[Editor's Note: Seattle-area journalist Carol Tice is the co-author, with serial entrepreneur David Lester, of the new book How They Started: How 25 Good Ideas Became Great Companies. In this excerpt, reprinted with permission, Tice tells the inside story of how entrepreneur Mark Pincus and his business partners turned an idea into the social gaming powerhouse Zynga.]

Searching for the next big consumer internet idea, Mark was drawn to the world of online gaming. People were playing games online in 2006, especially casino games such as poker. But they could play only against the computer or unidentified individuals.

At the time, Facebook had 50 million members. Mark observed that the most common activity on Facebook was viewing friends’ photos. Beyond that and writing updates, there wasn’t much to do. To address the problem, Facebook opened up its site to outside developers in 2007, so that new programs could be designed for the platform.

Mark saw his opportunity. His new start-up’s software would let users play against their Facebook friends. While most social networks aimed to help people make new connections online, his would offer a new way to connect with people you already knew.

The initial goal was to create and launch one social game. Mark decided it would be easier and faster to create a socialized version of a poker game than create a new game from scratch. It would also be easier to get Facebook users to try a variation on a familiar game. This would turn out to be a canny move; while competitors slaved to create custom games, Mark’s start-up would be early out of the gate.

A non-techie himself, Mark began tapping his extensive professional network to find experienced programmers who could create and operate the game. Paul Martino, who had co-founded online community Tribe with Mark, recalls Mark asking him and another Tribe co-founder, Chris Law, to meet him for lunch at a San Francisco coffee shop to discuss his start-up plans.

While Paul and Chris awaited Mark’s arrival, a horrific car crash took place outside. Paul rushed out to find Mark emerging from a totaled BMW he’d been test-driving. The salesman screamed at the other vehicle’s driver, who had run a red light. But Mark strolled into the restaurant clad in his usual work attire – a hoodie and jeans – and sat down as if nothing had happened.

“He was literally almost killed,” Paul recalls. “I say, ‘Do you want to go to the hospital?’ and he says, ‘No, I want to tell you about this start-up idea I have. Could you hire me a dude to write a poker app?’”

Mark Pincus (Photo by Zynga Games, via Flickr.)

Paul and Chris loved Mark’s social game idea. Chris had done research at Tribe on Korean social network sites that sold virtual “gifts” users could give to friends. Mark’s social games would offer a platform for selling such virtual goods.

Another new wrinkle: unlike traditional online and console games, where players paid to purchase a game, these games would be free. Only players who chose to purchase upgrades or virtual items would pay.

At first, Mark funded the new venture himself. The founding team consisted of Eric Schiermeyer, Michael Luxton, Steve Schoettler, Andrew Trader, and Justin Waldron. Nineteen-year-old Justin was a computer science student at the University of Connecticut, whom Eric recruited to serve as lead engineer.

Michael and Eric came from eUniverse (now Intermix Media). Andrew had been the CEO of Utah Street Networks, which operated Tribe.net. Server engineer Steve had worked with Mark on a short-lived project after Tribe sold. Other key early hires were Mark’s co-founders from Support.com, Scott Dale and Cadir Lee, as well as Kyle Stewart, another Support.com veteran.

In June 2007 work began on Texas HoldEm Poker (later known as Zynga Poker). The team worked remotely for several months, staying in touch via Skype and AOL Instant Messenger. Justin was on summer vacation from college and living in Connecticut, while Mark and the rest of the team were scattered in various California locales. Steve was working out of a converted-garage home office in Menlo Park, and sometimes Michael – who lived in nearby Sunnyvale – would join him there. But for the most part, it was a virtual team.

Zynga’s Texas HoldEm was launched on Facebook that fall. Facebook users took to the game quickly. Paul recalls that within a few months Mark told him Zynga was pulling in $1 million monthly. A key innovative feature of the game platform was a “social bar” that showed users what games their friends played.

Seeing encouraging initial results, the team took an office at the Chip Factory, an office building Mark owned in San Francisco’s Potrero Hill neighborhood. The staff grew quickly to 27, as Zynga hired more game developers and introduced socialized versions of other games including blackjack, and its own versions of popular tabletop games Risk, Boggle, and Battleship.

“For me it wasn’t the initial numbers that convinced me [to move to San Francisco],” Justin later wrote, “but the feeling that what we had created was fundamentally different than what gaming had been, and would therefore be completely disruptive. It felt like the first time you used Facebook or any other product that you now can’t imagine living without.”

How They Started: How 25 Good Ideas Became Great Companies, by David Lester and Carol Tice, is available at AmazonBarnes & Noble and 800 CEO Read.

Veteran freelance writer Carol Tice has covered business and finance topics for the past 20 years, first as a business journalist and now as a writer and blogger for print and online publications such as EntrepreneurThe Seattle Times and Alaska Airlines magazine, among many others.

Follow her on Twitter @ticewrites and visit her Web site caroltice.com.

Comments

  • http://twitter.com/jclaussftw Jason Gerard Clauss

    LOL. Revolutionizing gaming. I guess you could call it a revolution in the same way Lenin and Mao had revolutions. Gag.

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