Sunday, August 20, 2017

Passion and Business (Tradecraft)

If game store owners could run their businesses on passion, good intentions, and love of games alone, we most certainly would. Believe me, many of us have tried. Outspoken game store owners are told they're destroying the hobby when they encourage others to run their store by the numbers, profitably. They're told this by other store owners mostly, future ex store owners to be sure, because passion doesn't cut it alone. 

If you want to see passion alone, read the Designers & Dragons series and you'll see the pattern that passionate game designers with no business sense are doomed to the pages of an obscure series like this one, relegated to wistful conversations about gamer childhoods. The winners, those that survived to make it to today, were able to match their passion with business acumen. It's no different with running a game store. 

The margin of error is too slim for passion alone and as you expand, the complexity of running a store is well beyond the capabilities of the average person's ability to manage their personal finances. New tools and techniques are needed and you will not receive them from your distributor or publishers, who are intent that you buy-buy-buy constantly, with carefully constructed finance systems that insulate them from the enormous churn of failing stores, estimated to be as high as 25% a year. Of course we have no real data nor even a definition of "store," to show how backwards we are.

The desire to reduce this churn is why some of us give talks on business management at trade shows, in hopes to reduce the churn. Although the number of such stores attending trade show seminars is certainly growing, it's probably a bit like preaching to the choir, perhaps the top 10% or so of store owners attending. Those are just people receptive to advice. Most of the advice I give falls on deaf ears, because it doesn't match the idealized nature of a game store in the future owners mind. "But if I don't have a lot of money, I can still do this, right?" Well, no. You can't. Money would be a barrier to entry in most fields, but not this one. They proceed anyway and join the 25%.

So you don't become a professional retailer because you lost your passion, you do it because you want to survive and prosper at a level beyond "buy a job" status. Perhaps you want to own a home one day or get married or have children or just take vacations. In this trade, that often makes you a sell out, a money grubber, or the worst accusation of all in a hobby that runs on geek credibility, an imposter. And you'll likely suffer from imposter syndrome for a good long time, probably until you get crusty and stop caring about the opinions of others. May you acquire crust with great alacrity. 

Saturday, August 12, 2017

Vacation and WPN Article

I've been on vacation, so I haven't written much, with my usual level of rantiness reserved for myself, rather than expressed outward. Vacations are great to stress test the business, watching the rubber hit the road when it comes to policies and procedures. In my case, it became crystal clear what needed doing by the second week ... but with three weeks to go, I've got to put a pin in that and revisit it when I return.

My revelation was about the precarious state of the business after expansion, and the buckling down that I personally need to do to nurse it back to better health. It's like a marathon runner that just ran 26 miles and nearly collapsed at the finish line and I'm asking him if he wouldn't mind running over and picking up a quart of milk across town. Just chill out already. That's directed at me, while my staff and my manager have been fantastic in my absence.

I've agreed to write articles for Wizards of the Coast in their Wizards Play Network series. Other game trade authors like Michael Bahr are also in the mix, and I encourage you to read them. It was infuriating to hear non retailers give retailers advice in previous WOTC articles (just keep your bathrooms clean), so I'm glad they've asked us to write for them.

My first article is When and How To Expand. I have a very good editor over there that cut this sucker down to size while keeping my "voice" intact. I think it turned out well, especially the section on motivation. In the upcoming book, I try to expand on just about every option for obtaining money for these endeavors. This is an area that I don't mind admitting I've mined pretty hard over the years. OPM is my specialty, at least at the micro level.

Tuesday, July 25, 2017

Subculture, Style and Enjoyment of a Thing

Gaming is a subculture, a basket of subcultures really. Using the Dick Hebdige definition of culture from his book Subculture: The Meaning of Style, culture is a "coded exchange of reciprocal messages." Style is how that culture expresses itself, defined as a "signifying practice." The problem we have in gaming culture is a question of authenticity.

When those who believe they are part of the subculture experience someone outside the culture signifying, we have the potential to run into conflict, especially when that person doesn't match the usual encoding for that culture, usually because they are female or a person of color.

Geek culture is overwhelming white male, as we know (which is thankfully changing). As a store owner with female employees, I know they are regularly challenged on their cultural authenticity, their signifying questioned because of their gender. The messaging reciprocity isn't accepted because of unfortunate stereotypes.

The thing to remember about subculture, is it's an adopted culture. There doesn't need to be accusations of cultural appropriation, a term used to describe those who adopt cultural signifiers as style, without belonging to the culture itself. Cultural appropriation has a political component, as in the cultures being appropriated have a history of marginalization. Appropriating a marginalized culture is a kind of theft. However, as much as geek culture is marginalized by conventional society, it hardly rises to the level of say African American culture or the travails of the LGBT community. Geek culture can drop the militancy.

Geek culture does not need special protection or organizations to preserve its roots from conquering cultures. What it does need is a little more understanding of how people engage in subculture. In short, geek culture needs to chill out and allow engagement at a level comfortable for the signifier. You can legitimately like a thing without going deep into the tradition. The Internet allows deep immersion into subcultures, with nearly no limits to its depth.

