Zynga Shuts Down OMGPOP One Year After Acquiring It For $200M
techcrunch.com
techcrunch.com
| "but most of my team had new jobs lined up
| by the time they left the building anyway."
Edit: To be clear, having 'a job lined up' to me means that they already at least have an offer, rather than just a bunch of emails from recruiters and/or people looking to hire them. It seems really amazing to go from laid off to "have a job offer" in an afternoon. I could definitely see laid-off-to-interviews-lined-up in an afternoon though. Am I being too specific in my reading of this?
Linkedin revenues probably had a nice bump in the past 24 hours.
Game developers are still a pretty tight-knit group. It's not like getting laid off from a Wal-Mart.
Psa: if you're a smart engineer in NYC and you're not being paid market rate, please get a new job now, your equity has a median value of zero anyways. The lowest I've seen a smart junior engineer take at a non startup was 90k, and that depressed salary is sortah compensated by the mentoring learning opportunities at that organization.
One could say the position would be either; Senior Software Engineer or Technical Lead.
It may a little bit of negotiation finesse (or more realistically, holding several offers in hand at once and willing to play them against each other).
A lot of my acquaintances are working at those various Wall Street firms earning about $85k.
Finally, I have a friend who switched to Google NYC after about 9 months at a Wall Street firm (at $85k). Google started him off at $150k. But um, that's Google...
I didn't know people made so much in NYC. I thoughts these $200k jobs were only found in the Californian wonderland of Silicon Valley :-/
I even have a friend who did Computer Engineering (not CS) at college, and found a job involving low-level assembly/C programming for embedded systems. The company said they'd pay him $18/hour for the first few months; and if they liked him, they'd hire him for real at $60k. Phew. (This company is actually in Long Island.)
I'm always bemused by the sky-high consulting rates & salaries I hear on HN. I'm not sure if I live on the same planet...
Seriously though, $60K in NYC is extremely below market for almost any type of programming work. The only scenario I can imagine that happening is if you're writing VB6 Excel macros. Hell, even that in NYC is probably more than $60K.
$85K is also very below market. In fact, unless you're working in a niche that's extremely under-demanded, anything below six-figures I'd consider very suspect. If you have experience with something in demand (web, mobile, data, etc) hitting six figures should be a matter of course, and anyone giving that type of work for below $100K in NYC is ripping you off (or giving you an oil tanker of equity).
Embedded is a different ball game - demand for that type of work is pretty low in the NYC area. If you are proficient in standard enterprisey stacks (.NET, Java, etc) or "Valley" stacks (Rails, Node, etc) you can make quite a bit of money here.
Google NYC pays on the high end, but they are not a huge outlier. Remember that they are competing for the same talent pool as everyone else who wants capable hackers. I've seen plenty of startups and companies play in the mid-$100Ks range.
My email is in my profile. Feel free to drop me a line and I can put you in touch with a couple of recruiters I trust (and aren't slimy).
All I can say about those who make 60-90k is good luck, it's harder to work your way up to the rate that you deserve organically starting at that low of a rate.
let him help you :)
While it's often something of a surprise when you finally do get the axe, you usually have a sense of impending doom, and a feeling that bad things are going down, before it happens. Projects stop getting traction. Upper management stops caring as much about what you're working on. Everyone becomes very apathetic. You get a rash of invites on LinkedIn, and people start updating their resumes.
So, it's rarely a complete surprise, and people often already have some idea of where they're going to go, or are ready to start looking.
When I was working at chumby industries and it was imploding, it occurred to me that somebody could probably write a really good predictor of imminent company failure by scrapping LinkedIn data and watching for sudden surges of activity from people working at the same company.
I'd be surprised if someone (or multiple someones) doesn't already have something like that running, even if just for their own private purposes.
(BTW thanks for Chumby while it lasted. Great product.)
(You're welcome for what bits of chumby I touched. Of course I was just one developer in a team of wonderful developers and hardware designers. It was a great job and a lot of fun. I still haven't decided if we were a bit too late (introduction of iPhone and Android) or too early (explosion in hackable maker devices like Raspberry Pi). I guess a bit of both.
