Why Zynga is Failing, in Charts

Caleb Garling, in an illustrative post on San Francisco Chronicle’s site, explains why Zynga is failing (and perhaps is destined to fail):

One, since its inception, most of Zynga’s revenue was from users on Facebook. If you are a business, and you have tied your success to another business — especially one with aspirations of world domination — you’re setting yourself up for heartbreak. Zynga tried to get people to go to Zynga.com to play — and avoid Facebook taking about a third of every dollar it made — but never really pulled it off. (And frankly, any app developers with big aspirations should take a lesson.)

Two, your attention span. Most casual gamers don’t want to wait to get to their computers to play. In fact, the best time to play games for many people — those with jobs — is between computer time, commuting or waiting for the dentist.

Three, building games for many different platforms is just hard! You have to deal with different screen sizes and technical requirements, not to mention deciding whether certain devices have a demographic that will create a positive return on investment for that particular game on that particular platform. And all the while, individual developers, that can be a little more nimble, eat away at market share for games on each one.

Love the charts.

As for me? I am wary of games (and most apps, really) that are free but target you with in-app purchases. For instance, Real Racing was a great game for iOS, until they decided to ratchet it with in-app purchases.

I only play two of Zynga’s games: Words with Friends and Scramble with Friends.

Rappers Embracing Words with Friends

I am not a big fan of Zynga (previously), but I am a big fan of one of their games: Words with Friends. I usually have at least three or four games going on at once on my iPhone/iPad.

And it appears the game is making a big splash not just with the general public, but with celebrities. GQ has an interview with rappers Big Boi and Fabolous about Words with Friends and how they got into playing:

GQ: So when did you get into Words With Friends?
Big Boi: I started playing ’cause my wife was on it. Her and her friends, they were playing the game on the phone all the time. I was like, “What the fuck is this?” They said, “Just start playing, you’ll get into it.” So then we started playing for a $100 a game. When we started she’d kick my ass. She can’t beat me no more.
Fabolous: I think I just started from that same engineer who brought it into my studio. Then it advanced to the phone, and he started having it on his phone, and we could play each other on the phones. His name is Scribble, actually.

GQ: Do you have a default strategy? 
Fabolous: I definitely play it defensively. When you first start playing you start playing with an offensive mindset, just trying to make words. And as you learn how to play, you get better. It becomes clear that you wanna play on defense, to let other people not get words, and not get the spaces that get you points.
Big Boi: I’m a little strategic but it’s different each game. It’s whatever strategy for me to get my championship belt.

GQ: When you get jammed up with bad letters, do you swap out letters?
Big Boi: I swap it out. I swap my shit out.
Fabolous: I swap it out sometimes. Sometimes. Depending on how close the score is, I might not swap out. I might just try to hold steady. But if you can’t make a word, definitely, swap out the letters.

GQ: Do you have a favorite word that you’ve played?
Big Boi: I think I played ‘zooms’ for like a 107.
Fabolous: If I get over a 100, I tweet the screen shot. But I had an issue where I did that before. I put it on Twitter because I’m thinking that I wanna shit on somebody and show the whole world what I did, but they seen my [WWF user name] and I got so many friend requests that it ended up freezing my account. I can’t even put my name out there.

They also mention a few gripes with the game, such as people taking many days to make a move. I think Zynga fixed this issue, and now automatically resigns someone if they haven’t made a move in two weeks (I still think that’s too long). And if you’re curious, the biggest word I’ve ever played went for 157 points.

And no, unfortunately the handles of the two rappers aren’t provided in the interview. But if you want to play me, leave a comment with your WwF handle, and I’ll respond to your request.

On Early Employees and the Google Chef Situation

A recent Wall Street Journal article caused controversy regarding Zynga’s path to an IPO. Did Zynga have any right to declare that early employees give up their stock options?

The quote below also caused a stir in the blogosphere:

Built into that arrangement [stock options] is the chance that … some very early employees will end up with bigger windfalls than latecomers who contribute more to the company. Many in Silicon Valley cite an early-hired Google Inc. cook whose stock was worth $20 million after the firm’s 2004 IPO.

Zynga attempted to avoid such pitfalls. In meetings last year, Zynga executives said they didn’t want a “Google chef” situation, said a person with knowledge of the discussions.

The Google chef situation refers to an early employee at Google, Charlie Ayers, who made $20 million from his stock options at Google. Does this seem fair/right to you? Well, if you read this former Google engineer’s response, you’ll understand why the chef was important to the company. This software engineer argues that what Charlie contributed to Google on a daily basis was more than he (the software engineer) ever did. It’s a must-read post:

Working at a startup is hard. The hours are long, the stress can be brutal, and there is no guarantee of success. In fact, the odds for a raw startup (which is what Google was when Charlie joined) are very much against you. I have no idea what Google’s deal with Charlie was, but typically you take a pay cut for a shot at the brass ring. Charlie didn’t make $20M for cooking, he made $20M for taking the risk that the company he was joining would fail and that he could end up five years older, unemployed, and with nothing to show for his trouble.

But it is not Zynga’s failure to grasp this basic fact of startup economics that bothers me, it is their singling out of Charlie in particular because he’s a chef. As someone who was there in the early days I can tell you that Charlie Ayers contributed more to Google’s success that I did, and I was a senior software engineer.

Providing quality food to an ever-growing roster of hungry engineers is not an easy task. Charlie and his staff worked harder on a light day than I ever did (or probably ever will). If you doubt me, take a job in a restaurant kitchen some time. Not only that, but the stakes are higher than most people realize. Feeding a few hundred people in a professional setting is not just taking the process of preparing a home-cooked meal and multiplying. If a software engineer screws up, the site goes down. But if a chef screws up, people get sick. In extreme cases, they die.

If I were to point out that no one ever got sick from eating Charlie’s food most people would consider than to be damning with faint praise, but that is just a testament to how well Charlie did his job. Not only did he keep us well feed and free from salmonella, he inspired us. When I said that the best restaurant in town was Google’s cafeteria that was no exaggeration. Charlies food was outstanding, day in and day out. (It still is. If you’re in the Bay Area, do yourself a favor and have a meal at his restaurant.)

But Charlie’s contribution to Google’s early success went even well beyond that. Charlie was a friend and a cheerleader. Everyone at Google got to know him because everyone went through the lunch line, and Charlie was always there making sure everything was ship-shape. And Charlie got to know us, got to know our individual tastes and preferences, and bent over backwards to accommodate them, but never at the cost of compromising on his principles of making his offerings healthy and sustainable, principles he still adheres to. Being fed by Charlie was a privilege. It was inspiring. It was cool. It kept us going.

Don’t tell me Charlie deserved his payday any less than the rest of us.

What a compelling blog post. The lesson? Don’t dismiss a particular employee of a company: they may be doing more to keep the company going than you realize.