Lyle Fong, Patrick Lee tee up Hobo Labs with $4M

Serial entrepreneurs in 'learning' mode to build mobile game apps; First game expected in October

When entrepreneurs can raise millions for an idea or concept, it typically means they've had a big win in the past and former investors who are grateful. 

That's the case with Lyle Fong and Patrick Lee, who recently came together to start a stealth mobile gaming company called Hobo Labs. Last month, the two closed a $4 million round from investors who had backed them in the past, including Shasta Ventures, a big investor in Lithium Technologies, a social software platform founded by Fong in 2001, that's raised some $151 million. Rumor has it that Lithium may soon see an IPO exit. 

It didn't take very long for this venture to get off the ground and bring both men back together, many years after they started their first company while attending Berkeley as undergrads. Timing is everything, they say. This time, last year, they were both trying to figure out what to do next.  Fong was going to start another enterprise software company, but Lee made some "off-the-cuff" comment about doing another enterprise software company when the two could make games instead, Fong recalled. Hence, Hobo Labs was born.  

It's not surprising both would want to work together, as they had done so in the past. If anything is surprising it's what they're focusing on. Hobo Labs intends to produce mobile social games. Both Fong and Lee would agree - they know nothing about mobile social games, despite being very good at playing them.

After I had lunch with the team (see photo above), Fong, whose gregariousness can sometimes mask his intensity, would leave you thinking he is clueless about mobile gaming. "We're just learning," he said, as he ate his salad. He also seems to be very dedicated to his diet and working out (he has a treadmill rather than a chair in his office). I'm not letting that nonchalance fool me. My sense is underneath that facade is a person who is pretty determined to figure it out.

Lee, seemingly the studious, mild-mannered and gentle-spirited one, also doesn't give off any hint of bravado, which made me wonder how they pitched their investors?

The basic pitch was around the team and that the games would be social, they said.

Their team includes Dan Huddle, Janet Ha, Adam Traver, and Rob Weinberg. Huddle was the CTO of Xanga, which started in 1999 as a book and movie review site, but later pivoted to be a blogging site and one of the biggest on the Web. Ha was the first engineer. Of the six, only Weinberg has any mobile gaming development experience. Fong's role is CEO of the new startup while Lee is the game designer. "I've never designed a game before," said Lee. "But I have a lot of whacky ideas."

They also pitched investors on "taking guild-based game mechanics but pairing with more casual- to -mid-core gameplay," said Lee. "We were trying to be upfront about this. Lyle usually started the pitch with, 'You'd be crazy to invest in us.'"

In late August, the team had a company party, where they showcased a pilot of their soon-to-launched game in (fingers crossed) October. I was sworn to secrecy so I can't even tell you what the game is. I don't know much about games either and what makes a hit. 

But by the looks of it, it has a good of chance as any of being one. 

Their past  

Fong and Lee started their entrepreneurial track while sophomores at the University of Berkeley. Started in 1995, the company was called "Human Ingenuity" and it sold computer systems and components. Both Fong and Lee dropped out of school to pursue this company. Lee would eventually go back to finish his degree, but Fong never did.

After Human Ingenuity folded, Fong founded Gamers.com with his brother Denny. When Gamers.com went under, the Fong brothers split. Denny Fong went on to become the founder of XFire while Lyle founded Lithium. Meanwhile, Lee founded Design Reactor, an interactive design agency focused on the entertainment industry with his friend Stephen Wang. In August 1998, Design Reactor's creative director Senh Duong came up with the idea for Rotten Tomatoes and launched it on his own. After a year, the entire team focused on Rotten Tomatoes as a business and raised money for it. Rotten Tomatoes becamse an actual business in January 2000. 

Pictured above: Lyle Fong, Patrick Lee, Bambi Francisco, Dan Huddle (former CTO of Xanga), Janet Ha (first engineer at Xanga), Rob Weinberg.