Guest Post: Top 5 Reasons ‘Stealth Mode’ Will Kill Your Startup

Editor’s Note: This guest post comes from game design consultant Adrian Crook, a producer and designer with credits on over two dozen games spread across a variety of platforms, including classic consoles like the Sega Genesis and modern mobile games for iOS. In 2006, he was named Producer of the Year by the Canadian New Media Awards. You can find out more about Crook’s consulting agency here and the original text of his article, “Top 5 Reasons ‘Stealth Mode’ Will Kill Your Startup,” here.

By now I thought it was abundantly evident why your startup should never be in “stealth mode.” But just this afternoon, while on a call with a potential investor/advisor, I heard of yet another person who was still in stealth mode. So this must still be “a thing” for entrepreneurs.

It shouldn’t be. Yes, stealth mode sounds cool, but it hurts you more than it helps you. Here’s why:

1) Nobody wants to steal your idea.
There’s nothing more hilarious to me than when a startup CEO asks me to sign a non-disclosure agreement (NDA) before they reveal their grand idea. In reality, the most powerful force keeping me from stealing your idea is not an NDA, but my belief that my idea is better than your own. Most people are violently assured they have the right ideas – in fact, this reality distortion field is common among CEOs. So stop believing someone will drop everything to rip off your idea – they’re probably only thinking “I hope she’s not doing MY idea!”

2) Most people will never even hear of your startup.
Starting tomorrow, “unstealth” your startup and start spamming your social networks with App Store and landing page links as much as humanly possible. The fact is most of your intended audience (investors, customers, etc) will still never be even faintly aware of your existence. We’re all simply too self-absorbed or well-insulated to receive everything you’re broadcasting. To this day I still get Facebook friends surprised to learn I’ve moved to another country… over two years ago.

3) You leave stones unturned.
Mention your idea to someone even in passing, at the end of an email, on chat – anywhere. Don’t pass up the chance. You never know what they know or who they know or what you’ll learn as a result. Every day I am shocked at how effective this is: new leads are surfaced, competitors I didn’t know about are mentioned, or someone expresses a whole new way to view our product that hadn’t even occurred to me yet. If I had kept my mouth shut about our startup, I’d truly be “eating my own dog food.” In the same way one drinks the Kool-Aid.

4) Opportunity often takes a long time to knock.
So when you put off spreading the word about your startup, you also put off initiating the gestation period for opportunity. Practically speaking, VC investment alone can take 6-9 months to find and close, but if you wait until you need it, those nine months will seem like forever. But other types of opportunity take time to materialize too. One day your friend’s mind wanders and he comes up with the perfect person for you to talk to at ESPN. Or a former co-worker could have put you into their Q3 roadmap if he had known in Q1. Start seeding opportunity too late and you’ll run out of time before its first flowers bloom.

5) Get honest feedback when you can use it.
By telling your friends and colleagues what you’re up to, you get to hear some (very) honest feedback when you need it most – in the early stages, when course-correction costs you much less. Your friends will be candid, which helps you refine your pitch or product offering so it makes sense. And your colleagues, often strongly motivated to find the “gotchas” in your idea, will give you a good sense of the obstacles you might face getting investor or customer buy-in.

Obviously there are some people you might not want to tell, pre-launch. If someone is strongly in the competitor or potential competitor camp and the risk of telling them likely outweighs the benefit, perhaps skip that person for now. But try to avoid censoring yourself in any other way. As I said before, some of the most serendipitous connections or ideas have come from conversations that I thought would never lead to anything, startup-wise.

Be willing to have those conversations, to listen fully and to disclose as much (or a bit more) as you feel comfortable. Being unguarded about your concerns and your thought process is an excellent way to tacitly invite your conversation partner to help solve your problem. But when you attempt to appear like you’ve already got everything buttoned down, you leave little room for contribution.

And now back to working on PlayRank, our second screen sports product that launches this January. Have I told you about that yet…?

Thanks for reading,

Adrian Crook
CEO, PlayRank
Founder, AC+A

Applifier closes $4M second round for mobile games discovery

Applifier, the Robin Hood of Facebook games cross promotion, has closed a $4 million second round of funding led by Lifeline Ventures.

