How does a founder who says he tried everything, finally build a profitable business?
After his previous company failed, Roger Dickey tried multiple product ideas before finding his hit.
He’s the founder of Curiosoft, a company that he sold to Zynga soon after launching it.
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Roger Dickey, Curiosoft
Roger Dickey is the founder of Curiosoft, a company that he sold to Zynga soon after launching it.
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Hey there freedom fighters. My name is Andrew Warner. I am the founder of mixergy.com, home of the ambitious upstart. How does a founder who says that he tried everything finally build a successful business? That’s what I want to find out in this interview. Because after his previous business failed, that’s exactly what Roger Dickey did. He tried multiple product ideas and then he found his hit. He’s the founder of Curiosoft, a company that he sold to Zynga soon after launching it. Roger, welcome.
Roger: Well, thank you, thank you. Good to be here.
Andrew: You’re also incredible with user acquisition, and I know in your pre-interview you talked to Jeremy about different specific tactics for getting users. And I want to talk to you about that within this interview too.
Andrew: The biggest thing that you did. The one that got the most users. Was it mafia wars?
Roger: Yes. That’s correct. About 100 million users for that game.
Andrew: 500 million users?
Roger: 100 million users.
Andrew: 100 million users. On which platform?
Roger: Completely on Facebook to start out with. Eventually we moved it on to myspace as well. We tried an IOS app for it. To be clear, I helped get the team started grid it to a certain size and then there was a great group of people that took it further from there. I think it’s actually still live. It’s been running for five years.
Andrew: Yup. And on your LinkedIn profile, it says, where is that? Curiosoft, 19 apps in 2007. Largest app, Dope Wars, had 300 million monthly paid views, $2.5 million annual profit?
Roger: That’s right.
Andrew: And that was before you sold?
Roger: That’s before. Correct.
Andrew: Unbelievable. And how long did it take you to go through these 19 apps that you built before you found the one that was a big hit?
Roger: The great thing about the early Facebook platform was users didn’t expect a high degree of fidelity. So it was easy to experiment quickly. Make an app in 3, 4, 5 days, at most a week. The try concept. If you launched an app and people liked it, they’d start sharing it with their friends. The viral channels on Facebook at that point were still very fertile ground for growth. So we pretty much knew within a couple days of launching something if it had a chance. We’d maybe make one or two tweaks. At that point if the app wasn’t successful we’d move on to the next one. We pretty much did about one a week.
One last thing, I had a cofounder and we had a couple of interns at UT Austin until we finally found Dope Wars. We knew other people had had some success with games, but we had a broader thesis around social software thinking we’d find some other app that would do well. That would catch people’s attention. You know, maybe like a new type of Microsoft office. Turned out though, after everything we tried, the social software people wanted was games and dating sites. Also, quizzes and horoscopes and other things as well. But games and dating sites did the best.
Andrew: Alright. I want to understand the evolution of your thinking and how you went from launching the company to figuring it out and getting the success. But what about the business that you did before? Maybe we can talk about Turtle Tutors. What was the original idea for that?
Roger: So, everybody has their first start up, if you can call it that. This was the first group project I did that we even tried to call a company. It was me and a couple of friends in Austin. Actually, one of the co-founders was a piano tutor. And he had a lot of experience with students. I think he had 40 or 50 active students. Sometimes they wouldn’t pay. Sometimes they’d miss scheduled appointments. He had this kind of blurb that he’d email out to people on craigslist. So, he was using all of these traditional channels that were frustrating. And we thought, you know, okay, tutoring is a big market. We live in Austin, which is one of the largest college towns in the nation. Why don’t we launch a business to kind of help college kids tutor adults and high school children, and then we can scale that to every other university in the state and eventually non- university towns?
That was the inspiration. We worked on it for about six months, focused on all the wrong things. We took a month or two to come up a name and the logo. Just really, really silly things like that kind of were putting the cart before the horse. We didn’t go out and talk to customers. We didn’t start out trying to prove we’d found the right product. We didn’t try to sort of find products markets fit for it. Probably after six or seven months of doing that it didn’t seem to be going anywhere. My co-founders got job offers and left. That was the first kind of awkward startup, like that first awkward relationship we’ve all had.
Andrew: The idea was solid. I actually have interviewed two entrepreneurs who built companies that are similar to what you described. Pier to Pier Tutors was one, WyzAnt was another company that I did an interview about. Essentially the same model. The idea was good. I understand that you didn’t talk to customers and that maybe you should have, but what did you miss because you weren’t talking to customers?
Roger: We had a lot of internal conversations where we tried to play our intuitions against other on what people would want, even things like the right name, the right launch strategy, what’s a good first vertical to focus on? So is it music lessons? Is it language lessons? It was always my word against the co-founders’ word. We could have saved a lot of time if we had just said, “Hey, here are a few hypotheses, how do we go out and test these hypotheses?” We didn’t do as much as that as we should’ve.
We should’ve just written down the questions, kind of stack-ranked by what are the biggest risks we see. Like, number one, is it something tutors even want to use? Number two, how many different verticals is this applicable to? Number three, would customers want to engage, you know? And then you have other issues, the kind of things you hear BCs ask about. Are people going to disintermediate you? What’s your strategy to add enough value as the glue there. Things like that. We didn’t know what questions to ask, what order to answer them in, and we really weren’t diligent about answering them properly.
