SM: What was the genesis of a company based on social applications? How did you arrive at the thesis that it was a sustainable market?
SP: I organized a hack-a-thon at our offices at FreeWebs. We told every developer to build what they wanted on the Facebook platform for FreeWebs. I started advocating getting everyone on Facebook. Some of our interns had built Warbook, which was a social game. That became very successful. I started looking at the metrics and realized the business opportunity was very interesting.
I went and told the board I was going to focus on social apps and incubate it. I moved to California and got space in a garage in Palo Alto. I convinced an elementary school friend, Chris Henley, to move his to California as well. David Sze from Graylock became the lead investor. We just had our one year anniversary.
SM: What kind of metrics do you have?
SP: On the iPhone we are one of the leading game developers. We broke 10 million installs last month. We have really good reach there. On Facebook our biggest game is (fluff)Friends. People spend an average of $90 buying virtual items for their pets. We just launched $10-$25 subscriptions which are doing really well. My vision is to connect physical pets with the game.
SM: What is the demographic?
SP: The majority are older women. One person has spent $20,000 collecting items and giving gifts to other people. It is a valued form of entertainment. The Pink Unico is now a collector’s item and sells for $700. People see it as an investment because it grows in value. You can trade that for game currency to get more items. We have a lot of big plans for it.
SM: You are kind of becoming a toy company on some level?
SP: These are virtual toys. It is kind of like Webkinz and Neopets.
SM: Those are for little kids. I can completely understand that demographic, but you just said your customers are older women. I find that very interesting.
SP: Behaviors are hybridizing. It starts with the younger people and is now spreading to older people. It makes sense. The majority of people on Facebook are older people. It started as a college teen site.
SM: Facebook is a communication platform which makes sense for older people to get back in touch with past acquaintances.
SP: I view gaming as a form of communication. It is a form of social interaction. It is social play. People are finding value in it because it is creating a connection in human beings which is impossible when you are playing a computer.
SM: Explain to me what older women are doing with the pets?
SP: They are feeding each others pets, giving them toys and gifts. In India when the bombing happened, there was a girl who passed away who was a big fluff user. She was going to an Internet café to help another woman she met through Facebook who was traveling to India to help her understand where to go. The café, unfortunately, was where one of the bombs happened. The whole community then gave gifts and it spread virally. Her favorite color was violet, so we created a flower in her memory. People began spreading this flower.
SM: So you truly have a community.
SP: Exactly. We now donate $50,000 a year to the World Wildlife Fund out of proceeds. We are really into gaming for causes. We are looking at ways of using games to do great things for communities.