If you bounce from project to project and have a hard time focusing on just one, listen to this interview with Greg Thomson.
Lack of focus is what kept his previous businesses from reaching their potential. Once he learned how to work with his innate curiosity (not eliminate it, but harness its power), he made Tall Tree Games into a hit casual game company that generated $6+ million in its last fiscal year.
Listen to this program to hear how he’s doing it.
Greg has been developing for the Facebook platform since it first opened in May of 2007. In the last three years, he has lead the development and release of more than 20 Facebook applications that have each reached over 1 million users. In 2008, Tall Tree Games developed and released Yoville, a virtual world which was later sold to Zynga. Among Greg’s many contributions to social gaming was the pioneering of offer rewards in 2007, which account for up to 60% of revenue for most social games.
Three messages before we get started. If you’re a tech entrepreneur, don’t you have unique legal needs that the average lawyer can’t help you with? That’s why you need Scott Edward Walker of Walker Corporate Law. If you read his articles on VentureBeat, you know that he can help you with issues like raising money or issuing stock options or even deciding whether to form a corporation. Scott Edward Walker is the entrepreneur’s lawyer. See him at WalkerCorporateLaw.com.
Do you remember when I interviewed Sarah Sutton Fell about how thousands of people paid for her job site? Look at the biggest point that she made. She said that she has a phone number on every page of her site because, and here’s a stat, 95% of the people who call end up buying. Most people, though, don’t call her. But seeing a real number increases their confidence in her and they buy. So try this. Go to Grasshopper.com and get a phone number that will make your company sound professional. Add it to your site, and see what happens. Grasshopper.com
Remember Patrick Buckley, who I interviewed? He came up with an idea for an iPad case. He built a store to sell it, and in a few months he generated about a million dollars in sales. The platform he used is Shopify. If you have an idea to sell anything, set up your store on Shopify.com because Shopify stores are designed to increase sales. Plus Shopify makes it easy to set up a beautiful store and manage it, Shopify.com.
Here’s the program.
Andrew Warner: Hi, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How does a bootstrapped entrepreneur revolutionize the way the game makers profit online? Joining me is Greg Thomson, the founder of Tall Tree Games. He started developing for the Facebook platform when it first opened in 2007. To monetize his apps, he pioneered a new revenue format called offer rewards. In 2007, he created YoVille, the hugely successful virtual world which he sold to Zynga. His current roster of apps includes FishWorld, which according to Facebook has 925,000 monthly active users.
Greg Thomson: Thanks for having me.
Andrew: I probably could’ve just said that FishWorld has a million active users, but I figured if I said 925,000, it would nail home that this a large number. It’s not just a million. I mean, it’s not like a quote unquote million. This is real. You guys are huge.
Greg: It used to be larger, actually. FishWorld is actually a really interesting case for us. We’ve tried a number of different applications recently, some have worked, some haven’t. But what we really decided to do was to focus our efforts on FishWorld. What we found was just the way that the platform was changing, our daily active users are down. Our monthly active users have gone down. However, by focusing our efforts only on the one application, we have been able to get our revenue up every single month for about the past five months. It was one of the situations where from the outside the situation looks pretty bleak, that it was going down. Whereas internally, what we found was the users that pay are still around, and the users that aren’t are going away. In a roundabout way it’s actually decreased our costs and revenue is up. So we’re actually pretty happy with that.
Andrew: Speaking of revenue, before the interview, you and I talked about revenue, you said you were comfortable talking about it in this interview. What are your revenues? How much are you guys bringing in?
Greg: I’ll kind of go back, of recent, we try to not publish the numbers for the last six months or so. In the first year, we did about $3 million. Second and third year, we did around between six to seven million dollars each year. Now, that also includes the sale of YoVille in that one year.
Andrew: I see. Second year, is that 2008?
Greg: Yeah. Like I mentioned before the interview, year ends, our corporate year-ends are off.
Greg: It’s very difficult to kind of say exactly because ’08 really encompasses ’07, so. It gets a little complex. We’ve been doing it for, what, three and a half years or so. I’m kind of including a factoring in from ’07 to ’08, ’09 to ’10, and then we’re in ’10 to ’11 now.
Andrew: You guys are in ’10 to ’11, so when you say ’09, ’010, what was the revenue for that year?
Greg: That would’ve been about $7 million.
Andrew: The $7 million, okay. Let me ask you something. Why is that, why is it that some companies don’t use whole years as their fiscal years? Why don’t you go from January to December?
Greg: I wish we had. When I incorporated the company, I happened to have incorporated in September . . .
Greg: . . . we just naturally made that our year-ends, which I really wish we hadn’t. We could’ve made it December, but we’re incorporated in Canada, Ontario to be specific. I don’t know if that’s the same as in most states, but at least with ours we had the choice of setting a corporate year-end and that’s what we decided to do. I regret it to this day.
Andrew: Are there any benefits of having done it that way?
Greg: I don’t know of any benefits.
Andrew: Okay. All right. Because as I understand it in the U.S., you can say we launched in September but our year-end is still going to be December 31st, and then we’ll start over in January. Every once in a while I see a company that does things the way that you did, and I never asked the question. Now I see.
Greg: It’s been inconvenient. That’s what I can say for sure. I wouldn’t recommend it unless there was a really good reason. In our case, we just didn’t. I know my accountant what we would like to do. I thought does it make really a difference. Well, it kind of sucks especially when I found, I paying myself. Since the year-ends are off, you can’t have a real way of saying note, January to December, this is how much we made. This is how much I want to pay out for myself, and therefore that’s how much I’m going to claim on my taxes. It makes things quite difficult because you’re dealing with two different year-ends.
Andrew: What is your background, what were you doing before this?
Greg: I guess it probably kind of goes back about nine years ago or so. I was in first year of university taking computer science. I always wanted to do something, so I wrote a spam filter that integrated into Outlook. At the time there, I believe Twitter spam filters were then called “spam killer” which ultimately ended up being purchased by McAffee. The second one, I forget the name of it. At the time, I was the only one that integrated into Outlook, and that was kind of our, well, I guess that was my thing. By the end of the first year, I think I had done about $80,000 in sales. Of that, probably my expenses were maybe around 20, $30,000 of that. I was pretty happy. I thought I can go back for a second year, or I can just see how this all goes. I thought if I needed to go back to university, I could always go back. I decided not to. After the first year, I just kept working on . . . the program was called Inbox Protector. From there, just did a number of different, tried a number of different startups. All of the same company brands, it’s not like I went out and got financing and so on and so forth. It tried products. I’m sure a lot of your audience is in a similar boat where you try something, it doesn’t work, you kind of move on. In retrospect, I realize now that I probably didn’t give a lot of them their fair dues. I’d work on something. I kind of hit some bumps in the road, normally right after I released it. I would be like, “Okay, whatever. Not going to give it a chance. Hey, maybe this other great idea is maybe what’s going to be the silver bullet.” What you come to realize is that it is never that way. You can always look at the next idea as being the one that’s going to be easy to monetize, easy to get traffic. No, it’s really just the hard work that it takes. That’s one thing I wish I had realized earlier.
From there, it’s . . .
Andrew: Actually, let’s stay there for a bit. I told you before the interview that I’m such a fan. I’m so curious about your business that I’m probably going to want to spend forever on the early part of the business to see how you got here. You said that you probably shut down a couple of projects too early. Can you give me an example of one project that you launched and shut down maybe earlier than it should have been shut down?
Greg: Yeah, there’s one I called Net Operator, which at the time there was a service called Live Person which is still around but they actually went and changed their business model around. It was the idea that when visitors come to your websites, you can see them in real time, you can initiate chatting, and so on and so forth. At the time there was Live Person and I believe there was on other, Live PHP or something like that. I thought, you know what, here’s an opportunity. I can do it. I’m a one-man shop. Even if I can’t capture a huge portion of the market, I could still end up doing pretty well. I released. It all worked. There was a few little bumps here and there, but nothing too major. Just didn’t give it a big enough push. I kind of released it. Nobody came, surprise, surprise. I tried a few things here and there. Probably within a month or so, I was, maybe this is a better idea, maybe this is a side project that I can do, which in a roundabout way maybe I can catch some users there maybe I can funnel them back. It was just a really deceptive way of fooling yourself into thinking that you’re actually moving forward, where really I should have just focused my efforts on it. In retrospect, I think it could have happened. There was some good potential. I probably had, maybe it was 10 paying people at the time. I wasn’t actually charging them. They had given me their credit cards. I hadn’t billed them yet because I didn’t even have a way to bill them. It was one of those situations where I go, ultimately people are willing to pay for, I just didn’t give it the just due that it deserved.
Andrew: You know, I talk to a lot of entrepreneurs here who had previous companies that they launched, they tested, and within weeks, sometimes within hours, they said it doesn’t really work. Actually maybe hours is an exaggeration, but no doubt they launch and they move on very quickly. They say that’s a virtue. I wonder, like you, sometimes. Would they have been able to make this into a successful business if they stayed at it? How do, what do you think about the idea of launching, testing, and moving on?
