Lotus: From Yoga to Software
The History of Computing
Nelumbo nucifera, or the sacred lotus, is a plant that grows in flood plains, rivers, and deltas. Their seeds can remain dormant for years and when floods come along, blossom into a colony of plants and flowers. Some of the oldest seeds can be found in China, where they’re known to represent longevity. No surprise, given their level of nitrition and connection to the waters that irrigated crops by then. They also grow in far away lands, all the way to India and out to Australia. The flower is sacred in Hinduism and Buddhism, and further back in ancient Egypt. Padmasana is a Sanskrit term...
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Section 230 and the Concept of Internet Exceptionalism
The History of Computing
We covered computer and internet copyright law in a previous episode. That type of law began with interpretations that tried to take the technology out of cases so they could be interpreted as though what was being protected was a printed work, or at least it did for a time. But when it came to the internet, laws, case law, and their knock-on effects, the body of jurisprudence work began to diverge. Safe Harbor mostly refers to the Online Copyright Infringement Liability Limitation Act, or OCILLA for short, was a law passed in the late 1980s that shields online portals and internet...
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Bluetooth: From Kings to Personal Area Networks
The History of Computing
Bluetooth The King Ragnar Lodbrok was a legendary Norse king, conquering parts of Denmark and Sweden. And if we’re to believe the songs, he led some of the best raids against the Franks and the the loose patchwork of nations Charlemagne put together called the Holy Roman Empire. We use the term legendary as the stories of Ragnar were passed down orally and don’t necessarily reconcile with other written events. In other words, it’s likely that the man in the songs sung by the bards of old are likely in fact a composite of deeds from many a different hero of the norse. Ragnar...
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One History Of 3D Printing
The History of Computing
One of the hardest parts of telling any history, is which innovations are significant enough to warrant mention. Too much, and the history is so vast that it can't be told. Too few, and it's incomplete. Arguably, no history is ever complete. Yet there's a critical path of innovation to get where we are today, and hundreds of smaller innovations that get missed along the way, or are out of scope for this exact story. Children have probably been placing sand into buckets to make sandcastles since the beginning of time. Bricks have survived from round 7500BC in modern-day Turkey where humans made...
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Adobe: From Pueblos to Fonts and Graphics to Marketing
The History of Computing
The Mogollon culture was an indigenous culture in the Western United States and Mexico that ranged from New Mexico and Arizona to Sonora, Mexico and out to Texas. They flourished from around 200 CE until the Spanish showed up and claimed their lands. The cultures that pre-existed them date back thousands more years, although archaeology has yet to pinpoint exactly how those evolved. Like many early cultures, they farmed and foraged. As they farmed more, their homes become more permanent and around 800 CE they began to create more durable homes that helped protect them from wild swings in the...
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The Evolution of Fonts on Computers
The History of Computing
Gutenburg shipped the first working printing press around 1450 and typeface was born. Before then most books were hand written, often in blackletter calligraphy. And they were expensive. The next few decades saw Nicolas Jensen develop the Roman typeface, Aldus Manutius and Francesco Griffo create the first italic typeface. This represented a period where people were experimenting with making type that would save space. The 1700s saw the start of a focus on readability. William Caslon created the Old Style typeface in 1734. John Baskerville developed Transitional typefaces in 1757....
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Flight Part II: From Balloons to Autopilot to Drones
The History of Computing
In our previous episode, we looked at the history of flight - from dinosaurs to the modern aircraft that carry people and things all over the world. Those helped to make the world smaller, but UAVs and drones have had a very different impact in how we lead our lives - and will have an even more substantial impact in the future. That might not have seemed so likely in the 1700s, though - when unmann Unmanned Aircraft Napoleon conquered Venice in 1797 and then ceded control to the Austrians the same year. He then took it as part of a treaty in 1805 and established the first Kingdom of Italy....
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Flight: From Dinosaurs to Space
The History of Computing
Humans have probably considered flight since they found birds. As far as 228 million years ago, the Pterosaurs used flight to reign down onto other animals from above and eat them. The first known bird-like dinosaur was the Archaeopteryx, which lived around 150 million years ago. It’s not considered an ancestor of modern birds - but other dinosaurs from the same era, the theropods, are. 25 million years later, in modern China, the Confuciusornis sanctus had feathers and could have flown. The first humans wouldn’t emerge from Africa until 23 million years later. By the 2300s BCE, the...
