How I Got Here Nov 14 2011

The Guy Behind FarmVille

By joseph walker

It's not unusual in Silicon Valley for a 20-something entrepreneur to sell a start-up for millions.

But when Sizhao Yang sold MyMiniLife to Zynga in 2009, he helped make its chief executive, Mark Pincus, into a paper billionaire. The MyMiniLife team developed the FarmVille game, and the template for other Zynga games played on Facebook, like CityVille and FrontierVille. With about 30 million monthly users, FarmVille has been among the top 10 Facebook games since its launch in 2009.

Yang grew up in Glenview, Ill., and attended the University of Illinois at Urbana-Champaign, where he studied computer science, mathematics and finance. He joined IBM as an IT specialist out of college, then quit after less than a year to attend graduate school at UCLA.

He didn't last long in graduate school, either, and moved to Silicon Valley to pursue his start-up dream. He created MyMiniLife as a social network and, when Zynga won a bidding war for the company in 2009, Yang joined Pincus and designed the FarmVille iPhone application. All that, of course, was long before Zynga filed to go public at an estimated valuation as high as $20 billion.

The ever-restless Yang quit Zynga in 2010 -- leaving at least $10 million on the table -- to co-found BetterWorks, a cloud-based software company, which in August raised $8 million in venture financing.

Yang, now 28, spoke to FINS about why he wouldn't have sold MyMiniLife to Pincus if he could do it over again, the importance of quick decision-making, and why he gave up eight figures by leaving Zynga.

Joseph Walker: IBM was your first job out of college. What was that like?

Sizhao Yang: IBM had this big push toward virtualization and telecommuting, and practically everyone in my division worked from home. I reported to three different people: one in Philly, one in Florida, one in Chicago. The job assignment was good, but there was no sense of camaraderie. When you're a young kid and you want to enter the workforce, you want to be working with other people on a common task, and if you have questions, you want to ask them. I felt like I was just an Indian outsourced contractor. So I left after 10 months.

JW: Why did you drop out of graduate school and pursue your start-up full-time?

SY: I applied for grad school in the middle of working at IBM. I decided I wanted to be in California, and I chose UCLA. I decided to use the summer break right before grad school to start MyMiniLife. I thought it would be an interesting thing to pull off between my job and grad school. I invested $5,000 of my savings, and a friend invested $5,000.

We were looking at Facebook, and we thought Facebook was going to be big, but we didn't think it was going to be fully featured enough. We thought about the concept of a social network being distributed as a widget.

We had two college interns and we coded on a kitchen table. We did it for three months and we launched it to the University of Illinois, Urbana-Champaign's main website. We had 1,000 people sign up, but no one came back. To say it was demoralizing is an understatement.

So I went to grad school, and all of us, we were basically doing it part-time but the project wasn't being pushed forward. I realized that if I didn't do this full-time, it was going to die. So I decided to take a leave of absence, and try getting funding in Los Angeles.

I got rejected by eight different angel investors. I realized that as a younger guy I had to move to Silicon Valley to get any recognition. So I moved to the Bay Area and I got two part-time jobs, one was working at Stanford as a research programmer, and the second was teaching computer programming at a San Francisco art school. I was living in San Mateo at the time, working 20 hours a week, and the rest of the time I was working on my start-up.

JW: What was your big break?

SY: I decided to submit MyMiniLife onto this little site called TechCrunch.

Michael Arrington got the submission at 11 p.m. on a Saturday and created a MyMiniLife widget on TechCrunch and wrote about it. We were at the top of the site on Sunday and Monday, and so when all the VCs woke up on Monday, they saw us on the site. Accel called me, Polaris Ventures called me, and two angel investors called me. I was this kid in San Mateo and they emailed our customer support and said "Can you put me in touch with Mr. Yang?" I wrote back, "Surely, I'll coordinate immediately."

We scaled the site from 30,000 users to 4 million users from late 2007 to early 2009.

JW: MyMiniLife had some success as a virtual world/social network, but you had trouble retaining users. Why did you go into gaming?