Greg: The hours thing I kind of laughed at because I’ve been there. Maybe you give up after a couple of weeks, but it’s normally within the first hours of my experience where you’re kind of like, “Oh, this just didn’t have the result that I wanted.” In my personal experience, I can’t speak for other people. I mean I get letters that they failed fast kind of thing. It’s great, but I guess ultimately what decides whether it was really a failure or not. Because you’ll have a whole bunch of people that you talk that go, “Oh, you know what we’re just about dead. It wasn’t going anywhere, and lo and behold, miraculously it all worked out.”
I think that there are a lot of people that, especially if you’re [inaudible 0:10:34] developer, and naturally I’m interested in developing things that are new. I don’t like sales. I don’t like marketing. I don’t like working on the same project that I just potentially six months are year working on already. I would like to be working on the next great thing. I guess that’s where it’s easy to look at the product and go, “Oh, this isn’t going anywhere. I really should maybe try something better.” Whereas I think if you just keep on hammering on the same idea, at least in my case, I can’t speak for other people. But I would’ve ended up being in a better situation I think, earlier on and potentially had a company to sell.
I look at Albert Lai, who’s a good friend of mine. I think he’s a really good example where, I look at BubbleShare, which is a company that he sold. I don’t the full history of BubbleShare. But I look at that and I go, if that was my company, there’s a good chance that I would’ve been, “You know what? People are sort of adopting it. Not as fast as I really want,” and moved on. Whereas Albert, I mean Albert is naturally just sort of a hustler, and he just working on the backend to try to get new users and ultimately sell it and kind of get a deal going that way. I think that there’s a lot of people just give up too early and don’t really realize the value of kind of giving a product its time.
Andrew: Albert, yeah, he was one of the early interviews here on Mixergy and BubbleShare is a photo sharing app, makes it dead easy to share photo. He built it, he sold it, and the company that bought it recently shut it down. He did have a good hit with that, an incredible hit. Let me suggest this. When I talk to Sandy, the co-founder of Meeboo, she said that . . . what I got from her actually was, they launched a few different companies and gave it the Meeboo name. It wasn’t until they hit on this chat system that became the Meeboo that we know today, that they said, “That’s it. We’ve got to quit our jobs. We have to focus on this full time.” In talking to her, it seemed to me that there wasn’t any financial rewards that made her say, “Yes, we’re making so much money we have to quit our jobs.” There wasn’t any user acceptance necessarily that said black and white, you have to go with this. There was a passion. She got into it after trying lots of different things. She said, “I’m so in love with this that I’m willing now to continue even if there isn’t a business, even if it’ll take me forever to make this into a business.” Is it possible that the same thing was happening for you? That you were just kind of feeling around and saying what do I personally love and what does the world love? If we find something that we both love, then I’m willing to go in there all the way.
Greg: I think that’s a big part of it. It was my recent success in Facebook and whatnot that’s slightly different, but I was actually working on a product right before that called Demofuse, which I can get into the talk about later. But there’s a better example, where, yeah, I guess there’s the, is it user acceptance or is it really entrepreneur acceptance? Because I’ve worked on a number of products which I go, “Wow, this could work out really well. There could be some interest in it.” Then I go, “If users use it, well then that’ll be enough motivation for me to want to keep on doing it.” At the end of the day, it just doesn’t work that way because users don’t flock to something before it’s good enough. Now, Facebook has been the exception to that, but it’s, in most products, I would say that, in the case of Meeboo, I don’t know the story exactly but I am going to guess that is ultimately where the users may have loved product one or product two just as much as product three. But it’s naturally the desire to keep on pushing forward and forward is ultimately what ended up making them a success.
I think that’s in my experience also, coming back to the Net Operator where I basically based it on a lot off of Live Person, I realized that cloning something is a really crappy way of making a company. Not cloning something, but even basing something off an existing model. It’s a lot easier to get excited about coming up with a new idea than basing something off an existing idea. My really came from a point of, okay, so you based it off this idea. Naturally, if this company’s successful, odds are they’ve been around for six months to a year minimum. They’ve probably had more developers, they’ve had more time to refine the product, and there’s that sense that I can come in, I can get the basics down and I’m going to be able to maybe dethrone them or whatever the case is. It’s really easy to get discouraged in the beginning because your product not as good, you have no customers. Often it’s just a small team.
At least from my perspective, I didn’t have the [inaudible 0:14:57], you know, I’m going to take this over and I’m going to rule this market. It’s more or less you kind of sit and you go, “Okay, what do I actually have here? I have a worst product. I have no customers. I have no money and it’s just one or two people doing it.” Whereas if you’re actually coming up with something new, you still feel that there’s something you can change and there’s still potential, which you don’t know. And to me, it’s always the unknown potential which excites me. Not going, “Okay, well, there’s this exact market. I just need to capture 10% of it and this is how we’re going to go about doing it.” That has never really done it for me.
Andrew: When I did research for this interview, what I saw were a lot of blog posts that said that FishWorld was inspired by, or very close to, Zynga’s games. Isn’t that true? Wasn’t that a situation where you said . . .
Andrew: It was? So, sometimes you do, you can clone and have a hit that you’re passionate about, no?
Greg: Oh, absolutely. There’s many examples of that. FishWorld, I guess you can look at Tall Tree Games as it’s a little bit different than some of the companies that you’ve interviewed. Because something like Facebook itself, Facebook is a one product company. Whereas somebody like Zynga, a lot of these Facebook app developers, you have multiple different products. You just happen to have them all under one umbrella. There’s a big difference in that because, yeah, look at YoVille which we released. That was not really based off of any virtual world. Yeah, is it similar to the virtual worlds? Yes, but I also made a point to not play other virtual games. Any similarities that exist now are, I mean I don’t control YoVille, and hadn’t for a long time. It’s completely possible that that’s something that Zynga has done or whatnot. But, it came to a point with FishWorld, where we go, “Okay, what are we going to do?” The fish genre hadn’t been done. I felt that there was a lot of potential there. The dynamics, well, yeah, you do something that you know is proven. You look at any Facebook game that comes out. It’s kind of built on all the previous license. It’s been an evolution. Obviously a lot of people get into Facebook now, kind of see games as this. There’s often a primary currency, a secondary currency, now credits, but you go there . . . I remember in the beginning when the first person was like, “Hey, you know what? We can actually use the request to invite friends to the game.” It’d be like, wow, that’s a fantastic idea. It took I think about two to three days for that happen. I forget exactly the app that did that, but it was kind of, wow, that’s insane, free thinking. It exploded and obviously everybody did that after suit.
In the case of Zynga, you go, is it based off of Farmville? Well, I would say, no. I would say FarmVille’s based off of Farm Town and Farm Town was actually based off of YoVille, in a roundabout way. If you actually look at the avatars in Farm Town, they’re eerily similar to YoVille. They’re a little creepier looking but very similar. They actually cloned a lot of YoVille features thinking that’s what made YoVille popular. Then when Zynga ended up cloning Farm Town with FarmVille, they actually got rid of a lot of the YoVillesque features, which Farm Town thought would make it popular and just boiled it down ultimately to the farming part. There’s no multi-player version. There’s no real-time multi-player version.
Again, it’s an evolution. So in that particular case, going back to the original thing you were saying, there is value in sort of taking existing ideas and saying, “Wow, we know that works.” Or we know that this company allows you to import your contacts via Gmail kind of idea. Well, that’s great and there’s nothing wrong with doing that. It’s in case your full company is based around, we’re going to overtake this market leader. I think, at least for myself, it was a lot more discouraging when you finally release your product and you’re like, “Okay, yeah, we haven’t disrupted anything. We’re just a small fish here.” Now it’s no longer the development that’s going to get us there, it’s actually the sales and marketing. Now, we’re playing on a total level playing field with them except we’re at a huge disadvantage in the sense of almost everything . . . by level playing field I mean, you’re both in the same market but they’re just way up here and you’re down here and you’ve got to try get up there. That’s way less exciting of you being here with nobody else in that same field, at least for me it is.
Andrew: Okay. Let’s go back in time, and then we’ll continue to how we got here today. Inbox Protector, how big did that get?
Greg: Oh, I think I may have sold about 15,000 copies.
Andrew: Okay, and how much per copy?
Greg: About 30 bucks a pop.
Andrew: Thirty bucks a pop. Why did you decide to stop?
Greg: The market got flooded with some really high-end spam filter like Barracuda. In the beginning, I released this software and I didn’t know how to sell software. I had written it. So I decided to go to the download sites, like download.com, and I submitted it to all of those. That would’ve been, what, eight or nine years ago, somewhere around there. It didn’t really have a huge effect. I remember the first day I got a sale. I was like, “Wow, this is awesome.” I think that was after like 20 downloads. But it took a little while to get 20 downloads because there’s no good reason for people to download it because they weren’t actively searching for spam filters on these download sites.
Ultimately, what I came to realize is, hey, the world of pay-per-click. At the time there were a lot more providers than Google AdWords. AdWords wasn’t even the big player at the time. I don’t recall if it even existed at all. I think it may have, but there were a lot of smaller ones which . . . so I think I was managing about seven different accounts. At the time, I think the minimums were $0.01. I was able to get clicks from anywhere between $0.02 to $0.10. I think my breakeven was $0.12 at first. Basically, every person that came in, $0.12 that was the highest I could pay and I was doing great. Over time, I was able to get up to $0.17 a click, but that’s kind of maxed out at $0.17. What ended up happening is you had people at Barracuda spam filter, who were selling actual serious hardware who were paying upwards of $0.90 or $1.00 a click. The moment that it got past that threshold of around $0.15, it just no longer made sense for me to keep on doing it. I was ruled out of the market by virtue, I guess, of staying small. I had good timing in the beginning, where I got in there early .I just didn’t scale the company to be able to take advantage of the higher pay per click.