I live in the Denver/Boulder area, and I'm 90% confident that if I were laid off today I could have an approximately equal job in less than 3 months. I wouldn't say I have a new job lined up, but somebody could spin it that way.
Also, I'd imagine people from a well known company like OMGPOP, in a big tech hub like SF or NYC, would have an easier time finding something new.
It's a surreal place.
It's all about working with a range of people who value your skillset, and having a skillset that's valuable to a lot of people in useful ways and not setting off alarm bells, and understanding truly what other companies do (so they know you know what you'd be getting into without a lengthy interview/whatever process).
Giving talks at conferences, user groups, and helping people randomly (small amounts) for free on places like mailing lists builds tremendous goodwill in this arena and demonstrates your mannerisms, knowledge, and community relationships to everyone observing it.
--
On the other side of it, I have a list of people if I know they sound unhappy in their jobs or got laid off or fired, I'd thrust them in front of 3-5 people in front of my network INSTANTLY as I know they're not the sort of people you get by any other means. The golden handcuff type employees.
I ended up accepting a new job offer later that day and rescheduling my return trip. It's still weird for me to think about that.
I definitely got lucky with that one.
Networking and contacts (and I mean legitimate networking) really play a big part in your overall success.
I'm in a large city, but nothing like NYC or the Valley either.
| I mean legitimate networking
Networking and relationship building is huge. I got laid off from my previous $DAYJOB back in Jan '12. I showed up at the office at ~9:30am, got called into my manager's office almost immediately, left by 10:00am, made 2 phone calls from my car on the way home... by ~3:00pm that afternoon I had a new job all but lined up (had to interview and everything as a formality, but the job was essentially offered already).
Why? Because I take networking seriously, get to know a lot of people, participate in a lot of groups, do some public speaking, organize Meetups, etc., and more than a few people in my area know who I am and what my skills are. And I also knew exactly who was looking for the same reasons. So the 2 phone calls I made were extremely targeted, as I specifically knew those firms were looking to hire.
Now it might not always work out that way, but I absolutely endorse the idea that networking is crucial.
Really depends on how small the particular world is. When I was in Hollywood, it wasn't uncommon for a high-level exec to be fired from Paramount one morning and walk into work at Warner Bros the next day. Of course, that business is particularly incestuous, everyone knows each other, and the same people trade jobs the way schoolchildren play musical chairs.
Of course, things are probably a little bit more rigorous in this case. There might be a big talent grab in the wake of mass closures or layoffs -- but it seems unlikely that just anybody walks off with a legitimate job offer in supershort order. Known commodities and highest performers? Maybe. Those with great networks and recruiter relationships? Also possible. Anyone else? They'll get some halo and attention from the announcement, but they're not going to auto-convert that attention into an offer in a few hours. I suspect the part about "...had new jobs lined up by the time they left the building" is a slight exaggeration.
These social games seems so lame to me that I can't think of any reason why someone will even think of building a public company on top of it. You simply cannot meet investors' quarterly demand when your success is built on being "flavour of the month" business model.
I don't have anything wrong against Zynga or its founder and so I don't wish them failure but this should have come as a common sense that they should have stayed private and stayed lean (both in taking VC funding and the number of employees)
This is not an entertainment company.
If you've ever spent time in lower-end casinos, they're pretty seedy. But nobody cares as long as they get their fix. And, of course, "crack house" is not a synonym for a nice environment to consume your quality product.
Even on the engineering side, the clients can often take a long time to develop compared to a normal app. As opposed to using Bootstrap or UIFramework, almost all game UI's are "hand rolled" from scratch, and often have odd quirks in their design that can lead to a lot of extra testing. Games in general, whether poorly made games, or well made games, are a huge sink of labor.
> You simply cannot meet investors' quarterly demand when your success is built on being "flavour of the month" business model
Sure you can -- just look at any company that's in the entertainment business. All of their products, from pop songs to to supermodels to blockbuster movies, have a limited shelf life and require hit after hit after hit in order to sustain the business. They stay ahead of the curve by casting a wide net, having a team that is good at selecting the hits, effectively bringing the product to maturity (like producing an album or movie), and marketing the crap out of it.
