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Pincus: Employees have a "real love" for Zynga

Mon 19 Dec 2011 9:21am GMT / 4:21am EST / 1:21am PST
Business

CEO responds to rumours of a post-IPO talent exodus

Zynga CEO Mark Pincus has responded to claims that a large number of his employees will leave the company now that they are able to sell shares.

The rumours started with an article New York Times, in which EA's Gabrielle Toledano warned that Zynga's tendency to treat its "talent as a commodity" would lead to a post-IPO exodus.

The article cited the testimony of several former employees who claimed that Zynga's reputation had caused takeover bids for both PopCap and Rovio to fail.

However, in an interview with Fortune, the first since Zynga went public last week, Mark Pincus dismissed the idea.

"I'm not sure why there's been all that speculation other than that we've been in a quiet period," he said.

"Our company has historically had very low attrition, much lower than other public or private companies in Silicon Valley. I know that hasn't been reported on, but it's true."

Pincus believes that three factors are vital to the retention of key talent: belief in the direction and mission of the company, career mobility, and individual empowerment.

"Our employees have a real love for Zynga and real pride," he added. "We've asked them not to go out and defend us in the press or blogs, so I don't think that's come through publicly yet."

Forbes also questioned Pincus about his decision to sell $109 million of his personal stock in March. At the time, the stock was worth $14 a share - considerably higher than the $10 a share set by the IPO.

"I've never been trying to time the market or be an expert on valuation of us or anybody else. My approach from the beginning, because I've wanted to stay at this company for the rest of my career, has been to take a different approach from other entrepreneurs who might look to sell their company as an exit."

"Since early on, I've sold small pieces of my ownership along the way, so as not to feel any pressure to sell the company. I don't think you can look at any single one of those transactions and use it to judge my beliefs at that time in the future prospects of the company or its value."

Zynga's share price rose by 10 per cent to $11 immediately following the IPO, but subsequently plummeted to close the day's trading at $9.50.

The company's early market performance is consistent with this year's other major tech IPOs, including Groupon, Nexon and Pandora.

6 Comments

John Bye Senior Game Designer, Future Games of London

484 456 0.9
"The company's early market performance is consistent with this year's other major tech IPOs, including Groupon, Nexon and Pandora"

Actually Groupon's shares went up 30% on their first day, and apparently the average this year is a 10% first day gain - http://www.ft.com/cms/s/2/414358c0-280c-...

Posted:2 years ago

#1

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
Zynga may be an awesome or awful employer, we've had a few murmerings but we'll see for sure soon, but either way, the lower than average numbers of people leaving, and people not saying much on record, could be something to do with the stock options involved for staying past the IPO?
When those have been cashed in, then we'll see how much love people have, until then we probably can only speculate on rumour. Naturally the evil part of me wants to believe they company is as horrible as the games they inflict, but then the nicer part of me would like to believe that a big company treats it's employees like humans, I see so many instances elsewhere where that's not the case.

Posted:2 years ago

#2

Tim Carter Designer - Writer - Producer

579 322 0.6
The entire game industry treats creative talent as a commodity.

Unless you are criticizing this fact about the entire game industry you are a hypocrit to attack Zynga alone for it.

Posted:2 years ago

#3

Christopher Bowen Editor in Chief, Gaming Bus

459 738 1.6
Well, I do criticize the entire games industry for that. I do so because this is one of the few industries where creative people are the reason the best games are the best.

But these decisions aren't made by gamers; they're created by people who made their hay elsewhere. To use him as the example, Mark Pincus is a venture capitalist by trade who was in the telecom industry before becoming an entrepreneur.

I personally view his profession - the entirety of it - as a dirty, terrible one, though necessary in some forms of the economy, much like the person who works at the morgue, though performing a necessary service, is not someone you would associate with.

Posted:2 years ago

#4

Nathan Runge Managing Director, Genius Interaction Pty Ltd

11 0 0.0
Tim Carter, I agree that the industry, generally, views talent as an expendable resource. Thankfully, there are some very note-worthy exceptions to that rule. Without commenting on the validity of the claims against Zynga, I would ask you how you would expect to address the 'industry-wide' problem without addressing individual companies.

Posted:2 years ago

#5

Curt Sampson Sofware Developer

596 360 0.6
I'm not sure that the problem can be effectively addressed. Software development, and industry which is similar to game development in some ways, suffers heavily from the same issue: it relies on creativity for its best work, and there can be huge differences in productivity between any two developers, but developers are more often than not treated as a commodity.

Let's face it: a lot of businesses and managers can do a poor job and still get by, and as long as that's the case, many will do a poor job.

Posted:2 years ago

#6

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