Andrew: I see. So as soon as acquisition costs got beyond your target, that’s it. You couldn’t continue with the business. Why didn’t you evolve the product or find ways to sell it for more money?
Greg: I think I got into a rut where I built a business around pay-per-click, and that worked out great in the beginning and you kind of stagnate on that. You sort of just focus on what are more ways I can get pay-per-click? How can I decrease my cost of acquisition in pay-per-click? How can I maximize them on the other side? When that all kind of got to the point where it was breakeven for me at best, I didn’t really have any infrastructure to fall back on. Nobody was linking to where I was. I wasn’t really focused on getting reviews. I wasn’t doing any of that type of stuff. In retrospect, if I could go back, I would have focused on pay-per-click again, but then immediately after I set that up, I really would then have worked on actually, I mean, getting a lot more say Google traffic, a lot more blogs linking to it, just general word of mouth type stuff which I never focused on. I always focused on the core advertising. I was pretty short sighted with that. Lesson learned.
Andrew: I see. All right. And you brought in about half a million dollars in revenue from it, right? Pretty damn good lesson. Net Operator, how tough was it to close that down or to move on past it, considering that you were a guy who had achieved success, who is, I’m sure, known to your friends as successful Internet guy? How big, how did that play in your decision to shut down Net Operator?
Greg: I’m going to disagree with actually the point that you just made, whereas I wouldn’t classify myself as successful Internet guy, because I think there’s also a big difference, at least where I live, is there really is no scene. It’s okay, people go to their jobs, and okay, I happen to work with computers and that’s just what my job is. I’d say the majority of people that I talk to think that I am Facebook, which is ridiculous, but there’s just that concept. They have no idea. Okay, so writing applications for Facebook, they don’t even have, I mean, again, there is a number of people that I talk to that don’t even have Facebook accounts. Now, I’m not talking about the younger crowd, but I mean for example getting audited. I got audited not that long ago. The lady has never used Facebook, so trying to explain even the concept behind what I do becomes really difficult. There’s not that same sense of, wow, this is what you’ve done, this is what you’ve accomplished. It’s, okay, you actually work in it. It’s a great theory, but will it pay your mortgage? That’s kind of the extent to it. That didn’t really weigh into at all when coming to shut down Net Operator. It was more or less, Net Operator, it just wasn’t going anywhere. I think I caught up in the next idea thing thinking, okay, let’s just put that behind, let’s just let it sit on the back burner, see where it goes. I didn’t really shut it down as much as started working on the next thing. By virtue of working the next thing, server, get a server problem, then start, instead of fixing it, you just kind of go, “Eh, nobody’s really using it anyways. I’m of shutting it down.”
Andrew: What was the next thing?
Greg: Then the domain eventually expires and then that’s. . .
Andrew: I see.
Greg: . . . it’s just down hill from there.
Andrew: What was the next thing after Net Operator?
Greg: I don’t know. I’m trying to go through my mind. I did another site called Price Totaler.
Andrew: Price Totaler?
Greg: Yeah, which was basically a comparison shopping site mixed with coupons, etc., etc. That would’ve been, jeez I don’t remember how long ago that would’ve been, but a while ago. Again, gone through to the end. That I actually spent a fair amount of time on. It started to get traffic. I don’t recall the numbers exactly. How that all fell apart, I don’t remember that story exactly either. Again, it’s one of those situations where it’s never a deliberate leave it. It’s a okay, well, I’ve set this up. Maybe, it’s not like I didn’t give any effort. I kept on updating things. I kept on doing coupons. There’s a huge maintenance aspect to it, which I didn’t really anticipate. I was thinking, okay, you know what, maybe, community driven, they’ll submit coupons. That happens eventually when you have a community. Without a community, it doesn’t happen. Had the beginnings of a forum, soon on and so forth. Didn’t have the traction I wanted, and, again, being naïve enough to think that build it and they will come still. They just obviously didn’t come, didn’t give the time and then went on to another project.
There’s never like that abandonment. At least in my case, it always started off as, hey, maybe I’ll spend 10 hours a week on this new project. That will kind of keep me excited still as to what I’m doing. I’ll dedicate the time, and before I know it, by week two I’m already dedicating 40, well, not 40 hours a week but, 60 hours a week, 70 hours a week to the next project and kind of abandon the first one. So it was never done on purpose, but it was always the end result.
I would say that’s one advantage that somebody, I don’t want somebody that has. . . well, a, a partner, that’s a huge thing. Because it’s really if you go in with somebody as a partner and you’re actually doing an idea, it’s a lot harder to persuade someone else to just abandon that idea. You have to convince somebody else. Then raising money, even if it’s a small amount of money, I think that’s actually a pretty good idea, because even if you convince someone to give you $2,000, at least it kind of keeps you on track. Just saying, okay, because the last thing you want to do is go to the person and be like, “Yeah, that $2,000 you gave me? We’re actually just not even going to do this site anymore.” It kind of gets you through those dips that you go, okay, we just got to keep moving forward through this. The more stuff they can kind of lock you into going into the same direction I think is a great thing.
Andrew: How did abandoning projects impact your confidence in your abilities as an entrepreneur?
Greg: Huge and I would say that this goes way back probably, I started programming when I was 12. I would say it goes right back to when I was 12. It’s a habit that I got into because as most developers at least, I mean at least most developers that I know, you work on a tech demo. You work on something that is kind of cool and the moment that the cool stops, you move on to something else. You’re working on a 3D rate tracer for example, you get your spheres, you get some shadows, looks all kind of cool. You maybe get some textures on it, you go, “Well, that’s good. Now I’m going to go on to something else.”
It’s that whole vicious cycle of just doing something, hey, once the cool’s over, you move on to something else. That just continues on. It’s been a real hard habit to break that once the exciting part’s over, to just not want to keep on going on. That, from my perspective, as being a developer, that was probably one of the biggest hurdles that I had to overcome. There is no “business guy” to say, “Hey, we have to focus on this idea and move forward with it.” I was really driven by the desire to actually do something that I found fun. Working on the same project after you’ve released it isn’t very much fun.
Andrew: Why were you able to continue? Why didn’t you say to yourself, “You know, maybe I’m just a dabbler. I like creating sites. I’ll continue to do it on the side, but I’ve got to build a business or I need to feed myself or I need to build a life for myself, I’ll go work for someone else and do that and keep these projects as side projects.” Why didn’t you do that?
Greg: Well, it’s a mix of two. A, to a certain extent I did, which I’ll get to. B, I think, I’m foolish and naïve. I don’t have good examples. I had no good examples in my life who had achieved what I wanted to achieve. You don’t really know, wow, maybe I’m doing this wrong. It’s just a whole sense of, well, maybe this is the way it works. Yeah, it doesn’t seem right to be giving up. You kind of recognize that part. There is a certain blow of confidence, where you go, “Jeez, why am I even doing this?” But at the same time, I just love developing, so we just work on something new. You’re back on track. You kind of put your head in the sand, and then you pull it back up three or six months later after you release a product. You realize, wow, there’s not a real audience for this or if there is, I’m not willing to push forward. You put your head back down and you keep on going.
It’s not like I wasn’t making any money with these things. It definitely wasn’t a huge revenue stream. I would say, a precursor to Facebook, a year, year and half before I started working on Facebook, I took some side work through a friend who worked for the Ministry of Education here in Ontario. They were in the process of putting a lot of their course content online. The teachers had put together something called a learning object, maybe that was teaching kids how to distinguish between fruits and vegetables and meats or whatever the case is. They would put together a small game. I would have to code it in Flash and then hand it off and someone else would do the artwork for it. I was paid per piece, so I got really good at coding really fast in Flash. For about year and a half, it was just go, go, go. That translated over really well into Facebook that the mentality is just get shit done. I don’t really care how it gets done. I don’t care if it’s well engineered or anything of the like. Just get shit done. Don’t get me wrong, that sometimes comes back to bite you in the ass when you are trying to maintain something, but from my perspective, there’s a lot of stuff that would not have gone out had it not been for that attitude. FishWorld is a good example. FishWorld is just one of those things that spent a short period of time developing it. Then so on and so forth, after you release it, continue working on it.
That, back to your original question, I did basically go through those times where I’m like, “Jeez, why am I doing this?” Then, now during that one time where I was doing the contract work, I was also working on a product called Demofuse, which ultimately I think was a good project and I still think that it was pretty cool that the idea being that instead of doing Flash [inaudible 0:31:26] to your site, what this was, was a basic HTML label, like an overlay. There’s an editor that you would load in, show at the bottom of your website while in the admin mode. You could have a cursor that would go around, you could highlight different text boxes, you could put up speech bubbles, so on and so forth. You could go to different frames. You could fill out forms automatically. There’d be a cursor that would type out stop and submit forms. I ended up presenting it at a few different places. Had some people sign up. Had some paying people and then that’s exactly kind of when Facebook hit as well. Naturally, that just sort of took over all development time completely.
