Chris DeWolfe, CEO and Co-Founder, Jam City
Chris DeWolfe excels at creating massive user bases—a skill he has demonstrated with two companies you’ll likely recognize: Myspace and Jam City.
After DeWolfe launched the biggest social network of its time in 2003, it was only a matter of months before Myspace completely took off and attracted millions of users around the world. Only two years after the start of his company, DeWolfe sold the platform for $580 million. But he wasn’t done yet.
When DeWolfe asked himself ‘what’s next?’ he found himself drawn to the world of gaming. Not only was it easy to scale, but he also believed the current trends pointed toward an explosion in gaming. He wasn’t wrong. Today, Jam City is known for famous mobile games like Cookie Jam and Panda Pop, and it’s still going strong to keep up with the growing demand of casual gamers.
In this interview, DeWolfe discusses the hyper growth of his companies, how to stay focused when running such a behemoth of a company, and what it takes to build massive user bases.
If there’s any other content you’d like to see that would be valuable to you during this time, please don’t hesitate to reach out at firstname.lastname@example.org.
- How DeWolfe built the largest website in the world and the biggest social network of its time, Myspace
- The trends in pop culture and technology that led to the launch of Myspace in 2003
- A look into the rapid growth and eventual sale of Myspace in 2005 for $580 million
- How Myspace created a roadmap for companies like Spotify and YouTube
- The top three lessons DeWolfe learned from his journey with Myspace
- How DeWolfe figured out his next step into the world of mobile gaming
- Why Jam City targets an underserved audience for gamers
- The acquisition of Mindjolt
- How to be a great storyteller and create amazing games
- What’s exciting for DeWolfe in the future of the mobile gaming business
- What it takes to build large user bases
- Why DeWolfe recommends taking measured risks in the pursuit of innovation
- A sneak peek into Jam City’s latest upcoming mobile game
Full Transcript of Podcast with Chris DeWolfe
Nathan: The first question that I ask everyone that comes on is, how did you get your job?
Chris: Well, I actually created this job but generally, I’ve been an entrepreneur for probably 25 years now and I guess where my passion really comes from is creating things that lots and lots of people can get joy from and that kind of takes me back to the Myspace days when I created Myspace to… When I was done with Myspace, a lot of thought went into, “What’s next?” And I thought a lot about music, I thought a lot about video, and then I landed on gaming because it was scalable and ultimately I knew that mobile was going to blow up and everyone was going to have a console in their pocket. So that is the space that we went after because I thought it could grow in a big way, raise money. Had about three or four people to start with and then grew it out to about 750 people. So, yeah, that’s how we did it.
Nathan: Yeah, interesting. So, the two companies that you’ve started in the past 25 years is Myspace and Jam City.
Chris: Yeah, and then Response Base before that and then I was a part of a really early team on a company called Xdrive in the late ’90s which was cloud based storage, believe it or not, for consumers. So it’s one of those amazing ideas where we raised a lot of money but it was really a company before it’s time. So, that’s how I dove into the internet at first.
Nathan: Interesting. So, I’d love to talk about the early journey in Myspace and then move onto Jam City which is the company you’re the CEO of now. So, I’m curious, was Myspace your first company?
Chris: No, it wasn’t. Yeah, one of the recommendations I had was… I went to business school at USC and I knew then that I really wanted to become an entrepreneur but I knew I also wasn’t quite ready, which is why I decided that I wanted to be on a founding team or an early team of a really promising internet company. But that was really Xdrive and then after that, I started a company called Response Base. I sold that after two years and did really well on that and then I founded Myspace after that. But Myspace was the first really large company that I’ve started.
Nathan: Interesting and how did the concept of Myspace come about because it feel like… I remember, I would’ve been… I say 15 years ago, I created a Myspace account, I was pretty young but I had my favourite friends and you had, I think it was your top six or top nine and used to move people in and out of it and other people used to have me and I felt pretty special. So I’m curious, how did that all come about because that was really the pioneered first social network that I was exposed to and I think the Western world at large was exposed to. So it’s a pretty incredible feat, so I’m curious how did that idea conceptualise?
