brinking - nabeel hyatt

Harvard panel on non-competes and the example of Turbine

I wasn't able to make the event at Harvard about non-competition agreements recently due to my second kid being born, but wanted to share Scott Kirsner's coverage of the event:

Harvard prof. Lee Fleming said that people and ideas move from states that enforce non-competes to states that don’t (think California.) His research has found that non-competes squelch employee mobility by about 20 percent, and 30 percent for experts in a given field. Fleming asked whether non-competes might stifle the reallocation of the best people to the best business opportunities.

A great example of this effect just came to my attention. It turns out that Turbine has been trying to introduce new non-competes. Now, I haven't actually seen the agreements but apparently they have some clauses saying you are not to work for a gaming company within 100 miles (or something like that). Many of the professions in game development are industry specific (level designer anyone?) which essentially means that once an employee has worked at Turbine he is almost guaranteed to move away from Boston for his next job.

This is particularly ridiculous in Turbine's case, since just recently an employee left for Harmonix then thought better of it after a few months and returned to Turbine. With their new non-compete agreement this would never happen, as the person would have likely left Boston altogether and simply taken a different job wherever they had moved. Turbine is poisoning their own pond out of fear instead of building the company from strength.

What makes a Social Game, a social game?

It's been a little frustrating to watch as the term Social Gaming is being applied to practically everything on a social network - so much so that even single player games on Facebook are now "social games." The folks at GigaOm have been pinging me about writing an editorial for a while, and this topic seemed worth starting a wider dialog about, so here it is:

What makes games social? (GigaOm)

Notes from SXSW, and there's a spot here at Conduit for you.

Wrapped up a panel at SXSW, there are some liveblogged notes from Virtual World News, and Venturebeat did a good write-up here for those interested. I wish I could have stayed longer but we've got some deadlines coming up. Met some great people at SXSW and every keynote was wildly entertaining, but I must say the panels really left a lot to be desired. As Peter Rojas said, is it impossible to have a decent roundtable discsussion on the future of music? Either way, I fully expect us to throw a mighty fine party there next year.

I still can't find a photo of us rocking out at the NNN/Tumblr Rock Band party, but considering the number of photos taken they are bound to show up sooner or later. In the meantime, this is a shot from the dinner crew on Tuesday night.

Lastly, we've opened up to hiring again after keeping it tight the last few months. In the latest round of hiring we've already added a couple great engineers in Fareed and Adam, plus Rob our new animator, but are still looking for a Director of Marketing. If you know someone working in online marketing that could use being thrown into a fun, driven place to try something different, tell them to drop us a line. More information on hiring here.

What's wrong with Facebook games?

Matt Mihaly has a good post up talking about whether casual or hardcore games are more successful on Facebook. And while he took a stab at what types of games are going to work, I thought I'd step back a bit and just see how games are fairing on Facebook overall. Even with the limited stats provided by Facebook, we can start to get a picture of what works and doesn't work on Facebook.

I'll have to admit that the first pass on statistics surprised me. Of the top 100 most active Facebook applications, games do not do statistically better than the average application. Games only have a marginally higher percentage of active daily users (8.57%) than the overall average (8.01%). And if you expand the criteria to include all apps that use game-like mechanics, (such as Superpoke), the average is still in the same range (7.71%). It's a wash.

 

These numbers do not jive with the incredible popularity of games on the general Internet (as I have talked about before), so what's going on here?

Well, digging a little deeper, many of the Facebook games are simple single-player games whose only social mechanic is that they post your score for your friends to see. Jetman and Tower Blox are two such examples. What happens if we just count the games that are specifically multiplayer, and therefore fit the social nature of Facebook better?

Ahh, that's more like it. Multiplayer social games such as Warbook and Scrabulous average 11.4% active daily users, a good 30% higher than the average top Facebook app (8.01%).  I'm sure if we could actually get engagement, attention, and retention metrics we'd see the same trend. This combined with the relatively high percentage of games represented in the top 25 applications (7 games) would suggest that there is simply a lack of quality, socially-focused games on Facebook.