Andrew: I see.
Greg: I think Demofuse actually stood a pretty good chance though of being, because it was actually the one where I kind of learned lessons previous to that. It was the first project where I was truly giving it its time. I think I had released it about two months before that, three months before that. I was still going at, still pushing, still talking to people. This was the first site where we had a 1-800 number up on the site where people could contact me. I was really giving it its fair dues, but Facebook kind of just took over from that.
Andrew: All right. Let me be clear here for the audience who doesn’t know your story as well as I do, having researched you. When you say Facebook, when he says Facebook, he’s talking about Tall Tree Games, the game company that he created on top of Facebook. You’re saying Facebook as a platform, not Facebook as you’re working for Facebook. You’re creating your own business on top of it. I also want to ask about you working for someone else. You’re entrepreneurial. You built your own stuff for years. You go and you work for someone else. You told us the benefit of it. Tell me about the way that it impacted you personally to go and take on a job as an entrepreneur.
Greg: It wasn’t as bad as it could have been mainly because I kind of called the shots. As in, yes I had somebody to ultimately answer to, but I was kind of ten times better than anybody else they could’ve had. For the most part, I got [inaudible 0:33:33], I coded, I sent it back. I didn’t really have to make revisions, didn’t have to do a whole lot afterwards. At the same time, I was still spending, basically I was doing that for about 40 hours a week. For the other 40 hours a week and nighttimes, I was working on Demofuse. It’s not like I was working any less. Well, I was working less on the main product, but maybe only about 20 hours less a week. So basically, I had two jobs at the time. One job is paying the bills and actually making decent money, whereas the other one being working on the actual company. I didn’t really lose that starting a company because I’m sure a lot of your viewers are in a similar situation where they have to do side gigs or whatnot. It can work. It’s just really hard.
Andrew: That’s what I’m finding. It doesn’t mean it’s the end of your entrepreneurial career. It doesn’t mean that you can’t continue while you’re working there. In some cases, it seems that working for someone else even as an entrepreneur builds you up, gives you confidence, let’s you take a break from having to worry for a bit so that you can open your eyes up to opportunity. That internal ambition that sometimes you don’t know where to channel as an entrepreneur, when you work for someone else and you have a clear path to channel it through, you get to see results which seems to motivate you and get you back up and running. It builds up your confidence and your ideas. Is that your experience too?
Greg: It’s not actually. In my case, with the contract work that I was doing ended up going into the abyss that is the government. You didn’t really see where ultimately it went. I created it. It went somewhere else and I never really saw it again. In that case, it was more of a contract work. Imagine you’re online, going to oDesk or something like that, ELance, and you never saw it afterward. So I didn’t really get any satisfaction from that. On the other hand, I never actually had a job, other than the first job I ever had at a hardware store. So I actually feel that at times I’m at a disadvantage that I’ve never held down a job somewhere else, because I don’t know what a true company structure is. I know on the theoretical level how it works. But there’s a lot of time where I go, “I’m not in the position to be managing a company, running a company. I never even worked at a company where I’ve been a part of it.” Right?
So there are times where I think I miss out on valuable lessons and kind of just common knowledge where other people go, well, yeah, this guy reports to that guy and that’s what he’s does. I’m like, “Oh, fair enough. So that’s what a project manager does.” Whereas from my perspective, I have no idea I just know what problems I have. I don’t even know what problems sometimes. I just kind of go, “Well, who normally does this?” So there’s been a huge learning curve as well. Have I nailed it? No.
Andrew: How many people in the company now?
Greg: We’ve actually scaled back. Now, there are four full time and one contractor and then myself.
Andrew: So, $6 million to $7 million a year with four full time, one contractor.
Greg: Yeah. Now, last year, we reached a peak of around 15 people.
Andrew: I see.
Greg: Long story short, it just didn’t have . . . I realized myself that my goal is not to have a massive company. It really is a lifestyle business, and that’s something I’ve been able to work. We actually opened up a second office in Toronto. That’s ultimately the root of where the problem came. Is I was not there frequently enough. The team that I put together, while a good team, just didn’t do things the way that I do things. I wasn’t able to transfer over my method of building things. My get shit done kind of attitude just didn’t transfer over the same way. So at the end of the day and we also ended up working on another project, which didn’t go anywhere. It got to the point where I was going to have to renew the lease, which was basically a three year lease. I was getting in and it was $50,000 a year. My thought was, do I want to tie myself into that? Then there’s also a side thing where I was really getting burnt out and that’s a whole separate issue. After about three and half years, it just got to the point where I didn’t really have the same motivation to show up to work and really go at it.
Andrew: You’re a fan of Mixergy. You’ve seen some of my interviews. You’ve heard me ask other people about their revenues. What do you think of it when I ask other people? Is it useful? Is it interesting? Is it just another number?
Greg: I think it depends. It’s always great to know. I think there’s that curiosity factor. I think the problem behind the number is that it’s a little hard to quantify. Because you go, hey I did sales of let’s say $48 million last year. People go, well, that’s great, that’s surprising, but I don’t actually know how that money was made. I think that’s where it becomes a little difficult. You see some companies, you go they shouldn’t be making any money yet somehow they’re making $20 million a year? Okay, can you show me your revenue breakdown so I actually get some lessons learned from this? Because just that number alone, it’s great to impress, but it doesn’t really tell the story as to how that money was made. Really no lessons been gathered from it.
Andrew: Can you do that for me? If we’re talking about 6 to 7 million, can you break that down the way that you would want it broken down as an audience member?
Greg: Sure. Well, I can use FishWorld as an example. Going back, FishWorld is a big part of that revenue. It’s not all of it, but in Facebook in specific, we make money in one of three ways give or take. There is display advertising, that would be something as simple as a banner. There is offers, so people filling out surveys, signing up for Netflix account, that kind of stuff. Then there’s just straight up cash purchases. I would say banners are a pretty small portion of revenue. They might be five to ten percent. I would say people filling out offers, it’s kind of varied. It used to be about 60% of our revenue. It’s actually gone down drastically. Because if you think, we have a core user base, you only have so many offers people are going fill out. Maybe in the beginning, and we have a really high turnover, people are a lot more likely to fill out offers. Where as they become used to playing your game, they just give their credit card. They don’t want to be [inaudible 0:39:46], hey, what’s the next great offer. I’d say it’s down to about 30%.
Andrew: Thirty percent.
Greg: Then just straight up cash purchases make up the rest. I would say our average purchase amount might be, I don’t know, we try to get it closer to $20, but I’d say it probably averages about $12. When people are buying virtual currency and we have a core group of about 5,000 users who make up about 90% of our revenue.
Andrew: How many that make up 90%?
Greg: About 5,000 players make up about 90% of our revenue.
Andrew: So, 5,000 players out of almost a million players make up 90% of the revenue?
Greg: Let me put it as this, if you look at our complete history with FishWorld, we’ve had about 22 million people install our game. Of that about 100,000 have made around 95% of our revenue.
Greg: It goes to show you percentage wise and then we have top players. Like I would say our top users have purchased over $10,000 in virtual currency.
Andrew: Why does somebody, what kind of things does somebody get for $10,000 and why do they do it?
Greg: A lot of stuff. Basically, it’s not playing for one item. There’s one person in specific I can refer to. We’ve talked to her a little bit, kind of saying, “What’s this all about?” (A) there’s a certain status thing about it, but (B) she just likes to give stuff away. She gets a lot, there’s more . . . the reason that these 5,000 people stick around is it’s a community. She just likes giving things away. That is ultimately what she spends her money on. I don’t judge her. I’m happy that she’s our customer, but I don’t fully understand it. We’re happy that she plays.
Andrew: In other words, the way that I might say thank you to you is by sending you something. Maybe in the old days I would send you a book. Today, I’d feel like, I have to get his address, he’d have to burdened by another piece of mail, and then he’d have to be burdened with having to hold it in his apartment. In this new world, I would buy you a digital good, I’d send it to and say thank you. You’d appreciate that it was there, put it on display in your aquarium, and we’d have this feeling that we used to get by giving each other stuff. Now would come by giving each other digital goods.
Greg: Right. And in this case, a lot of the people that she’s sending it to have, she met through FishWorld.
Andrew: I see.
Greg: So there’s definitely a value to those goods. Whereas I could send you a virtual fish and you’d be like, “Man, I couldn’t care less.” Whereas if you actually played the game, and you had been for a long period time, that’s a much different case. Going back to those 5,000 users, they’ve played on average it’s about 300 games. The games have been out for about a year and a quarter. So they’re really pretty hardcore users. Naturally coming back pretty much every single day, multiple times a day, they’re not just the kind of people that collect a bunch of fish. They’re very excited about receiving one.
Andrew: Except for the sale of YoVille, is this pretty much the revenue breakdown of your business across all games?
Greg: There is one other sale that we had. I don’t legally know how much I can go into it. The short of it also was to Zynga. The sale kind of went a little funky. But long story short, there was another sale included in those figures, but the majority of our revenue has been straight up or the majority of those figures have been straight up revenue.
Greg: Those percentages come across for the most part I mean, although they could breakout banner to straight out cash purchases, etc.
Andrew: Okay. Going back to when the Facebook platform launched and you launched on it, what was the opportunity that you saw that made you say, “I know I’ve something going on with Demofuse but I got to build this too”?