Andrew: I see. And then what did the product look like? How much was built?
Roger: Actually, my girlfriend did most of the art for it. We we’re really scrappy. Obviously didn’t got try to raise funding first, which was smart. At least we tried to build it ourselves. We had this pretty simple-looking user interface. There was this turtle, it was mostly green. It kind of had this anthropomorphic nature. You looked like you were, you know, it kind of played with this metaphor of you learning in the net natural environment, learning in nature, so there was grass on the background, things like that.
It was kind of stupid-looking, honestly, in retrospect, but the first couple of people who used it liked it. I mean, things like user interface, really that’s not the right thing to focus on. Look at Craigslist. Look at eBay. Really, really simple products that haven’t evolved much since they launched that just do one core thing well. The value on a site like that, on a site like Craigslist, is if there’s listings. It doesn’t matter that it’s a pure white background with black text.
Andrew: I see. And so, when it didn’t work… By the way, is it painful to talk about this? I feel a little bit bad bringing it up, and I’m looking at you to try to gauge whether it’s OK, whether you feel comfortable with it or not. Instead of just looking, I’ll ask you. Is it tough to talk about?
Roger: It’s not tough to talk about. Maybe if I hadn’t sort of hit an inflection point professionally after that, it would have hurt a little more, but instead it was a learning experience. It’s like recounting awkward childhood memories. You have a chance to reflect on how much you’ve grown.
Andrew: Afterwards, it’s so easy for entrepreneurs who don’t have any outside validation to see a setback as evidence that they never were meant to succeed anyway. You blow up the significance of it. How did you handle yours?
Roger: For me, I’ve always worked on projects. Since a very young age I’ve just had an internal drive to build complex systems with multiple parts and sort of bring them to an audience. At a young age I would write games, put them on floppy disks, bring to school. People would play them on DOS. If a kid was playing a game I wrote, a kid who I didn’t know, that’d mean somebody had copied a disk and given it to him, you know. Like it was going viral, in a way, right?
Andrew: I see, yeah.
Roger: So those were kind of the first experiences I had with building consumer products, so to speak, and that was always very addictive to me. I didn’t so much see it as like, ”Okay I failed, should I stop doing this?” It was always just the default for me to build products and bring them to audiences, so failures were really just information for me. I don’t think that anything could throw me off the drive that I have, and you know it’s not just me a whole lot of people I know and value are successful entrepreneurs, and kind of talk this way.
This is one of the things, you know, entrepreneurs should look for in themselves when they’re asking, ”Should I be an entrepreneur?” and it’s something to look for as a hiring manager if you’re hiring entrepreneurial talent. This kind of drive to never give up, not, ”Did somebody go to Harvard?” not, ”Do they have a 160 IQ?” but, are they smart enough to get the job done and are they going to sit there and passionately, tirelessly, you know, grind [inaudible 1:19:5]. So, you know, when you start a company the company starts with no employees and then the first question is do you want to hire yourself as the CEO? So, I’ve always felt it was appropriate to hire myself to work on my own projects because I know I have that drive.
Andrew: And you were also working as a software engineer at National Instruments the whole time. So did that soften the blow, the fact that you had a job?
Roger: It actually did. I think especially on the financial side, this can always be challenging for people, it can always be reason not to start a company. If you have a job and you can take a leave of absence, that’s probably one of the best ways to do it; that’s actually what I did. Quitting is probably the second- best thing to do if you have savings. Distant third or fourth would be trying to do it as a weekend project or side project. The problem with that is one’s level of motivation for a project is often tied to the sensation of momentum or forward progress.
So there’s very much an exponential effect to putting effort in, seeing a return or a reward and wanting to work harder. If you work on a side project and only give it ten, twenty hours a week, it might never go anywhere so you might never even have that motivation to see the product through to a launch. You need to actually give yourself time to focus on it so that it has the oxygen to grow and to keep that motivation engine running.
Andrew: And is that why, after you closed down Turtle Tutors, after you realized that this business wasn’t going to be the business for you, instead of saying, ”I’m going to spend more time working at my company, at my job” you said, a couple of months later it seems like you said, ”Alright I think I need to go and be a full-time entrepreneur.”?
Roger: That’s right. I had made a decision around three months before I started Turtle Tutors that I was going to start a company of some sort. It was just the natural progression to the type of projects I’d always been doing. I found I wasn’t able to really do those projects in the corporate environment. I tried my best, I had done, you know, sort of unsolicited things and shown them to my boss, and he’s like, ”Oh, that’s cool, but why aren’t you doing the, you know software engineering tasks that you’ve been given?” That kind of thing.
What I realized was if I wanted to work on a project and I wanted to involve other people, other adults who had busy schedules and jobs, there had to be some money in it for them. And if you work on a project that makes money, that’s a business. So it just sort of naturally turned into that for me, and I realized that the next thing I did would be a business, and if Turtle Tutor didn’t work, I’d do something else.