Chris: Yeah, it literally became the largest website in the United States and I think in the world and by far, in a way, the biggest social network but the way I look at companies, businesses, projects, investments, a lot of it is from a passion perspective but a lot of it’s also from kind of looking at macro trends that are out there, both from a pop culture perspective and from a technology perspective. So if you kind of think back to 2003, that was… You were probably also on AIM, you had email, you had a BlackBerry that could take pictures, everyone was just starting to get broadband. So what was interesting about that time was everyone was taking a lot of pictures but they didn’t have anywhere really fun to put them. I think Kodak had a site where you could upload your photos but that’s not fun, no one else can see them, you can’t share them.
So, A, we thought it would be interesting to have a really fun community where people could enjoy the photos that they took and then, from a communication perspective, it was kind of the same, email and AIM were largely used but they weren’t really that fun to use. And so Myspace, we also thought of it as a place to be your primary communication hub that, in a lot of ways, would replace email and would replace the need for instant messenger. Around the same time almost everyone had gotten away from dial-up and everyone had some kind of cable modem or maybe even WiFi at the time, and so all of these areas sort of were coming together, all these trends were coming together at the same time, which, from our perspective, made Myspace a really, really interesting and then I think, more from a pop culture perspective or from a social perspective, it was also a time when there was a lot less of a stigma around socialising online. So, I think in the late ’90s, if you had told someone that you met your wife on match.com, it would’ve seemed a little bit weird. Or if you were in some kind of random group online, the average person would’ve thought that that would’ve been a little bit out of the norm.
But all that was changing around 2003, 2004 and then you add on top of that how the music industry was changing and how the media industry was changing and it just became, for us, really a perfect storm to create a community where you could connect around shared interests, share your favourite things with your friends, make plans with your friends and have Myspace really be your home online. And so, again, it was the combination of macro technology factors and then popular culture and social factors that were all kind of happening at the same time and then we’d built the… I guess you would call it the website, the social network, very, very quickly, we got it online quickly, we executed it really well, gave people what they want, made it a little bit irreverent, it was very much influencer and media focused in a lot of ways. Like LA and New York were the first major adopters along with London, to Myspace. And then from there it just kind of spread like wildfire. So yeah, it was a lot of fun.
Nathan: Yeah, interesting. So, what year did you start it?
Chris: So we started building in the middle of 2003 and I think we did a soft launch around September, October 2003 and then it started gaining some real traction around November, December of that year, very, very quickly. Strangely enough, with that business everything really happened to plan, if not ahead of plan, in the first probably four years of the business and then, grew it heavily the following year in 2004 and then sold the company in 2005 to what was then News Corp, what is now Fox, I guess what is now Disney.
Nathan: Yeah, so in the space of two to three years you sold that company for 580 million. That’s pretty crazy growth.
Chris: Yeah, it was definitely crazy growth from a user perspective especially when you consider that mobile was not really used for what it’s used for now and the majority of people, if they had a high end device, it was BlackBerry and they didn’t use it to access the web in anyway, it was just more of a communication tool and nothing else. So the fact that it grew that quickly and it was on the web and it had way more page views than Yahoo, which was the top website at the time, way more time spent than Yahoo, way more unique users than Google. That all happened in a very short period of time and those companies have been around for a very long time.
So, yeah, it was interesting and then it also brought out the whole sort of notion, I think, of influencers and then it was also the roadmap, to a certain degree, what Spotify is right now, we had the largest licenced catalogue of music in the world where we had deals with Universal at the time, EMI, Warner Music and Sony as well as all the indie labels, so you could find any music that you want, you could create a playlist, you could have your playlist on your site, it was all ad based. So yeah, from that standpoint there were tonnes of breakthroughs, lots of… The biggest musicians in the world were discovered on Myspace, the first short video that would be, I guess, kind of Quibi style video or maybe professionalised YouTube video was made and debuted on Myspace. The show The Office, when that came out in 2004, that premiered on Myspace before it premiered on television. There’s a lot of really interesting popular culture moments on Myspace during that time.
Nathan: Yeah, it’s really interesting. So I’m curious, what was the user base around the time that you sold because you guys were… Even in 2009, you stayed on as CEO but then you eventually stepped down. You guys were bigger than Facebook so what was the user base around the time you sold in 2005?
Chris: I really don’t remember, but I think it was… I mean, it was big and I’m sorry doesn’t help. But I think it was-
Nathan: It’s long time ago.
