What they were bad at was making money…

Things are not going well over at Zynga.

While I always root for companies to succeed, it’s not all that surprising to hear that the company responsible for 1,400 invitations I’ve received to play pretend farming with lackluster visuals isn’t doing well, particularly when they pay nearly $200,000,000 for a company with a history of failures and a poor track record of making money.

A little over a year ago, another app was “on fire” called Draw Something by OMGPOP. It acquired almost 15 million daily active users in 6 weeks. That’s truly an unbelievable figure, particularly because it was a paid app. A bit of analysis by Tech Crunch poked more than a few holes in it’s monetization potential though: people paid a small fee upfront to download the app and in app purchases were “durable”, meaning people could retain their in app purchases (such as color packs) rather than virtual currency like other Zynga games that was “spent”.

But… like a lot of what happens in tech, there was a huge amount of hype with very little meat on the actual bone. FOMO, or Fear of Missing Out, ruled the day. Plus, with so much hype and people engaged, it’s a guaranteed success, right? Where has that not worked out before?

Andrew Carr wrote a great piece recently with some very enlightening insider interviews about the bungled acquisition which has caused Zynga to write down nearly $100 million on the OMGPOP acquisition. The most enlightening quote of all?

“I knew the OMGPOP guys–they were really talented, and really good at making games,” says a former Zynga general manager. “What they were bad at was making money, and they were struggling for a long time.”

The enormous war for talent in Silicon Valley – and the broader tech world – is no secret. Many companies are bought outright by larger ones just to bring in good engineers and developers, with the company purchased being not all that important to the new parent. This “acqui-hire” model is currently being debated in many circles, but it’s clearly not without its major flaws. The biggest flaw has been watching those “acqui-hired” depart as soon as their lockup period expires. Another insider was quoted saying “The cofounders who get hired in will stay for exactly how long it takes to vest in whatever exclusionary clause was in the acquisition. I think there are very few people who are still left who came through acqui-hires…” This has implications, on stock price and profitability, as others see things being run poorly along with hitting employee morale. Says a former designer, “I wish that they would focus in on their own employees a little bit more, because people in there have great ideas.”

When companies focus a bulk of their energy externally, chasing the next hot thing for fear it will overtake them, rather than focusing on creating value internally and building products and services that people are actually willing to spend money for, it catches up with them. Zynga’s market cap at the time of the OMGPOP acquisition was just over $10 billion. What’s a measly $200 million? Zynga’s market cap today hovers around $2-3 billion. One mistake or failed acquisition is understandable, and OMGPOP’s astronomical acquisition price and very real flameout bring a lot of attention; however, it’s clear this strategy has been more the rule than exception, and reality is beginning to set in. I wrote about this problem recently.

OMGPOP did not have a successful track record. The (overpriced) acquisition was mostly based on the skyrocketing (month long) growth of one app and apparently the talent of some of their developers. Some people may disagree with my (and other’s) analysis, saying that talented developers eventually create value, even if they aren’t successful at first. That is completely reasonable. Paying $200 million (for one popular, but fiscally lukewarm success) is not. A great deal of what Apple has built over the last decade has been predicated on acquisitions (touch screen technology, a good deal of the software). Acquisitions are a valuable tool for growth and innovation, when pursued rationally and successfully incorporating them into the company’s already proven innovative ecosystem.

What’s clear is the focus of Zynga has been more skewed towards chasing popularity than creating real value from the inside out.

The Entitled Generation… and Those That Will Work For It

While I’d prefer not to give this young woman any more attention, Suzy Lee Weiss wrote an op-ed in the Wall Street Journal this past weekend entitled To (All) The Colleges That Rejected Me with the byline “If only I had a Tiger Mom or started a fake charity”. I’m sure (and I hope) most of you are already disgusted with some saying “well, maybe it’s a bad title, and she has valid points” It is, and she doesn’t. It is a shocking confession of the most entitled generation in existence, demonstrating perfectly the “Participation Trophy” culture and should be a dramatic wake up call to parents, educators, politicians, and business leaders that years of failed policies, bad parenting, and excuses are coming home to roost. Some chastise the Wall Street Journal for posting such a ridiculous piece or childish whining, but I say kudos. I’m sure they said “People need to see this.” They most certainly do.

Some of Ms. Weiss’ embarrassing rant includes:

  • Colleges apparently told her to “just be herself” – which she feels is a lie. Newsflash: just being yourself is not a skill that will earn you admission to college and no admissions officers leave their advice at that. Don’t be fake, but impress them and show them why they want you.
  • She would have gotten in to her dream school(s) if she had just faked diversity by wearing a headdress or claiming 1/32nd something like Sen. Elizabeth Warren
  • Taking stock photos of “scooping up” a starving African child would surely have wooed admissions officers
  • If only she had a coffee pouring fake internship, she would have been deemed a top candidate
  • Her parents didn’t push her hard enough and make her do activities she hated, so now she’s an undesirable undergrad (Jeez Mom and Dad, you ruin EVERYTHING!)

