

OMGPOP’s Sale to Zynga Is One of Y Combinator’s Biggest Exits To Date - dko
http://techcrunch.com/2012/03/21/omgpop-iminlikewithyou-ycombinator/

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sambeau
This acquisition demonstrates the wisdom of investing in people rather than
products. A good team will be flexible and have the ability to take advantage
of small pieces of success and build them into hard-won 'luck'.

Being lucky requires the ability to see when you've been handed an advantage
and the tenacity to step into and exploit a lucky situation.

Many people just let luck pass them by.

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schoudha
Wow, great call by YC and patience by the founders.

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brico
Yes, but this one was pure luck.

They didn't plan on building games for android and iOS. I remember them for
being a 100% flash-site that offered a mediocre tetris-clone until they were
sued by the tetris-copyright-holders.

"Draw Something" was an extremely fortunate product: a) they finally had a
hugely popular game which took everyone by surprise and b) they made so much
money that Zynga decided to just buy them instead of spending weeks/months on
copying them and losing money every day they didn't have an alternative to
"Draw Something"

~~~
inovica
Many successes are based around 'luck' - or more accurately capitalising on it
when it comes your way. I know my business has continuously evolved over the
years and people have often used the term 'lucky' for me. I find it irritating
when people say that someones success is purely down to luck - I'm sure that
there were a lot of decisions that were made that contributed to their success
here, as that's what it is

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brico
sorry for not being clear: not the people running OMGPOP were lucky, the
investors were, they just couldn't have known how things turned out to be.
When they invested in the initial round my guess is that the idea behind the
startup and the business ideas were completely different from what the company
represents now

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mdonahoe
Yc invests in people.

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brico
if you are an investor and you don't have a look at the team behind an
ambitious and promising idea you will soon run out of money, this is nothing
Yc-specific.

edit: ok, another try, people don't like the word "luck" so let's call it a
hail mary pass :)

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stevenj
The article forgot about Reddit. Not sure what the terms were though.

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jacoblyles
reddit was one of the most undervalued sales of all time.

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philwelch
Was it? They're not exactly rolling in profits seven years after launch.

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brico
because they are very concerned about annoying/destroying the community.

in the hands of a purely profit-oriented company they would make enormous
amounts of money and milk the site until its demise a couple of years in

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swombat
Dubious. Reddit's users are viciously anti-commercial. I doubt you could make
that much money from traditional advertising there...

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brico
the core surely is anti-commercial but the main subreddits like r/funny or
r/pics and the like are so huge that the majority consists of "normal"
internet-consumers that visit other sites as well and are used to commercials,
the reddit-frontpage is mainstream, it's no longer an obscure site that some
nerds know about

and in addition they could have very targeted advertising for the highly
specialised subreddits.

but aggressive money-making surely would destroy the community and turn the
site into a superficial link-collection with comments in the style of youtube
but you _could_ milk it for a couple of years and earn a lot

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waxy
Is it a cash deal though? If not, it might take a few years until their stock
vests and until than zynga might not be worth much. So i really hope it's at
least 50% cash.

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swombat
Iirc, Zynga is public, so their stock is basically (almost) as good as cash in
terms of liquidity.

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wheels
That's orthogonal to what waxy said. Public stock can vest as well. The
liquidity of the stock is only relevant at which point it vests. So, if, as
suggested, ZNGA were to lose some percent of its value before the first cliff
hits, the effective value of the transaction would that percentage of the
sticker price in an all stock deal.

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swombat
Would an investor in startup X accept vesting stock from company Y as a
payment for their stock in company X? Surely for investors, the stock has to
vest immediately (if it's paid in stock)... It doesn't make sense to try and
"keep the investor around", does it?

~~~
benatkin
Yes, but it would make for a less impressive deal. OMGPOP being acquired for
much less is plausible, so another kind of a less impressive deal is plausible
too.

Zynga could go bust. Without being acquired OMGPOP could go bust. So the
investor would have to weigh the risk.

I also think there would have to be some cash and/or stock that would be
available right away, for it to be an enticing deal.

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parfe
Any issues dealing with a Zynga and their business practices? Will the
founders and later employees of OMGPOP be protected from Zynga's
underhandedness (reported aggressive clawbacks)?

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est
From one of the earlier days

<http://news.ycombinator.com/item?id=52206>

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dlokshin
This is taking the word "exit" a bit liberally, but has YC sold any stock in
later rounds of financing for companies like Dropbox and Airbnb?

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danssig
Congratulations to them. The bad news is; now they work for Zynga. I hope none
of the founders is a chef.

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joejohnson
The name was changed from "iminlikewithyou" to "OMGPOP"? Wow, they really
never planned on leaving the 10-12 year-old market.

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k33n
You're attempting (and failing) to belittle a company which just sold for
$200,000,000. They clearly had very broad appeal.

Sorry you're feeling a little jealous. Try not to let it show so much.