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SABRE and the Travel Global Distribution System
The History of Computing
Computing has totally changed how people buy and experience travel. That process seemed to start with sites that made it easy to book travel, but as with most things we experience in our modern lives, it actually began far sooner and moved down-market as generations of computing led to more consumer options for desktops, the internet, and the convergence of these technologies. Systems like SABRE did the original work to re-think travel - to take logic and rules out of the heads of booking and travel agents and put them into a digital medium. In so doing, they paved the way for future...
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The Story of Intel
The History of Computing
We’ve talked about the history of microchips, transistors, and other chip makers. Today we’re going to talk about Intel in a little more detail. Intel is short for Integrated Electronics. They were founded in 1968 by Robert Noyce and Gordon Moore. Noyce was an Iowa kid who went off to MIT to get a PhD in physics in 1953. He went off to join the Shockley Semiconductor Lab to join up with William Shockley who’d developed the transistor as a means of bringing a solid-state alternative to vacuum tubes in computers and amplifiers. Shockley became erratic after he won the Nobel Prize and...
info_outlineMark Pincus was at the forefront of mobile technology when it was just being born. He is a recovering venture capitalist who co-founded his first company with Sunil Paul in 1995. FreeLoader was at the forefront of giving people the news through push technology, just as the IETF was in the process of ratifying HTTP2. He sold that for $38 million only to watch it get destroyed. But he did invest in a startup that one of the interns founded when he gave Sean Parker $100,000 to help found Napster.
Pincus then started Support.com, which went public in 2000. Then Tribe.net, which Cisco acquired. As a former user, it was fun while it lasted. Along the way, Pincus teamed up with Reid Hoffman, former PayPal executive and founder of LinkedIn and bought the Six Degrees patent that basically covered all social networking. Along the way, he invested in Friendster, Buddy Media, Brightmail, JD.com, Facebook, Snapchat, and Twitter.
Investing in all those social media properties gave him a pretty good insight into what trends were on the way. Web 2.0 was on the rise and social networks were spreading fast. As they spread, each attempted to become a platform by opening APIs for third-party developers. This led to an opening to create a new company that could build software that sat on top of these social media companies. Meanwhile, the gaming industry was in a transition from desktop and console games to hyper-casual games that are played on mobile devices. So Pincus recruited conspirators to start yet another company and with Michael Luxton, Andrew Trader, Eric Schiermeyer, Steve Schoettler, and Justin Waldron, Zinga was born in 2007. Actually Zinga is the dog. The company Zynga was born in 2007.
Facebook was only three years old at the time, but was already at 14 million users to start 2007. That’s when they opened up APIs for integration with third party products through FBML, or Facebook Markup Language. They would have 100 million within a year. Given his track record selling companies and picking winners, Zynga easily raised $29 million to start what amounts to a social game studio. They make games that people access through social networks. Luxton, Schiermeyer, and Waldron created the first game, Zynga Poker in 2007. It was a simple enough Texas hold ’em poker game but rose to include tens of millions of players at its height, raking in millions in revenue.
They’d proven the thesis. Social networks, especially Facebook, were growing.. The iPhone came out in 2007. That only hardened their resolve. They sold poker chips in 2008. Then came FarmVille.
FarmVille was launched in 2009 and an instant hit. The game went viral and had a million daily users in a week. It was originally written in flash and later ported to iPhones and other mobile platforms. It’s now been installed over 700 million times and ran until 2020, when Flash support was dropped by Facebook. FarmVille was free-to-play and simple. It had elements of a 4x game like Civilization, but was co-op, meaning players didn’t exterminate one another but instead earned points and thus rankings. In fact, players could help speed up tasks for one another.
Players began with a farm - an empty plot of land. They earned experience points by doing routine tasks. Things like growing crops, upgrading items, plowing more and more land. Players took their crops to the market and sold them for coins. Coins could also be bought. If a player didn’t harvest their crops when they were mature, the crops would die. Thus, they had players coming back again and again. Push notifications helped remind people about the state of their farm. Or the news in FreeLoader-speak.
Some players became what we called dolphins, or players that spent about what they would on a usual game. Maybe $10 to $30. Others spent thousands, which we referred to as whales. They became the top game on Facebook and the top earner. They launched sequels as well, with FarmVille 2 and FarmVille 3.
