Sunday, June 24, 2007

How To Turn A $100 Investment Into A $10 Million Business.

Rags-to-riches entrepreneurs don't usually brag about crashing on a friend's couch and eating cheap food. But John Vechey, 28, proudly recalls the early penny-pinching days of his Seattle gaming company, PopCap Games, which he co-founded with partners Brian Fiete, 29, and Jason Kapalka, 36, in 2000, after their buddy Shawn Saggis founded a successful business matchup website.

After leaving their steady jobs at gaming companies, the trio pooled $100 to purchase business cards, used their own computers and convinced a friend who owned an ISP to give them server space for free. Working first from Fiete's condo, then from Vechey's apartment, they started with a simple business model--to make games and license them to websites.

Then the ad market crashed, rendering their model insufficient and teaching the partners the first lesson of bootstrap entrepreneurs: flexibility. In 2001, based on feedback on their first game, Bejeweled, they created an enhanced, downloadable version. Instead of charging sites like Yahoo! to host their games, they offer the web versions for free in exchange for having the sites direct people to PopCap's site to download full versions of the games. "At first, we were making $5,000 to $10,000 per month. Then it was $30,000 to $100,000," Vechey recalls.

Vechey and his team raked in more than $10 million in 2006, and they now have 13,000 square feet of office space in downtown Seattle, a studio in San Francisco and a satellite office in Dublin, Ireland. They employ 118 people and have more than 30 different games.

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