Card sharks - success of card game company Wizards of the Coast - Company Profile

Entrepreneur, Oct, 1996 by Dennis Rodkin

One nationwide distributor in particular, Wargames West Distribution in Albuquerque, New Mexico, spotted the game as a future hit and pitched in with big advertising dollars, effectively hitching its wagon to Magic's fiery horses-and then had to hold on for dear life. "My initial order was for 24 units, my second was for 572, and my third was "Send everything you've got in the warehouse,'" recalls Wayne Godfrey, Wargames' CEO. Godfrey estimates he sold $700,000 worth of Magic card sets in the last five months of 1993, then 10 times that amount ($7 million) in 1994.

Godfrey decided to carry Magic after running into Adkison at a Ft. Worth, Texas, game convention. 2 a.m. one night, Godfrey happened across Adkison wide-eyed and playing Magic with two teenagers in the hotel lobby. This was obviously a guy who loved what he was doing," Godfrey says. "He wasn't in it for money alone-he had a passion." Godfrey concluded that Adkison was precisely the kind of entrepreneur he wanted to bankroll.

The next step for Adkison was to show the game to potential players. Having worked without a vacation for three years, Adkison and his wife, Cathleen, finally took one in August 1992, driving down the California coast with decks of Magic cards. They stopped at some 15 fantasy game stores and hobby shops to demonstrate and hype the game. As soon as they got home, they hopped a plane for Milwaukee, where the showed the game at GenCon, a convention for hobby gamers.

"That's where we saw word-of-mouth really take off," Adkison says. "It is incredibly effective if your product is genuinely better than anyone else's, which we knew Magic was. People think its amazing, and they go home pumped up and tell all their friends about it. It pulls the product through the pipeline."

Garfield says that while he was always optimistic about the games potential, he hadn't factored in the boost the game would get on the Internet, via the game chat rooms that first linked him with Adkison. "Word-of-mouth is one thing, but having people talk about your product on the Internet is like throwing kerosene on the fire," he says. "It took off."

Sales boomed so fast, Wizards of the Coast had to run to keep up. Ask Adkison how he managed employee growth from five to 250 in three years and he simply says, "Agonizingly." Moving out of the Adkisons basement into commercial office space in 1994 to make room for all those employees helped. And to better handle the boom, he recently enrolled in an MBA program at the University of Washington in Seattle ("I wish I'd done it before everything went crazy," he says). Despite their inexperience, Wizards' founders managed to sidestep some potentially dangerous pitfalls. A big one was legal protection of their intellectual property-the characters in Magic. We didn't know we were in a position where somebody could have taken every@ thing away from us," Adkison says. "We got it all registered and protected just in time."

Avoiding such potentially dangerous situations is easy, he says, if you get good advice. "I always tell people to do what we [eventually] did: Set up a board of directors made up of people who have done what you',re doing," says Adkison. "Everybody has advice for somebody starting a business, but the only advice worth anything comes from people who have done it themselves."