Chris: Yeah, the rate of growth was the most impressive aspect of what we were doing and how it was changing the way people use the web and how they communicated, how they expressed themselves, all those things were really ground breaking but I’d have to look at Comscore media metrics but if I had to guess, I would say, in the US, my guess would be 20 to 30 million unique daily users but that was a long time ago and I just don’t remember. I’d have to get the information from Comscore media metrics or something like that,
Nathan: No, it’s okay. So, I’m curious, when it comes to that, that level of growth, was that viral growth strategic? Did you strategically build in any components to fuel that virality?
Chris: I think the whole use case for Myspace was around doing things communally with your friends and the notion that anything you do with friends is more fun than doing it alone. So listening to music and talking about music has always been more of a communal act. Sharing photos and talking about photos has always been more of something communal. The fact that you could even get connected with all of your friends and chat with all of your friends at the same time was viral. So if all of your friends are essentially making plans on Myspace and you’re not a member, you are going to join and if people are talking about a really cool new band they found on Myspace and you’re really into music, you’re going to join and you’re going to find that band.
So I think it was the way we constructed the service that really made it viral. There weren’t any real tricks or anything like that but people would share, there was lots and lots of content to share which would make it viral both inside and outside of Myspace. We sort of gave YouTube their start because we allowed YouTube to actually paste their videos onto peoples Myspace pages. If you remember, you could do your own HTML and design your page the way you wanted design it and so you could have widgets on your page or it had different functions and one of those was YouTube. So that was where YouTube really got its first distribution and then as they would create a video on YouTube, it got its original distribution on Myspace and we allowed that and that’s what allowed it to grow. Then people would go back to YouTube and then YouTube started their own distribution and they were able to grow that way.
Nathan: Interesting, so at the time when you started all the way to the time you sold, how many employees did you guys have around… A rough estimate?
Chris: When I had left the company we probably had around 1,600 employees is my guess. When we sold the company, my guess would be around four or 500, maybe 400.
Nathan: Wow. And so that means you were hiring a new person basically every week? From-
Chris: Yeah, it’s pretty-
Nathan: Yeah, from launch to sale.
Chris: Yeah, it’s pretty crazy and I’d say when you’re hiring people that quickly, just as a management tip, you’re not always going to get all of the greatest people in the world because you’re under this pressure to start up all these new services, support them and you get into this mindset of throwing bodies at a problem, throwing employees at a problem as opposed to developing it in a super technologically sound way and developing… So you create a lot of technical and a lot of kind of people that when you grow really quickly, and you end up breaking some things. So, I think it was probably the right thing to do but I think, in retrospect, you’d probably hire a little bit slower. We hired a lot of people to our international expansion, very quickly opened up in the UK, Italy, Spain, we did a join venture with SoftBank with Masayoshi Son in Japan. We opened up there,, we opened up in China, we had an office in Canada, I could go on and on and on, and all these offices were staffed up with their own GM’s, their own sales forces and localization. There was a lot going on, a lot work and a lot of people being hired in a short period of time.
Nathan: Yeah, that’s crazy. So, couple of last questions and then I’d love to talk to you about Jam City and what you worked on there. Just around the sale, why did you decide to sell in such a short period of time?
Chris: We were getting a lot of offers at the time and we thought that we could legitimately be a stronger company. The sort of thought was that we could combine our amazing distribution and authentic social network and then layer on access to every kind of content in the world from a company like News Corp and we’d also been talking Viacom and MTV at the same time and some other folks at the same time, and we thought that we could be a much stronger bigger company in doing that and it didn’t quick work out that way but it made a lot of sense. I think the other thing to keep in mind was, no internet company or media company had sold for… Or had been even remotely successful or had sold for anywhere near that amount of money since the dot-com crash and whatever that was in 2001 or 2000.
So at the time, $580 million was a lot of money. Looking back on it now, it doesn’t seem like a particularly large sum but at the time, if you put everything into context, it was a lot of money and we thought that we could create a lot more value by being a part of a bigger organisation that had access to all of the media in the world.
Nathan: Yeah, interesting. Look, I agree, still to this day, half a billion dollars, even 15 years ago, that’s a lot of money, a significant amount of money. So, I’m curious, just before we move on to everything you do in Jam City now, I’m curious to know, any lessons like key big lessons that you’ve taken away from that journey that you’d like to share with our audience? Maybe top three for that journey?
