20VC Zynga's Mark Pincus on When To Ride Your Winners and Cut Your Losers, Why People With Broken Resumes Make The Best Hires & The 2 Biggest Lies Told In Silicon Valley By Founders and VCs

In a conversation with Harry Stebbings, Mark Pincus, the founder of Zynga and an early pioneer in social networking, shares his journey from investing in Napster to creating social networks like Tribe and ultimately revolutionizing social gaming with Zynga. Pincus emphasizes the importance of aligning with investors who share the vision for long-term success, the value of hiring team members with "broken resumes" for their hunger and humility, and the need to differentiate between winning instincts and losing ideas. He also discusses the challenges of consumer startup distribution and the potential of cryptocurrency. Insights from Bing Gordon and the significance of product releases in gauging success are also highlighted.

• Harry Stebbings introduces Mark Pincus, a serial entrepreneur and investor.
• Mark Pincus is known for founding Zynga and his investments in major internet companies.
• Mark Pincus collaborated with Reed Hoffman to purchase a social networking patent.
• Harry expresses gratitude to Bing Gordon for introducing him to Mark Pincus.

Hello and welcome back to the 20 minutes vc with me, Harry Stebbings at H. Debbings with two B's on Snapchat. I always love to see you there and hear your thoughts and feedback on the show. However, to our guest today, and you all know I love doing the show, but it's episodes and guests like this with truly incredible and inspiring people that make me really appreciate just how far the show has come and really be thankful for being able to do it.

The quote is Harry Stebbings' introduction to the podcast episode and sets the stage for the interview with Mark Pincus.

With that in mind, I'm so honored to have Mark Pinkus on the show today.

Harry Stebbings expresses his honor in having Mark Pincus as a guest on the show.

• Mark Pincus founded Zynga, introducing social gaming to the mass market.
• Zynga's games, such as Farmville and Words with Friends, have been played by over 1 billion people.
• Mark Pincus has invested in companies like Facebook, Twitter, Airbnb, Snapchat, and Xiaomi.
• He also founded startups including Support.com and Tribe.net.
• Mark Pincus and Reed Hoffman purchased the six degrees patent to protect innovation in social networking.

Mark really needs no introduction, but in the theme of tradition, Mark is a serial entrepreneur and investor best known for founding little known Zynga, the first company to introduce the mass market to social gaming.

Harry Stebbings provides background on Mark Pincus's achievements and contributions to the tech industry.

• Mark Pincus and Reed Hoffman purchased a key social networking patent in 2003.
• The patent purchase was aimed at preventing patent trolls from hindering innovation.

A fun fact recognizing the importance of social networking, in 2003, Mark teamed up with his friend Reed Hoffman, the founder of LinkedIn, to purchase the fundamental six degrees patent, which broadly covers social networks, in order to keep it out of the hands of patent trolls and guarantee that all players could innovate on this technology.

The quote explains the strategic move by Mark Pincus and Reed Hoffman to protect social networking innovation.

• Harry Stebbings thanks Bing Gordon for the introduction to Mark Pincus.
• Harry endorses Raiden travel products and Simba mattresses, sharing personal use and benefits.

I do also want to say a big thank you to bing Gordon at Kleiner Perkins for the intro to Mark's day, without which this episode would not have been possible.

Harry Stebbings acknowledges Bing Gordon for making the interview with Mark Pincus possible.

• Mark Pincus reflects on the potential of a "people web" influenced by Napster and social connections.
• He discusses the origins of social networking and his involvement with Friendster and Tribe.
• Mark Pincus identifies social networks as themed cocktail parties and sees potential for more engaging activities within them.
• The opening of Facebook's platform in 2007 provided an opportunity for rapid innovation and application development.
• Social gaming was seen as a way to create an "always on bar" for socializing on networks like Facebook and Myspace.

Well, I don't know if it was exactly the 2007 moment as much as I think that in 2002 and 2003, a few of us started getting together and really thinking about the potential for a people web.

Mark Pincus discusses the early conceptualization of social networking and its potential.

And so when Facebook opened up in May of 2007, there was this interesting opportunity for people to try lots and lots of kinds of apps.

The quote highlights the pivotal moment when Facebook's platform became a catalyst for social gaming innovation.

• The social networks' open platforms allowed for quick iteration and testing of new ideas.
• Developers could reach a broad audience without traditional funding or lengthy development cycles.

And so you could, in a matter of days or weeks, be bringing an application out to a whole user base. And before that it would have taken an entire company with venture backing, and it might be a year or two before you even got a product in front of a consumer.