SY: Everyone plays games. Originally, we were trying a spreadsheet game, or a Monopoly game, and we basically tried to do a photo Twitter. Those didn't work out. We were going to do a pets game, a music game and a farm game. In the course of doing that, we were about to run out of money in early 2009. We started talking with people about an acquisition as well as raising a venture capital investment.

Max Levchin of Slide made the first acquisition offer, then Zynga followed, Hi5 followed, Challenge Games followed. It became a bidding war between all four of them, and we were also looking at VCs as well as angel investors.

Zynga wined and dined us. They kept on raising the bid. They were fairly generous with us in terms of the acquisition. Mark Pincus also spent a bunch of time meeting with us. He delayed a board meeting to go over the agreement line by line.

JW: How did FarmVille come about?

SY: Zynga asked us how we would build a farm game. We showed them how we would do a farm game and do it within five weeks. We took the offer from Zynga and did the game in five weeks. We closed the acquisition on June 5, 2009 and launched the game on June 13. We worked on the game during the acquisition process.

We wanted to make sure that if Zynga backed out of the acquisition, that we would retain the intellectual property for the farm game. So we asked for an explicit contract that said if the acquisition fell through we owned the entire IP, the entire game, everything. They signed an agreement that said if the acquisition fell through the farm game would be entirely our own.

JW: Was it tough giving up control of your company when it was acquired by Zynga?

SY: It is what it is. After acquisition you're subject the rules of the field, so to speak, so whatever happens within Zynga you're subject to. You don't have the same control over projects anymore. I didn't like it as much as owning my own company.

JW: Did you think Zynga would get this big?

SY: We thought it would be big, we didn't realize it was going to be this big. If I had known then what I know now, I don't think we would have sold the company. But we did fairly well for ourselves, as well as for our investors.

JW: How did you end up leaving Zynga?

SY: I gave my notice to Zynga on October 22, 2010, and left on October 23. I left about eight figures in restricted stock on the table. I realized that when I'm 80 or 90 years old, am I going to be more proud of the fact that I created FarmVille and BetterWorks, or more proud of the fact that I have $20 or $40 million in my bank account? For me I was going to be more proud of the things I create and the things I do.

JW: What was working with Mark Pincus like?

SY: One thing about Pincus is his judgment abilities. He's super fast at deciding, and his ability to size something up quickly was just unbelievable.

Even while the company was growing, the really good thing about the FarmVille story was we didn't die on the vine. He kept on supporting us with resources. He pulled programmers from other divisions to help us. He supported us with the marketing budget.

In the grand scheme of things, we're one of the more successful acquisitions simply because the organization actually supported us whereas if you look at a lot of the acquisitions, they got into messes with the operational team. He was very data-driven and very functionality driven and supported the organization.

JW: What was your impact at Zynga?

SY: In the Zynga S-1 they talk about technology and scalability as a proprietary advantage and they tout what's called the shared tech group as the source of their proprietary advantage. That's basically MyMiniLife. What I'm proud of first is FarmVille, second is the entire platform, powering 250 million in monthly uniques, and hundreds of millions in revenue. I'd say that's pretty decent for my first company.

JW: Do you have any advice for people who would like to become their own boss?

SY: The two main things I did were read a lot to construct best practices and mental models about how I approach things. Mental models are a Charlie Munger concept. It's a constructed framework of thinking about things and best practices so when you encounter the real-life situation you're not frozen on exactly what to do.

The second is speed of execution and decisiveness. If you're able to prepare and think about what the right choices are ahead of time, and know how to think about things, how to decide on what you really want in life, you're able to quickly execute on those things.

JW: You're the co-founder and chief operating officer of BetterWorks, a start-up that makes Web-based software for small- and medium-sized companies to more easily obtain company perks for their employees. How did that come about?

SY: I personally had this problem at my previous company. At MyMiniLife I tried to provide gym memberships to everyone at the company at a discount. I spent two weeks negotiating a discount from Gold's Gym. I realized this was a problem a lot of small- and medium-sized businesses have, even if you want to provide snacks or water in the office.

Write to Joseph Walker at Joseph.Walker@dowjones.com



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