about this episode
This week, Jason welcomes Shervin Pishevar, founder and CEO of Social Gaming Network. We also have a brand-new Jason’s Shark Tank and Lon Harris with the news.
This is episode 82, only a few weeks shy of 100, which should hit somewhere in late November or early December.
If you want to be on the show for ask Jason or Shark Tank, email firstname.lastname@example.org.
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JC: Shervin, Welcome to This Week in Startups.
SP: Thank you.
JC: Tell us about the Social Gaming Network.
Social Gaming Network focuses on Mobile devices. When the app store came out I realized it would be bigger than anything on Facebook. We started the company and we’re very quickly putting out products on the iPhone. We currently have upwards of 25M users. We just announced our Mini-Tycoon social gaming platform. It’s a Farmville game, but you’re building your gaming empire.
JC: Sounds like a game I would like. And I guess the model there is virtual currency?
[Jason and Shervin discuss the different games, the projection of growth for these games, and the mechanics of the games, and some of the games they love.]
JC: You know how to get people addicted. Walk us through the addiction cycle and the game mechanics.
SP: Harvest mechanics are when you take a plant for example, buying the seed, then planting it [Lost Shervin].
TC: One of the things that I find fascinating is how they are getting women into these games. They have a very nurturing nature, which is part of their psychology.
JC: Sorry about that Shervin. Tyler brought up an interesting point about women and gaming, and getting them involved because of the harvest mechanic, is that true?
SP: Yes. 50-66% of the game demographics are women. This is opening up a whole new group of players that aren’t typically playing elsewhere.
[Shervin discusses the early days of games in Facebook and how that has opened new demographics and opportunities in mobile.]
JC: Why haven’t people built more cross platform games? [desktop, mobile etc.]
SP: It’s possible. One of our games is Sky’s of Glory, which we launched on iPhone, iPad and with 3G you should be able to play these games live. The next step was to battle between Android and iPhone, so now we have iPhone and Android pilots shooting each other down. That’s the future of social games. It can happen now.
[Shervin discusses the economics of playing games on the mobile devices]
JC: Are people going to get burn-out playing the same game in several different metaphors?
SP: The well of creativity is just now being tapped. Between social games, location based, on-demand reality, we’ll be able to put our phone up [Shervin puts his phone to his eyes] and see the characters we’re playing against. We’ll have the ability to use your phone to engage with your real world. It’s just starting. It’s going to be real fun.
JC: Let’s switch to angel investing for a minute. You angel invest prolifically. You run the OAF in Silicon Valley. Tell us your strategy. Do you have a formula, or do you just go with your gut?
[Lost Shervin again]
[Jason and Tyler discuss Shervin’s recent investment in Qwiki]
SP: I think you and I share a lot of the same values. In terms of risk, we’re taking the most risk as far as the investors go. Going in at an early stage is about investing in people. Our instincts about people is important. As entrepreneurs we have to be able to look death in the face. If you can look at the risk and still say ‘I can do this.’ those are the guys I’m looking for.
[Shervin continues to describe the kind of people and teams that increase your chances of success. He discusses some of the people in
<href=http://www.qwiki.com/>Qwiki and how they represent the type of people he likes to invest in]
SP: We also have to look at trends. Then we have to look at entrepreneurs in those trends.
[Jason and Shervin discuss the attributes of an effective CEO. Intense and passionate. Visionary. Insanity. Execution.]
JC: Angelgate? What are your thoughts on the state of angel investing?
SP: My thoughts are simple. An angel is someone who is investing his own money. This term ‘super-angel’ is doing a disservice to both angels and people who are being labeled super-angels. A super-angel is investing other people’s money. They’re a small VC. That’s what they should be labeled. Matt Cohler got up and said the same thing. We need to stop using that term aand cut down the confusion.
JC: What about the valuation bubble? Are you seeing the same trend?
SP I’m seeing the same. In fact there are some that are talking about a 30M valuation just 2 months after starting. We want to get involved in companies as early as possible. That’s where everyone wins.
JC: Have you ever heard of any collusion in the angel space? I think it’s too competitive for that. We never discuss keeping a round down.
SP: I wasn’t there. So I don’t know exactly what was discussed, so I really can’t comment on it. The things that I’ve read seem to indicate that what was being discussed were things like standardized documents. I think that was the main focus.
JC: It seems like we had this discussion at the OAF as well. It’s a virtuous discussion to have to try to keep costs down for startups.
SP Sacca’s points were good. The number one goal is to help the entrepreneur to realize his dream. That’s what’s most important. The ROI on joy is high.
JC: If you go about t with that attitude you always win
TC: You can tell that you’re sincere as well. Your face lit up when you mention the entrepreneurs you work with.
[Shervin tells a touching story about one of the
<href=http://www.qwiki.com/>Qwiki engineers after the TC Disrupt win. Shervin is obviously touched by the story. That’s his moment of satisfaction.]