The quote emphasizes the significant shift in how consumer applications could be developed and launched thanks to social networks like Facebook.## Consumer Distribution Challenges

• Current fallow period in consumer sector due to costly distribution channels.
• Incumbents are driving up the cost of these channels.
• Mark Pincus highlights that distribution exists, but organic virality is lacking.
• References Evan Spiegel's decision with Snapchat as an example of unconventional growth.
• Emphasizes the importance of maintaining the value of distribution channels like text messaging.
• Warns against overuse of channels, which can lead to their devaluation.

"That is a problem, but I wouldn't say that the problem is that there isn't distribution."

This quote by Mark Pincus acknowledges the issue but refutes the idea that distribution channels are unavailable, suggesting that the problem lies elsewhere.

"The distribution is there, bigger than ever, but there are not easy, proven paths that people can follow."

Mark Pincus points out that while distribution opportunities are abundant, the challenge lies in finding straightforward and successful strategies for organic growth.

• Mark Pincus prefers focusing on expected value rather than avoiding losses.
• Encourages cautious optimism within teams, to focus on potential success.
• Stresses the importance of taking risks and not being overly risk-averse.
• Discusses his personal and company real estate investments as examples of this mindset.

"And the first part of what you said, expected value over loss points, it gets more to a desire and a need to instill cautious optimism into our teams and ourselves."

This quote explains Mark Pincus's approach to decision-making, emphasizing the importance of adopting a mindset geared towards potential gains rather than being paralyzed by the fear of losses.

"I think you can waste a lot of time making sure that you don't do something stupid at the expense of doing something smart."

Mark Pincus criticizes an overly cautious approach that can hinder smart decision-making and risk-taking, which are essential for growth and success.

• Mark Pincus shares insights on hiring and managing talent.
• Acknowledges his weakness in interviewing and assessing candidates.
• Prefers hiring individuals with 'broken resumes' who have experienced failure.
• Values humility, curiosity, and a hunger for success in potential hires.
• Warns against hiring those who may rest on their laurels due to past successes.
• Advocates for a diverse and inclusive team culture that encourages creativity and resourcefulness.

"I like to hire people who have what I call broken resumes."

Mark Pincus explains his preference for hiring people who have faced setbacks, as he believes they bring humility, curiosity, and determination to succeed.

"So all that is involved in this question of how do you hire and create great teams and at the same time wanting to bring in some weird, quirky people and have a culture that allows for them so that you get some good diversity of people."

This quote underscores Mark Pincus's belief in the value of diversity and inclusion within teams, which he sees as essential for fostering creativity and a strong team culture.

• Discusses the importance of alignment between investors, founders, and team members.
• Emphasizes the need for a shared vision and long-term commitment.
• Recognizes the value of everyone thinking in the same direction but cautions against uniformity that stifles diversity and growth.

"I think one of the ingredients that I think was really key to making Zynga successful in the early days was alignment."

Mark Pincus attributes part of Zynga's early success to strong alignment among stakeholders, which ensured everyone was working towards the same goals.

"We wanted to remain an independent company and never sell the company."

This quote reveals the specific vision that was shared among Zynga's stakeholders, which was to maintain independence and not aim for a quick exit strategy.## Alignment with Investors and Board

• The importance of having alignment with investors, board members, and team members is crucial for the success of a startup.
• Creating a unified vision and mission helps during challenging times and decision-making.
• A diverse team with shared vision but different skills and perspectives is more beneficial than a team of clones.

"So the first part of it I like of I think that this alignment and having alignment with your investors is so key too. And your board and having everybody signing up for the same mission and journey turns out to be really powerful."

This quote emphasizes the power of alignment among all stakeholders in pursuing a common mission and journey, highlighting its significance in the foundation of a startup.

"You want them to share your vision and commitment intensity, but you're better off if they are bringing some additional dna that you and others don't have."

The quote underlines the importance of diversity in the team's skill set and perspectives, despite a shared vision and commitment.

• The challenge in achieving true investor alignment when investors and founders often don't disclose their true intentions.
• The effectiveness of being upfront with potential investors about reasons they may not want to invest.
• The strategy of withholding financial details until late in the investment process to avoid attracting investors solely based on financial performance.

"The two biggest lies around startups are founders saying, I don't care about the valuation and investors saying we don't care about control."

This quote reflects the common dishonesty in the startup investment space regarding valuation and control concerns.

"I started off by saying to investors, let me tell you the top ten reasons you're not going to want to back us, and if you still want to talk after that, we will, but then we won't waste time."

