Pokemon Go: What Mobile & Gaming Entrepreneurs Can Learn from It

If you haven't heard about the success of Pokemon Go, recently, from Niantic games based on the beloved Pokemon franchise, you would have to be hiding under a rock.  It has been downloaded many millions of times, and has become the #1 top grossing app in both the Apple App Store and Google Play Store.  Millions of players are wandering around with their phones held up high looking for “poke-stops” where they can catch a “pokemon”. 

Many articles have been written about the arrival of AR (augmented reality) and location based games.  The week Pokemon Go was released I was walking with some twenty-something colleagues to lunch castro st in downtown Mountain View, in the heart of Silicon Valley, and they were of course holding up their devices and pointing out not just pokestops but excitedly chattering about the latest “pokemon” which they were trying to catch. 

I had a strange sense of déjà vu. In fact, I recalled in 2011, when the founders of another gaming company, had shown me augmented reality games on the same street.  In AR mode in both Pokemon and this game, you had the camera of the phone on which showed you the surroundings with the “augmented” elements.  In their case, they were “bombs” placed by other players at specific locations around downtown castro st.  In the new case, they were Pokestops and lures placed by other players to catch Pokemon.

That company in 2011 was one of a steady stream of location-based augmented reality games that entrepreneurs showed me for the next two years.  It was one of the things that you could do with mobile games that you couldn’t do with any other type of games (Facebook, Steam, Console), they argued, and it was bound to be the future of mobile gaming. Many investors agreed and put some seed money into these companies.

In fact, at one point (I can’t remember what year), a couple of guys out Stanford showed me their game which was a location based game where you captured cute little creatures that had different abilities and then you battlted other players – it was called Geomon, a play on “Pokemon” and “Geo” - sounds familiar, doesn't it?   

What happened to those startups? Most of these location based augmented reality startups came and went – they’re either out of business or were acquihired by other companies needing the engineers and their games shut down.

While I think it's very difficult am hesitant to compare one startup to another, there is an important lesson here: Don’t be Too Early.  Sometimes, being too early can be as bad as being too late.

If you are too early, you need lots of staying power for the market to catch up with you, and to keep creating products until one of them hits the sweet spot in the market.  It’s not easy – in fact, most of the companies that pitched location based AR games to me in 2011 and 2012 ran out of money – they couldn’t convince investors to keep supporting them, which is the dilemma of the startup entrepreneur that is too early.

Pokemon Go Studio Niantic also released their first well-known location based game, Ingres, in 2012, then released it to the public in 2013 on Andoird.  But Naintic was initially part of Google, and they were able to keep the company going for a while before they signed on Pokemon, and they got a $30 million investment before they released it.

Now I’m not saying that the AR/location mechanic was the only reason for the success of Pokemon Go; The other, perhaps just as important reason was that the IP, Pokemon, appealed to a generation who are now grown up (but not too grown up) and are heavily into mobile games, so every twenty something mobile game player probably had good memories of Pokemon and wanted to try it out.  Not to mention, the fact that their friends were playing it means it got to the critical mass.  This expression “critical mass” comes to us from the world of the atomic bomb, where it defines the amount of mass needed for a single neutron to set of a chain reaction; the neutron hits the nucleus, sending off several neutrons, who hit other nucleus, and so on, until it reaches the point where it becomes a self-sustaining chain reaction. 

But for entrepreneurs who are looking for the “next big thing” (and there are lots in Silicon Valley right now, particularly looking at VR, for example),  the real lesson is that in startups as well as in life, Timing is often the most important factor.  Hitting the market at the right time – not being too early and not being too late – are critical for the type of product that you have.  A related lesson is that sometimes, the second or third product is the more successful one.    

Similarly, Angry Birds was famously Rovio’s 51^st game., and Draw Something, was the last attempt by the gamemaker OMGPop, which was sold to Zynga for $200 million.

Finally, leveraging the strengths of your company’s first product is sometimes a key part in getting out the second or third product which may be the one which vaults your startup to success!

How to be happy and successful: Find the intersection of the spheres

“There is no path to happiness.  Happiness is the path.”