Greg: It’s not nearly as exciting as it sounds. [0:43:50] I just knew that they were going to have a platform. My wife had a Facebook account, and I thought, hey, maybe I could do an app where you could send a rose to your significant other. One rose, keep it easy, whatever. I was kind of working on that, and one thing I thought, well, you’re only going to ever send maybe one flower to your girlfriend or husband or wife. Not two, three, four, I mean, that’s going to be the [0:44:19]. So I thought well maybe you could send all kinds of different flowers to them, not just roses but daffodils, etc. I thought, well, it does look kind of weird to just to keep on receiving flowers. I thought well why not make it a garden as opposed to just a bouquet of flowers. That’s how the first game I release started. If you really want to call it a game, it’s called My Garden.
Thinking back it’s really quite funny the way that I kind of viewed the world, because you couldn’t buy your own flowers. You could only send them. Whereas now you look at something like FarmVille and the majority of times you’re buying your own stuff and then it’s the rare case where you send something. My thought also being, well, I think you got 200 points a day for free. Then you could fill out offers or buy additional coins. Actually you couldn’t fill out offers. I’m sorry, you could only buy at the time. People, some people bought, I remember the first day I implemented payments, we made like $70, which I was like, “Hey, sweet, this is not too bad.”
When I released My Garden, it was early on the platform. I think the first day there, I actually have my growth chart somewhere. I don’t recall exactly where it is. There was about 100 people the first day, which was enough to get me on the . . . Facebook used to have the top 25 apps or the top 100 apps, and I got right on the very bottom. Then there’s also the fastest growing apps. By day two, I was actually able to start to go up the fastest growing apps, very similar to what the iPhone has now. That was enough to get me, I think I was on the top one or two for a couple of days. That kind of has launched, I never spent any money on advertising. Like, I’ve never spent a dime. I’ve always been able to roll over existing traffic into new games, new games, new games. A lot of people come to me now and they go, “Well, how do I get traffic?” I’m like I have no idea because it just always been something that I can kind of roll into new games that we have.
Andrew: How soon after you launched did you offer people the ability to pay for flowers that they would send or play for digital goods that they would send?
Greg: I think it might have been a couple of days.
Andrew: A couple of days?
Greg: Yeah, because it wasn’t really that hard. I went through a company called [inaudible 0:46:19], which I’ve had a good experience with them. They take 10% off the top, however, well give or take 10%, that’s what it was at the time, the average. It was just, I kind of get to take payments within 30 minutes. That’s what I kind of liked. It was a little bit more formal as opposed to PayPal, where I don’t know from my experience now, granted at the time . . . right now we still make a good portion of our revenue through PayPal, except, I don’t know, I don’t really like the image that it portrays nearly as much as sort of having a nicer pay option. Any rate did that, and it didn’t take long for me to take it back down because that’s kind of getting me into the offers part of things.
The way it worked out was I had banner ads. I thought, well, hey, looking around I saw that another app was advertising Winkies and Webfetti, which is an IC toolbar. I can put that banner right up, why not? I remember putting it up, but I think I made about $500 in one day. I was like, “This is awesome. This is fantastic.” I had never done any sort of affiliate offers before that. I realized that they do a ping back whenever somebody downloads the toolbar. Well, that’s kind of nice. For internal tracking, I was able to do it. I didn’t have to wait for their system. I thought, well, wait a second here, if I know that these people are downloading this, why don’t I just say if you download the toolbar, then I will give you, it was like 1,000 coins. I implemented that. Within about three hours, I made about $5,000. I was like, “This is awesome. This is fantastic.” Well, then about 45 minutes later, I got a phone call from my affiliate manager going, “What’s going on here?” I said this is what I’ve done. He said, “Well, that’s great except you’re not actually allowed to do that because you’re not allowed to incentivize toolbar downloads.” Which then I kind of got introduced to the whole idea of incentivized affiliate offers versus non-incentivized affiliate offers.
That was kind of the beginnings of this whole offer wall. So then I made a link that said, hey, click here to earn coin. You went there, and then I had to manually keep this list of offers updated. I was probably going through about five different offer providers at the time. I remember Vespa scooters were a huge thing from the UK, because a large number of our customers were from the UK. I was really now having to keep offers loaded for about five different countries, the top five. It was a pretty big burden. What eventually happened is, I was doing it and doing it. But I never did a great job because it’s really a full-time job. At that time there was, in the very beginning it was just myself. Shortly after that, I hired my first employee. But I never really kept him updated, and he ended up working on new apps, and long story short that just sort got left behind. Still made some money, but then some of the companies like OfferPal and SuperRewards came around. It was fantastic because it embodied exactly what I needed at the time, but I just didn’t have it so.
Andrew: I see. But you created it before OfferPal, before SuperRewards it sounds like.
Greg: Their model was basically based off a similar. I’m not saying it was based off me exactly, but I do know if you actually look at any of the early presentations, they’re often referencing our apps. This is basically how you should be implementing, etc., etc.
Andrew: What was the Vespa offer, by the way? You got paid every time a user did what?
Greg: I think you filled in an e-mail address and you were offered, I think you could win a Vespa scooter which . . . I just remember it was top paying in the UK for a long time.
Andrew: I see so . . .
Greg: It was just an e-mail and I guess Vespa scooters were popular, so.
Andrew: It wasn’t that people were, it wasn’t a lead for Vespa of a potential customer. It was just someone who was entering to win a Vespa, and after they entered to win the Vespa, they were going through other leads. All you were doing was saying . . .
Andrew: . . . I’m sending this person to get a whole bunch of other leads.
Greg: Except we were getting paid I think about a buck 15 for e-mail, which was huge considering the conversion was actually pretty good.
Andrew: Wow, that’s great. Okay. And that also brings up some of the issues that came up with “Scamville” the TechCrunch article where they said all these offers that are going through games on Facebook are shady. These are the people who are especially shady, and I think they pointed to OfferPal as the shadiest or maybe OfferPal just got a lot of attention. When that happened, how did that impact your business? You weren’t directly implicated.
Greg: It didn’t impact us at all.
Andrew: It didn’t?
Greg: I think those things kind of get blown out of proportion. I’m not saying that people like to get scammed, and I’m not encouraging scamming. I think it’s one of those things that it’s a natural progression. I mean, yeah, things always get higher, higher, and higher. If SuperRewards has these offers and OfferPal doesn’t, and SuperRewards will make you more money, well, as a developer you would sort of go with Super Rewards. Now do we audit what’s in that list? Absolutely not. I don’t audit that list. That’s why I outsource it to another company to do it. So what it comes down to is I’m not being very [inaudible 0:51:29] saying, “Okay, you know what, let’s just try to screw over our users. Let’s just try to milk them for every scam that we possibly can.” It’s a matter of saying, “Okay, I’m going to you. You guys put in offers and make us the most money you possibly can, everybody’s happy.” At the end of the day, this whole scandal thing, yeah, we then get contacted by OfferPal and SuperRewards, saying we’re trying to clean up our act and so on and so forth. At the end of the day, maybe that has also contributed to why we make less money on a percentage basis versus offers and payments. But I would say at the end of day, we didn’t really make less money. People just aren’t no longer filling out offers. They’re now just using credit cards.
Andrew: Really. I actually interviewed both the founders of SuperReward and the founder of OfferPal, and I don’t remember which one said that their revenues took a hit for a little bit after that story came out, and then eventually, within a few months, they got back up. It didn’t take a long time for them to recover. Did you have any dip?
Greg: I didn’t really find that there was a big dip, no.
Greg: Not for us.
Andrew: Okay. So going back to when you launched the first game, My Garden. What did that first version of the game look like?
Greg: Oh, it looked like crap. It, again, I’m no UI designer. I just tried to base it as much on Facebook’s look as possible, like rising the blues and whites. I got some art off of iStockphoto for the backgrounds. It was a Flash app, because, again, that was my background. I’d been using flash every single day. So, I thought, hey, why not make it Flash? I did that. I think it took me, I don’t know, three days or something like that. It didn’t take me too long. Most of that was learning the platform, very simple and that’s kind of what started it all.
From there, I made something called My Aquarium, which was basically the exact same, except instead of sending flowers, you could send fish and then the fish would swim around. Kind of a full circle type thing whenever I look at it, but at the time it was pretty much based off the same thing. I think it took me, again, under three days to make the Aquarium.
Andrew: So, three days to make the Aquarium about, is it less than a week to make My Garden?
Greg: The threshold now is significantly different than what it was three and half years ago. You could theoretically still do an app in three days and release it, but it wouldn’t go anywhere.
Andrew: What about this? When I asked you what the first version looked like, you said it looked crappy. How do you, someone who’s proud of your work release a product that first version doesn’t look so good? I ask because I wrestle with that too. Anything that I do, the very first version is going to stink. The very first version of my audio interviews had my voice very low, my guest voice very high. It must have killed people’s eardrums. First version of video had all kinds of issues. Till this day, I still have issues. The next thing that I launch, the first version’s going to be pretty crappy and it hurts to do that. How did you feel as a creator, and how were you able to get past it?