They bought Challenge Games in 2010, which was founded by Andrew Busy to develop casual games a well. They bought 14 more companies. They grew to 750 employees. They opened offices in Bangalore, India and Ireland. They experimented with other platforms, like Microsoft’s MSN gaming environment and Google TV. They released CastleVille. And they went public towards the end of 2011. It was a whirlwind ride, and just really getting started. They released cute FarmVille toys.
They also released Project Z, Mafia Wars, Hanging with Friends, Adventure World, and Hidden Chronicles. And along the way they became a considerable advertising customer for Facebook, with ads showing up for Mafia Wars and Project Z constantly. Not only that, but their ads flooded other mobile ad networks, as The Sims Social and other games caught on and stole eyeballs. And players were rewarded for spamming the walls of other players, which helped to increase the viral nature of the early Facebook games.
Pincus and the team built a successful, vibrant company. They brought in Jeff Karp and launched Pioneer Trail. Then another smash hit, Words with Friends. They bought Newtoy for $53.3 million to get it, after Paul and David Bettner who wrote a game called Chess with Friends a few years earlier. But revenues dropped as the Facebook ride they’d been on began to transition from people gaming in a web browser to mobile devices.
All this growth and the company was ready for the next phase. In 2013, Zynga hired Donald Mattrick to be the CEO and Pincus moved to the role of Chief Product Officer. The brought in Alex Garden, the General Manager for Xbox Music , Video, and Reading, who had founded the Homeward creator Relic Entertainment back in the 1990s. The new management didn’t fix the decline. The old games continued to lose market share and Pincus came back to run the company as CEO and cut the staff by 18 percent. In 2015 they brought in Frank Gibeau to the board and by 2016 moved him to CEO of the company.
One challenge with the move to mobile was who got the processing payments. Microtransactions had gone through Facebook for years. They moved to Stripe in 2020. They acquired Gram Games, to get Merge Dragons! They bought Small Giant Games to get Empires & Puzzles. They bought Peak Games to get Toon Blast and Toy Blast. They picked up Rollic to get a boatload of actions and puzzle games. They bought Golf Rival by acquiring StarLark. And as of the time of this writing they have nearly 200 million players actively logging into their games.
There are a few things to take from the story of Zynga. One is that a free game doesn’t put $2.8 billion in revenues on the board, which is what they made in 2021. Advertising amounts for just north of a half billion, but the rest comes from in app purchases. The next is that the transition from owner-operators is hard. Pincus and the founding team had a great vision. They executed and were rewarded by taking the company to a gangbuster IPO. The market changed and it took a couple of pivots to get there. That led to a couple of management shakeups and a transition to more of a portfolio mindset with the fleet of games they own. Another lesson is that larger development organizations don’t necessarily get more done. That’s why Zynga has had to acquire companies to get hits since around the time that they bought Words with Friends.
Finally, when a company goes public the team gets distracted. Not only is going through an IPO expensive and the ensuing financial reporting requirements a hassle to deal with, but it’s distracting. Employees look at stock prices during the day. Higher ranking employees have to hire a team of accountants to shuffle their money around in order to take advantage of tax loopholes. Growth leads to political infighting and power grabbing. There are also regulatory requirements with how we manage our code and technology that slow down innovation. But it all makes us better run and a safer partner eventually.
All companies go through this. Those who navigate towards a steady state fastest have the best chance of surviving one more lesson: when the first movers prove a monetization thesis the ocean will get red fast. Zynga became the top mobile development company again after weathering the storm and making a few solid acquisitions. But as Bill Gates pointed out in the 1980s, gaming is a fickle business. So Zynga agreed to be acquired for $12.7 billion in 2022 by Take-Two Interactive, who now owns the Civilization, Grand Theft Auto, Borderlands, WWE, Red Dead, Max Payne, NBA 2K, PGA 2K, Bioshock, Duke Nukem, Rainbow Six: Rogue Spear, Battleship, Centipede, and the list goes on and on. They’ve been running a portfolio for a long time. Pincus took away nearly $200 million in the deal and about $350 million in Take-Two equity. Ads and loot boxes can be big business.
Meanwhile, Pincus and Hoffman from LinkedIn work well together, apparently. They built Reinvent Capital, an investment firm that shows that venture capital has quite a high recidivism rate. They had a number of successful investments and SPACs.
Zynga was much more. They exploited Facebook to shoot up to hundreds of millions in revenue. That was revenue Facebook then decided they should have a piece of in 2011, which cut those Zynga revenues in half over time. This is an important lesson any time a huge percentage of revenue is dependent on another party who can change the game (no pun intended) at any time. Diversify.