Draw Nothing – except a few conclusions – the fall of Zynga?

In the early 90s I formed my first company, Video News International – VNI.

The idea was to give small video cameras to freelance journalists around the world and get rid of the need for crews and fly-in reporters for international news coverage.

In a little more than a year, I had 102 journalists, mostly NPR radio stringers, equipped with Hi8 video cameras and reporting.

In a short period of time I had more global coverage than CNN, and for a far lower cost.

I built that company at the height of the dotcom, and sadlly missed out.

I was an idiot.

We had based the company in Philadelphia, and Anthony Lappe, one of the young guys working for me was also working nights at Comcast.  He was part of an ‘experiment’ that was being carried out in the basement. He said I had to check it out. I would ‘get it’ right away.

So one evening we went down to the deepest bowels of the most sub sub basement in the Comcast building and came upon a room of about 6 young men, all in jeans, hunched over giant CTR computer screens.

“What are they doing”? I asked.

Comcast had set up an experimental program to put video and text directly into people’s homes on their computers – if they had one.

They had 3500 people in the test.  It was called… The Internet.

“Interesting”, I said, “but why don’t they just watch TV?”

The head of the project, who was probably all of 22 years old said that Anthony had told him about my reporters all over the world with their video cameras and asked if I would be interested in contributing their work for the experiment.  “It would be interesting content” he said.

“You mean a TV show?”

No, they just wanted some reports, some video, some text… stuff like that.  They were willing to build me a ‘web page’ whatever that was, and I would even get my own URL, whatever that was.

“You know, it’s like your address.  We can give you something that will make it easy for people to find you.  Like… ummm… Broadcast.com or TV.com or News.com… stuff like that. Whatever you want.”

“And how much are you going to pay me for it”? I asked.

They didn’t want to pay anything.

They wanted it for free.

“Forget it”! I said.  “That’s no way to run a business”.

……um……..

……yeah.

Well, what can I say.

Now, I see that the folks who made Draw Something, an app for an iPhone that was hot for about an hour a few weeks ago were not so stupid.

They built the thing, they watched it shoot up, and then, they sold it to Zynga for the mind-blowing amount of (ready?) $200 million.

Now it seems, after only a few months, Draw Something, which everyone was doing… now… no one is doing.

It’s over before it got started.

But not before the staff of 40 employees at OMGPOP (who invented Draw Something) were able to cash out. Big time.

Draw Something went down as fast as it went up –

And Zynga?  It’s stock price has declined 50% since its IPO last year.

And stil dropping.

The lesson in all this?  When a deal is put in front of you, act quickly.

Particularly these days.

©2012 Michael Rosenblum