Zynga’s Mark Pincus: Ignore If People Think What You’re Doing Is Stupid. Press On & Treat Your Team Right.

There have been a lot of great speakers that tech publication, PandoDaily, has brought forth each month. It all started out with TechCrunch founder Michael Arrington and continued with Path’s Dave Morin, investor Peter Thiel, Facebook co-founder Dustin Moskovitz, and one-half of Andreessen Horowitz, Ben Horowitz. But never in San Francisco has PandoDaily had the CEO of a public tech company on stage and one that has helped change the way an industry operates. Last night, PandoDaily’s Sarah Lacy made it happen with Zynga’s CEO, Mark Pincus.

The Controversy?

The beginning of the talk began with Mrs. Lacy addressing what some people might think of as controversial–Zynga’s company culture. What some believe is that Zynga’s culture has people subscribing to the belief that long and tiresome work is needed from them and there are rumors saying that it’s resulting in a talent drain the company. In a snippet from the New York Times article via the San Francisco Chronicle, it’s reported that:

But that culture, which has been at the root of Zynga’s success, could become a serious liability, warn several former senior employees who agreed to speak on the condition of anonymity because of fear of reprisals…As the discord increases, the situation may jeopardize the company’s ability to retain top talent at a time when Silicon Valley start-ups are fiercely jockeying for the best executives and engineers. It could also hamper deal-making, a critical growth engine for Zynga, which has spent about $119 million on acquisitions in the last two years.

It seemed that while this controversy seems to be out there, Mr. Pincus doesn’t have an answer for why things happened the way they did. Zynga became a company that grew to the size that it did much larger than any other startup in Silicon Valley. But could the corporate culture be tied into Zynga’s mission and belief in it? For Mr. Pincus, he’s determined to make Zynga succeed, and for the most part, it has–having just had its IPO happen, that’s probably the pinnacle of being a success. But the job’s not done yet. For Zynga’s CEO, his aspirations don’t include him being a serial entrepreneur. It’s just not his thing. Sure, he’s done at least a couple of other startups and many have unfortunately failed, but for Mr. Pincus, he derives value out of being passionate about one thing in the world and growing to change with it.

When asked whether he always wanted to be CEO and not just a founder and eventually step aside and watch his company blossom, he responded that if you wanted to build something that lasts, then you need to aspire to be a CEO, not just the entrepreneur. The CEO is the one that will be setting the priorities of the company. Sure, you might need to delegate some tasks and responsibilities, but it depends on the person and company. He’s also tried to build a long-term company that mattered and followed a specific mission. He’s not interested in an exit, nor will he accept selling a company. The only way for Mr. Pincus to exit is by “natural causes”.

Mission And Passion.

As he explains, Mr. Pincus worked hard in the beginning to get everyone in his company on the same mission at the very beginning. This seems to work best in the early days of the business. Amazon founder & CEO, Jeff Bezos, once told him that after you’ve passed a few hundred people, all the rest are not in the original group of hires and haven’t been a part of the original mission. As a result, it’ll be harder for the new people to take risks. The opportunity in the beginning to have the early team subscribe to the company mission is that you’re going to get people willing to take risks because they’re going to have to since there wasn’t anything there before. You need people who can scale and be entrepreneurs. There are very few people who can do both. For Mr. Pincus, he started off with an entrepreneurial instinct. If you’re a successful entrepreneur, your instincts will be probably right 90% of the time. But on the flip side, your observations will be right about a quarter of that.

Moral Contracts & Team Respect

As an entrepreneur, we have a “moral contract” with others that we work with, says Mr. Pincus. To that end, he responds to every email he receives from his employees. It’s his hope that Zynga will be an open and honest community and to help get them there, they’ve had quarterly all-hands meetings for the past 4-5 years where employees are invited to submit their opinions and feedback anonymously. Then, the management team and Mr. Pincus reviews each one and they select the most hard-hitting ones and reads them aloud to the entire staff. Why? Because he feels that since there’s a moral contract with the team, they deserve answers. If you can convince employees that this isn’t a normal job; that this isn’t just a stop on your resume; and that the company is built as meritocracy rather than a hierarchy, then your hard-work will be recognized and rewarded.

To accomplish this, Zynga went and acquired some perks for their employees to make them feel more comfortable. They hired several chefs, including one from the Food Channel to help provide sustenance to their employees. The thought was that by having cooks around, it enabled people to sit around, eat, and chat, thereby helping their company DNA and fostering community. The reason why you do the perks is because it’s the environment that you want to be in, says Mr. Pincus. Employees are given gym membership, trainers, massages, acupuncture, and other pragmatic things. They try and stay away from perks that are opulent and excessive. When it becomes a culture of rewards, it’s when you lose touch and becomes too much.

Over the course of his entrepreneurial experience, Mr. Pincus has been called “stupid” for some of his decisions. To that, he says that he doesn’t care because if you’re an entrepreneur, it doesn’t matter–you need to stop looking for your self-worth from your peers and the industry if you’re going to start your own business. In fact, your company doesn’t have to be completely understood by people on the outside all the time. Zynga, for example, has gone through periods where they weren’t understood or even respected by the gaming industry or the tech pundits. But they’re working on trying to innovate and change an industry. If it was easy to do, everyone would be doing it! Put simply, if you’re worrying about whether you’re going to be called stupid, then you’re going to be doing something stupid and won’t take many risks. For Mr. Pincus, the only thing that matters is the impact on his employees.

What Should Entrepreneurs Do?

So what are the three things that an entrepreneur should do? Mr. Pincus lays it out (and throws in one more as a bonus):

Investors and your board really matter and can represent the death of your company, accelerate your company, and hurt you. Go with the lead investor if you feel a real chemistry and have a trust with.

If you can keep control over your company, value that above everything else. There is no comparison with keeping control over your company and choosing your co-founder/partner. You decided to be an entrepreneur so you want to control your own destiny. Why would you want to turn around and just be an employee? Entrepreneurs want to please their board…Mr. Pincus is interested in winning, not the appeasement of his board.

For seasoned entrepreneurs, Mr. Pincus would take the investor that would be the least involved and least strings attached for his company. He cites Yuri Milner because he asked for nothing from entrepreneurs (specifically Mr. Pincus), doesn’t show up for board meetings, but at least once a month, will want to have dinner with you and often will share some great insights while also challenging you. You basically feel that the guy is as good as his word.

Lastly, you want your investors to believe in your macro-vision as much as you do and wants you to go for it. If you find someone who believes it that much, then you’re going to be sure that they’re a good investor. You shouldn’t ever want to surprise your investors, though. Make sure that if the company isn’t pursuing its intended mission, the investors know. Their job is to hold the company accountable.

There are definitely more insightful gems that came from Zynga’s CEO and you can watch the whole thing right here or read more snippets and stories from his PandoMonthly talk on PandoDaily.

Photo Credit: All photos of Mark Pincus and Sarah Lacy taken by Kenneth Yeung