There needs to be respect for those who dwell at all the depths of the subculture, an openness that allows each of us to learn from each other, rather than ego driven genitalia measurement that often accompanies signifying conversations.

At its root, geek culture is youth culture, and youth culture is about how one defines oneself. Defining oneself is often in opposition to the Other. A sign of maturity, a sign that geek culture can grow up, is dropping the opposition, signifying to root out the Other. The high priests can engage and embrace their brethren, even if the adherent only goes to church on Sunday.

Wednesday, July 19, 2017

Third Place Theory in the Devalued Marketplace

Third Place Theory is the foundation of the modern hobby game store. Here's a reminder of the characteristics of Third Place from the Wikipedia article cited above:

  • Free or inexpensive
  • Food and drink, while not essential, are important
  • Highly accessible: proximate for many (walking distance)
  • Involve regulars – those who habitually congregate there
  • Welcoming and comfortable
  • Both new friends and old should be found there.

Third Place Theory is the Unique Value Proposition every game store needs. It's not enough to exist and sell stuff well, it requires this special sauce. The problem with Third Place is it functions poorly in a devalued marketplace. When customers buy product online at a steep discount and use the Third Place to access community, the Third Place facility acts as a host in a parasitic relationship. 

With game trade product devalued, the response from the venue is to increasingly monetize Third Place, whether it be nominal fees or how we do it with paying a small fee to play that goes towards store credit, essentially guaranteeing anyone playing is a de facto customer. This is somewhat at odds with Third Place and a bit alien to store owners. 

Nobody wants to charge for game space. I'll just repeat that: Nobody wants to charge for game space. Game stores are not built on the movie theater or hotel model where our commodity is the space and there's a need to sell it in a particular space-time or forever lose its value. There is limited money and opportunity to make third space our main event. The main event is having things customers want, when they want it, with special sauce to increase that demand. We're not in the special sauce business.

Increasingly publishers are moving to protect their brands from predatory pricing. They understand the hobby game store is their marketing arm, and when people stop playing their games in stores, publisher sales fall. Store owners who understand this relationship between brand value and Third Place are actively shying away from devalued brands and actively embracing protected brands. 

Retailers no longer wish to be part of a polyamorous relationship. Let me be clear though that root cause of devalued product is the very system itself, the distribution model that sells to poorly run game stores that use the Internet like an exhaust port. There are only a handful of relevant online discounts, not that they don't bear responsibility as well. As with most dysfunctional relationships, there is blame and failed responsibilities on both sides.

The winners and losers in this selection of publisher value are not always obvious, they're not the usual winners and losers. 30 publishers account for 80% of my sales, and I'm increasingly looking beyond these top 30 for value, which assumes I have an apparatus in place that can push demand. For example, we're seeing stores shy away from Wizards of the Coast, with their deep devaluation and move more towards companies like Cool Mini or Not who are more active in protecting brand value and supporting retailers. 


Saturday, July 15, 2017

Competency Curve (Tradecraft)

It takes a long time for a new team member to gain competency. This often surprises people, especially those who think their teenaged children would be perfect for a game store position. The complexity of the job mostly has to do with the level of service we provide. A game store owner who makes a bunch of exceptions to satisfy customers is likely to create a chaotic environment. A store owner who turns those customer pleasing exceptions into policies and procedures is bending the service curve in their favor. Unfortunately, that also adds to staff complexity.

The complexity of implementing such policies and procedures is why working at my store is wickedly complex. I personally would have a difficult time learning all the tasks we're expecting new staff to master. There is a tremendous amount of detail involved in sales, special orders, receiving, and day to day operations of the store. Change exceptions occur on a daily basis, usually communicated through Facebook. Some of our tasks are now specialized with a division of labor for things like online sales and technical tasks, like iPad content updates.

The game trade doesn't help either, as we have no uniformity amongst suppliers, meaning it takes a holistic understanding of the trade in order to function well within it. Yesterday we had to adjust our cost of goods on Magic boxes, because Wizards of the Coast sells product by the pack, while everyone else sells it by the box. Our point of sale system had Magic boxes with $2.11 cost of goods. As an employee, you inherently understand this and know how to manage this in the POS, how exactly? 

Special orders are looked up on one distributors online system, but might be set to be sourced from another. The employee will need to know which product code to use based on distributor, as one insists on a space between their alphanumeric code, while another might just make them up as they go. Oh and margins on items? Yeah, they're all the same with our primary, our secondary changes on a quarterly basis, and they're always the same with Games Workshop, unless it's a web item, in which case it's not. You all should know that, right?

This is all fine with a single owner-operator, but with nine people on staff, it means there's a competency curve, often based on time in service. Institutional knowledge takes a long time to develop. This means there's always confusion. Always. It also means we're insulated from a lot of big competitors because the game trade is such a shitshow.

