easy for them to start practicing that behavior and create the conditions for them to internalise it.

      Crap game designers use that influence to get people to spend more cash and waste more time. Great game designers can use it to share experiences, new perspectives, create change, you name it.

      • Ivan Beram says:

        I honestly don’t know where you get this energy from Epona.

        My post funnily enough, is influenced from watching Gordon Ramsey in Kitchen Nightmares. He basically gets asked in by owners to coach the kitchen staff, including the chef and owners. If people think that there is actually nothing similar to game development and the restaurant business, then, they’re in the latter group I mentioned ;).

        When it comes to food and getting people to pay for it and eat out. It requires technique (technology), and it is as much about the visual look of the food and atmosphere of the environment, as it is the quality and taste of the food. In that you are providing an immersive experience as much as feeding people and satisfying base needs. Honestly, if you just want to feed yourself, you can go to Burger King for that.

        Anyway, here’s Ramsey coming in to get these people to change for the better, to see certain truths. And he has to drag them kicking and whining across the finishing line in most cases. And usually, they end up back where they started once he leaves.

        If I were coaching, I would start by calling the CEO a: “a fat dirty pig!” Just like Ramsey would. At least I would feel better ;).

        • Epona says:

          I love game development. I genuinely believe we’ve only scratched the surface of what games can do. And the more people I help go indie and make better games – the more awesome games we get 🙂

          LOL you’re going to have a tough time seeing any kind of results if you’re coaching like Ramsey 😛

          Ivan, we’ve got a whole world of people online and offline only too happy to insult us, troll us and tell us we’re not good enough. We don’t need one more.

          That kind treatment results in compliance – not creativity.

          Want someone to achieve more? Do more? Reach for new heights?

          Show them it’s possible. Show them they actually CAN do more.

          I spend more time as a coach trying to undo the damage of family, friends, church and school than anything else – every year I get folks who genuinely believe that they can only do what other people tell them they can do. They’ve had the bar set low and never had an opportunity to see just what they’re made of.

          Heh, when everyone else is only too willing to be cynical and cruel I am more than happy to overwhelmingly positive, celebrate small wins, pick people up and dust them off and push people to do more than what they thought was possible.

          • Ivan Beram says:

            By far, you’re a more patient person than I am I suspect. And FYI I am not trolling, nor do I think I want to coach anyone — I’d prefer to be simply getting on with it =).

            I might add, that old Gordon usually has to put up with a lot of disrespect in way of attitude and verbal abuse first before he really tells them what he thinks of them ;). But hey, sometimes the truth hurts and sometimes it’s exactly what they needed to hear.

            Helps penetrate that egotistical shell of theirs.

          • Terry says:

            +1 for that kind of energy. Pretty much the whole world encourages you to be conventional and find a boring desk job for the rest of your life. I’m always frustrated seeing friends waste good talent by falling into that trap. Keep up the good coaching.

  2. “Secrets Exist”.

    And this is the precedent that he’s trying to set, for companies to become naturally secretive, and closed off. There’s only one kind of business that deals with secrets (because it needs to do so); warfare. Sadly enough, we live in an “industry” that operates on competitive principles that escalate conflicts of interest.

  3. Entendi bem,acho que entre tudo isso a dedicação é mesmo uma forte aliada.Fico feliz por estar desenvolvendo um jogo porque sei que é bom.

  4. Ah the variety of life… I read. I say, I could add to this, but I wouldn’t know how. Not good with the words. Then I read the comments. All of a sudden some words do appear. @Ivan Beram. I see what you’re saying, but watch what happens when you try to label things nicely into 3 pots and place them on a shelf? You end up ignoring Heisenberg’s people who had a spark of a thought, and given this variety of life, think about that thought all the way up starting from 0% – and sometimes remaining there. It is when they find things like Epona (what a cool name! fun to say it 😀 I congratulate your parents) wrote that they either shift more to one side or the other of that initial idea they had (shifting towards convert or otherwise), or go into a new dimension and come up with a fourth label, the one we have to buy a new jar for. That is the beauty of math. You ‘feel’ that the height of the cylinder affects the volume more than the radius, because it looks bigger, until you see that that is not the case. I’m not criticizing what you say, I am trying to add to it 🙂 Since I’m not good with the words, I’m quoting an Arab proverb, must be good, cuz it’s been around for a while: “If everybody agrees on something that is wrong, then it is right”. Now a purist says “Hey! That is nonsense! wrong is wrong”. Then reality incarnated in facts could say “Well, let’s try to explain that to the victims of, say, the inquisition – oops, you can’t they are already dead”. The duality. Never forget the duality, and you’re more informed. @Epona. You taught me. I never forget people who teach me. If my game – or one of them – ever works, I’m making you the Minister Of Good Taste in my island. Great job.

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