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Play your startup like a poker hand; fold often; but when you have a great hand, go all in
As the daughter of a poker player, this advice to entrepreneurs definitely hits home.
In this segment of Lessons Learned, Mark Pincus, founder of Zynga, the largest social gaming company and publisher of the popular Texas Hold'Em poker game on social networks, shares his advice to entrepreneurs. Pincus has raised $39 million in funding for Zynga to date. In the past, he co-founded Tribe, one of the first social networks having launched in 2003, which was sold to Cisco Systems. He also founded software company SupportSoft, which went public during the Internet heyday.
The bottom line from Pincus is, to borrow from the great Kenny Rogers, "Know when to hold'em, know when to fold'em."
1 - Pick your macro first. Figure out a good macro. In other words, pick a body of water that floats all boats. If you pick a good macro, and you do a bad job at execution, you can still stumble into a good business. If you pick a bad macro, and you execute flawlessly, there’s a good chance that it won’t be a viable business. For instance, Pincus' best friend started a chain of restaurants. It was brilliantly executed and profitable, said Pincus. But restaurants are such a "bad macro," his friend couldn’t really make a big business out of it, partly because he didn't have access to capital. So, pick a good macro because you'll probably get it wrong for a while.
2 - Start your company as a project, not a company. Many people walk around with a business plan, hoping to get funded to start it. If they get funding, they decide to do it. That's not the right way to do it. Start everything as a project and look for positive indicators before you commit and go all in. In other words, treat your hand like a good hand of poker. Don't play every hand. By folding a lot of bad hands, you don’t waste your chips and time on mediocre hands.
3 - When you do find that all the stars align and you have a good hand. Go all in. Go all in and raise as much money as you can, and keep bringing in more experienced and top-notch people in as you can.
Pincus is sure sounding like my father giving advice to me about how to play poker.
Editor's note: Check back to hear more from Pincus and his lessons learned from Tribe, a social network that began in 2003.
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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users. Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered at the Chip Factory in San Francisco. For more information, please visit www.zynga.com.