Digital Chaos - Year-End Review from a Business Perspective

Note: Before reading, keep in mind that this is a year-end review from a business perspective. Perhaps in the future I will write a more personal article on my experiences as an owner and the team in general. For most, I expect this to be a boring read. Sorry!

Well, this has certainly been an interesting year with plenty of ups and downs. I felt it would be cool to share the journey of the business of Digital Chaos and how it has progressed or faltered throughout this year. Hopefully you find it interesting.

When we set out to create Digital Chaos, our focus was all about developing a sustainable way to take care of our players, and also allow players to feel truly invested in the success of the organization. We've heard so many horror stories from players on how they were mistreated in some way by their orgs, usually from a financial standpoint. We wanted to make sure our players knew that we were in this together with them, not just to make money off them. For example, the players will be getting all of the prize pool money earned by their amazing run at TI6. Our overall ambition was for the players to care about the organization, and ideally this would create a mutually beneficial partnership from both sides.

So with that said, how have we done in our first year? It’s a mixed bag, as can be expected with these things. I feel transparency is important, but ultimately being too transparent (at least to the public) can be harmful. Hopefully you understand why we can't divulge certain information.

The Good:

1) We pay our players a very competitive salary and we pay them on time: This might seem like an obvious point, but if you’ve been in the scene long enough, you’ll know that not every organization does this. Our players’ base salary comes entirely from sponsorship money, and it’s a very high percentage at that. I like this system the most because it incentivizes players to continue to be hungry to win. The better they do, the more money we'll be able to get from sponsorships, meaning more money in their pocket. Conversely, if the team struggles to perform and does not bring in sponsorship money, we still provide them a salary floor, meaning the organization in many cases would take a loss. This happened in the first iteration of the team.

2) Transparency: We offer full transparency to the players. If they want to know something about the company, we'll tell them, including financial records.

3) We provide just about everything: We want to make sure that our players focus on playing. We cover the costs of the team house, food, travel expenses (including hotel rooms, if not already provided), visas, computers, apparel and more.

4) We care: This may seem like a simple thing, but I feel it is probably the most important. This goes for the whole organization of course, but I'm going to focus on myself for a moment (you know, since I have to live up to my label as a narcissist). I watch around 95% of the team’s scrims. When we picked up the latest roster earlier this year, one of the players actually commented about it, basically saying it was not a normal thing for an owner to do. I had never actually thought about this, but I guess it makes sense for other organizations. They have to worry about their other teams, or other responsibilities in life. Not me. I went all in. I have always loved eSports and I've given everything I can to this team and I’m sure the players can appreciate that. The team quickly became my top priority, much to the chagrin of my Moonduck and DotaCinema brethren (sorry). I don't even know why; I just wanted this dream to be successful so badly. After one year, I can't tell you how thrilled I am that we are able to continue to do this after some trials and tribulations.

The Bad:

1) Intro Video: Need I say more?

2) Merchandise: We failed pretty horribly on this. We love the jerseys that MetaThreads provides, but we started the process too late, which meant we only started selling them mere weeks before TI6, which is almost a year after the team's inception. We also had trouble finding a shirt/hoodie manufacturer that we liked and we're still looking. There's pretty much no excuse for this. We have to do better in this department.

3) Partners: We honestly haven't had any issues with sponsors aside from LootMarket. But regardless, some real lessons were learned. Most of the fault was on our end because we did not set expectations with LootMarket from the start. I won't get too specific, but every sponsor wants something different, and it's almost always related to exposure. There are also tiers of sponsors, which go from the lowest to high (in terms of $ per month). When a sponsor gives their list of asks, we need to be more cognizant of whether it actually fits in the tier they are in financially. What we need to do better is set the expectation levels from the start during the negotiation process. This was an area that I was not directly involved with last year, which will now be changing. As per #2 we lacked a good merchandise partner until halfway through the year, and we didn’t pick up a good streaming partner until the start of this year. And finally, we need to do a better job with our players so they understand the obligations for specific partners, in order to yield the greatest returns.

4) Not enough employees: For most of this past year we only had 3 employees, which is definitely not enough. We are directly addressing this issue by hiring more people, including a new sponsor representative to help make sure that every sponsor is taken care of. In the past, the manager position had to do WAY too much work. With these extra hires, it will ensure that this person only has to worry about things related to being a manager.

5) We care: Sometimes you can do too much. From a principled standpoint, I think it's important that every player on the team recognize that they have some basic responsibilities, whether it be waking up to scrim, or to just play enough Dota in general. Basically, to treat gaming as a profession, not a hobby. In our first year, we didn't really have too many issues with this, but I think it's best to treat each roster as its own entity and to establish guidelines from the start. An example of us doing too much is getting involved in team discussions (or sometimes arguments). Some players aren't receptive to the organization stepping in, while others welcome it with open arms. We need to cater how we respond to these situations based on the players themselves. Finally, we need to find a good balance when allocating the earnings of the organization. The players and the organization should both be rewarded for sponsorship and playing success to manage the risk for everyone. From here on out we will be receiving a percentage of prize pool winnings, albeit a small one.

This of course is not a comprehensive list, but it will have to do for now.

Some of you may also have heard that we're looking for a new manager. As was explained in #4 on the Bad list, the manager for the last year (Sajedene) was put in an incredibly difficult situation where she had to manage way too many different jobs in DC. It was only because of her hard work that we made that work at all. As a result of the effort she put in throughout the year, we felt it was only right to offer her an ownership role within the organization.

All in all, I think this last year was a success. We (and me specifically) still have a lot to learn and I feel that accepting that fact is the first step to help grow the company as a whole. I know our intentions are in the right place, we just have to make sure we keep the organization sustainable for both the players and employees.

Over the next year we will be engaging with some new partners and looking forward to announce that in the future. We’re excited about the new employees we’re bringing into the organization and look forward to what we hope to be a successful season. We are also looking over the next year to engage in some other game titles and will diligently find a team that fits our player focused criteria.

Hopefully you can take something from this post. I'm honestly not even sure how many people find this interesting, but I figured if nothing else, it would be therapeutic for me. Thanks for reading!


PS: To clear up some misconceptions I’ve been seeing: Unless there is a breach of contract, roster changes are handled entirely by the players on the team. The organization will be there for guidance if it is requested, but nothing more. This may sound like the players have too much control but we’ve always taken this avenue (DC v1) and we believe in it.