The influx of funds will be put toward accelerating Applifier’s growth on iOS, where the company currently hosts a video-based discoverability service called Everyplay. Its Facebook video ad service, Impact, will migrate to mobile next year. To that end, Applifier is staffing up both its engineering-focused Finnish headquarters and a much smaller developer relations-oriented San Francisco office. Applifier currently has about 25 employees total.

Everyplay continues Applifier’s mission of leveraging games’ appeal to generate organic growth and retention. The SDK, when implemented into a developer’s game, allows players to capture video of their in-game play experience and post said video to Facebook, Twitter, YouTube and Everyplay’s site (picture, right — click to enlarge). Since we first saw the service, the site part of the experience has evolved into more of a gamers social network, with avatar creation, status updates and a Follower system similar to Twitter’s. Players can link their Facebook accounts to Everyplay, but that is used more as a means of finding friends instead of a substitution for a virtual identity.

Speaking to Inside Social Games this week, Applifier CEO Jussi Laakkonen explains that gamers naturally prefer anonymity to the use of real identities in games. But at the same time, he admits that the social nature of sharing games — showing them off, beating set high scores, competitive multiplayer, etc. — requires some form of connection.

“We want to make a safe and fun environment,” he says. “So we’re not launching the face-cam part of Everyplay until Q1 next year when we have moderation in place. We don’t want this to be Chatroulette.”

Everyplay is currently live in two iOS games, Fatcat Rush and Stair Dismount, and the SDK is now widely available to developers. A few additional features are planned for Q1 in addition to the face cam capture function — such as a picture-in-picture video display where game developers can choose to show community videos or trailers from a game title screen as an engagement tool. Like Applifier’s previous service on Facebook, Everyplay monetizes through native ads (e.g. sponsored or promoted videos that function on a traditional CPI model) and could potentially branch into other forms of display ads.

Laakkonen — along with many others in the social/mobile space — believes that the next big frontier for mobile games will be tablets, so the sooner Applifier can establish itself on mobile, the better off it will be. This is not unlike the situation the company faced in 2008 when it first contemplated the rapid growth on the Facebook platform.

“We’re hoping for explosive growth on mobile, because [there are] similar market conditions to what we faced on Facebook,” Laakkonen tells ISG. “We don’t know where things will go, but for now, it’s about discoverability.”

Applifier’s second round saw participation from existing investors MHS Capital and PROFounders and from new investor Webb Investment Network. Angel investors include Steven Lurie, Anthony Soohoo, Philip Reisberger and David Wright and Tekes, the Finnish Funding Agency for Technology and Innovation. The $4 million brings Applifier up to $6 million in total funding following a $2 million round closed in February 2011.

Ubisoft, Toys “R” Us partner for Toys “R” Us Towers Facebook game with in-store discounts


Ubisoft and Toys “R” Us today announced the release of a free-to-play toy store simulation Facebook game where players earn coupons to be redeemed at the toy retailer’s website and brick-and-mortar locations. The game is due out on mobile devices in the coming months.

Developed by Ubisoft Quebec, Toys “R” Us Towers has players managing a Toys “R” Us store by building and designing a variety of toy departments and attractions. For example, players can create a science toy department or a giant Ferris wheel like the one at the retailer’s flagship store in Times Square. As they gain experience, players work their way up from trainee to store manager and finally CEO.

Like most business sim casual games, Toys “R” Us Towers incentivizes players to get their Facebook friends involved and purchase premium currency, which can in turn be spent on additional energy, premium toy departments and other bonuses. Toys “R” Us Towers’ special hook is that it will also allow players to earn coupons for discounts redeemable at Toys “R” Us stores nationwide and The press release we received claims that users can earn a coupon for 15 percent off their next in-store or online store purchase within the first hour of the game.