Anyone with any sense sees right through this pathetic diatribe – except those that live this life. It’s clear Ms. Weiss has zero drive, no ambition to succeed, no will to challenge herself, and a humiliating lack of perspective made all the worse by a bit of investigation Caity Weaver at Gawker that shows her parents have a luxury home featured by the Wall Street Journal. Life has clearly been a struggle for this privileged middle to upper class suburban child. The rude awakening she feels she’s just experienced will pale in comparison to life outside the comfortable nest her family has provided.

This generation, spanning Generation Y to the Millennials, is in for a rude awakening across the board due to what they’ve been told by their families, teachers, politicians, and corporations promising them everything without ever really having to work for it. From participation trophies to classes without “F’s” because of how it makes students “feel”, many kids and young adults feel so dangerously entitled, it’s terrifying.

Which brings me to one of the best quotes I’ve read in a long time:

Hard Work

Nothing is guaranteed. No one owes you anything. There is no “safe” path. Life isn’t fair. The only way to give yourself the best shot at success – whatever that means for you – is to work harder than everyone else. Make your own luck. You’ll be surprised at opportunities that suddenly “appear” because of how hard you are working, how people treat you differently and want to help you on your way, and how success begets success. One thing I can promise anyone who feels how Ms. Weiss feels is that there are countless others around you willing to work so much harder, day in and day out. Those that will work for success will earn it. Those that feel entitled, never will.

I don’t need to add much commentary around the college admissions process, because that’s not really what this young woman was even talking about. This rant was a young person waking up to a reality she had been shielded from and her violent reaction to it. I guess it isn’t even a violent reaction though – it’s just about as much effort as she could muster, a 250 word gripe fest passively complaining about everything and everyone except her own lack of ambition and motivation. Note that 250 words is just about a quarter of a standard English class essay… You can almost hear her sigh with exhaustion at the end of it. Of course the colleges admissions process is flawed at some levels, but by and large, students demonstrating drive, ambition, and an interest in the world around them outside social media and reality television will stand out.

I hope her parents are as embarrassed as they should be. If they aren’t, the only hope Ms. Weiss has a reality check outside her parent’s Wall Street Journal Luxury Homes featured nest.

The implications for our society are real. An entitled generation unwilling to work hard and frustrated by other’s success around them does not bode well for anyone.

I do see some hope, though. Organizations like the Young Entrepreneur Council are growing quickly with young adults looking to make their mark on the world in business, philanthropy, education, and the arts. Organizations like KIPP are teaching teenagers about hard work and the need to educate yourself. More needs to be done though, particularly from parents.

Let’s hope parents, teachers, politicians, and corporations are leading young adults in the direction of the YEC rather than the line of thinking that leads to this the spiteful rant of an entitled teenager.

Start Something.

Start Something. I think this is an amazingly simple challenge that can have profound implications for our economy and society at a macro level and our overall wellbeing and outlook on so many things at a micro level.

Start something, anything really, as long as it something in which you can make money. You don’t have to go start the next multibillion dollar business empire, next Facebook, or even the next hot gaming app. Why? There are a few main reasons.