Andrew: Wow. And weren’t you afraid at that point? You see, before you start a business you think, I thought anyway, before I started a business I was so smart I was one of the people who did all my homework, who studied, who was passionate about business. I wasn’t going to fail, people who failed didn’t care as much as I did, weren’t as smart as I was. And I started a business and I saw, maybe I’m vulnerable a little bit. I still believed I could do anything but I was vulnerable. I don’t know that when I really came into contact with my vulnerability if that would have been the time where I felt confident to quit a job and go full time. Weren’t you at least a little bit scared now that you saw that not everything is going to work out?
Roger: The leave of absence helped, I was willing to quit my job anyway, because the xperience of being an entrepreneur, in particularly this market I was going after, the Facebook market, had been demystified for me. So somebody really helped, my cofounder, to make it easy for me to leave and to do this. I was fortunate to have that kind of resource available to me. It’s really hard to do something alone.
I recommend to everyone who’s starting their first business to have a cofounder, because you need emotional support and at that phase of your life you won’t know many other entrepreneurs who will give you the time of day and help you through it; you need somebody there with you every day in the office. And you need to know that, you need to really know and feel inside and internalize that what you’re doing is possible otherwise you won’t have that confidence and motivation to do it. My cofounder told me an app he made that he spent eight hours working on was making two thousand dollars a day in revenue.
Roger: I mean that’s $700,000 a year, I was making less than a tenth of that at my job and I had to show up to the office everyday: not just spend eight hours building something and launch it, right? So it was, hearing that, was really inspiring. When I meet entrepreneurs who are on the fence one of the first things I try to do is demystify entrepreneurship for them. And say look, Facebook, Instagram, these billion dollar outcomes started out as a couple of guys in their garage. And you hear a lot of those stories, you know, the couple of guys in a garage stories, but usually there’s like a dot-dot-dot, then they had a billion dollar exit. I try to go into even more detail and say they were in a garage, then they did this thing, then they hit this inflection point, this inflection point, this inflection point, you know, four or five of those later they sold for a billion dollars. But you know, there are too many layers of indirection between that sort of garage startup and the billion dollar exit for most people to really believe it. So you’ve got to demystify it, I think.
Andrew: That’s what I’d like to do here, and I can see by the way, that you are now after having done so well, you are helping a lot of other entrepreneurs. I met you through A.J. [Foresight], the founder of I- Cracked, where you’re an investor.
Andrew: You’re also an investor in Look-Craft, in High-Gear, in E’ Lecarte, Facebook, and a bunch of other companies; and an advisor to many others, too. So you now had this cofounder, who is the cofounder? I’ll be honest with you, as you’re saying ”cofounder” I was Googling to see if I can find his name because I don’t see it in my notes, and he doesn’t come up on Angel List, he doesn’t come up on Google Search; who is the cofounder?
Roger: So he likes to stay off of the radar. I don’t know if I should share his name, he’s a very private individual.
Andrew: He doesn’t even want to be known as the cofounder?
Roger: No. No he, it’s strange. In Silicon Valley you see a lot of people who chase press, and chase recognition, like doing it at parties and who like to play the role of CEO and speak. He is kind of the opposite of all that, he’s a very private guy. When we sold to Zynga, he didn’t want to be involved at Zynga. He took some cash and the exit and went his own way, I couldn’t even tell you where he is right now.
Andrew: Oh, really? So how did you guys know each other?
Roger: We met in college. He was a senior when I was a freshman at University of Illinois.
Andrew: Okay. And so why would he come to you, and show you what he was making, instead of saying, ”I’m a private person, I’ll keep generating revenue and ideas on Facebook, I don’t need Roger to know any of this.”?
Roger: He and I have always been close.
Roger: So after he graduated freshman year he started an organization at school. About 40 or 50 engineers joined, and I was one of the most active contributors to this kind of program or organization. Then he graduated and went to work on a couple of entrepreneurial projects which I helped with in spare time at the school, and I might have helped him a little bit during one of the summers. So we kind of always had an on-again off-again professional relationship, and then about two years after I graduated from college, I’d been working on this job, he was finally doing something that I felt had a chance. And it was the right timing; I wanted to start something, I was willing to quit my job. Facebook was great. Now mobile is kind of the new platform; if you’re an engineer, a product guy like myself but you have no idea how to market a product, because the marketing is built into the platform. So that’s kind of what excited me about it and got me to make that jump.
Andrew: Alright I can see that. Why did he want to work with you then?
Roger: He and I were a good pair. We were kind of both these strong generalists, product people, engineers. I think we had the same kind of energy, the same culture. We were both tireless workers, hundred hours a week plus on what we did. We didn’t leave the apartment. I think I showered once a week. He ate nothing but popcorn, my girlfriend would make him popcorn. I had these one dollar TV dinners, one or two per meal. That was the lifestyle and we loved it. Probably the best four or five months of my life.
Andrew: Wow. On a site called gotinterviews.com, you said that line that I mentioned at the top of the interview where you felt like you tried everything. I tried to make a list of what I found that you did. You had apps, social games like dress friends in funny outfits, vaguely dating related apps, tool for connecting friends who are two to three degrees away, and Dope Wars. Can you walk me through the evolution of your thinking? What was the first direction you guys went in?