Chris: Sure. Yeah, we found that, on the positive side, how quickly we took… Went from concept to soft launch, was unlike anything that I’ve ever done before with a team and so, there was obviously a lot of other competitors out there including much smaller ones that were quite… Got off the ground like Friendster or Tribe and a whole bunch of other ones but we got the site up and running very, very quickly and it’s one of the things that allowed to our success. So when you see a need in the market, move quickly and get it to market and very quickly test it to see if it resonates, if your hypothesis is true. So, I think that was one lesson on the positive side.
I talked to you a little bit about possibly hiring too quickly and thinking about solving problems through hiring too many people versus taking a more measure approach. I think there was also some lessons to be learned around focus and so, at the time, we were thinking about, “Hey, you have your social network but…” And the whole premise of what I said before around everything… When you have a critical mass of people and people that you know, everything is that much more valuable. So there was Craigslist at the time so we decided, “Hey, we should create our own Craigslist. We should have our own movie review site. We should have our own music set. We should have our own music label.” We started a music label. So there was probably just too much going on at one time versus all these things that I’ve mentioned, Facebook or SnapChat which someone else has done many, many, many years later. We had instant messenger, we had… All these things we had, at the time.
And so, I think really getting the core sort of photo sharing, communications, ability to be able to find people you know, user experience, getting all of those things 100% right probably would’ve been the right focus at the time. I’m not sure if that hurt it that much, I think probably the third big lesson is that when you sell a company or when you buy a company or the lesson could even apply to when you raise money, that you should make sure that your values and culture are aligned with your new financial partner/acquired/company you acquire. Meaning, there was nothing bad about News Corp or Fox, it’s just that they were a media company that was very much built for bottom-line, EBITDA and revenue and then there’s Myspace which was profitable actually when they bought us and we had a real business model.
But we were in a position where the one thing that mattered most was revenue and EBITDA as opposed to the whole notion of blitzscaling. For example, Reid Hoffman talked about blitzscaling where if you had something good and there’s a huge consumer demand for it, don’t worry so much about the economics of the business, scale it to build a moat around your business and get everyone in the world on it the switching costs become so high that you… You have that moment in time to do that and I think that’s definitely one thing I learned, that we had that moment in time and we probably focused far too early on really growing our revenue. Some of the top execs in the company at News Corp publicly said Myspace was going to a billion in revenue, this is right after they acquired us, very quick after they bought us, and 250 million in EBITDA. That really changes your values as a company, it changes your priorities in terms of how you build out your advertising and monetization business versus features and creating user experience. And neither YouTube of Facebook had to deal with any kind of revenue expectations or profit expectations for many, many years.
It’s not a bad thing, I think it’s a lesson that you learn to make sure that you’re aligned with whoever you’re combining with, that these are going to be your new partners, you’re going to be shoulder to shoulder with them and you better have similar goals to them or things may not work out how you planned.
Nathan: Yeah, I see, interesting. So, well thank you for sharing Chris. So, moving on to the next part of your journey, you haven’t really stopped. So 2010 you stepped down… No, sorry. 2009 you stepped down as CEO and kind of moved on and you purchased a company called Mindjolt.
Chris: Yeah, it was a little bit more deliberate than that. I mean, I took a couple of months again and my true passion is developing services, products, projects that can scale and give lots and lots of people joy or fun and, at the time, again, I was thinking about several different industries, so I was thinking about the music industry because I’d just done deals with Universal, Warner, Sony and EMI. But, for me, those negotiations were so tough and so acrimonious and the margins were thin that I didn’t want to go back into the music business with them and again this was pre-Spotify. So I didn’t want to go back in the music business because I knew it would take a massive investment and wasn’t sure if it would ever get profitable.
The second thing I thought about was, “What about video?” And it felt to me like YouTube was already at critical mass in video and there wasn’t any really major spot to play in video from what I knew. The third thing I thought about was, “Hey, you could develop another social network that’s better than Myspace, that’s better than Facebook.” And then when it really came down to thinking about what that would be, all the ideas seemed very incremental and I felt like I was really too close to that idea to have an objective opinion on what would be a lot better. Then I thought about games and the reason I thought about games was… A lot of it came from my experience and I had mentioned to you earlier that we had a joint venture with Masayoshi Son and SoftBank, so every time we’d go back to Tokyo they would arrange a trip to different consumer internet media firms in Tokyo.
