Dot-com layoff all part of game-"Burn Rate" a hit

When Rich Koehler was 12, he wrote a letter to Parker Brothers. He wanted them to know how much he loved their games, especially Monopoly, which he often played against his stuffed animals.

By Monica Soto
Seattle Times technology reporter

It was the first letter he had written to someone other than his grandmother. Still, his voice carries a tinge of astonishment when he tells the story.

"They actually wrote back," said Koehler, who remembers storing the response in his toy safe along with a lucky rabbit’s foot. "As a kid, you never get letters."

Koehler, now 32, hopes to accomplish what Parker Brothers did with the introduction of Monopoly, an idea born of the Great Depression: to sell a game that outlasts the inspiration behind it.

Burn Rate — a card game that mocks the plethora of well-funded, albeit questionable business ideas that marked the rise and fall of the dot-com boom — has already received an impressive start.

It was carried during the holiday season at Wizards of the Coast, Tully’s Coffee shops in four cities, some Barnes & Noble bookstores, Chapters/Indigo book and coffee stores in Canada and 23 mom-and-pop stores in nine states.

The game sold out at most locations, even though the company had no marketing budget. Its sole funding came from the unemployment and severance checks Koehler and several of his laid-off friends received.

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Playing games

Here is a roster of some of the board games that were developed in the Seattle area.

Curses

Year introduced: Unknown
Creator: Play All Day Games (Brian Tinsman)
Copies sold: Unavailable
Focus: Family card game featuring challenges, mixed with "curses"

SceneIt

Year introduced: 2002
Creator: Screenlife (Dave Long and Craig Kinzer)
Copies sold: 30,000
Focus: Movie-themed board game featuring interactive DVD

Cranium

Year introduced: 1998
Creator: Cranium Inc. (Richard Tait and Whit Alexander)
Copies sold: 2.5 million
Focus: Adult board game featuring 14 different activities, from singing to sculpting

Cadoo

Year introduced: 2001
Creator: Cranium Inc. (Richard Tait and Whit Alexander)
Copies sold: Unknown
Focus: Ages 7-12, board game featuring multiple activities — "Cranium Jr."

Burn Rate

Year introduced: 2002
Creator: Cool Studio (Rich Koehler and Jim Massey)
Copies sold: Unavailable
Focus: Adult card game based upon dot-com bust

Derivation

Year introduced: 2002
Creator: Entspire (Brad Chase)
Copies sold: Unavailable
Focus: Teen and adult board game featuring derivation of words and phrases

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"Our only fault was not having it in more stores," said Koehler, a dot-com refugee himself. "We were not prepared for how much sales we got."

Koehler’s journey so far, while impressive, is not unique. Burn Rate seems part of larger forces in the Pacific Northwest: an unmistakable entrepreneurial ethic as seen in the high-tech community and a propensity for some of those entrepreneurs to develop popular low-tech games.

Consider these titles, all with local ties: Pictionary; Cranium; Pokémon, the trading-card game; Magic: The Gathering, a role-playing game; Derivation, a board game developed by former Microsoft executive Brad Chase; and SceneIt, the first DVD game, which sold exceptionally well during its first holiday season in stores.

Freddi Scott, spokeswoman for Wizards of the Coast retail stores, said four of the top 10 games sold at its 84 retail locations during the holiday season were created by local entrepreneurs.

"I first noticed it probably back in November," Scott said. "I thought, ‘I can’t believe how many of these are local games — maybe it’s just because we are a local company.’ But I thought, ‘No, we look at games from everywhere.’ It’s definitely a trend in the last three years."

Wizards of the Coast itself is a local story. Peter Adkison, a former Boeing analyst, founded the company in his Kent apartment in 1990 and launched his first game, Magic: The Gathering, in 1993.

The game flew off the shelves, with sales of $210 million by its third year.

Adkison subsequently purchased TSR, creator of the classic adventure game Dungeons and Dragons, opened a retail store chain and expanded the chain by purchasing The Game Keeper, with its roughly 53 retail and 100 seasonal stores.