Roger: That’s a great question. If I had five or ten minutes to research it I could probably answer that for you. We made, like I said, 19 apps. We tried to play off of existing behaviors we saw on the Facebook platform. At that time you could put a profile box on your Facebook profile, specifically for the app because the app could control some real estate there. We were thinking, how do we grow quickly? The key to growing quickly is to get everybody to want to add this profile box when they see a friend have a profile box.
We made this little game where you could send people pizzas. I don’t know where we got the idea but you could send them slices of pizza and you could make your own pizza. People would go to the game, they would make pizza, which kind of got people to visit, and then they would share those pizzas with friends, and those friends could only get the pizza on their profile. It was kind of a way to get people to get these profile boxes out there, but after a while it kind of lost its luster and people were onto whatever the next app was.
I think after that we tried to stay closer to the social paradigms on Facebook, messaging. We tried one app where you could message your friends masquerading as a celebrity, so you could message your friend as Sean Connery, or Tom Cruise, or whatever. That was a funny one. We did a number of different social apps until we finally made Dope Wars which really was probably the most engaging thing we did, and the best shot at monetization. It was the first game we made and was an instant hit.
Andrew: Was there an intentional goal to try a lot of little projects until you found the one that hit?
Roger: There was. My co-founder and I were kind of mentally and emotionally prepared to have a few failures. What I wasn’t emotionally prepared for was as many failures as we ended up having. I didn’t know we’d have 17 or 18 apps that would essentially fail for different reasons. Some would take off, grow exponentially for a while and then later fail. It was really, really hard for me to do that, kind of throw away all that engineering effort because I was sitting there coding basically all the apps myself. We were prepared but it’s always hard.
Andrew: I don’t remember where I saw this online, but you said if not for your co-founder you would have given up.
Roger: I think I might have. Not 100 percent, but there were some pretty dark days where we’d launch something I sat and worked on for three, four straight days in a row, maybe 50 hours, 60 hours and it would fail within two days, and it was on to the next project.
Andrew: How do you know within two days that it failed?
Roger: Because the platform was such fertile ground for viral growth.
Andrew: Within two days if it doesn’t take off, you don’t need to do anything like get a PR or try to tweak it, you just know it failed.
Roger: We would sometimes try to make tweaks if we had intuition for why they had failed. Now you hear about AB testing, and there are people AB testing button sizes and colors, and where does the payment called the action. At that point we were testing what product do people even want on this platform. Do they want productivity software, do they want games, do they want some like Craigslist marketplace type experience. There were a lot of question marks and a lot of feeling around that had to be done.
Andrew: Roger, one of the things I’m seeing is that some entrepreneurs like John Herring, founder of Lookout, spent a long time trying to find out his product, trying to figure out which market he should be in. I think at first I remember him going on to IOS app market, the app store, and then I think he found his grove in Android but it took a while. Then I see entrepreneurs like you who are going for much shorter task. Do you feel there is a right approach here or is it just different styles, or is it based on the platform that you are on that if something’s growing so quickly, you know if it’s a hit or not quickly. What do you make of this dichotomy?
Roger: Well, [??] wasn’t read the book, ‘Lean Startup’ or at least read a pretty comprehensive summary of it. I kind of preface this by saying do that first. I could go into details but as they say, you might as well go and read it online.
Roger: The general gist and take away is really different for every business even if you’re starting a restaurant. There’s a way to ghetto test so to speak or cheaply test your idea before you go and lease a place, hire employees, print menus and signage, and get on Yelp. There’s all these things you can do that really don’t get you any closer to figuring out if your concepts will work. A friend of mine was trying to start a pizza restaurant so he and I went to a local park and this is a true story. We got a converted Coleman grill, turned it into a pizza oven, made pizzas that used his new recipe, and went out and just handed them to people. A friend of ours was a videographer and recorded a video of people’s reactions. We rolled that into a video that we’re using now actually to raise money.
We were able to basically do all that that I just described for about $900 and it got a bunch of great reactions from people of all ages, races, genders, and demographics. With a website there’s a lot of cheap ways to test as well. There are sites like unbounce.com they’ll make landing pages that are actually faked, they’re not even really web sites and they’ll just buy Facebook ads. They’ll put $100 into Facebook ads to see how they’ll convert. There are a lot of cheap things you can do. The way you can tell how to order those test is in the order of basically the biggest risk to your business. [??] though doesn’t say, the first people might not want this, so ask a hundred people in the park if they want it or run an ad.
The second one is can I build this? Do some research, see if you can build it or whatever. You just go down those test one by one.
Andrew: What did you think it was about the hit that worked?
Roger: About Dope Wars?
Andrew: Sorry, about Dope Wars that worked?
Roger: A couple of things. Grand Thief Auto had been a successful game. The crime genre has always worked well for gaming. It’s fine and little risque. It’s even funny to joke about different things related to like crime and drugs. That was the case in this game. People were having a lot of fun with it, dealing drugs with their mom virtually, things like that. We get a lot people that try it because it had this shock value if you get a link to it you are more likely to click and then once they got in it’s a very engaging experience.
You start with a certain amount of money then basically would start by buying low and selling high. It’s just pure commodities trading simulation using drugs and crime as a theme. People really got into that. It was a easy but not too easy. You could go see a bag of weed in New York cost this amount and in Amsterdam it cost this amount so if I buy it here and sell here I make money. People are able to come zone out but they feel like they’re doing something that’s not just kind of clicking squares in Farmville or clicking little jewels in Bejeweled.
