Wednesday, July 20, 2011

Wizards: Peter on the Cusp, Part Eleven

Talislanta Geographica
What if?

Uncounted alternate histories have been written, launched from those two words.

Wizards of the Coast in 1992 begs us to play the What If? game. It was the year where the first generation's dream of forming a successful RPG company almost came true.

For about eight months in 1992, from April 1st when the boxes filled with The Primal Order arrived from the printers until December 28th when Wizards distributed their last paychecks for a while, it was an RPG company inching ever closer to success. Had other factors not intervened, Wizards would have been in the black before the end of the year.

The Scent of the Beast
Before April 1st, they were trying to be an RPG company, but until you release your first product you're not really there yet. After December 28th, they were too financially disrupted and in some ways reverted to their pre-April 1st condition (though wiser and more professional) of having difficulty keeping up a full production pace of publications, and they soon became too distracted by unexpected success to keep their focus on RPGs.

Anyone who decides to become an entrepreneur and start up a company is in for a lot of stress and unpleasant surprises on the way to success or failure. Companies start in the red and continue to bleed money rapidly long before they ever produce any income. Keeping up with the new business's urgent hunger for funds to keep it operating keeps the executive and often many of the staff distracted from being able to fully attend to the actual business of the company, because if you look away from the problem of raising funds for too long you're out of business before you realize what happened. During that period of distraction, most organizations make embarrassing mistakes because of the lack of executive oversight. If you've never tried to start a business you may be surprised that the statistic that 90% of new businesses fail in their first year of operations is so high, but if you have tried then the surprise is that the failure rate is so low. It's tough work.

Pawns, The Opening Move
From October 16th, 1989 until early 1992, Wizards began as many organizations do, holding down its pace of spending by relying heavily on part-time and volunteer labor. This is not a bad way to begin an organization, since it limits the pace at which you bleed money and gives you time to figure out how to get organized. An underappreciated factor here is that you're going to make a lot of mistakes, and it helps to do so when you don't have much money to lose doing it; mistakes become more and more expensive as an organization grows, which is partly why so many large organizations become so conservative and bureaucratic (which, yes, is also a mistake). Unfortunately, this strategy also holds back the pace at which you can produce, which in turn holds back the pace at which you can develop an income stream to offset your costs, which extends the time you will remain in the red. It's a difficult chicken-and-egg problem that is usually resolved only through loans and investment to pour in enough money to get the company on its feet (or more typically through bankruptcy).

The Archaen Codex
By early 1992, though, Wizards had increased its rate of production by shifting the balance of the core staff more and more toward full time.

Later, when we go back and cover the early history in detail, I'll get firmer dates for the 1992 releases (I'm sure some of these are wrong), but here are my guesses so far based on studying ads, the books themselves, and Internet sites:

April 1st: The Primal Order
May: The Talislanta Guidebook
June: Talislanta Geographica
August: The Scent of the Beast
September?: The Primal Order: Pawns, The Opening Move
October: The Archaen Codex
October: Tales of Talislanta
November: The Compleat Alchemist

Tales of Talislanta
When you factor in the back stock of Bard Games products they acquired as part of the Talislanta deal with Stephan Michael Sechi, that gave Wizards a respectable product catalog by the end of 1992. When you factor in the many RPG products they had planned and in production by the fall of 1992, 1993 looked to be an even better year. The Wizards team were not yet in TSR's league when it came to the experience of their production team, nor in sales figures, but by hook or by crook they were turning out well designed, well produced products and were getting better and more successful as they went.

Likewise, although the year began with their in-house organizational systems still being cobbled together - in January they were just beginning to shift from individual assignments to the concept of formal teams, and in March George Lowe was going back and entering their basic financial data from the previous year to try to get it all recorded in one place - by the end of the year their organization although simple was coherent and productive.

The Compleat Alchemist
So the game of What If? here is a bit of a cheat. Anyone with access to the before-and-afters can see that all else being equal Wizards of the Coast would have probably been successful for at least the next year, which would have been long enough to fully get their feet under them. If they kept up the standards they'd set for themselves and kept learning lessons and making organizational and process improvements, they would have been on a long shallow curve of slow growth that would probably have been much healthier for them as an organization in the long term than the crisis followed by explosive success and growth they were subjected to instead.

That would have been more in accord with their dream for their company than what actually happened next. Until their train went off the tracks, their dream seemed to be coming gradually true. As Peter wrote in 1993:
After the Guidebook, Geographica, Tales, Pawns, and the Codex seemed to just fly out the door. Once we had Jesper, we had an incredible team and we started to really get into synch.

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