Zynga may have made many mistakes along the way and probably got too large to quickly. But they not the first nor last company that got a couple of major hits and were backed to produce more based on that record. Do it well, and you have Pixar. Do it poorly, and you join the massive pile of overhyped one-hit wonders.
To your questions above, my opinions. I'm no expert, just have some experience there.
1) The massive staff is due to massive success initially, then massive management mistakes continually, from the top down the chain. That's not to say there aren't great people fighting the good fight; There are many intelligent and capable people, but there's also a great deal misalignment of interests throughout the organization.
2) I think most of the games are pretty lame as well. I don't understand why Zynga customers pay for the games in most cases, but they do. Millions of them do. Zynga is very good at catering to their audience and giving them what they want but...
2.5) Typically what happens is a studio will operate trying to make the most profit in the shortest time, burning out its users with cheap grabs because that's what the higher ups demand. A lot of people in the trenches love games, and want to make great games, but get mired in the moment and vague demands from on high.
I don't think social games are a fundamentally flawed model. Some of Zynga's own games had massive retention and monetization per user, but didn't scale. I think it's an equation no one has fully down yet.
What portion of people at Zynga genuinely like the games they're making, and what fraction think they're terrible?
I ask because one writer in Hollywood mentioned that she was surprised to discover that the people in charge actually like the dreck they shovel out. Her theory was that having real taste in Hollywood was a handicap to career advancement. I was wondering if Zynga was the same way.
In those, there were many people that liked their job. By job I mean, the challenges, the scale, and environment. I only met a handful that were jazzed up about the game they were working on... and that was usually the most heartbreaking, because they just never had an opportunity to change things for the better as far as game design, or the art. There are two specific people I know as exceptions, that are tenacious as hell, and made concessions only when absolutely necessary. Total respect for them, but they're still pretty beaten down and discouraged.
Intermittently, a lot of people got excited about games. Overall a lot of people derided the games they were making, a lot of the time.
Edit: Thanks for all the upvotes/support. To those who see this as legitimate criticism, really? The OP elaborated on nothing - no constructive criticisms were made. Instead, it just sounds like pure anger and naïveté on my end, alluding to all entrepreneurs trying to make it/who have made it as "leeches" and "near-sighted execs" that have "networks of cronies." Stay classy.
I believe there would exist some analysis/research around this already. For there does seem some evidence of great companies been built by people who were hurt, emotional or egoistic about their shit.
Not sure what your aggressive reply accomplishes; at least OP has sparked discussion to point out a major flaw and source of Zynga's downfall.
So, that type of criticism holds very little weight.
Talk is only cheap if you're lapping it up in bulk from poor sources. If talk were always cheap, advisory boards and mentors would never, ever provide any value. So by all means, throw it away; disregard people based on who they are and not what they say. It's your own loss.
Just have the decency not to mislead people who are looking for guidance with your own cheap talk.
Your parent is referring to perhaps (similar to) talking heads in a way that they get on TV not knowing all the facts or reasoning and state after the fact what should be.
But even if they state "before the fact" there is not a complete record of their thoughts on everything as being vetted as correct (success has a million fathers etc.)
So you can go back and say "see I said this was a bad idea" but what about the other 20 things someone says that you don't have the same outcome? You can just cherry pick. There is a common stock ruse that works this way. You call people up and say "I'm giving you a tip don't buy now". Then next month you call back all the people that you gave "tip a" to but not failed "tip b".
That said there is much to learn from criticism no matter where it comes from or what their axe is to grind etc.
do I need skin in the game to create a histogram? to do multiple regression? to get a hunch that something is foul? judgement and critical thinking have nothing to do with skin in the game. business is not lacrosse.
https://itunes.apple.com/us/app/brabble/id570281083?mt=8
Edited: 5 others. Forgot the Angel.
http://i.imgur.com/AcmcN53.png
While the site is responsive and making the window small so the left menu goes away fixes it, resizing to any amount larger than that results in some of the text being hidden off the right hand side.