Andrew: How did you figure out what revenue model to put in it?
Roger: We actually never really saw revenue. We were making a lot money but it was just on ads. Seven or $8,000 a day on ads so that was $2.5 to $3 million a year just on advertising. If we’d gone in and put virtual goods in, it would have done much better. We ended up trying that later, once we sold to Zynga, that’s one of the reasons Zynga bought us. It never did as well with virtual goods as we wanted because, the whole game was designed around the advertising revenue model.
Andrew: Why did you, well before I get into that question why did you sell. How did it feel after having tried so many things to finally have one that just, blew up.
Roger: It wasn’t a sudden, Oh my God we’ve solved it feeling. At every point along the way, we have this success, we move two steps forward, but then we’d end up going one or two steps back. Whether it was a server issue or, users complaining about bugs in the forums, running a $3 million business completely by yourself doing everything including art, bug fixing, community management, business, advertising. Doing that is very much a full- time, and stressful endeavor. So there was always something broken in some part of the business. That wore on me kind of emotionally so, there would be those euphoric days where you wake up and your revenues are up from the previous day, and nothing is broken, and your users seem happy in the forums, and you can take a breather, but then the next day something would break.
I never had this sudden eureka moment, but there was over time the feeling that, OK, I’ve finally built something that’s working and, when I take a step back and look at what I’ve done objectively, look at the numbers, it’s a big achievement. I’d have to take a step back and look at it, I’d have to get out of the weeds and get out of the trees and see the forest.
Andrew: Why did you decide to sell?
Roger: For a lot of the reasons I just mentioned. It was very, very stressful to do it alone, at this point my co-founder wanted to move on, he had something else he wanted to do. Business was doing well but it didn’t work for him philosophically, he had a different direction he wanted to pursue that was a better fit for him. So he disengaged from that business.
We had a couple of acquisition offers, I spurned everyone for as long as I could. The thing with an acquisition offer is, it’s kind of a strategic weapon from a large companies (inaudible) group. They’re able to plant that seed in your mind that, if you ever want to give up, we’re there (laughs).
Andrew: And now it’s in your mind and when things are tough, how do you feel?
Roger: It’s like inception, when it’s like 3:00 in the morning and your product is broken, you’re like well shit I could just sell. So a lot of these companies, I think Zynga’s strategy actually was to go, trying to talk to everybody, find out what’s on everybody’s mind. Whether they bought you or not they, actually did talk to a lot of people. Which I think is devious, but smart. So that ended up working on me and, one day I just decided to bid them up a little and take the offer.
Andrew: At that point were you alone, or was your co-founder still working in the business day to day?
Roger: We were physically in the same space, but we were working on different things already at the point that we sold.
Andrew: Really, so didn’t you feel betrayed? Here you were building this business, dealing with issues even as you guys were growing, and he was working on his own thing.
Roger: It was upsetting. He never believed that a big business could be build on the Facebook platform. He thought Facebook was a toy, he just wanted to use it to drive marketing towards a different project he was doing. Turned out he was mistaken on that point, at least in the short term. There’s no $10 billion business in social gaming, but there is a $1 billion business, which is a lot bigger than anything he was planning to work on.
There were feelings of betrayal and it always feels bad to split up with somebody you’ve been close to, professionally or romantically or a friend. It always feels bad, but I had security in just knowing that my path was right. I disagreed with his perspective that, there was nothing valuable to do on Facebook. I think one of the things that had gotten me through the whole time and had gotten me through to that point was, the clear vision I had, that Facebook was a platform to build on and there’d be a big business there. There was a lot of potential.
That ended up getting me through the “co-founder breakup” was, just knowing that I’m going in the right direction. If he doesn’t understand that, or can’t come with me, there’s nothing else I can do.
Andrew: And you ended up owning the company the day that you sold, on your own?
Roger: I had most of it, I gave him a little.
Andrew: OK. Then, you sold. How did it feel the day after the sale went through?
Roger: It was pretty amazing. That was probably, if there was a euphoric moment through the process, that was it. It was the book-end to the entire experience. It was something I could hang my hat on and tell my parents and say, “Hey look, I’m not doing this little side project anymore. This is actually a real business. We’ve sold to a real funded company with legitimate entrepreneurs. I’m now moving to San Francisco.
It was a big life change for me, in a lot of ways. I always wanted to live in California, though. It was, just, really positive all around. It ended up being a huge inflection point, for me.
Andrew: Did they do all cash? Or, cash and stock? Or, just stock?
Roger: Both parties in the transaction wanted to push for as much stock as possible. Zynga was valuing their stock pretty highly, because they’d just raised a round. So, they were motivated to give that stock out instead of cash so they could redeem the cash for other acquisitions or to do ads.
I wanted stock, because, I saw the acquisition as an investment. It was the first investment I was making and, I wanted to invest in, basically, the winning social gaming player. I remember when I sold to Zynga, and, looking at the acquisition price, I was like, “OK. This is great. But, it’s really going to be 6x’s this, because, I know that Zynga’s at least going to go 6x from where it is.”