And back in 2006, we learned that over half of the access to the number one social network in Japan at the time which was called Mixi, was through mobile. And so their mobile devices were so far ahead of ours, their connections were so much faster than ours, your whole mind could open up and really imagine… Your imagination could open up and think about what a mobile device would become in four or five years and so that experience never really left my mind. I would also say that, at the time, Zynga had started their company and they were on the Myspace platform and they were making quite a bit of money on our platform, they’re making quite a bit of money on the Facebook platform. So it felt like there was room for new platforms to emerge. I think the iPhone had come out maybe two or three years ahead of time but we started to get to the point where it could support and games and it felt to me like games were going to be the next big thing and if you look at all the other mediums, there weren’t necessarily going to be more music listeners created, there weren’t necessarily going to be more video watchers create but there’s going to be a heck of a lot more game players created because everyone was now going to have a console in their pocket in the form of their mobile device.
And so, we just got really, really excited about that and then we got really excited about the fact that the majority of game players were young males playing on consoles and these young men playing on consoles meant that there wasn’t a lot of great content made for an underserved audience of females or quite frankly just casual game players that wanted to pick up a game and play it and have access to it. And so that was the original premise for raising money. And so we raised money, went out and raised money. Ended up raising money from Austin Ventures with… Some of the money that we raised, we acquired a company called Mindjolt, we built games, development videos, we did a lot of different things, we built up our infrastructure, we created cross functional technology that allowed us to build a game once and it could live on the web or on mobile.
And so that was really the big start, was getting that initial investment, getting some content and distribution into our acquisition on Mindjolt and then building up our own expertise internally and then we were really off to the races. And then we started building our own games and then we had some big break throughs with Cookie Jam and Panada Pop, which were amazing because they were two of the top 20 grossing games in world. And just to think that, at the same time, two of the games that we had created were into the top grossing games in the world where people are spending all this money on these games, really showed us that we had developed the expertise to be really good storytellers and create amazing games.
There’s a lot of things that happened in between there but the initial idea was that games were going to become huge on many platforms including mobile and that ended up being true. In 1995 there were 150 million gamers, now there are 2.5 billion. No other medium has grown anywhere near that fast. So yeah, I think we really saw the opportunity early and captured it and… If you want to kind of take it back to the thought process of starting Myspace and looking at all the macro factors as well as the social factors that contributed to our thought process, I think there’s a lot of builders out there. Meaning, everyone was going to have a console in their pocket, there were underserved audiences out there that didn’t have the software or content that they needed and the competition wasn’t such that you couldn’t break into the new market and become a leader pretty quickly.
Nathan: Yeah, interesting. I see. I’m curious, with Jam City now, what are the plans for the future? What’s exciting?
Chris: Yeah, so I think that… I mean, like any other tech business or even… Now you look at media business, it changes so quickly and I think we’re at the point now in mobile gaming business where there’s over 500,000 games developers world-wide, there are fewer barriers to entry in terms of making games but actually getting distribution for them is becoming a lot harder. So we’re in a really good spot right now in that we have a really, really large user base that gives us the ability to launch a new game. It’s much like a new musician that comes out, why they would need a label because if you just kind of put a song out there, you could be the best artist in the world and no one may discover you. We make a great game, we’re able to put it out there, we’re able to get really wide distribution on that game through cross promotion, through our partnerships with Apple and Google as well as different marketing strategies.
And so… Sorry, so I’m going to get around to answering your question directly. So that gives us an advantage on the distribution side though with all these developers out there, you really have to create super high quality games and you have to make them really big, bold, bets and we’re making big, bold, bets. You’re taking much higher risks, you’re investing more money but the potential for real innovation is that much greater. So, to me, that’s fun. So for example, we have a game coming out called World War Doh which is what we call PVP, player versus player, multi-player, real time battling strategy games with a deep, deep storyline with really funny characters. It’s just a really fun game to make, it’s been fun game to iterate on and to market and again, it’s one of those sort of big bets, you’ve invested a lot of money making the game but it’s not super clear that the market is going to love. It’s unprecedented but we also see huge opportunities, not only for the game itself but because it has such a deep storyline to it and the characters are so fun and engaging, we think there’s also room in that particular game for potential brand extensions whether it be an animated series or plush toys or a movie, whatever it may be.