Chrome Version 27.0.1453.94 m
neither do the execs, if they get paid anyway. (which was the point)
His comment wasn't aggressive either. It was firm. Zynga's major flaw isn't "cronyism" or "leeches" as far as I can tell; its major flaw happens to be a confluence of bad choices and poor insight; I however, do not know enough to actually constructively criticize the company and its leadership.
Edit: no, that's too mean. But I like people who take risks, and I get defensive when people snicker at failure from their armchairs of hindsight. We should learn from failures, but not rush to say, "he failed, what an idiot!"
To the post below: BKRGB which was an signage platform and ShaiSoft, which sold networking library software. The rest of the details are none of your business sir. I like how you belittle me because my numbers aren't big enough on the Brabble app. I've heard all this type of BS before. Don't listen to me then. Just keep attacking other developers for trying.
BTW, we have a NASCAR running this on June 7th in the Party in the Poconos 400 with our logo on it. Keep an eye out for it. We're just starting.
By the way, I've also made iOs apps that barely get any ratings.
It's interesting how you belittle me because my numbers aren't big enough on the Brabble app. If I had bigger numbers could I criticize then?
Sorry about that. It was uncalled for. Honestly I thought you were just making stuff up. You've certainly done more than most.
Or maybe we could realize that this creates a ridiculous logical fallacy on the level of "only god can judge me". Who decided that the only people who can criticize obvious mistakes, shady behavior and being a downright bad person is literally immune to all criticism from 99% of people? How on earth does even a single person think this is passable logic? I get that being a founder is hard, but saying that people literally cannot criticize founders unless they themselves have started a company is absolutely absurd. I cannot believe you and others would lack the self awareness to realize this...
"alluding to all entrepreneurs trying to make it/who have made it as "leeches" and "near-sighted execs" that have "networks of cronies." Stay classy."
Just saw this edit. I really don't know how you managed to read it like that. But yeah, there you go, just create a strawman, tell others to stay classy and smugly believe you're right and you'll never have to actually deal with the idea that you might be wrong.
I never mentioned or implied that one would need to be an entrepreneur in order to criticize others in this field. And if you are going to criticize others, do it constructively, which the original OP obviously didn't do. Thanks.
Realizing someone is performing or behaving poorly isn't a bad thing at all (it's how we learn!) but sitting on HN declaring that the nebulous "we" needs to "take back" our industry from leeches is absolutely ridiculous. Like the other commenter said, go build your own company! If you truly are more competent, fair, and mindful as a leader THOSE TYPES will flock to you.
It's what I'm doing. It's what many entrepreneurs I know are doing.
Suggesting that we all are free to become executives and take part in the problem may be true, but it doesn't fix the problem or eve address whether one exists.
There's truth in what you say about the system rewarding the lazy. But that's fundamentally because of the stupidity and laziness of the shareholders. There's still opportunity in this turbulent system though to pick winners, and be a shareholder that rewards competence and punishes incompetence.
Absolutely, I agree 100%. Our Democracy as a whole suffers from the same problem. That doesn't imply, however, that the problem can't or shouldn't be fixed by someone other than the shareholders. Our society may decide that it would be a better one with some checks and balances in place to keep shareholders from shooting themselves in the foot.
Note that I'm not arguing, one way or the other, that there's a problem or that it should be fixed. I'm simply pointing out that You can start a company too! and even It's the shareholders' fault may be true statements but they don't address whether the problem should be fixed.
It's kinda cute that you believe that, and are prepared to go to any length to blame immoral behavior on anyone you can find other than the people engaging in the behavior.
Also, beyond the initial purchase of the stock -- which may be well before any signs of trouble -- shareholders can easily be made to have zero power; even the power to replace directors through shareholder elections can be taken away:
http://www.nytimes.com/2013/04/13/business/sham-shareholder-...
"My shares count more than yours", requiring an ousted director's approval of his own ousting, plurality voting which allows directors to remain even when they can't muster a majority... the list of tricks goes on and on.
I am not normally the type to say this, but: in the case of corporate governance, the system is now actually rigged against shareholders. Much larger changes than just "don't buy stock in a company that will later go bad" are needed.
If you're on the bottom and don't like it, then get on top; this day and age that is actually possible. In history prior, you had to be born into the right name or granted a monopoly by the empire or king in order be "financially independent" (or thieve). In the USA you just had to have a great idea and the persistence to get people to buy into your idea.
