Chicago native creates ...
By Sandra Guy
Business Reporter/sguy@suntimes.com
Chicago native creates an empire with games designed for Facebook
by Sandra guy
Business Reporter/sguy@suntimes.com
ZYNGA'S COUP DE VILLES
"I always thought I would end up here [in Chicago] after college and after business school, but it never matched up with where my career was going. I have always considered myself a Chicago person." — Mark Pincus
By Sanddra Guy
Business Reporter@suntimes.com
Every day, some 13 million Facebook users tend to their virtual farms, sowing and reaping crops, buying and raising livestock, in FarmVille. Twenty million build virtual cities with CityVille, 5 million pioneer the West with FrontierVille and 2 million fight Mafia Wars, ordering "hits" on each other and building their "families."
They are playing games created and owned by Zynga, a company created and run by Chicago native Mark Pincus, 45.
Zynga, the biggest social-games developer for Facebook, has about 58 million daily active users worldwide and 250 million players in total, according to AppData.com. About a quarter of the players are in the United States with the rest overseas.
The online game developer has shown the world one way to make big money off of social media. The games are free to play, but players spend real money to advance more quickly through the games or to buy products (such as a $20 tractor) or accessories to dress up their virtual properties. Zynga declines to comment on revenues but The Wall Street Journal has reported that the company made $400 million in profit in 2010 on $850 million in revenue.
Market experts value the San Francisco-based company as high as $10 billion.
Forbes magazine estimates Pincus's wealth at $1 billion.
The only boy among five children, he grew obsessed with Pacman, Ms. Pacman, Pinball and Atari starting at age 10.
"My friends and family joked that I wasted my youth playing videogames," Pincus said. "Who knew it would end up being a career?"
Success wasn't immediate. He started three Internet-related businesses, including one that fell into bankruptcy, before deciding what his dad had always taught him was true: Own your own business, and build it as the house in which you want to live.
Pincus is the son of Ted Pincus, who built his own successful mergers-and-acquisitions consulting firm, Stevens Gould Pincus, and who for years has written a business column for the Sun-Times.
Now, the younger Pincus is getting personal mentoring from Silicon Valley's biggest names: John Doerr of Kleiner Perkins Caufield & Byers, famous for directing venture capital funding to web successes such as amazon.com and Google, and William "Bing" Gordon, former chief creative officer at Electronic Arts, the videogame developer, and now a partner at Kleiner Perkins. Gordon sits on Zynga's board of directors.
Pincus, a new parent with wife Allison of fraternal twin daughters, grew up in a family of competitive game players. And while heeding his father's business advice, he credits his Lincoln Park upbringing and Francis W. Parker schooling with much of his creative success.
"I always thought I would end up here [in Chicago] after college and after business school, but it never matched up with where my career was going," Mark Pincus said in an interview at his father's home here. "I have always considered myself a Chicago person."
He isn't exactly ruling out returning.
"Chicago could make a play for us," he said, half tongue-in-cheek because of his long-standing love affair with the city and Zynga's undeniable growth.
More realistically, Pincus said, Zynga could set up a design studio here.
"If we found the right team, we'd love to start a studio in Chicago," he said, noting that Zynga operates seven studios — in Austin, Baltimore, Boston, New York and Seattle, and two in Dallas. Zynga's 1,500 employees include 1,000 at San Francisco headquarters and the rest spread among the studios and worldwide as the company expands overseas.
Pincus left Chicago in 1985 to get his bachelor's at the Wharton School of the University of Pennsylvania, and his MBA at Harvard Business School.
In 1995, he started Freeloader, a
web navigation pioneer, followed by Support.com, an enterprise software company that went public in 2000, and Tribe.net, an early social network. While doing so, he became an early investor in Friendster, Napster and Facebook.
After Tribe.net went bankrupt in spring 2006 — Pincus attributes it to spending too much time on getting the site up and running and not enough on giving people "cool games to play" — Pincus bought back the company and sold it to router maker Cisco.
By that time, Pincus said, he recognized his "painful pattern" of giving control of his companies to others, a mistake he likens to "death by 1,000 cuts" and being made a lobbyist instead of controlling the business' direction.
"Mark Zuckerberg [Facebook's founder] has talked about building for 'the medium' — the Internet itself — rather than treating the Internet as a channel through which to funnel existing content. Only companies that organically build something get it right and succeed."
So in 2007, Pincus started Zynga — named after his late beloved bulldog — with the intent of doing something organic. The first effort was poker.
"We asked ourselves, 'How do we create the best cocktail party where you and your friends want to be?' " he said. Zynga Poker let players win dancing gnomes, martini glasses and a lucky rabbit's foot so they could be cool at the poker table, he said.
Poker was created to eliminate what Pincus believed to be too many barriers to online game-playing: Friends had to be together in the same place with a complicated controller for Xbox play, and no one was offering compelling game-playing on social networks.
In the process of experimenting with Zynga Poker, Pincus learned that players would pay real money to increase the game's stakes.
On March 7, 2008, Zynga Poker launched the sale of virtual goods — poker chips — so players could more quickly advance to vie against better rivals. The first day's take totaled $30,000.
"We started with $5 chip packages, and then we tried packages for $15, $30, $50 and then $100. No one stopped buying," he said.
"Our poker game is the biggest in the world by any order of magnitude," he said.
With FarmVille, the company attracted a new audience — people who were older than initial Facebook users, and who crave fun and 15 minutes of unexpected play and relief in their lives.
The lesson is that future web success stories will be based upon building the best product experience, Pincus said.
"My mentors — Bing and Doerr — gave me this concept of an Internet treasure. It's the chance we have today of creating something that could matter in a couple more decades — a service that people cannot remember life before and cannot imagine life without."
Said Mark, "With Zynga, I've built a house I want to live in."
By Sandra Guy
Business Reporter/sguy@suntimes.com
How Facebook players get hooked on FarmVille, other Zynga games. | Page 26
al podgorski~sun-timesAl Podgorski