Greg: Obviously it’s disappointing. I think, I kind of look at my situation where I had limited resources to do the best I can in the shortest period of time. What I’ve come to realize since then is users don’t care nearly as much as the creator cares. Now I look at some games, which I go, “That is just is hideous. Nobody should ever use it, play it,” and it’s extremely popular.
I look at something like Farm Town. I go their avatars, I was never a big fan. Their graphics, I was never a big fan. I remember looking at it and going, “That’s just hideous.” Yet, people don’t care. It was one of the most popular games on Facebook for the longest time. I’m not saying to you to throw design out the window, because there’s a lot of very nice, something like Wufoo and stuff like that. They’re very nice products. But at the end of the day, I don’t think users care nearly as much as the creators care. We think the users care even more. At the same time, it’s always nice to have pride in your product, because then you work harder. But I think if you’re sacrificing, (A) getting it out, and (B) sort of the features. I’m not saying features trump all but kind of usability and actually making a good product versus making it look nice. You look at how many games get reviewed, two out of ten will look fantastic but aren’t fun to play. Facebook isn’t exactly in that category yet, not even close. You kind of see that in mature media like Xbox games where really the looks are great but they don’t actually make the product all that good. I think there’s a . . . I mean you don’t hear that about the web apps. Like that app looks fantastic but it’s not a very good app. I don’t know why that isn’t the case, but you often hear that for games.
Andrew: A few notes here of things that I wanted to come back to and follow up with you on. The first is, why from the beginning did you decide that you were going to charge your users when Facebook was offering their service for free to users, when so much on the Internet is free but ad supported? You told me within days you had a system where people can come and buy garden equipment or buy garden something or other and sell it. Why did you go that direction so quickly?
Greg: Well, there’s some additional history to that. My wife, she was at university. She had just graduated. She’s going to teacher’s college, and I managed to convince her not. Again, I kind of went, “What? That’s fine if you want to go, but I don’t recommend that the best way.” I managed to get her to start her own business, which ultimately involved me to a large extent. It was a message in a bottle company. People, romantic type gift, very popular in business and Valentine’s Day, people would come, they would order, type in the message they wanted based off a template. Roll it up, put it in a bottle, put it in a case, and ship it. Charging was just a natural, you’re not going to ship that for free. It wasn’t, that tends to where it kind of explains more or less where I was coming from to send flowers. It wasn’t a far stretch to imagine, hey, romantic based gifts here, romantic on Facebook, kind of understood that quite well. So charging wasn’t really a crazy concept. It wasn’t a huge stretch, I guess is maybe the best way, because the romance side had already shown that people want to spend money so you can impress your significant other.
Andrew: I see. I’m sorry Greg, but there was a bad connection there as you were explaining it. I want to make sure that I understand this. This is you creating the message in a bottle product is something you created and it was all digital, no physical?
Greg: No, it was my wife. My wife basically ran the company. I helped her, but no, it was a physical. Basically a real glass bottle, a real piece of paper printed, burnt edges, rolled up, put it in a bottle, corked, put in a case, shipped. There was real work involved.
Andrew: I see but users bought it online.
Greg: What’s that?
Andrew: Users paid it for it and ordered it online?
Greg: That’s right. [inaudible 0:58:31] the bottles and then ship it out. Coming from the physical aspect, that’s not what I spent all of my days doing. I assisted her with it, but kind of understanding that, okay, people are willing to spend real money for this and naturally you have to charge real money. It was absolutely, kind of, it wasn’t a big leap to assume that people would be willing to spend money for a digital gift. Don’t me wrong. I was still surprised that people did it, but I was willing to try and glad that I did.
Now, one thing that I also came to realize is that people will pay an arm and leg for additional features. Like for example, the message in a bottle. The whole base package was maybe $30. But to burn the edges of the paper, people were willing to spend an extra $5. We had a laser engraver, you could engrave the bottle for an additional $10. You’re really able to double the price of the package by offering these other things. It was once people had made the commitment to buy, it was really easy to pile on additional add-ons. That was one thing that I’ve tried to kind of take beyond. Profit was made in the add-ons. The base, I mean there’s still money to be made, but you make way more with the additional higher priced.
Andrew: Can you give me an example of how you brought that to Tall Tree Games?
Greg: We tried to manipulate that in, not manipulate, but use that in our pricing schemes where for offering sales. It’s not just . . . one thing we’ve been able to find is . . . in a roundabout way it applies, is don’t offer say, we never offer discounts. We never say, hey instead of $10, you’re going to get . . . let’s say for $10 you get 50 fish bucks. We never say for $7.50, we’ll always say, “Here’s $10. We’ll give an additional 35 bonus.” That way we never actually cut down on the money we make. We always increase the upside, because it keeps our, first of all revenue, you don’t have to change anything. It’s a lot easier to change it backend to give them more. But on top of that, we’ll also incentivize and say, “Well, it doesn’t apply to the lower-end products. It applies to the higher-end products.” So, if you are, only if you spend $20, do you then get the bonus. Really trying to get people further up, because again we make more money on the $20 purchase than we do on the $10. First, realistically, there’s a lot of people that only ever make one purchase, so we try to get them higher up. We only offer the bonuses on . . . like a sale [inaudible 1:00:56] the sale on the higher ones. Now, granted is that revolutionary? Absolutely not. But there’s a big difference between understanding something and actually implementing it.
Andrew: What about upselling? Do you guys have any upsells that are the equivalent of engraving and burning the edges of the paper?
Greg: In Facebook? No, we don’t do, we’ve never done a great job of that.
Greg: It’s just one thing that we’ve never really tried. Again, to a large extent it’s not out of our control, but we kind of pass it off to OfferPal or SuperRewards. Then it’s kind of in their hands to do the best that they can. Can we do things on top of that? Yeah, but it’s in a [1:01:33], like they kind of control that area. So, there’s certain things that we can do, but it’s not as easy to offer, to A/B test and do all those types of things. Yes, we can work with them and try to do things, but our time is better spent doing other things.
Andrew: I see. What else was I going to bring up? I wanted to also bring up burning out. Right. You mentioned burning out. I didn’t ignore it. I wrote it down so I could come back. Inc. magazine recently talked about my burnout and how that lead me to sell a previous company. What happened with you, and what happened to the company?
Greg: I would say it started about a year and half ago, yeah, about a year and half ago. I was just sort of done. I had been doing it for about two years, and I guess it really goes all the way back to the very beginning, where call me a pessimist, call me whatever you want. But I remember at the very beginning of Facebook, I’m like, “If this thing lasts for another two weeks, I’m going to be amazed.” Because it was just insane growth at a very fast pace. I go, “Another two weeks I’ll be amazed if this whole thing is still going.” Two weeks come and go. I’m like, “If it just lasts another month.” So I was always working my ass off, like whatever money I made during the next month was all I was ever going to make, and then this whole great thing is over and I’ve got to move on to something else. I lived basically every single day and just worked my ass off thinking that it was going to be the last day that I had. That really starts to wear thin after two years of feeling that six months is all we got. And eventually, you kind of get to the point where you’re like, “Okay, I can’t do this anymore. I am just tired.”
Facebook had some really big changes where suddenly you’re going down one path and then they go, “Yeah, we’re going to change the way stuff works.” Then life is kind of difficult, because you’ve released something that doesn’t quite work the way you want it to. You go, “Why am I still like doing this?” I’ve basically made my money. I don’t need to keep on working. So that’s the other problem is cost of living is relatively low. I’m not doing it for the money anymore. At first, I was doing it for the money, and I guess I’ve lost my hunger for it. Right? It’d be great if I still had that same zest that I had in the beginning. I don’t. I’ve become more complacent.
About two years ago, it was like I can’t do this anymore. I took about three weeks off. I went on a trip to Mexico by myself. I came back. I’m like, “You know what? Okay, I’m going to give this one more push.” Then from there FishWorld came to be. That’s when I started to build a team. Kind of did a number of different things. There’s some good stuff that came out of that push. There was some good lessons learned.
Did it all work out? No. But at the end of the day, now going a year and a half later, I’m okay, done that push, made more money, things are great. But I really don’t need any more money and I’m tired. I’m just tired of doing this, and I need something different. I found that, that I was sabotaging, but I found that get shit done attitude has its disadvantages as well. Because you want to get stuff done really fast, and some stuff just can’t be done fast. It’s going to take six months to get it done, and cutting corners isn’t going to help. I found sometimes that . . . I just didn’t have the patience anymore is probably the biggest thing. So I thought, “Why don’t I just step back for a while?”
So, as it stands, I’m at home right now. I go into the office maybe once every couple of weeks. I still keep in contact with them, but the company pretty much runs itself right now. Eventually, I may go back. It may all just fold up and kind of whatever money I make, I make. Or I may end up releasing another game at some point in time. We don’t have anything on the horizon right now. I mean Facebook is not a bad place. But it’s, the app market isn’t fantastic right now. There’s been better times. We’re kind of staying low and just focusing on FishWorld. Like I said, revenue has been going up. So, it’s not like it hasn’t been worth focusing on those efforts. Right now, I’m just sort of focusing on doing fun stuff. I’m on hobbies and kind of . . . I really didn’t understand it for the longest time, I mean, burnout is . . . maybe everybody experiences it in a different way. I just sort of found it was a lack of desire, a lack of motivation. I would just show up to the office and I would sit there be like what am I even doing here? I would start to work on something and have motivation for about, I don’t know, sometimes an hour, and then I started doing it. I’m like, “I really couldn’t care less about this.” It was almost a, not a fake motivation, but I really didn’t care. I just thought I’m going to kind of step away and see what time does.