NOW all you need is an internet connection, some free software, time, and some free fucking education to build financial independence.
Sure there are a lot of hurdles, but if you want to be that executive being paid millions, you can do it - whether you're a programmer, a writer, whatever.
If you don't think an injustice exists, wonderful, you should argue that point. Something like "Stop complaining, because..." Or don't argue that point and don't participate in the conversation. But the endless "stop complaining because I personally don't have a problem with this" is highly annoying.
If you accept the premise that an injustice exists, of what use is it to argue repetitively that one should "get on top", if one has a problem with it? You seem to assume that the OP is saying "It's not fair, why can't I be on top??" when he's not arguing anything of the sort. Not everything is about winning.
Is it possible that you're presenting a clever, sardonic caricature of an entrepreneur, and the joke went completely over my head? If so, you got me! Good one!
I don't accept the premise that an injustice exists. Someone being "on the bottom" isn't an injustice, it's a social role. It's a social role that if someone doesn't like being there, they can decide and act to elevate themselves into a different social role (one with more power? one with more freedom? one with more money? one with no attachements? there's a lot of different social roles in our society - none of them are being done an injustice but by the people that stay within their role and complain about it).
I never said anything is about winning. Everything is about how happy you are, clearly the OP is unhappy about something and all of the words written so far saying "stop complaining, go build something yourself and exemplify the morality you think is right" are totally spot on.
But as a programmer, it's easy to avoid: Avoid buying into risky IPOs. Whee.
Are you a good programmer contesting that the system as-is reduces your pay or your options for meaningful employment with fair pay? I doubt it. If anything it makes it harder for "good" places, which would like to employ you meaningfully at a fair value, to hire anyone-else, increasing your odds.
Now, if you're a good place who wants to hire good programmers and these stupid places compete with you raising your costs, that's another matter, and it really must stink for you... but it still sounds pretty implausible to regulate this problem away. If investors are going to be stupid about throwing around their money at the wrong companies, I expect government bureaucrats to be exactly as stupid about trying to hammer down the wrong companies, and now you've just made the whole process of being a company more risky and capricious for everyone.
The execs get paid well because the owners of those companies assume (rightly or wrongly) that the execs performance determines the outcome of the business. The average engineer working in that company is assumed to not have such power (which is true for a lot of companies).
BTW If any company started holding up salaries of their employees dependent on profit, nobody would join that company !
That's a pretty bold statement. Any particular reason you think that's true? I don't think profit sharing is that arcane of a concept. Unless you're talking about the extreme of no salary, only profit-sharing, in which case, yeah. But that's not what execs get, either.
Freemium does work in the medium term if you can generate enough value in your networks and data as an asset to grow your valuation. You obviously do eventually need to stop recapitalizing and monetize at some point. I would argue that a lot of companies should do this a much earlier point in time, rather than growing without reasonable bounds.
A counterexample to you last point is being a startup founder. For these folks, until you prove your concept to investors and/or go cashflow positive, your salary is completely dependent on profit.
A startup founder is the owner (part or full) and is not a regular salaried employee. Hardly a counterexample...
http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...
And then (I had to dig in the comments) (2) as that column was circulating, OMGPOP CEO Dan Porter supposedly sent the Twitter message "What's so interesting about success is the number of failures who try to ride on your back. Shay Pierce is just one of many..."?
(The message was supposedly at https://twitter.com/#!/tfadp/status/185901564131688448 but this is a dead link.)
What would you want to hear from Porter now?
You would think when you are throwing around that kind of money, they would do some rudimentary research?
How much money was omgpop making at the time of the acquisition?
MP: "FUCK! OMGPOP's drawsomething is the number one game! COPY IT!"
varucasalt.jpg
Legal: "Mark, uh - I don't think we can copy that one"
MP: "WHY?! - We've done it with everything else!"
Legal: "Yeah - but this one's too big, too successful. If we copy the number one game, it would be too obvious."
MP: "How much to buy it? I WANT IT!"