In 1999, Adkison sold the company to Hasbro for $325 million.

Pioneering city

Cranium co-founder Richard Tait said such local success stories aren’t isolated to the games business.

"Seattle was the last settled city in America. It’s a pioneering city by nature," said Tait, a former Microsoft executive, whose company has sold 2.5 million copies of Cranium worldwide. "There are many great examples, whether it’s Boeing or Microsoft. I think it’s part of the culture."

David Long, a former financial analyst who co-created the DVD game SceneIt with Craig Kinzer, said his company received distribution deals from other local companies such as Nordstrom, Wizards of the Coast and Amazon.com — all of which helped it sell more games in its first holiday season than Pictionary, Trivial Pursuit and Cranium did during their first holiday seasons.

"The bottom line is that you have to start with a great core concept, and Seattle has been able to facilitate that," he said.

Chase, the former high-profile Microsoft executive who created Derivation last year, said he isn’t so sure there is a reason.

"It’s probably just a giant coincidence that it has all happened here, but maybe there’s something in the water or the cosmos," he said. "Or maybe it has to do with the precipitation."

The test

The term "burn rate" refers to how fast a startup depletes its cash reserves. If startup A had $30 million in cash and had a burn rate of $5 million per quarter, simple math would deduce the company had 1-1/2 years to turn a profit or die trying.

GREG GILBERT / THE SEATTLE TIMES
Brad Chase, a Microsoft alum who created the game Derivation, isn’t sure why this area seems to spark successful game concepts.
Koehler, who held jobs as a software programmer and then a product manager, was intimately familiar with this term. He received a pink slip from a local Internet startup trying to slow down its own burn rate. After sending out several résumés and receiving no feedback, he decided to go it alone.

"I was working in the dot-com industry as a product manager, and (product managers) are used to making products and making them successful," he said. "I felt like the products that I was working on were not successful. I thought, ‘Was I doing something wrong?’ "

Burn Rate gave Koehler the means to test himself.

"It was the game outside the game: Can I start a company and have it be successful, unlike the companies that are in the game?" he said. "There’s some irony there, I think."

The premise of Burn Rate is simple: Each player becomes the owner of a dot-com startup with great funding but a not-so-great business plan.

The idea is to force your opponents to execute bad business decisions — whether they be hiring too many employees or launching bad dot-com ideas — so they can burn through their funding and go out of business. The last company afloat wins.

Koehler tested the game by hanging out at coffee shops with a prototype fashioned from paper, tape and all. Most of the time he met a friend and played the game to garner interest. They’d invite others to play in return for feedback.

"We used four coffee shops as focus groups," he said. "They were everything from UW professors, artists, laid-off dot-com entrepreneurs and waitresses.

"A lot of them got excited," he said. "One person told us, ‘You should totally sell this on eBay.’ "

Among friends

Meantime, Koehler formed the company Cool Studio along with eight friends, including designer Jim Massey, who created the look and feel of the game.

Koehler’s group included young, talented and mostly out-of-work friends that contributed in various ways: an attorney secured the company’s business license and wrote up contracts; friends with marketing and sales backgrounds help pitch the game and secure distribution deals.

The company printed a 2,000-card test run and began selling it online last May. Venture capitalists started buying the game as gifts to their startups. A magazine in the U.K. printed a tiny article unbeknownst to Koehler and they began receiving international orders.

The first print run sold out in three months and its next run of 10,000 also is gone. The game is in its third print run.

Koehler said the company is profitable, but he’s still doing consulting work to pay the bills.

His big chance comes next month. Koehler and two sales friends plan to attend the American International Toy Fair in New York City, the largest toy trade show in the Western Hemisphere, where toy retailers will purchase games for the 2003 holiday season.

"We’re going to go kind of guerrilla: Start making phone calls with buyers that we can meet, have ‘Burn Rate’ T-shirts, print up flyers and brochures and shake hands," he said. "It’s kind of the way you’d think of a small, scrappy startup trying to get in the door."

Monica Soto: 206-515-5632 or [email protected].

Copyright © 2003 The Seattle Times Company

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