Rise and fall of software company

If you’re following news from gamedev/IT portals, you know that 2008 has been one tough year for the industry. Many good companies have been forced to either fire big part of their staff or even shut down completely. Reasons were probably different in every case. Sometimes it was recession, sometimes, recession could be used as an excuse to get rid of dead wood, in many situations hard times simply made internal problems more visible. From my observations and stories I’ve heard, it’s possible to notice certain pattern that’s similar in many cases, especially in gamedev. This cycle is long, takes many years, but roughly, it may look like:

  • company starts small. Just a bunch of young enthusiasts. Management cut down to minimum, in many cases project leader/CEO actually does some “real” work himself (sidenote: best project leader I’ve seen was working as part-time graphics artist at the same time, true story). No official bullshit, just passion and 18h workdays. Eventually, if team is lucky and works hard enough – they succeed, mainly thanks to heroic efforts rather than rational reasons. There’s much rejoicing.

  • more managers appear, usually with no prior industry experience. They decide it’s time to get bigger. Hiring spree starts. Not all of new people may be as skilled or dedicated as old timers, mainly because there’s pressure to grow fast, after all – 2/3/4/… new projects can’t wait. Success of the first project is usually misattributed to good development process rather than individual skills. Company is sure that if they managed to create good software with 30 people, they’ll easily produce 3 even better projects with 90 folks.

  • scheduling is done based on productivity figures from first project. No one seems to notice that bigger teams are harder to manage and new hires may need additional training. Old core team members are usually promoted to senior positions by this moment and spend 30% of their time doing paper work/managing, which causes further productivity drops (ie, best rendering programmer now barely even has time to launch compiler).

  • “surprisingly”, teams struggle to meet milestones. Either work is not done on time, or it’s not up to the expected standards.

  • atmosphere starts to get nasty, scapegoat hunt begins. Management blames the team, team blames management. Nervous HR moves appear, projects change leaders, people are punished to set an example, new methodologies are tested.

  • original core team members have enough and start to leave. At this point they’ve probably been in the company many years, feels nostalgic about old good times, are fed up with being powerless and lost the hope for change. This usually causes snowball effect. As more people leave, those who’re still there feel even worse. In most cases, best specialists leave first as they have many other options. Unexperienced people are promoted to senior positions, manager:employee ratio skyrockets.

  • company struggles to deliver external milestones, publisher freezes payments. If there’s no external sources of income (90% of cases) – problems with salaries appear. More people leave.

  • two possible outcomes here – either company’s left with bunch of most dedicated folks who’ll try to finish the project and basically cycle may start again, or it collapses.

  • …in the latter case, three months later, people who ran it into the ground magically get funding for a new venture or are employed at top management position somewhere else. Ordinary workers meet over a beer from time to time, recall old times and wonder if it could have gone the other way….

Vaguely related link – very interesting story of Tabula Rasa (note: it’s vaguely related to post subject not my purely fictional bullet points).

Old comments

Jacek Weso??owski 2009-01-20 08:19:47

I suspect there’s some relation between the TR story and your points. There’s an interesting, if a bit old article on Escapist, telling the story of EA’s takeover of Origin.
Focus on the bits about Origin, their work organisation, and their approach to development.

Maciej Miasik 2009-01-20 22:17:53

This is scary shit, man! :)

Maciej Miasik 2009-02-15 16:32:15

Well, well, 3 weeks after you posted this we moved to the next item on the list. Just next 3 items to go.