The story of what happened to PMOG.

Justin Hall, “Fate of a Small Social Games Studio”

Justin started writing online 1994, did game journalism until 1998-2004, then USC Interactive Media Division 2004-2007, whih led to GameLayers Inc.

In mid 2006 saw ppl playing WoW, this sounds great but we are already on computers all day working, why jump back on to play? Could you take the elements of Wow and put them on top of everyday computer life, and get points, levels, etc?

prototype in May 2006, putting D&D stats on top of popular websites, like flickr and google, get str by surfing LA Times, lower Con by surfing Kotaku. Got funded for 10,000 pounds by the BBC. Use this to teach web literacy! But you need British programmers. So we got a British prototyper and built pmog. A toolbar that sat in an iframe and followed you around the web, classified you based on sites visited, let you level up.

This was enough to spend allt he money and please the BBC. But we kept going and in mid 2007 had a firefox sidebar, miniprofile, chat, leave a mine on a page, connet websites into quests, etc.

A roleplaying game of websurfing. And in mid 2007 if you had an idea like let’s make Firefox into an MMO for surfing, people would give you money and tell you to build a company. I had been a part of Internet startups in the 90s, bu7t had not made the connection. So then i agreed to take people’s money. Joi Ito put in the first $50k, and then let to 500k seed funding in september 2007 from O’Reilly Alpha Tech Ventures.

Chart of our operating expenses. Closed funding… don’t raise money in the summer, people take time off. When you have money, you spend a lot of it on other people. One thing I learned when raising money and being part of this VC thing, if you want to know how much it costs, you take it and multiply the employees times $10000 per head. So we hired more people. So we spent our money.

Chart of money and actual expenses. [Laughter] We planned to run out of money by April, but we could not hire fast enough, moved to cheap offices in Oakland, bang bang (scary) [Laughter].

So we didn’t spend as fast as we wanted. We iterated PMOG. We got Wired press and Techcrunch, sounded extremely innovative, people wrote articles about it. Have you played an MMO in a firefox plugin? No? Obviously a gaping hole in your life, write an article!

We hit the road, driving up and down, Menlo Park, Palo Alto, taking meetings, [hilarious desription of meetings with VCs]. So intense… just a year ago I thought it wouold be cool to make this game, and now you have all these hard questions, and I don’t know the answer to your questions, but we’re cool, do you want to write a check now, or…?

So someon said we were cool and sort of saved us. So jun 08 we got more funding… right when we were running on fumes (29k balance). The new VC was all about “how fast can you move, has your time doubled, what are your strategic initiatives,” targets got bigger, spending went way up.

June 17th, we got married, On Monday we moved to house, an Tuesday we signed 1.5m term sheet, and on Friday we fired someone for the first time. Glad to say we are still married.

I think there are part sof being a CEO I was not very good at. VC calls at 9:30am, asks what is up, and I would go straight into the weeds on crates not working, the mission system is fixed, and what he wanted was “we are on track with our strategic targets” and I had to learn how to communicate with my investors.

So the VCs and my wife went out to dinner, and one of the reasons was that they said they wanted a new CEO. I had spent every waking minute on this company. We’re six people, who are we going to hire? Can they code? If we find, Javascript, AJAX, and CEO, that would be good!

So we are going to spend $100000 to find the ceo, then raise $5m.

Then the economy went down the toilet, and it was clear that a Firefox game with 100k users can’t raise money in 2009.

So we changed. A friend at EA said you can innovate on theme, gameplay, or platform. So pick one. And I said no, we should do all three! But we realized we innovated too much. The UPS guy would drop off a package and I would focus test him and say we have a firefox mmo and you leave crates on websites! And he would say cool, wanna sign for the package? Hard to get people’s eyes to light up with a short picture.

So we started The nethernet, a new theme. We got a distribution deal with Mozilla and our servers fell over. And our CTO in the UK stepped back from the company. it’s march, the product is renamed, there is no CTO, I am still CEO…

The tool bar `had all these buttons, it was really slick — windows with rounded corners! It was aewsome! But the new TO came in and said, we are out of money. We need to make money. So we screwdd up monetization.

We took stuff we had given players for free and we took it away. We did it quikly with no announement. Then we started raking in $20 a day.

July 2009:
120k registered.
40 signups a day
2500 daily connected
low hundreds using tools a day
$24 revenue a day. Burning $60,000 a month, Close the gap!

So we decide to shut this down and make games that will make money to keep the studio alive. So Facebook.

So we decide to make a social RPG. FarmTown debuted then, but we didn’t know Flash, so we ignored it. Instead, we made Dictator Wars social RPG, a dark time I spent reading four months of dictator biolgraphies.

So we put out Dictator Wars and then Supr Cute Zoo, targeting men, targeting women. W ran to Facebook right when facebook ran to Flash gaming.

Mid October 2009

28k registere for Dictators wars, 1700 DAU, .3% growth rate. 3 cents/DAU. I am watching the blood seep out of our corpse as our FB allocations are locked down.

Basically, we had $40,000 left, we rebooted, nobody is going to play them, so we lay off everyone.

Lessons:

- focus! Pick your innovation! A Firefox MMO might work, but test it!
- build-in the business. Seems obvious in 2010, but in 2007 seemed like 1999 again.
- test core interactions and experience before accelerating with money
- don’t wait to lose non-performers.

I am pleased to announce the guys who worked on it and played it were upset that we closed it, so we paid to host it with the remaining cash, and we are open sourcing the engine, so this is exciting for me because we spent $2m to make an open source way to make web mmo’s. So go innovate with it.

Q: Would you do it again? Yes, but I went and got a job so I could learn how to run a business.

Q: How much of your company did you sell off to raise? 20% at each round, basically. First VC meeting, “How about your company is worth $2m?” “How about $3m?” I said. He said “How about $2m?” I said cool!

We looked at Facebook as another startup. But the reality is if you are making a play for a new platform, you need to have time to noodle, it is a process unless you have unfair advantages.