It takes about six weeks to train up a new employee. Acquiring competency takes even longer, perhaps six months. I still consider an employee new within the first two years. Mastery? That's probably at the four year mark. Mastery really means they've internalized store culture and behavior, good and bad. If it's hard to train a new person, it's even harder to change behavior in a veteran. There's the Zen saying, "In the beginner's mind, there are many possibilities. In the expert's, there are few."

As an IT professional, my longest job was two years, yet I'm expecting my own employees to stay for far longer than that, and in fact need them to stay far longer to acquire the institutional knowledge necessary to make the business function. Could it be simpler? I think the answer is no. I really do. I think the level of service needed to survive as a brick and mortar store is now at the level of "exceptional." It's a big reason why we're all so obsessed with our trade, why we write blogs and talk incessantly on Facebook within a half dozen groups.  Survival requires tricks, customer delighting exceptions turned procedure, and the goal of perfection, which will always fall short. We'll do it with a staff that isn't paid nearly enough for the years of service required to learn the skills necessary to maintain such quality. 

As I've said many times, achieve mastery working for me, and you can go anywhere, do anything. I thought getting into this trade would simplify my life. The complexity is enormous. I'm extremely lucky to have such dedicated staff making it look easy.


Thursday, July 13, 2017

Presentation Anxiety and GTS 2018 (Tradecraft)

I will be presenting my inventory management seminar again at the GAMA Trade Show, March 12th-16th in Reno. I really don't like talking in front of groups, another reason I've been hitting the YouTube hard with new videos. I'm not even comfortable with myself and a camera, so overcoming that anxiety is important for me and my future endeavors (I sound like a guidance counselor).

Funny story, I took my freshman speech class requirement as a senior in college. I had this absurd idea I could skip graduation requirements if I demonstrated I was well beyond the minimal requirement. Ha! I also turned in my MA thesis close to the deadline, in the last hours of the year, because I ignored the margin size requirements. I learned to follow directions by having it pounded into me.

So true story, I was also taking courses at an executive security school, namely bomb detection and identification. When it came time to do my freshman speech class presentation (as a senior), I chose bomb detection and identification as my topic. I went to the classroom thirty minutes before class and hid fake bombs throughout the room.

Then as I explained each type of explosive device, I went over to the hidden bomb and demonstrated a detonation, using a battery and flash cube element to simulate the explosion. There were motion sensitive bombs, time bombs, pipe bombs, you name it. It was a huge hit. This was 1991, so we were still a decade away from 9/11 and the social more against joking about explosives. I suppose the point of the story is find ways to personalize your presentation to take your focus off your anxiety and onto the topic at hand.

If you're planning to go to GAMA in Reno, now is the time to reserve your room. The block with the cheapest rooms is already full. Yesterday, when I reserved my room, I ended up in the next most expensive block. I've stayed at the Peppermill a couple times, on purpose even, and it's an excellent, smoke free hotel. It is away from Downtown Reno (a good and bad thing), so if you don't get a room at the Peppermill, you will be commuting to the show.




Tuesday, July 11, 2017

Video Roundup (Tradecraft)

I've had more free time than usual this summer, with my family out of town, so I've been playing more with game trade videos. I started with some "around the store" topics, but settled in with business interests. I've had readers wondering if I had switched mediums, but rest assured, I'll keep writing. I'm going on vacation in a week, so the videos will stop for a while and I'll consider if I want to put more effort into them when I get back.

If you watch the videos, I think you'll agree they get better going forward. I learned important techniques, like holding the camera horizontally, taking the case off the phone for better sound, trying to use the best lighting (and locking the iPhone to keep it from hunting) and not letting them see your nostril hairs. I've also become more comfortable in front of the camera. Part of that is doing most of the later videos by myself in an empty house.

My goal was to do this without new equipment, and so far that has worked. Videos also get made without a script, editing and in a single take (lucky you). I figure if I need a script, it probably deserves a blog post. As I've gone forward, "one take" has meant multiple takes, and I've gotten comfortable re-shooting the same topic with my thoughts better organized. Sometimes I re-shoot four or five times.

If an idea comes to me and I can organize it in my head, I think it's worth a video. If it's deeply complex, and many of my video requests are complex, then it's probably a better blog posts. Blog posts take more time, especially complex ones, so you'll see I've shot a bunch of little videos in a little over a month.

Anyway, if you like the videos, please "Like" them on YouTube and Subscribe to the channel. Someone recently discovered my YouTube channel and tweeted I was a great resource on finance, known by less than 100 people. You would get that impression on YouTube. It's not that I need personal validation (which is always nice too), I just need to know if it's a medium worth pursuing.

Here's what you may have missed since my last post about videos, in order except for the first two (two parts). There are more besides these, so please explore the channel if you find them interesting.

Introduction to Commercial Leases, Part Un


Introduction to Commercial Leases, Part Deux


The Successful Hobby Game Store


Game Retailer Success


Avoiding Discount Culture


Monetizing Game Space


Process Improvement


Impressions of Kobold Press D&D 5E Products


So You Want to Start a Game Store: Business Plan


Rejection of Expertise in the Game Trade


So You Want to Start a Game Store: Your Income
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