It turned the company was, at one point, 100x when I had sold. So, they ended up doing very well, definitely, meet expectations.
Andrew: When did you sell?
Roger: Early 2008.
Andrew: OK. By then, early 2008, this is before they went public, right?
Roger: Well before, yeah. They went public, I think, 2011, after a few quarters of consecutive, massive growth.
Andrew: Wow. How did life change after you sold your shares?
Roger: After I sold my Zynga shares?
Roger: That didn’t happen until much later. I didn’t actually do that until after I left Zinga, post IPO.
Andrew: I see. OK. I thought you were saying that you sold your shares in 2008. No, you’re saying, you sold the company in 2008, launched 2007, sold 2008, and then, sold your shares after they went public.
Roger: Yeah, that’s right. In terms of life after the exit, I didn’t have…since it was mostly a stock sale, I didn’t have that much cash liquidity. So, I didn’t go buy a Ferrari and get a nice house kind of thing. I just…I think convenient. Like a lot of people, convenience is a think I look for most in life.
So, having a laundry service and not having to look at prices on menus anymore. Not caring if the salmon is $10 but the steak is $15. I would just get the steak, that sort of thing. How much does it cost, really, to spend, on average, $5 or $10 more per meal you eat-out? You’re talking $1000 a month. And, laundry service was another $500 to $1000 a month.
Maybe a maid to help out around the house, that sort of thing. So, I added a few convenience elements to my life, but it didn’t change things too much.
Andrew: Did you feel like…were you a millionaire right after the sale? After you sold the stock?
Roger: On paper, I guess. Yeah, certainly, on paper. But, again, the difference between having wealth on paper and having actual, concrete wealth, became very clear to me after Zynga IPO’d. There was some volatility in the stock price.
Andrew: But you sold, and what year did you sell?
Roger: I ended up…what are we in now, 2013? I sold sometime this year. It’s different, I sold different bits at different times, but, I did sell a chunk of it this year, as well.
Andrew: There’s one other thing I want to ask about, and then I want to get into…sorry I’m taking so long to even get to them…these specific tips for user acquisition, but, “Mafia Wars”? Whose idea was that?
Roger: “Mafia Wars”…so “Dope Wars”…my co-founder and I, at Curiosoft, had the idea for “Dope Wars” Then, “Dope Wars” inspired an app called “Mob Wars”. I’ve, actually since, met the creator of “Mob Wars” and he’s, sort of, an acquaintance here in San Francisco, which is cool.
Then, after I joined Zynga, we saw the rise of “Mob Wars”. There was a lot of…since the names are so similar, they’re both crime-themed, and they’re both RPGs…there were a lot of internal comparisons around, OK, “Mob Wars” is doing these revenue numbers, “Dope Wars” is doing these revenue numbers, how do we bridge the gap and beat “Mob Wars”?
We eventually realized that, while “Dope Wars” was a great property to have as an early company, Zynga didn’t want to align their brand around a drug dealing game, basically, and “Mob Wars” was doing better. So, we had to do something in the mafia space.
So, I went to Mark one evening, might have been June of 2008, and I was just like, “Look, we need a mafia game and I want to start working on it right now, can I do that?” He said, “Yes.” So, I went and grabbed some ideas I’d been working with, we all piled into a conference room, and 10 minutes after the decision was made to start the project, we designed the whole thing.
I think they laid down some code that night and, two and a half weeks later, we launched “Mafia Wars” and “Pirate Wars”, which is a pirate-themed RPG, both on Facebook and MySpace. We did four simultaneous launches in about two and a half weeks.
Andrew: That’s a whole other launch than the kind of launch that you were able to do on your own. Suddenly, things are polished. I remember, even at launch time when you guys had your iPhone app, it was beautiful. It blew away other similar games. What was it like to have all those resources?
Roger: I wasn’t involved with the iPhone game. I was only very early on the founding team of “Mafia Wars”, and scaling it a little from there.
Andrew: I see.
Roger: The way the work through was done, the fidelity moved up and up. I think, a few years after launch, we even did this event with Snoop Dog in the Las Vegas desert, where Snoop Dog blew up an armored car and there was video, and we got 10 million people to watch it or something like that.
So, yeah, it became more of a media franchise. That’s how we viewed it later, because, the property was doing…I think this was public now…it was doing a tremendous amount of revenue. It was doing, maybe, a third of the company’s revenue.
Andrew: Lately, I’ve been asking entrepreneurs to turn on their computers, privately, and show me their base camp. Show me how they launch new product, show me what goes into it.
What I’m noticing, is often they’ll have base camp, with a list of check boxes. They know what it takes to launch a new product or create new software. They have it all laid out as a template in bass camp. All they do is, hit copy, and they start going to work.
Did you start out that way with Zynga, too? Was there a list of things that have to go into an app to make it successful? Or, were you just winging it the way you were as an entrepreneur, except now, with more resources?
Roger: Even with the team that made the first version of “Mafia Wars”, I think we were four or five, we used notepad and email for project management. I would go in and make a list. I had a certain template I used to build a product spec and I would go…whenever we were building a new game, and I think I might’ve built ten games at Zynga…I’d go into my format, fill it in, share it with the team.
