North Star Aims to Shoot the Moon
Star light star bright. I wish I may. I wish I might. Play this game all night.
That's what the brains behind North Star Games hope every family member across the nation will say each night before they go to bed.
Founder Dominic Crapuchettes and his business partner Satish Pillalamarri may get their wish. The small business recently signed a deal with national chain Target to carry their game Wits & Wagers for this holiday season.
"We had to raise half a million dollars, negotiate contracts with overseas manufacturers and navigate the intricacies of Target's electronic procurement system while trying to maintain our normal operations," said Crapuchettes. He created his first game in 8th grade - Kabloogi - which was banned because too many students played it in class.
The Greenbelt, Md., outfit is a two-person startup operating out of Crapuchettes's living room. The company's only two employees met while getting business degrees from the University of Maryland and turned to the games business full-time upon graduation in 2004.
Wits & Wagers is a trivia game for people who don't know stuff. It won the 2007 party game of the year from Games magazine and the Mensa Mind game award. It's also cultivating fans via a monthly Wits & Wagers game show at Mayorga Coffee Factory, a coffee house in Silver Spring, Md.
The firm recently signed a video game contract with Seattle-based Hidden Path Entertainment that plans to release Wits & Wagers on a video game platform in December. There are ongoing talks about making it into a television game show for 2008.
North Star previously had success with a game called Cluzzle, where you try to sculpt poorly. It won seven industry awards and was carried by small toy and hobby stores.
The Money Race
Success has its challenges. While signing a deal with a big company like Target may be exciting for a little outfit like North Star, reality can quickly dampen some of that excitement, said Crapuchettes.
The company had only seven months to prepare for its Target launch after it learned at a toy fair early in the year that the big-box operation was interested in carrying one of its games.
"We had to have our games delivered to Target distribution centers, and we had about a three-month lead time," said Crapuchettes. "The first thing we had to do was raise money" to supply the amount of games that Target wanted.
That's when Crapuchettes and co-manager Pillalamarri, a former Wall Street analyst and Jeopardy contestant, started working on business plans and turning to their contacts at the University of Maryland's Dingman Center for Entrepreneurs.
They pitched their plan at venture capital "angel" fairs across eastern Pennsylvania and drummed up interest by speaking at this year's Dingman Cener Cupid Cup business competition for young entrepreneurs. They had won the event's $10,000 prize in 2006.
They were able to find private investors who ponied up $400,000, but still need an additional $100,000.
The company had to juggle expanding its normal print run for the game and eventually split it between two firms based in China. Printing the game in the United States was prohibitively expensive, according to Crapuchettes, because the cost would have been more than double than the costs incurred in China.
The duo also had to approve manufacturing of other parts of the game such as poker chips, dry erase boards and pens, a sand timer and a casino betting mat. Insight World Group, a firm that guides American companies manufacturing overseas, helped them.
"There are so many parts involved in getting a game manufactured and shipped; it's like a rabbit hole once you begin getting into it," said Crapuchettes. Pillalamarri is working with four different companies just to get the games through ports and into the United States.
Crapuchettes and Pillalamarri flew to Target headquarters in Minneapolis this month to meet with the chain's games buyer and discuss their future relationship.
"We also talked about how to get better shelf space and how to get into Target circulars," said Crapuchettes. "It was basically a fact-finding mission because we haven't really worked on that level before."
In October, Target's games buyer begins figuring out which games to carry for next year's holiday season. Naturally, North Star pitched a new game.
"We're a little nobody in my living room, and we pitched some grand ideas," said Crapuchettes. "We pitched a little bit bigger than we are, but it's all about how we want to grow."
Learning by Mistakes
Crapuchettes believes his company's success reflects the tenacity of its co-managers. "Luckily, we're both very ambitious and we're both not afraid to make mistakes," said Crapuchettes.
That is a trait that kept the company going when mistakes were made.
North Star partnered with Eagle Games of Chicago, a larger game company that wanted to go mass market, but had offered primarily hobby games.
The plan was to split the revenue from Wits & Wagers evenly after initial costs were covered. Eagle Games planned to finance North Star print runs as well as market and sell their games.
But Eagle Games went bankrupt, owing a lot of people a lot of money. A lien was placed on the company, along with North Star's inventory.
"For me, that was the moment of truth," said Crapuchettes. "We didn't have the money to buy our game back, and I was furious that it was going to be sold on the open market," said Crapuchettes. "I had to decide if I was going to fold the company, but I wasn't ready to. While the financial problems were happening, the game was winning awards."
Crapuchettes turned to his personal credit cards that he hadn't used in 10 years. "I asked [the credit card companies] for increased limits and put $40,000 worth of debt on them to buy back as much of our game as we could."
North Star's two executives discontinued paying themselves salaries and were able to recoup the entire product by 2006.
"We just started selling the games ourselves. We called up places and took over the accounts they had with Eagle." It took about four months of negotiating with different, often very irate, parties.
"You have to work hard and fail and not get paid for your time," said Crapuchettes. "You just keep going and then biggest thing you're doing is building a brand and then just hoping you get lucky."
He says he learned the importance of best practices, information and learning from people "who do better than you" from his 10 years working at a commercial salmon fishing operation in Alaska. "That's how I paid my way through college and it allowed me to support myself from working just six weeks in the summer."
That stint allowed him to tour as a card-game player during college, but after the salmon industry crashed, he signed up for an MBA with the specific interest of starting a game company.
"I love the company and the only negative is that when your hobby becomes your job, it can be work," said Crapuchettes, who says his favorite game "depends on who I'm playing with." He has a soft spot for charades and he praised party games coming out of Germany like Settlers and Carcassonne.
Crapuchettes, now 38, played the strategy card game "Magic: The Gathering" professionally while in college and won $30,000 over five years. "I knew one day I might want to start a board game company and I learned a lot about the industry while on tour at tournaments."
His ties to gamers got North Star's executives invited to an annual invitation-only games industry convention in Columbus, Ohio. Of the about 300 people that attend, about 200 are involved in the board game arena, according to Crapuchettes.
"I am doggedly determined to not fail. I took a leap of faith, brought in money from friends and family," said Crapuchettes. "I refused to fail. Most people with less determination give up... We're not profitable yet. We're optimistic."
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