Case Analysis Report on

‘GAME COLAB: CAN IT CONNECT INDIE GAME

DEVELOPERS?’
Executive Summary
The case is about Game CoLab, a start-up by Ben Reichert and Joseph Darnell, which began in
October, 2013 as a co-working space for indie game developers in Phoenix, Arizona. The core
situation is that after a positive start, Game CoLab’s memberships are decreasing. It’s a lean start-up,
and the problem is deciding its next iteration. It should increase Game CoLab’s memberships and
revenue. It could do so by pivoting to an incubator, by focusing on corporates, or by overhauling its
current model. They should pivot to a start-up incubator for increased memberships, and continue
servicing corporates to increase revenue. (100 words)

Situation Analysis
Case Facts
 Reichert and Darnell started Game CoLab in October 2013 as a co-working space for indie
game developers in Phoenix, Arizona
 Darnell taught entrepreneurship in Mexico before moving to Phoenix in 2012
 Reichert was CEO and cofounder of Abeona Games, a videogame studio focused
 Co-working spaces offered shared offices to entrepreneurs or small businesses
 Co-working space focused on community and networking aspects of the space rather than just
being offices for rent.
 In 2013, mainstream press outlets such as Forbes published positive reviews of co-working
spaces as a viable business model
 Reichert discovered a fairly large community of indie videogame developers in Phoenix who
were completely disconnected
 Several new digital distribution channels were recently created which allowed indie games to
reach very significant worldwide markets
 IGDs though that the place Reichert and Darnell picked out was “cool”, but they thought it
could use some more amenities or perks

Inferences
 Reichert and Darnell were entrepreneurs
 Reichert and Darnell were passionate about contributing to the community
 Reichert was good at communication and networking, while Darnell was good at thinking
ahead and focusing on the task at hand
 Indie game developers (IGDs) in Phoenix were deprived of networking, and were
disconnected
 IGDs needed a support system to enable networking and help them form a community
 Co-working space fulfilled the needs of IGDs by offering a place for them to connect with
others like them
 Co-working space needed to have a “cool look” in order to attract IGDs, but needed good
facilities and location to retain them
 Social Events were popular at Game CoLabs
 Servicing corporates and institutions was an opportunity to increase revenue
 Pivoting to an incubator was an opportunity to increase memberships

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Problem Statement
The core problem for Darnell and Reichert is to decide what Game CoLab’s next iteration should be,
allowing them to pivot to a start-up incubator while maintaining a balance between the co-working
concept and servicing corporate clients.

Objectives
1. Increase the no. of members, and increase the retention rate for existing members
2. Increase their revenue from the membership
3. Increase revenue through corporates and institutes
4. Find a permanent location for their co-working space, preferably at a technical hub
(Here, the numbers indicate the priority of the objective)

Options

Option 1
They can pivot to a start-up incubator, after which they can trade the membership fees for a royalty
fee or part ownership of the ventures or products that emanate from the incubator.

PROS
 Increased long term returns on investment
if IGD’s venture or product succeeds.
 Increased number of members as there is
a possibility of working without paying a
membership fee
CONS
 May incur hefty losses if the ventures
or products don’t work out
 Might need to assist or even provide
seed funding for a start-up

Option 2
They can alter their membership fee structure by introducing weekly and annual packages instead of
just monthly packages, and improve on their co-working space by providing the “perks” that the IGDs
desire, while scheduling regular events.

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 PROS CONS
 Altering fee structure might attract more  The profit margin will not be very high
talent on the weekly rates
 Increased number of members will mean  Providing extra perks will increase the
increased revenue costs

Option 3
They can focus to servicing more corporate clients and institutes and prioritize revenue generation
over membership increase.

PROS
 Profit margins will be high when servicing
corporates and institutes.
 Members will be happier as there are
increased opportunities
CONS
 This will shift their focus from
servicing the community to servicing
the corporates
 These engagements eat up a lot of
Reichert and Darnell’s time, which
they could otherwise utilize to work out
the lean canvas for their next iteration

Decision
The best move now is to pivot to a start-up incubator, as it will allow them to restructure their
membership model and it strikes the best balance between increasing the number of members as well
as the revenue.
The following option-objective matrix depicts how pivoting to a start-up incubator is the best move
for Game CoLab:
Pivot to a start-up Improve on the current Focus on corporates
incubator model and institutes
Increase no of  
members and retention
rate
Increase revenue from  
membership

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 Increase revenue from 
corporates and
institutes
Find a permanent  
location for co-
working space

Here, 2 options – pivoting to a start-up incubator and improving on the current model have the most
synergy with the objectives, but pivoting to start-up incubator is a better choice because the
probability of increasing member retention rate is higher with this option as compared to others.
Also, if they pivot to a start-up incubator, they can align themselves for long term returns on
investment as they can trade membership fees for royalty fee on any venture or product developed
inside the incubator. This will mean that they don’t need to focus on corporate engagements which
use up a lot of their time.

Action Plan
1. Rework the business model and the lean canvas to accommodate the new iteration: Start-up
Incubator.
2. Modify the membership fee structure to include weekly and annual membership plans.
3. Introduce the fee swap feature, which allows the IGDs to trade their membership fee for either
part ownership in their future venture or product; or royalty fee as a certain percentage of
profits earned from said venture or product.
4. Find a new location, preferably at a technical hub with good access to public transport and
food joints. That way they don’t have to provide free parking or food.
5. Give the members touch points with corporates and institutes to help them get seed funding
for their ventures or products.

Contingency Plan
In case the plan of pivoting to a start-up incubator fails, they should shift their focus to doing what
was successful in the previous iteration – organizing events and servicing corporates and institutes.
While doing that, they can still rework their membership fee structure and aim at increasing retention
rates of existing members.
(998 words)

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