We’ve seen social games offer real-world rewards before, with Race 4 My Place’s cash prizes being a recent example. Toys “R” Us Towers’ has several advantages over previous attempts, however, due to Ubisoft’s Facebook and game-making expertise (although it has seen mixed results in the former) and Toys “R” Us’s easily recognizable branding. The partnership also seems to make a lot of sense on paper since both companies court the attention of young audiences, especially around the holiday season when kids are asking their parents for toys and video games. The discounts earned in-game may well push consumers to shop for presents at Toys “R” Us as opposed to other big box or online stores.

You can find Toys “R” Us Towers here. Look forward to our review.

Hearst Corporation makes equity investment in Spooky Cool Labs

Giant media company Heart Corporation announced today that it made a minority equity investment in social-mobile game developer Spooky Cool Labs. The financial terms of the investment were not disclosed.

Spooky Cool Labs recently released its first social game The Wizard of Oz based on Warner Bros.’ iconic film. The Wizard of Oz is a 3-D  citybuilding game that takes full advantage of the licensing deal Spooky Cool Labs made with Warner Bros.; featuring the film’s characters, music and likenesses, including the likeness of Judy Garland’s (Dorothy), Margret Hamilton (the Wicked Witch of the West) and others.

Explaining the investment, president, Hearst Entertainment & Syndication at Hearst Corporation Scott Sassa cited the talent at Spooky Cool Labs, which includes CEO Joe Kaminkow (formerly vice president of game design for IGT) and chairman Larry DeMar (who worked on classic video games such as Defender, Robotron, and Stargate, and hit pinball machines, such as Black Knight, High Speed, Fun House, and The Addams Family).

“We plan on pairing our intellectual property and access to third-party intellectual property with the game development expertise of Spooky Cool to build a big presence in this space,” Sassa added.

Inside Social Game will publish its review of The Wizard of Oz at noon PST today.

Social games news roundup: Bossa Studion launch Merlin, Playdom celebrates Halloween, Peter Moore on the state of social games and more

DisneyUTV releases Cricket Fever Challenge – On Wednesday DisneyUTV released its multi-platform multiplayer cricket game Cricket Fever Challenge. The game allows players to challenge their friends to matches across iOS and Android devices as well as through Facebook. The game also keeps track of players’ performance with leader boards and Player Profile Cards in the style of Xbox Live’s Gamertags.

Bossa Studios’ Merlin: The Game launches open beta — Fans of the hit BBC television show can now play Merlin: The Game. Developed by Bossa Studios, makers of the BAFTA winning social game Monstermind, Merlin: The Game aims to introduce casual players to a deeper, real-time cooperative role-playing game. We published a very favorable review of the game which you can find here.

Disney Playdom launches spooky Halloween content for top games — Disney is adding Halloween-themed content to many of its game as the holiday approaches. Ghosts of Mistwood now features four new ghastly locations and the Pretty Little Liars 5 Days of Gifting promotion in which players investigate the Ghost Train from the Pretty Little Liars Halloween special. In the Time Crystal chapter of Gardens of Time players explore buildings like Haunted Mansion. Even Marvel: Avengers will celebrate Halloween with new missions featuring Ghost Rider, and in Disney Animal Kingdom Explorers players can build Haunted Tents and rescue Black Cats and Scarecrows.

Lima Sky partners with Ravenburger — Doodle Jump developer Lima Sky announced that it partnered with German board game manufacturer Ravensburger to create the first Doodle Jump board game. The announcement comes on the heels of the latest major Doodle Jump content update (also Halloween-themed) that is slated to release at the end of October.

Warner Bros. signs Spooky Cool Labs to develop Wizard of Oz Facebook game – Spooky Cool Labs announced it acquired the license from Warner Bros. Interactive Entertainment to develop and publish an online social game based on the classic movie The Wizard of Oz. The license grants access to the film’s beloved characters, music and likenesses, including the likeness of Judy Garland’s (Dorothy), Margret Hamilton (the Wicked Witch of the West) and others. Closed Beta testing of the game is already underway. Interested players can Like the game’s new App Page to participate as testers.