Andrew: Who runs the company the now? How do you make, who makes sure that everything, that the trains are running on time?
Greg: Again, a small company that pretty much everyone does their own job.
Greg: I have one programmer, two artists, two customer support. So they decide amongst themselves. I kind of oversee it all, but they, again, it’s a team that I trust.
Andrew: So how do you spend your day now?
Greg: Actually, I’m in the process of trying to build a car.
Greg: It’s completely off to the side. It’s still building, right, and that’s ultimately what I enjoy doing. Instead of software, now, I’m kind of setting, trying to go about building a car. So I’m kind of dedicating my time towards that.
Andrew: For you personally?
Greg: It’s something that I want personally. However, I’m looking at building a company around it.
Andrew: I see. You and I talked midday. Were you building the car earlier in the day? Will you go after this interview and go build your car?
Greg: Probably not today because it’s 3:12 where I am. But earlier today, I was yeah out in the shop. Today I happen to be organizing bolts and cleaning up stuff.
Andrew: What’s your vision for this car company?
Greg: Right now, it’s just a matter of get the car out. It’s kind of funny that you ask. Because, like I mentioned, I got audited not that long ago. Naturally, the government’s like so what’s your vision for this car company, because you’re claiming this as business expenses. I’m like, “Well, to be honest with you, I don’t know how to do a car company.” I don’t know the first thing. I’m not looking to become a massive company. I’m basically in a R&D phase right now. Trying to build a prototype, I guess, would be the best example. It just happens to be a car with a set of software. My thought is, build a car, see how the process goes. I have no idea how much it’s going to cost to do it. I don’t know exactly the full extent that it’s going to take to do it. Time, I thinking it could take two to three years. When it’s all said and done, can I say okay, is there interest in it? Would I sell this as a kit? Would I . . . that’s kind of the thing.
I’m approaching it from a business perspective, but in the end, but at the same time I can’t predict right now where it’s all going to go. I may have it all together and be like, “Neh, this car isn’t nearly as good as I was anticipating, and there’s no way anybody’s ever going to buy this and just sort of fold it all up.” That’s not what I anticipate will be the case, but it’s hard to anticipate day one what something’s going to look like in three years time.
Andrew: I see what you mean. It’s hard to explain to the government what you’re doing there. It’s hard to say, “Hey, look that’s how I ended up with Tall Tree Games. I was just goofing around.”
Greg: That’s exactly it. I said to him, which maybe isn’t the best thing to say to the guy auditing, “If you know of a better way of starting a car company, let me know because I don’t, right? I’m just kind of stumbling along trying to do the best that I can.” Coming from a software background, it’s just build it and then figure it out from there.
Andrew: All right. Final, actually two questions. Final question on my list is, why did you sell YoVille? Why didn’t you build it up and add other apps? Why did you sell it to Zynga?
Greg: Because I would say it kind of got me my “FU”‘ money. That is probably the biggest thing. Up to that point, I had probably banked about $1.5 million. And I was like, “Okay, I’m fine. I could break my back tomorrow and be okay.” But it was one of those situations where I had a lot of fun making it. I still miss it to a certain extent, if that makes any sense. There are still parts of me that go, “You know what? It was fun running, it was fun coding.” But at the time it made sense. Sold it off to them, and kind of went from there. In retrospect, had I kept it, would I have made more money? Hell, yeah, I would’ve made way more money. I don’t regret the sale though. That’s one thing that I kind of knew at the time is even if it did well, I wouldn’t regret it, because knowing what I knew then, I made the right choice because it kind of locked in. It goes back to that thought that this may only be around for another two months, so lock it in now. I also, actually, another big part was Albert Lai, because I remember he told me something with BubbleShare, because I don’t know the full history of BubbleShare around that sale time. But I do know that they had actually had a previous offer from another company that ended up falling through because they ended up kind of holding off for a while. It was one of those situations where I figured I can lock this in. I can sort of go forward knowing that I have a lot more flexibility. Maybe my last year and half wouldn’t look anywhere close to what it has, the last two years wouldn’t look anywhere close, had I not had that security blanket behind where you know it could all go down today and I would still do okay.
Andrew: There’s a post here on Hacker News today, one the of the top posts of the day that says, you don’t really want — not you don’t need — but he goes you don’t really want a million dollars. There’s a big movement today to say, “Money. Who cares? It doesn’t matter. All I care about is hits and Twitter followers and Facebook friends.” You got “FU” money. How did life change after that?
Greg: Money is an interesting beast, I guess. I guess I would say that I dedicated my life to the million dollars, and that’s basically what drove me, drove me, drove me. I had, I describe it as a mid-life crisis at 27 that I didn’t really know what to do. I was no longer driven by the money, and I didn’t find any other, nothing else really drove me the same way that acquiring more money did. I mean, even to this day, I kind of go . . . I don’t know. The money’s great. I mean, I guess that’s the difficulty. I mean, yeah, I spend money and I’m glad that I have it. It makes life, I guess it opens up options, is probably what it is. I mean, building this car. I don’t have to do it on the cheap. I don’t have to worry, “Okay, where can I find this normal $2,000 part on for $200 and wait around?” I can actually buy a used one that’s $1,500. Now don’t get me wrong. At the same time, I still buy all my equipment used. All those types of things.
But it opens up a whole different level of options. I think anybody that says that the money doesn’t matter whatsoever is kind of fooling themselves to a certain extent and is just sort of . . . I don’t know, “Eh, money’s not really going to happen, so instead I’ll say . . .” It’s like saying beauty’s on the inside. I mean, come on. Sure that’s great to say. But, I mean, walk down the street and tell me how beautiful somebody is. Right, you judge somebody based on their outward appearance. It’s the same thing. At the end of the day, nobody’s impressed to say . . . or maybe a better example would be if you said, “Oh, I have a million Twitter followers.” You’d be like, “Oh, that’s great. What do you tell them?” You’d be like, “Well, I tell them about my company.” And you’re like, “Okay. And what does your company do?” X. “Oh, and how much money does it make?” I mean, at the end of the day it all comes back. If someone goes, oh, I don’t make any money because I’m feeding children with the donations, well, that’s a whole different deal. They’re getting a different satisfaction. But I would say, at least for me, I mean I can’t speak for anybody else, but money matters to a large extent. If I didn’t have my ‘”FU” money, then that’s absolutely what I would still be going for. I wouldn’t be sitting at home right now. I would still be at the office.
Andrew: This has been such an inspiring story. I kept you longer than I usually do because I couldn’t stop. I said, “Andrew if you don’t stop asking about the earlier life, you won’t have time to cover it all within the hour that we agreed to.” Then I said, as we were going through the business, through Tall Tree Games. I said, “If you don’t stop now, we’re not going to be able to . . . forget it, I don’t care, I don’t care, I going to do what I can to get as much as possible.”
Greg: I’m not in a hurry. I’ve got nothing to go to. That’s the thing.
Andrew: Yes, and then as you were starting to say you had free time, I said, “All right. Relax, just ask your questions.”
Greg: This is big thing of my day today.
Andrew: It’s what?
Greg: This is the big thing of my day today.
Andrew: I appreciate that.
Greg: It’s like an old person [1:14:15] that’s their travel plans for the day.
Andrew: We’ve got to cut that and make that into a testimonial. Mixergy is the biggest thing for my day. All right. How about one thing, and I hope to have you back on here again. I have to find an excuse to have you back on or a reason to have you back on, but one last thing. Somebody’s who listening to this full interview, gotten inspired by everything you said, he’s like bubbling with energy to go do something, what’s the one action step that you say, go do this, take your energy and go do that?
Greg: I’m going to say, I guess maybe I would rather put it on the idea. If you’re going to do an idea, I would choose an idea that hasn’t been done before. Not that you can’t succeed with another idea, except it’s way easier to be excited and it’s way easier to recruit people and it’s way easier to get interest in an idea that hasn’t been done. Yes, you can do another take. You can be like, “Well, we’re doing this, but instead of giraffes, it’s going to have zebras.” Well, that’s great, but people aren’t nearly as interested in that as coming up with something new. People, I need to say one last thing. All agree that ideas aren’t worth that much. But we had a Christmas event yesterday, my nephew has these Bakugan things, I don’t know if you know what they’re about. They’re like a modern day transformer. They’re little circles come in a magnet and they open up, they’re actually pretty cool. I go that idea is just [1:15:38] as much as you want to devalue the idea, yes the execution was really important. But that idea was just awesome. I think there’s often this sense that ideas are not worth enough. I’m not saying that there’s a market for ideas. Yes, you can say that ideas are worth nothing because nobody buys them, etc. etc. I think that, for me personally, an idea has a lot of value. Maybe my idea has no value to you, but to a person I think kind of value the idea to a certain extent. I say it inspires me and I feel that there’s going to be a huge market for it. I mean, look at the Snuggie. It wouldn’t inspire me to create an awesome company around it, but maybe somebody it would. I go, it doesn’t devalue the value of the idea. Come up with something that inspires you.