As my team got bigger and bigger, at one point when I was running “Fish Fill” we had, maybe 40, 45 people at the most. I would have people on staff who would make nice specs but, I would always send them that clean text version that was, just, flat.
Andrew: What was in that flat text version?
Roger: It endeavored to drill down from the broad to the specific. So, at the top level, what’s the vision of this project? What’s the existing user behavior, or user media franchise that we’re targeting?
In the case of mafia, people already watch shows about the mafia, like “The Sopranos”, there’s movies like “Godfather” that are cultural icons. So, starting from something like that, saying, “OK. Now, obviously, we have Facebook, looking at competitors was somewhere up there on the list.” Coming down to how we’d be different and better.
Part of the document was a thematic study. Painting a picture of the theme space and saying “Okay, what was in the mafia, within the mafia fiction, you have concepts like crime jobs, you have apprentices, you have mob bosses, you have prohibition era”. So we took all that and we made a big list of everything and then once we had a sense of what features we wanted based on like what business [??] we wanted to be strong in the product, we’ve gone and kind of featured mapped fiction and theme on to those KPIs so you could say something like ‘OK, we know we want a feature that’s really viral, that’s get people to invite their friends. How do we do that? Well, in the fiction space there’s this concept of a mob. It will get people in a mob who hang out and work together.’
So we decided, Okay, we’ll make everyone have their own mob and they will have to invite their friends into their mob.
Andrew: That goal was on the checklist and then you just had to think within this theme how do you hit that goal, which is to make it social.
Roger: Yes, so that will turn into a feature. The feature would be like, you know, like mafia lists, like friend mafia list and invite button. And that would be kind of like at the bottom of the document. So it kind of like started broad and then got down to the bottom to really concrete spec of what we were actually going to build.
Andrew: And I imagine, Roger, that after each product that you build using this spec sheet or this template, you figure out what you could have done better and then you’d go and change the template so that the next time it’s improved.
Roger: Yes, absolutely.
Andrew: Okay, so here are the tips that you and Jeremy talked about. I think the easiest way for me to do this without having you go back and look through the list is how about if I read the tips as you guys wrote it and maybe give an example or talk about it?
Roger: OK. I can do that. I got about 5 or 10 minutes.
Andrew: Why don’t we start with the first one which is go to the platform that is getting tons of traffic or you think is going to in the future. And we saw how you did that with [?] but how do you figure out where those platforms are? And it’s always the platform or did happen to be that you happen to around the day that Facebook was taking off but it’s not usual?
Roger: That’s a great question. There’s not always an opportunity the size of Facebook. There’s not always something that’s going to [??] come and go in waves. So, [??] the dot com boom. That was sort of an era where there was a disparity between the amount of opportunity and the number of qualifying entrepreneurs pursuing that opportunity. That ratio was much greater than one. Either that or there was a lot more opportunity than entrepreneurs so everyone that got into that space who was like halfway competent and motivated was able to make a couple of million dollars off the website or started business they could sell for a couple of thousand or make some money off of that, whatever it is.
Facebook was the next dot com boom. Smaller in magnitude but still very big. Mobile is kind of the current boom. Google Ask could be one in the near future.
Andrew: What do [??] between these booms? There was a period there between Facebook and the dot com boom where things just seemed kind of blah. In those moments do we still start a company or are you just saying, actually yes, what do we do in those moments before I go into making [??]?
Roger: Yes. Fair question. There’s always kind of many booms. Right now, I just entered XZ demo yesterday and there’s all these apps that are uber for X or strike for X. So many booms can launch around some really innovative entrepreneur coming in and kind of transforming user experience in a certain way, which ends up horizontal.
So uber for X might mean a simple mobile app where in one or two taps I can get a service done for me so that you can have an uber for having your dog walked. You’d press a button and somebody picks up your dog, etc.
Andrew: Uber for laundry, etc.
Roger: For laundry, there’s a new one NyZ called prim. It does that. So that’s sort of like a mini-boom. It’s like ‘Oh, shit. There’s this idea. Let’s all jump on this’.
If you know where to look, there’s always opportunities like that. They’re not always as big as the ones you get, like the dot com boom.
Andrew: Here’s number two. Craft your referrals, your buildables and you say that this is 60% of Drop boxes’ business. What do you mean by that?
Roger: So everybody talks about wanting viral or referral marketing built in their product. This isn’t just something you get by bolting on it, bolting on like a Facebook invite or Facebook feed mechanics. You need to have core value in your product that makes it shareable, that makes it a better experience for using it with your friends. And then I think I was saying, the statement that you repeated, it was that if Expedia can package it in a fun way. So, in the case of Dropbox, they have this concept of hard disk space that you get when you invite a friend. It’s almost like if you’re building a hard drive and your friends are helping you build it, and they’re helping you get more and more space.
There’s almost a real world analogue to that. People used to build barns together in the past, right? So there’s this kind of feeling that feels very real and earthy. I don’t believe there’s really anything new under the sun, so if you’re making some new kind of modern product you’ve get to find a referral mechanism for it. Look at some analogue in the real world and play off of that. We did this in Farmville. We had a literal barn you could build with your friends. They had to come in and 50 of them had to help you do it, and people did. They sent hundreds of millions of invites a day for barn help. It was ridiculous.