And so, I’m really excited about that, whether it’s a huge hit or not, it’s been a great experience and I think you’ll see a lot more of that from us because in order to cut through the noise you need to innovate, you need to take some big chances, you need to take them in measured ways but you need to take some big chances and that’s one I’m particularly excited about.
Nathan: Yeah, I see. And what do you think it takes to create a great game? A game that has a lot of people playing and a lot of friends and people are saying, “Yeah, you got to get on this.”?
Chris: Yeah, I mean, that’s a great question and we ask ourselves that every day and try and refine our process every day. I think you need to be really humble, I think we have a very humble company in understanding that there’s a lot of competition out there. But I think what it really takes is understanding your customer or player’s motivations. When you have a player that can spend an extra three, two hours a day on Netflix or on Instagram or on SnapChat or playing Candy Crush, whatever it may be, you have to figure out what your hardcore user is really going to love about your game. And we have a very distinct and special process for doing, we have a hypothesis of who the players going to be, what the game is going to be, we’ve put together either… Usually we’ll start out with storyboards and we’ll bring in who we think our hardcore audience for that game will be and we’ll literally spend three weeks with them. And sometimes we even go as far as developing a prototype for that game and we’ll get lots of input and at the end of the process we’ll ask ourselves, “Was their hypothesis correct?”
And most of the time it’s not 100% correct and we’ll end up making some edits to that hypothesis, then we’ll test it again and then we’ll test it again til we get to a point where, okay, we know a least with these four users that we think they’re going to be the big fans in game, they’re going to be the real ambassadors in our game. They have proved the concept of this game, they think it’s super unique, they think it’s something that they would rather do than play one of our competitors games or beyond Instagram or watching Netflix or whatever it is. Then we’ll start into the process of either building another prototype or beginning to build out the game.
And so, it’s sort of that initial, I would call it almost pre-production phase, where we’re spending a lot more time and really understanding our customer. And then when you think about scaling the game you think about, “Okay, what could make this game incredibly social? Do we have competitive elements in the game?” Like with World War Doh we have player versus player, we have leagues which we call clans and in some of our other games we have cooperative type of events where you cooperate with people within the game to achieve a higher level of success or … in the game. So, all of those plans make the game very social and make people want to invite their friends because it makes the game more enjoyable.
Nathan: Yeah, I see. So, one thing that I found interesting is the level, I guess, product development and iteration, you go through this process to give yourselves the best chance to get it right, much the same somebody would follow process if they were creating a SaaS company. If you go through that process quite strenuously and even bring a lot of people in to test and a certain type of audience, why do you think sometimes it still doesn’t hit or pop?
Chris: Because you always have the execution side of things where… You also have to have the perfect team that works in harmony. So if you think about making a game, it’s very different than making a piece of software because you have artists involved, you have animators involved, you have engineers involved, you have producers involved, you have product managers who are basically managing the business and so, this whole sort of core team needs to work together in perfect harmony and they’re not always able to do that. And sometimes when you’re doing initial tests with storyboards and/or prototypes, it’s not the same as the real game and the game goes into a direction that you didn’t think it was going to go into. I guess what I’m saying is that having a deep understanding of your customer and a process to do so greatly increases your chances for massive success in a creative process like mobile game development.
Nathan: Yeah, I see. Well, look super to be mindful of your time Chris, we have to work towards wrapping up, last question is, where’s the best place people can find out more about yourself and your work and we can wrap there.
Chris: Yeah, for so, I think there’s a Wikipedia page out there that probably has good …, there’s probably some… If you want to learn more about the old Myspace days, there’s some old Fortune articles, I think there’s an interview with Charlie Rose, there’s one with Barbara Walters, there’s some Time articles, there’s some Fast Company features, more recently lots of stuff in VentureBeat that talks a lot about the business and what we’ve done but, yeah, I think the Wikipedia’s a good jumping off point.
Nathan: Awesome, well look, thank you so much for your time Chris, I really, really appreciate it.
Chris: Okay, Nathan. Great to meet you, appreciate your time.