/stamps foot
---
I picture an internal battle around wanting to copy it and realizing that there was no way to copy them without a PR nightmare - so they opted to purchase them for an insane amount... even though that amount was not reflective of their ability to maintain or succeed with future releases.
"They have a huge hit, and no money in the bank. Let's acquire them now, before they raise money, for relatively cheap, so we don't have to sink time and resources into developing a clone ourselves."
Too bad it looks like this theory didn't pan out.
Someone was incentivised (for lack of a real word) to make this happen. I would look toward short term incentives and/or compensation.
Without getting into issues of culpability or "guilt", at a very basic level I can't help viewing the repeating series of these instances as simply being another form of "pump and dump".
They keep happening, because someone (or, a certain kind/role of someone) is making money.
That's probably an overly simplistic way of looking at it. OMGPOP had very little money in the bank but had just gotten a runaway hit with Draw Something. So they were a prime target to take over
Link: http://www.businessinsider.com/heres-why-200-million-is-chea...
If you look at the way business worked in, say, the '80s most companies that became big did so by selling stuff, and having positive rates of return. And the general trend for a company that was growing was for it to maintain that growth for several years, or at least retain that level of business. But today business is far more ephemeral. Revenue can be far more sporadic, monetization can be far more complex, and the valuation of a "customer base" can be much more difficult because of that.
So you can get these flash in the pan products that produce millions of dollars in revenue for a few months but then maybe they go away just as quickly and aren't worth anything later. It makes for a weird market, and it makes for an even weirder industry, especially when things tend to be organized around "empire building" and such-like.
I suspect that in the future there will be more and more of a focus around project-based business services rather than organization-based services. Kickstarter, I think, is an example of this.
Page F-32 in https://www.sec.gov/Archives/edgar/data/1439404/000119312512...
- Michael Arrington
- Kleiner Perkins partner Bing Gordon
- John Doerr
- Fred Wilson
The NYT ("Will Zynga Become the Google of Games?") and San Francisco Chronicle ("[Pincus] was indisputably farsighted in recognizing the opportunity") are also on the list.
Sheryl Sandberg and Business Insider are named as well, but the quotes attributed to them don't seem to be in the same league.
1. http://valleywag.gawker.com/heres-everyone-who-hyped-zynga-b...
To be fair to them all, it reads like a who's who of the VC world from Brad Feld and Reid Hoffman through to Andreessen Horowitz, Softbank, and Union Square Ventures. I'm not sure any blame could be laid at their doors though, it was an exciting and high growth company and that's exactly what they tend to invest in (and what gets celebrated the most around here on HN.. growth > profits, a "startup" isn't really a startup unless it's growing fast and all that, etc.)
But now we've seen. The question is whether we will treat this as a freak accident purely unique to Zynga, or learn something from it. First, though, we need to allow that discussion rather than just saying "just make your own company if you think Zynga was bad." Really?
I vote with my appstore.
For nearly everyone else all the money is made in the first few months after which it disappears into the bargain bin. It seems like social gaming is no different.
I have no idea just how miserable it would have been working at Zynga, but working for a year in order to get three month's of severance doesn't sound too awful to me.
I don't regret working there at all. I just wish the stock hadn't of tanked and the game I was working on hadn't of been a failure =P
That ...
> viral games
.. sounds ...
> and monetization
.. horrible.
Forgive my naivety, but don't these things have to get past a board of shareholders with a public company like Zynga? This isn't just a hindsight-is-20/20 kind of thing; IIRC the general consensus at the time was that it was a risky, ill-advised acquisition for a potential one-hit-wonder company.
If they did have stock options, did they immediately vest upon termination or did they lose them?
An acquaintance of mine who worked for Zynga up until a few days ago spoke fondly of her position and the company's prospects. I issued her a warning months ago. I think it just goes to show just because you have kids/mortgage/bills, etc you should always evaluate who you are working for.
http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...
Does anyone know?
My implementation used javascript, php, and canvas, but I'm considering learning ASP.NET by making this with it. Any thoughts?
I uninstalled all Zynga games and blocked all FB entries as soon as I found out this was a common pattern for them. I also shared that knowledge with my largely non-techie social network so they could see the kind of company they were supporting.
Cha-chin!