Start Something

  • Experience. The experience of accomplishment (or failure) that is yours. Working for others, for companies, will mean that your successes and failures are always on on other’s shoulders – your boss, your coworkers, your direct reports, and the company’s shareholders. When things go well, or poorly, generally, the accolades or blame get spread around, even if it was virtually all because of you or in spite of you. Even if it was your idea, your execution, and even your job on the line, with almost virtual certainty you relied in some way on company resources, capital, prior experience, connections, reputation, and personnel.
    It’s an indescribable feeling when you can look at something you made or a service you provided and know that someone paid their hard earned money for it.
  • Ownership. If I were to say “lemonade stand”, most of you would likely think of young kids selling lemonade in their front lawn. It’s a fantastic experience as a kid, mostly because it’s all profit for you, but to make something yourself, then watch as people give you money for your time, effort, and product.
    What I’m speaking of isn’t vastly different – maybe you have some artistic or crafty talent, you’re really good with computers, or perhaps could be a freelance personal trainer to help friends or family get in shape. Whatever your talents, use them, even if it’s selling hand made candles out of your house or apartment. The feeling of ownership is one our society is lacking on a growing level. Knowing that you can build something or offer your skills or talent is a powerful feeling, and one that you will never fully realize working for someone else.
    This doesn’t mean you have to quit your job and be a starving soap maker. I’m merely saying start something that is yours, even as an occasional activity at night or on the weekends, to really get that amazing feeling of ownership.
  • Opportunity. Do you notice how those that are successful just seem to have the right opportunities fall into their laps? I promise you, that isn’t true. They are out there working their tails off every day, whether it’s building a business as an employee, as a partner, as an owner, investing in others with their time and resources, or networking and proving their worth as a person with whom others would like to do business or just simply be around.
    You’ll be surprised at the opportunities that begin to present themselves when you begin to put yourself out there.
  • Understanding. There’s a great deal of hostility towards business owners these days. Walk a mile in their shoes, even in your own small way, and begin to understand things in a new light.
    Certainly negligent or malicious business owners deserve the scorn they receive, but the large majority of business owners are men and women who wanted to build something of their own, hire a few employees, and make their own way in the world.
    Daymond John recently said “Being a boss is this: Your employees don’t like you. Your family doesn’t think you’re doing enough at home. You share the success with everyone, and the failure is yours alone.” It’s no cakewalk, despite the widespread perception.
    Business owners are also the ones who create jobs – no one else.
  • Economy. That is a perfect segue. New businesses, new products, new services. These drive us forward. The beautiful thing about starting something is it’s not a zero sum game. Think about GoPro – they created an entire industry around high quality video cameras on the go out of virtually nothing and destroyed no other businesses in the process. This results in more jobs and new opportunities others had never imagined.
    We need people who are willing to take risks and grow this economy. Status quo is unacceptable.

Start something. Anything. Do it for the experience and fun at first, then grow. Get to a point where you are ready to start something great. Something that will have a real impact on the world. Don’t worry about changing the world with your first go – doing it at all is more than 99% of people. As you gain experience, aim higher than a flash in the pan or a quick buck. It will be so much more rewarding than all your past experiences combined.

Please don’t misconstrue this challenge. It is vitally important that people start and continue efforts to help those around them, their community, and those that deserve our assistance. Another disclaimer that must be said: anyone who starts something is likely going to rely on the help of partners, employees, investors, or family and friends at some point. That does not diminish the points made above, and if you are fortunate enough to start something and receive help from those around you, be sure to recognize it.

Get it done. Period.

Of all the things that have been most surprising in starting a business, I think the lack of interest in earning new business or retaining existing business I’ve experienced from a number of vendors has to take the top spot. It also makes me appreciate vendors, or companies I am a general customer of, who don’t just do the bare minimum, but go above and beyond. In a world of low-touch interactions and poor customer service, any business has an easy shot at standing out from all the rest. I came across this quote recently and was struck how many different ways it applies to being successful in business. It also reminded me of how much I love companies that I work with that I know will just get “it” done. Whatever it is. I know I can trust them to get it done.

Be A Good One

“Whatever you are, be a good one.” Abraham Lincoln

  • If you are starting out as an assistant, be the best assistant there is. You won’t be an assistant for long.
  • If you are in charge of new business, don’t let anything or anyone slip through the cracks or feel like they don’t matter. Trust me, you’ll be at the top of their mind anytime they have to make a decision related to your industry. If they can’t choose you for whatever reason, be it price, timing, etc., they will recommend you to their contacts or network. You won’t be in charge of new business for long, because everyone around you will see how much potential you have to get things done and get them done right. You’ll be in charge of all business, operations, or the company.
  • If you are a customer service representative, each customer should feel like once they call you, you will take care of their problems on your side of the fence. People are way too busy, all the time right now. If a customer calls you and says “I have a problem.” When they hang up, they should feel like 1) it’s resolved or 2) you will personally see to it that it is resolved.
  • If you are a sales representative, don’t make your clients or customers work to give you business. This should go without saying. If you make them work for you, you won’t be a sales representative long – you won’t have a job or, if you are the only representative, your business may fail. If you work your tail off for them, you won’t be a sales representative long – you’ll be in charges of sales, or the company, soon.

See a pattern?

I strongly encourage you read this article called the $4 Million Complaint Call. In a nutshell, one customer named Bob required an enormous amount of help with a software package, including basic training on how to use the computer itself. While some at the company encouraged the CEO to give up (“We can’t AFFORD to help him – just refund his money and move on”), he didn’t. Six months later, a call came in out of the blue with a new company requesting to standardize their systems on this company’s platform. How did they know they should select this company? Bob was brought on to their team a few months earlier – he said there was no one better to go with.

One final thought: things go wrong. All the time. If something can go wrong, it will. Maybe not now, but sometime soon. Don’t lose yourself. Don’t start cutting down people around you. Just get it done. Be the person that people want to have on their team, as a partner, as an employee, as a boss, or as a friend. People should know that if you’re involved, you are so good, whatever needs to get done, will.

Whatever you are, be a good one. Get things done. Period.

Everything else will fall into place.