Mark Pincus discusses his approach to investor transparency, aiming to filter out incompatible investors early in the process.

• There is no single formula for balancing vision and adaptability in startups.
• Entrepreneurs must distinguish between their 'winning instincts' and potentially 'losing ideas.'
• The danger of sticking with a B+ idea is that it might lead to mediocrity and waste time.

"I think we all have to develop this ability to separate our winning instincts from our losing ideas."

This quote highlights the critical entrepreneurial skill of discerning between valuable instincts and ineffective ideas.

• Mark Pincus shares his experience with the 'people web' as his winning instinct, which began with his investment in Napster.
• His biggest failing idea was sticking with one iteration of a social network, Tribe, for too long without considering alternatives.
• Success in the modern startup landscape involves rapid testing and learning from the industry and the market.

"And it's why you might almost succeed and not completely or not be the winner. So that's the tough part."

This quote describes the challenge of almost succeeding due to sticking with a good but not great idea.

"And the most failing idea was tribe. I stubbornly stuck with one iteration on a social network for four years and I got it so wrong."

Mark Pincus reflects on his experience with Tribe as a learning opportunity that taught him the importance of iterating and testing ideas rapidly.

• The importance of learning from past entrepreneurial mistakes for future success.
• Mark Pincus applies the lessons from Tribe to Zynga, emphasizing the value of rapid testing and innovation.
• Keeping up with industry developments and continuously evolving ideas is essential for sustained success.

"Learning that I got wrong with tribe and then got right in the Zynga model and aided by the fact that we could be one of the first app companies and test so many ideas so quickly before we had to build a whole product."

This quote demonstrates how past failures informed future strategies, particularly the rapid testing model that contributed to Zynga's success.## Favorite Book

• Mark Pincus recommends "Ready Player One" as a must-read.
• The book is a visualization of a potential virtual reality world future.

Ready player one. Because it's by far the best way to visualize what this virtual reality virtual world future could look like.

The quote explains why Mark Pincus finds "Ready Player One" significant, highlighting its depiction of a virtual reality future.

• Mark Pincus reflects on not investing in Square when Jack Dorsey introduced the dongle.
• He felt too busy at the time to consider the opportunity.

I don't know that it was offered to me, but square when Jack Dorsey was walking around the hallways at a conference with a dongle and I thought I was too busy.

This quote reveals Mark Pincus's regret over not seizing the opportunity to invest in Square early on.

• Bing Gordon and John Doerr have been influential teachers to Mark Pincus.
• Bing Gordon's connection with Mark started when EA considered suing his company.
• John Doerr taught Mark the value of courage and leadership in venture investors and board members.

Bing Gordon has been an amazing teacher to me... John Doerr has been an amazing teacher to me for years.

The quote highlights the significant impact Bing Gordon and John Doerr have had on Mark Pincus as mentors and teachers.

• Reading "Microcosm" by George Gilder in 1989 was transformative for Mark Pincus.
• The book changed his perspective on the future impact of microchips and networks.

I read this book in 1989 called Microcosm by George Gilder, and that changed my thinking about the whole future.

This quote discusses a pivotal moment in Mark Pincus's life that shaped his outlook on technological advancement.

• Zynga's success is a career highlight for Mark Pincus.
• Product releases and user engagement are particularly rewarding moments for him.
• The excitement of users interacting with new features is likened to Christmas morning and communion.

Well, zynga by far, I guess, obviously... there's no greater high that at least a consumer founder or product creator can have than seeing that people love your product.

The quote captures the essence of Mark Pincus's career highlights, emphasizing the joy of user appreciation and product success.

• Mark Pincus follows his intellectual and emotional interests.
• He seeks growth by stepping out of his comfort zone.
• Mark is enthralled by the potential of cryptocurrencies and their transformative possibilities.

I just follow things that interest me intellectually and emotionally... I'm completely drinking the Kool Aid and I'm completely enthralled by just the potential of cryptocurrencies.

The quote conveys Mark Pincus's approach to his future endeavors, specifically his excitement about the potential of cryptocurrencies.

• Mark Pincus appreciates the 20-minute format of the podcast.
• The podcast host, Harry Stebbings, endorses Raiden luggage and Simba mattresses.
• Special offers are mentioned for Raiden luggage and Simba mattresses.

I love the 20 minutes format... You'll get a $25 of Uber credit this season... It's changed the game for me in travel.

These quotes from both Mark Pincus and Harry Stebbings express Mark's approval of the podcast's format and Harry's promotional mentions of products he endorses.