Andrew: Number three, tweak your value proposition, especially if referrals don’t work, and make sure that it’s shareable.
Roger: Yeah, so as I said, a lot of people who are seeing that kind of issue with their KPIs, they’re not [??] sizing, or people aren’t inviting friends, or they’re not as engaged as they’d like. Most of these issues come back to just not having built something that people want. Like you skipped a couple of steps and you just said, “Oh, I intuitively think this is gonna be awesome. I’m going to build it and I’m going to start pushing traffic at it.” And you’re not seeing the conversion rates that other people did.
The first step is always to do those tests, make sure you have core value. In the case of Uber it is transportation. People like transportation, and they like convenience. They also kind of like luxury, they like to show off, they like white glove experience. It’s all those things rolled into one that people already wanted. That’s why it worked. The execution early for Uber was actually pretty shitty. I was talking to a friend of mine. He said that he was looking into seed investing in Uber, and he played with the product. He tried to plug in his credit card number and it didn’t even work. Wouldn’t take his credit card even though it was a valid credit card.
Roger: So he passed on investing which was a mistake. All these products, if you’ve really found a need, a real need, you can mess up a lot and still succeed. If you haven’t found a real need, no matter how well you execute, you will not succeed.
Andrew: Number four, you’ll probably need to become an SEO ninja. You’ve seen people say, “I don’t care about SEO,” and then what happened with them?
Roger: This piece of advice was more for people running businesses, and I guess could be generalized too. When you start a business, there is a lot of pieces to that business that have to deal with that you’re not going to like. In my case, it’s SEO. When I make a website, I know I have to tune the page so that versions will show up on Google and people will find it when they search. I don’t necessarily like that I have to do that, I’d rather sit there and just build beautiful products and talk to customers all day, but that’s not the whole thing.
There’s a lot of dirty work that goes into building a product. The point I wanted to drive home and deliver with this is to look at what’s important to the business you’re building, and make sure that you’re ready to do everything you have to. Otherwise don’t even start it. If you do 80% of the work, you’ll get 0% of the result.
Andrew. And just because I know a lot of people read the transcript, transcribers, we’re saying “SEO, Search Engine Optimization” and before he said “KPI, Key Performance Indicator.” The next one, we have two others that are left. Tip number five, you’re days are numbered if paid marketing is your only sustainable strategy. Zynga was buying how many ads on Facebook at its height?
Roger: A lot of ads. Zynga was spending, in some cases, a million dollars a day in advertising.
Roger: It’s a strategy to get rocket fuel, to get out ahead of the competition, but if you’re in a market where paid marketing is the only way companies differentiate themselves, you end up running into this race to the bottom on margins, so to speak. Let’s say I’m running a subscription shoe company like ShoeDazzle, this happened to them actually, and I’ve noticed I can acquire a customer for $50 worth of advertising, and that customer on average is worth $60 in the margin that I make off shoes over the course of let’s say a 12 month period and then they unsubscribe.
So I’m making $10 on that, which is great. But then a competitor comes in and they’re willing to pay $55 for those same ads to get their product out, because maybe they just raised a lot of money from a VC and they want to get out ahead and they want to have a good series A. You see people even spending over the cost of acquisition. You see people spending more than lifetime value Just sometimes to juice their numbers. So when you get into a market like that, it’s that competitive, you just can’t sustain the business.
Andrew: Right. And finally offer cookies. That’s tip number six. Why did you guys offer cookies?
Roger: I was actually, I told you about going to the park, and testing the restaurant idea. I was in a different park testing out a business I was working about six months ago. It was a kind of a dating and counseling platform for middle aged women. We actually went to this park, we had a box of cookies, and a sign that said “Free cookies.”
People came up, we’d give them a cookie and say, “Hey, do you mind playing with this app from laptop?” It was great. When you give somebody something, something tasty, get their attention, and talk to them it’s pretty amazing what you learn from just free-form conversation with a customer.
You learn so much more than you would from a survey, from a structured survey that you push online. You can drill out on whatever questions you want.
So this is just the age old like focus group concept. Like do focus groups, talk to customers. Make it fun, and even if that’s not fun you don’t want to take your Saturday in a park to talk to customers to do it.
Andrew: All right. I know that you’ve got to go so I’m looking to make sure I’ve got your web page. What is your personal site? I thought I had it up on my screen here, I guess I don’t.
Roger: It’s just RogerDickey.com. R-O-G-E-R-D-I-C-K-E-Y.com.
Roger: It’s going through some updates in the next couple of months, but for now it’s got the information, at least.
Andrew: And it’s a good way to find you. Thank you so much for doing this interview, and before I, and I also want to say not just to the audience, but especially to the premium members for being premium members. In addition to getting courses and interviews with hundreds of entrepreneurs as part of your membership, you also are funding the pre-interview process that went into making this interview helpful for you, and for everyone else. You’re also funding the research that goes into doing these interviews. You are helping to make these interviews happen, and I really appreciate you doing that.
So, thank you for being a Mixergy Premium member, and if you’re not and you’re curious about it, just go to mixergypremium dot com, and sign up. So, thank you premium members. Thank you to the viewers who are watching for free, or reading, or listening to the audio however you prefer to take it.
Roger, thank you for doing this interview.
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