EA’s Peter Moore responds to Zynga layoffs, state of social games – “We always feel bad when people lose their jobs,” Electronic Arts’ COO Peter Moore told Eurogamer in an interview. “Our hope is certainly… those folks can get re-employed pretty quickly.” Kind words considering EA’s and Zynga’s ongoing legal dispute and public name calling. Moore also countered a lot of the doomsaying which followed the recent layoffs and departures at the social gaming giant. “I think [social gaming] just got a little overhyped. And now the demise is being overhyped the opposite way. I still think there’s a strong place for social gaming. I think a lot of social gaming is moving [to] mobile. We feel well positioned to take advantage of that. And people shouldn’t read too much into whatever is going on with Zynga.” Read the full Eurogamer interview here.

Ngmoco co-founders Neil Young, Bob Stevenson depart

Ngmoco co-founders Neil Young and Bob Stevenson have stepped down from the company, leaving their positions as CEO and CCO. Ngmoco parent company DeNA appointed former head of studios, Clive Downie as CEO to replace the outgoing Young.

According to today’s announcement, Young and Stevenson are moving on to “new adventures”, although Young will remain on DeNA’s board of directors.

DeNA acquired Ngmoco just over two years ago for $403 million — a deal that still stands as one of the biggest mobile gaming acquisitions. At the time, Ngmoco was one of the leaders in the mobile gaming space, having hit early success with titles like We Rule and Touch Pets. And while the purchase saw Ngmoco’s own game development efforts largely sidelined (the company has only released a handful of first-party titles since 2010), the past two years have seen the slow, but successful launch of DeNA’s Mobage gaming platform in the west.

Read the rest on our sister site, Inside Mobile Apps.

Zynga’s newest ‘Ville is sequel CityVille 2

A few months shy of its two year anniversary on Facebook, CityVille gets a sequel in beta form from embattled developer Zynga.

CityVille 2 is currently in geo-locked beta in the Philippines, which is the same region where Zynga tested FarmVille 2 several months before its launch. A brief blog post announcing the sequel declines to name a launch window for the game, but based on FarmVille 2’s timeframe and on statements made in Zynga’s latest earnings report, we anticipate a December launch assuming the geo-beta runs smoothly. As you can see from the screenshot below, it looks like CityVille — but with slicker graphics and apparently a day-and-night mechanic as this appears to be a nighttime shot.

The announcement comes just as the frenzy surrounding Zynga’s lowered 2012 outlook reaches a fevered pitch. The company’s stock opened trading today at $2.42 — down more than 75 percent from its IPO opening price of $10 a share. Two more high-profile departures hit the developer’s ranks last week. Over the weekend, our friend and former Inside Facebook lead writer Josh Constine over at TechCrunch ran an article provocatively titled, “Why Zynga Failed,” although the article stops short of actually claiming the Facebook games giant has completely flatlined. Today, we see that doom and gloom sentiment being reiterated by articles from The Wall Street Journal, Forbes and AllThingsD.

Despite the obvious turmoil at Zynga, it’s still a far cry to call the developer “failed” at this stage — particularly if it’s still launching games and making money. In the rush to declare 2012 the year of another internet bubble burst, it seems as though many people forget that a games company is defined by its ability to release games — something Zynga has never not done regardless of what its stock was trading at. Plenty of social and mobile developers have actually failed in 2012 — as in shutting their doors, laying off their entire development staff and never releasing any new games — and yet none of them seem to register with an audience that was just so eager for the No. 1 Facebook developer to fall off its pedestal. Incidentally, it’s a pedestal still occupied by Zynga; our AppData traffic tracking service shows that the top three apps on Facebook by monthly active user are all Zynga games — ChefVille, Texas HoldEm Poker and Zynga Slingo.

For a bit of historical context, CityVille was both the largest game and app on Facebook in terms of MAU and daily active users for a run of more than 12 months. At its peak between January and March of 2011, the game boasted more than 101 million MAU and just above 21 million DAU. It currently sits at 16.8 million MAU and 2.2 million DAU.

GREE picks up Dino Life developer App Ant Studios

Japanese mobile-social gaming giant GREE has acquired App Ant Studios, the San Francisco-based developer behind the company’s casual-social title Dino Life. GREE did not reveal the financial terms behind the deal.