Maybe it doesn’t have to be unique, kind of going full circle. Maybe it doesn’t have to be unique. Maybe it just has to inspire the person to truly be willing to go at it for three years. That’s kind of where the car comes in. Where I go, “Yeah, I can imagine myself.” I ask myself the question, “If I was not going to make a dime on something for the next three years, what would I do?” It wasn’t write Facebook games. It was build a car. [phone ringing]
Andrew: Do you need to get that phone?
Greg: No, it’s not for me. I know that it’s not for me.
Andrew: I’ve seen that a lot of people do have unique ideas, and I bet the person who’s listening to us right now has got a unique idea in his head. What you’re saying is do that idea. Don’t hold back because it’s too different. Don’t wait for an opportunity to do it. If you’ve got a unique idea, find a way to do it. Act on it. Don’t wait for . . .
Greg: As long as you’re excited about it.
Andrew: As long as you’re excited about it. Find that . . . I see.
Greg: And not just like two weeks of excitement as much as you could see yourself doing that same idea for like three years down the road if you’re making no money. So imagine that you’re somehow able to bring in $20,000 a year on the side and basically live just on your means. Would you still continue to do it? Maybe that’s utopia, because I’m in a different situation. I’m not going to be so arrogant as to say everybody has to heed that advice because it’s the only way. I’m saying more or less from my perspective I think looking back that I was doing ideas that didn’t really motivate me nearly as much. Therefore, I didn’t’ give them their just due at the time because it was just about the money. There’s no way you can just last and then create something decent if you . . .
Andrew: I’m looking down at my notes here from our conversation, and I can see that the ideas that you were into, that you were passionate about, were the ones that you spent more time on. The ones that you weren’t so passionate about, like Net Operator, are the ones that you moved on. Maybe too early, but if you’re not passionate, you cant’ fake that.
Brad Mills, who introduced us. How do you know Brad?
Greg: Brad actually happens to be a guy from around here as well, who’s probably about 20 minutes, 30 minutes away and also does Facebook apps.
Andrew: Ah, so he writes Facebook apps, and you guys meet at a conference where he said, “Hey, you should come do an interview on Mixergy”?
Greg: No, actually I was speaking at a local conference, where he saw me.
Greg: The e-mail, he just cc’d me on the e-mail.
Andrew: He saw you at a local event. He said, “Hey, you know what? You should go do an interview on Mixergy.”
Greg: He didn’t approach me. He just sent you the e-mail and he cc’d me. So I was not aware of his intentions or plans.
Andrew: Interesting. Okay. Actually, you know what? I love that. All my interviews now come from people in the audience. I’m curious about how they connect with my guests. I see so he just saw you at an event and he said, “Hey, he’d be great on Mixergy. Andrew, I’m going to introduce you to a guy.” First, he checked in with me and said, “Andrew, is Greg a good fit for you?” Then he sent you and me an e-mail and he said, “Andrew, you should have Greg on. Greg, you should be on Mixergy.” That’s when I followed up with you. I said, “Greg, can you be open because I don’t see much information about you online. Are you willing to be open about your business?” You said, “I don’t have anything . . .”
Greg: I have one more thing. If you’re not on a time limit here, I’ll add one more thing. I’ve done of a really crappy job of putting myself out there. That has actually had a lot of negative impact. I would say when it comes to (A) recruiting. It’s become way more difficult even locally. Where . . .
Andrew: Tell me about that, because I thought that was intentional. I looked you up . . . tell me what you, it’s not a strategy then. It just happened. Tell me what . . .
Greg: No, it’s not a strategy whatsoever. It’s that I’m not an outgoing person in the least. You put me in a crowd, I mean, if I go to a conference, I don’t really care to talk to people. I’m a pretty big introvert when it comes to that. Now, in an interview, I don’t just freeze and I can’t talk. But I find that I don’t really have a huge desire to be social. At the same time, I don’t go to conferences and sort of spread the gospel of Tall Tree Games. I just sort of go, “Uh, whatever, if you want talk to me, fine. If you don’t, I don’t really care I have nothing to sell you.” It’s, like this interview, I have nothing to gain from this interview. I’m just doing it because you asked. It’s an opportunity, fine. I should have gone above and beyond that, because it would have made my life a lot easier when it came to recruiting, when it came to just sort of getting the word out about something, and sort of getting more relationships. The relationships that I have, have really just kind of fallen into my lap. Like Albert, Albert happened at a big conference. I didn’t approach Albert. Albert approached me and then it kind of went from there. Noah, I know you’ve also interviewed Noah. Again, met him when he was at Gambit. I’ve talked to him since then. It’s one of those situations where, you know, I didn’t actively go. If I saw him at a conference, I wouldn’t have approached him, but I’ve gotten to know Noah.
They have a lot of value, those relationships. I just never put enough emphasis on it. I should have, I just didn’t.
Andrew: Noah Kagan, currently of AppSumo, but previously created Gambit, should do a class on it. He just knows how to find the right people who are doing things in life and befriend them. You doing any business with Noah now?
Greg: I keep on friendly terms with him. I message him back and forth. No, nothing in the active business world.
Andrew: But he stays connected. I think I’ve known him for maybe five years or so. I just knew him through his blog. I reached out to him once. We stayed friends. He’s been incredibly helpful for me on Mixergy. He knows everybody. He introduced me to, Tyler Crowley, not Tyler Crowley the other Crowley, the founder of FourSquare, got him to do an interview here. So many others. Some people who really should do a class on that. Maybe if someone in my audience could help you with that, what kind of help would you want? Would you want them to blog for you?
Greg: It comes back to that same thinking, where I’m like I have nothing to sell and I don’t need anything. Right now, I guess if somebody has experience building a car. From more of the realistic, there’s not a whole lot I need. I probably devalue it to a large extent. I guess that’s just the sort of person that I am. I’ve never really put a lot of emphasis on it, and even knowing that it’s something that I should have put more emphasis on, I still don’t. I would say that’s one of my flaws.
Andrew: I don’t know if there’s someone in my audience who would do this. If I were starting out in business, this is what I would do to reach out to you. I would reach out to you and say, “Look, you’re really good on camera. You’re good at answering questions. I’m going to set up a blog for you. I’m going to once a week reach out to you for a 15 minute Skype call, where I just ask you about what’s in the news, or ask you about a business issue, startup related whatever. You give me the answers. I’ll personally transcribe it. Put it up on your blog. All I need is to connect with you and have you give me some feedback on my idea. Or all I need is to raise my profile by working with you.” That seems like the kind of thing they should be doing.
Greg: I just don’t have the motivation to do it myself.
Andrew: I know. They’ve got to motivate you. We need a hustler in the audience to motivate you by doing all the work for you as a way of connecting.
Greg: Exactly. Speaking of which, I don’t have a lot of things on my plate right now. One thing I do do, is if somebody has a question or wants certain advice or whatnot, I’m always open to that. I don’t have a whole lot to hide. It’s not like Zynga’s my competitor. Technically, we’re the same. I’m not even in the same league. I’m not really competing with anybody. It’s like revenue numbers, yeah, it’s not really a big deal to me. I can tell you how we make our money. I can tell you pretty much everything you want to know. When it comes to startups, I’m not saying I have experience in . . . someone trying to start an online dry cleaning service, I don’t really have a whole lot of experience in that. I was talking with Noah about AppSumo the other day, just kind of saying, “I think maybe you could tweak that a little bit.” What I found is the Facebook virality game, because that is what it was for a large extent, for a long time really changed the way I looked at the world. Because as nasty as it sounds, it’s not really because everybody does it they just don’t use the term. You’re basically always trying to manipulate people and try to convince them to buy. Manipulation sounds kind of nasty but that’s the reality. When you’re doing an A/B testing, you’re truly trying to manipulate people to click on a button. It’s amazing the results you can get if you sort of lead people in the right way, if you present things in a certain way, and . . . that’s one thing I’ve actually gotten really good at. Because when you’re looking at Facebook and you’re looking massive numbers [inaudible 1:25:23].
Andrew: We’re losing the connection here. I don’t know why. Are you still there? We lost the connection there for a minute. So, you’re saying when you look at a site even like AppSumo, you can come up with ways of making it more viral or leading people where Noah needs them to go?
Greg: [inaudible 1:25:42] Yeah, I think I gave him some good advice. [inaudible 1:25:48]. Try to do this. Try to do that and just give some general advice in that regard.
Andrew: All right. I don’t want people to flood you with requests for help. Hopefully they’ll offer to help you before they ask you for help. I appreciate that you’re offering to do that for my audience. Thank you. I’ll say this, this cannot be the last time that you and I talk. I’ve got to meet you in person. We’ve got to talk in person. This cannot be the last time that I have you on Mixergy. You are great. I really appreciate you doing the interview.
Greg: Thank you. Have a good day.
Andrew: You too.
Greg: If somebody wants to get in contact with me, it’s [email protected]
Andrew: What I was going to say was, if anyone like Brad Mills, is at an event and you see somebody who’s incredible who most people don’t know about how great their success is, or even if they do, and you think they’re a good fit for Mixergy, e-mail me and maybe we could have them on here. I want to get more guests like Greg here and I need your help to do it. Thanks for watching. Thanks in advance for helping me find those guests. Greg, thank you. See you guys on the website. Bye.
Greg: Take care. Have a good one.