With an average install base of 2.7m users for top Facebook games, this is a massive new distribution channel that makes the curated Xbox Live Arcade look like a backwater. I'll be chatting a bunch more on the topic at GDC in February where I'll be leading a panel discussion on Facebook and the new web of Social Gaming. I've grabbed  TJ Murphy (Warbook/SGN) and Mark Pincus (Texas Hold'Em) and it should be a one stop shop of what works, what doesn't, and the size of the opportunity presented by social online gaming. Should be fun.

Oh, and while you're at it, on Monday we publicly released our first Facebook app (more of a toy than a game really) -- Make Me.

 

 

See you at Virtual Worlds, Widget Summit, Web 2.0, and more

October is definitely the month for conferences I'm leaving today for San Francisco and I'll be at a couple of events, so here's a little update on this month.

Virtual Worlds 2007 - Oct 10-11, San Jose, CA. Thursday, 3:00pm - 4:00pm

Web-based Virtual Worlds
This session of leading web-based virtual worlds experts will discuss the finer points of developing web-based virtual worlds. Attendees will gain valuable insight into best practices, techniques and technologies for implementing web-based virtual worlds. Find out why web-based virtual worlds are here to stay and how the technology roadmap will develop over time.

- Daniel James, CEO, Three Rings
- Nabeel Hyatt, Founder & CEO, Conduit Labs
- Teemu Huuhtanen, President N.A., Sulake
- Toshitaka Jiku, EVP and CTO, 3Di Inc.

also I'll be in San Francisco next week at the Widget Summit and Web 2.0 Summit (Summit is the new conference, apparently). Then later in the month I'll be doing an event that is hosted by Scott Kirsner of the Boston Globe.

How are Blogs Changing the Way Technology is Covered?

Entrepreneurs, CEOs, VCs, journalists, and PR professionals are increasingly cranking out blogs, podcasts, and video dispatches. How does this change the way the tech sector gets covered? What does it mean for CEOs trying to get their stories out, PR firms trying to get coverage for their clients, VC firms touting their investments, journalists trying to cover important news, and customers tracking the market? (Not to mention the relationships between all of these players.)

We'll bring together representatives from all four camps for a wide-ranging conversation (definitely *not* a panel) about the way blogs are changing the game in the tech world.

- Don Dodge, Director of Business Development, Microsoft
- Jimmy Guterman, Editor of Release 2.0, O'Reilly Radar
- Barbara Heffner, partner at CHEN PR 
- Nabeel Hyatt, CEO at Conduit Labs
- Scott Kirsner, Boston Globe "Innovation Economy" columnist
- Bijan Sabet, venture capitalist at Spark Capital

there are only a few place left for this, and you can RSVP here. Hope to see you at one of these spots.
 

Interview with Intruders.tv

Intruders.TV came by the offices here in Cambridge and sat down outside our kitchen to chat about Conduit Labs. Strangely, they don't have embeddable video (they've heard of YouTube right?) but the link is below.

(this is cross-posted with the Conduit Labs' blog, I'll try not to do that anymore so I've added a little sidebar of Conduit items or you can subscribe to Conduit's blog here)

That's a lot of ramen.

Here at Conduit Labs we're announcing the closing of our $5.5m Series A round with Charles River Ventures and Prism VentureWorks. We're also using this occasion to launch the Conduit Labs blog and begin the dialog with everyone, so drop by and say hi. In the future we plan to give a pretty open and honest look at building this startup, everything from what fundraising was like to the technical hurdles we've hit dealing with Flash, and most anything else you guys are interested in chatting about.

The opening post is: How we started Conduit Labs

Virtual Goods Summit Video

Video from the recent Virtual Goods Summit is up, so if you weren't able to make it you can catch up now. I'm so glad Charles did this, since I had to miss the afternoon panels, and I can clearly see I was in need of a haircut.