App Ant Studios was formed just over 15 months ago, founded by four game industry veterans who had racked up stints at EA, Yahoo!, TInyCo and Storm8. According to the App Ant website, Dino Life was the company’s only completed game.  Under the terms of the deal, all App Ant employees will join GREE, with the company’s four co-founders taking up unspecified leadership roles in GREE’s engineering and game development teams.

The acquisition is GREE’s first since the company acquired mid-core mobile developer Funzio for $210 million. Its likely GREE decided buy the App Ant team to bolster its Android development expertise. When Dino Life made its debut in May, the game was an Android exclusive title, although it appears GREE is currently testing an iOS port of the game in the Canadian iOS App Store.

So far Dino Life has been a modest success for GREE and has been downloaded more than 500,000 times according to its Google Play listing. Our traffic-tracking service AppData reports the title is currently the No. 357 most popular game and the No. 439 top grossing app in the Google Play app store.

EA reports $955 M in earnings, 7.3 M decline in MAU and $500 M share buyback

Electronic Arts made $955 million in earnings during Q1 2013, suffered a 7.3 million monthly active user decline and kicked off program to buy back $500 million worth of shares.

The company’s earnings statement reveals it had 41 million MAU playing its social games at the end of the quarter. This is a 15.9 million (27 percent) MAU decrease year-over-year from Q1 2012, and it’s still significant drop from the 48.3 million (15 percent) MAU the company began the quarter with. Our AppData traffic tracking service also shows the company’s daily active users are at 8.9 million DAU, down year-over-year by 200,000 DAU (2 percent).

The program to purchase back $500 million of shares shows the company has cash in the bank and believes its shares are undervalued, as well as making sure there are fewer shares on the market to short. The move should help stabilize stock prices, which are trading at $11.24 a share at the time of writing.

Revenue for EA’s digital segment (which includes social, mobile and digital downloads) showed continued growth for the fourth straight quarter in a row, increasing to an estimated $324 million in Q1 2013, up 55 percent from Q4 2012. Mobile devices accounted for $79 million; smartphones and tablets increasing 86 percent year-over-year, while feature phones decreased 13 percent. Revenue from social games wasn’t highlighted in the earnings report. You can read a more detailed analysis of EA’s mobile earnings on our sister site, Inside Mobile Apps.

EA’s been trying to reestablish its social games presence over the past year with mixed results. In September 2011, The Sims Social proved to be digital lightning in a bottle, helping the company achieve 102 million MAU and 18 million DAU. Since then, EA’s social games like Risk: Factions, Lucky Gem Casino and Solitaire Blitz haven’t achieved the same kind of success. This quarter saw EA launch two high-profile social games — SimCity Social and Outernauts — which still in the early phases of their life cycles.

Zynga faces lawsuit alleging executives engaged in insider trading

After last week’s second quarter earnings call, Zynga’s stock price tumbled even lower and five legal firms announced they were investigating allegations that members of the company engaged in insider trading. Today, VentureBeat is reporting San Francisco-based firm Newman Ferrara has filed a class-action lawsuit against Zynga, the company’s directors and associated brokerages.

The suit was filed on behalf of Mark H. DeStefano and “all other persons similarly situated.” The main allegations are based around how Zynga set the initial executive lock-up agreement to expire on May 28, 2012 (ten days after Facebook’s IPO and Zynga’s stock plummet), issued positive statements about its anticipated bookings and then revised the lock-up agreement in March. The new lock-up expiration date allowed the defendants to sell their shares on April 3 for $12 a share, generating proceeds of over $500 million.

The suit also claims, “Zynga misrepresented or failed to disclose material adverse facts about its business, operations, and growth prospects including, among other things, that: (1) Zynga had been experiencing a rapid decline in user numbers and virtual goods sold in existing web games; (2) Zynga had faced substantial delays in launching new web games; and (3) Zynga’s revenue and bookings were entirely dependent on Facebook’s online gaming platform.”

Zynga has yet to publicly respond to the lawsuit. At the time of writing, the company’s shares are trading at $2.93.


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