JC: I don’t think most people realize that the returns are of secondary importance. The satisfaction of being on a winning team and working with great people is a big motivating factor. Between a company that makes 100X but has no lasting value, and a company that makes 50X and changes the world, which one would you choose?
SP:50X that changes the world.
JC: It’s like a sport for guys like us, no?
SP: Yes. Yelp is an example. They took the lower amount from Google because of the company.
JC: The best way for someone to reach you? Should they ask you to have coffee? Should they come to you with a business plan? Should they wait to have their site built? When do you like to get a pitch, and how do you like to get it?
SP: I try to tell a story, when I came out of Berkeley I tried to raise money from investors, and I read an article about a high power finance exec that was taking time off. So I decided to call this guy. I called 411 and got a number that I called expecting to get a secretary, and it was him. And I was like, ‘Oh Shit!’, and I knew I had 60 seconds or else he was going to hang up. I knew I had to speak from the heart. If you speak from the heart, people understand. They sense the sincerity. So no one is too busy not to spend 60 seconds with you. So my advice is reach out to me. Reach out to Jason. You might catch people at a bad time, but don’t give up.
JC: Awesome advice. Thanks for being on the show.
SP: Thanks. Cheers guys.
wiki Wins TechCrunch Disrupt
Informational platform Qwiki took the top prize at the TechCrunch Disrupt conference, walking away with a $50,000 grand prize. The runners-up were CloudFlare (security and performance tools for small companies) and Pinger (developers of the popular free texting app “TextFree”)
Qwiki is an information source collecting images, video, maps, text, audio in a single interface. You search for something, and Qwiki basically gives you a spoken, multimedia guide to that topic, showing you key things you’ll need to know from a variety of sources (like Wikipedia, Linkedin, Google, etc.)
– There was a bit of controversy about the selection – as there always is – as Qwiki used a demo as opposed to an actual working product during their pitch. Do you think there should be preference given to companies that actually have launched, and can demo a live product?
– What are your thoughts on Qwiki more generally? Think an algorithm can actually give us a “narrative” based on our searches, using photos and videos as well as text?
[Jason talks about the Qwiki win and discusses the fact that he wouldn’t have given the award to someone who didn’t have a fully functional product. Jason discusses the value/utility of Qwiki. Tyler disagrees with Jason on the emotional appeal of Qwiki.]
Tonchidot Raises $12 Million Round B
You probably rememberTokyo-based augmented reality startup Tonchidot from TechCrunch50, where they had one of the more memorable presentations with their “Sekia Camera” app. They’ve just closed a $12 million Series B round from a variety of Japanese companies, including the country’s second biggest telco, KDDI.
The company plans to use the money to expand its Sekai Camera app platform, opening it up for third parties to create location-based Augmented Reality games within the application itself. They’re calling this platform “SoLAR,” which stands for “Social, Location Augmented Reality.”
What do you think about the direction this company has gone in since TechCrunch. Is this where you expected them to be?
[Jason admits he never expected gaming to be as popular as it is. He discusses his thoughts on the application. Tyler admits that this will be very big in Japan. He admires the progress of Tonchidot.]
Why Wesabe Lost to Mint
Marc Hedlund wrote a lengthy blog post this week discussing his startup, Wesabe, that shut down earlier this summer. Wesabe had been similar in some ways to Mint, in that it helped people manage their personal finances online.
Hedlund said he was responding to a lot of speculation about why the company didn’t work out, and has listed the reasons he thinks Mint ended up “winning” the face-off between the two companies. (Mint was purchased by Intuit, the makers of Quicken, for $170 million.)
– Mint launched first
– Wesabe never made money
– Mint was a better name and better designed
– Mint was viral while Wesabe wasn’t
What do you think of the list? Did he leave anything out?
[Jason says Wesabe should have launched at TC40. Jason discusses the list of items and which one is real and which are smoke and mirrors. Product is the most important and that’s where Wesabe really fell down. Life is a game of inches. The 6 inches in front of your face are the most important]
The Social Network
So, of course, the big movie about Mark Zuckerberg, “The Social Network,” opens today nationwide. I believe some Mahalo and maybe even a few ThisWeekIn people are going to head out to see it.
We also have word that screenwriter Aaron Sorkin (who now says he wanted to direct the film as well) got some inside scoop on some of the Harvard clubs portrayed in the film from actress Natalie Portman, who attended Harvard from 1999-2003 and dated a member of the Porcelain Club.
How accurate do you think the film is? Do you think it’s good or bad for tech entrepreneurs and startups in general to be depicted in a mainstream Hollywood film, and in a somewhat negative context?
[Jason says movies reflect the world that the people who watch them live in. All discuss films that represent the time in which they were released. Teenage Billionaire is born. Lon and Jason strategize about writing a TV show. Tyler is excluded. Doogie Howser meets Technology at summer camp.]
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