Above is the panel I moderated: Why Virtual Goods Matter . Another panel chock full of great facts was the first one, Virtual Goods Success Stories, where Susan Wu of CRV does a great run down of the industry, and you get good stats from Habbo, Nexon, Neopets, and Tencent.

Rest of the videos here.

If we were on the west coast, we'd have been funded by now.

I hear this refrain quite often from consumer Internet entrepreneurs on the East Coast. "If we were in the Valley we'd have raised money in no time, but people here don't get us." This is a kind lie, and it is time we rid ourselves of it. You're not getting funded because your idea stinks, the way you talk about it stinks, you stink, or VCs in general stink - but it's not because you are in Boston, New York, or DC... not anymore.

Scott Kirsner's article in the Boston Globe this Sunday (where I was quoted), or his follow-up piece with George Zachary of CRV on his blog both give this feeling of impending doom for consumer folks on the East Coast. But I think he's being overly dire.

It IS harder to build a consumer internet business in Boston. You get this constant nagging feeling that you're missing the kind of impromptu meetings with like-minded folks that provide inspiration -- that's why I support efforts like OpenCoffee so much. And he is right when he says:

Having just boomeranged back to Cambridge after spending two years in San Francisco, the lack of consumer tech activity here is startling to me -- it's like going from a noisy, hot, crowded bar to another across the street where the bartender has plenty of time to wash glasses and gab with the three regulars perched on stools.

But the fact that it is harder is nothing new. That's like saying, "the financial industry in Boston is still not as big as New York's." That's not news, that's reality. I think what IS news is that it is much easier to run a consumer business on the East Coast than it used to be. There are more of us for one, and location is much less of an issue for funding.

As recently as five years ago most VCs invested locally exclusively, but that is becoming increasingly rare. Today plenty of west coast firms, from Redpoint to Sequioa to Kleiner Perkins, invest in east coast companies. Three of the most famous consumer internet investors are not even in Silicon Valley. Brad Feld (Colorado), Josh Kopelman (Philly), and Fred Wilson (NY) make it a point that they will go anywhere for a good company.

But the reverse is happening too, Charles River, Matrix and Venrock are bi-coastal, and guys like Bijan and Will seem to be doing as many deals in Seattle, NY, and LA as they are New England. All that is to say that VCS are getting better at not making excuses based on location, and so should we entrepreneurs. If you are down the VC road and aren't getting the reception you want, first check yourself, then I encourage you to have no fear and get your ass on a plane to hunt down that deal.

Conduit got fairly close to moving (none of us have much family here, and I'm sure the house would do well in any market) but we decided Boston was the best place to build this company. Some of our reasons for Boston were:

1) Much easier to hire excellent engineers. Google and a few others have sucked all the oxygen out of San Fran, and that's why they are trying to recruit here now.

2) Easier to get mainstream press attention. While getting Techcrunched and Digged is somewhat harder, New York is a huge asset when it is time to access mainstream TV and print. I've seen this first hand.

Virtual Goods 2007 wrap-up

The first Virtual Goods Summit was on Friday, and congrats to Charles and Susan for getting together an amazing group on short notice. There was remarkably little filler and a ton of real concrete discussion from the leaders in this industry.

I moderated a panel on Why Virtual Goods Matter, and there is good coverage on 3PointD. Craig, Amy Jo, Byron and the inimitable Daniel James represented a great range of perspectives on why customers care, from the social worlds to mmos to academia.

For me virtual goods represent two important things: the ability to monetize online communities in a much more effective way than advertising or subscription, and the ability to actually increase engagement of that community.

Virtual goods enable a user's ability to invest in their online identity the same way they invest in their offline one.

Read:  3PointD, Raph, and Virtual Worlds News for overall coverage of the event.