      -Buddha

Because I often speak in person and in my book about using meditation as a tool for self awareness (“clear the mind to see clearly”), and intuition to find your path (“follow the clues to reach the treasure”), I’m often asked for advice on how to be both happy and financially successful.

 I’m also asked the same question, though in a different form, by entrepreneurs about their startups.  “How can my startup be both financially successful and feel like we’re doing something meaningful/unique/making a difference?”.

 It turns out that my answer to this question is the same for both individuals and for startups.

A Tale of Two Extremes

First let’s look at two extreme pieces of advice that I ‘ve often heard given (and followed):

Extreme Advice #1: “Do what you love and the money will follow.” 

This is great advice (and if I’m not mistaken, was the title of a bestseller long ago) in theory, up to a point. 

But what happens when you start to do what you love and the money doesn’t follow?  The reason there’s still a self-help industry is because it isn’t always so easy to make a living  doing just what you love.

I was reading a book by Dannion Brinkley recently (there’s a throwback to the nineties, when Dannion was a bestselling author, famous for having an NDE after being struck by lightning) and he said that one vision he brought back from the “other side” was a form of spiritual capitalism. In this vision, everyone would do work that they loved and earn enough income from it to make a decent living.    Again, a great vision, but one that doesn’t always play out in the real world the way we’d like. 

 This is also true for startups/entrepreneurs as well, though it can seem paradoxical.

 Some of the most successful startups did in fact start off doing something they believed in, and the monetization came around much later (think twitter, facebook, and Google).  But these are also extreme cases; unfortunately, more often than not (let’s say 9 out of 10 times), simply focusing on your vision without taking the time to fit it to the market is also a recipe why most startups go out of business.

 Too often I see entrepreneurs holding on to a vision of what they want their startup to be, but that vision isn’t producing results and isn’t generating enough cash to stay as an on-going concern, and they don’t admit it until it’s too late.

Extreme Advice #2: “Do what the market needs.  Find meaning elsewhere.”

In a way, this is great advice to be financially successful, but it leads to a whole different kind of frustration.  In the work world, many people have jobs that do not involve something they are passionate about and provides no meaning whatsoever – it’s simply a way to earn a paycheck.

For a startup, this means doing whatever a customer is willing to pay for. While this may lead to a successful company financially in the short term, as an entrepreneur you an feel like you’re “selling out” your vision and you’re not likely to make a big difference or feel passionate about what you’re doing. 

I’ve been in startups which started out as “fun” and “innovative” but ended up being slaves to the almighty dollar – every decision that was made had to do with “will it improve our financials or not?”.  That’s no fun either and you end up wanting to "quit" your own startup and go do something "fun" and "innovative" again!

The Middle Way: Find the Intersection of the Spheres

After reflecting on this question for most of my adult career, I have come to the conclusion that people are only happy and financially successful when they can find the intersection of three spheres. 

Sphere #1: What you love to do, what you want to do. 

Suppose you love writing. Or music.  Or acting, and you decide you want to pursue these things full time.  One thing to think about is that something that we “love” as a hobby may not be so “enjoyable” if it is the sole source of our income – it turns from a “hobby” to “work”. 

Still, it’s useful to create a list of the things we “want” or that we would be happy doing.  For a startup this is our “ideal vision” of what the world might look like with our product/service, without regards to the financial question.

As I mentioned before, focusing too much on sphere #1 often leads to unacceptable results in our careers and our startups but it’s a great starting point.

Sphere #2: What we are good at? 

Creating a list of what we are “objectively” good at is not as easy as it seems.  This is because we are often so concerned with sphere #1 and sphere #3 that we don’t stop to reflect on ourselves.  In fact, I often recommend asking someone else for this list, and we are more likely to get objective answers.

It’s important to be honest with ourselves here.  As an extreme case, suppose I want to be an NBA basketball player – but the truth is that I’m only 5’6 and not very athletic and objectively not that good at basketball.   In fact, I’m a much better computer programmer than I am basketball player. Or for that matter, an actor.  Orson Scott Card wanted to be a stage performer and “loved it”, but he realized he wasn’t that good at it. In fact, the was a much better writer than he was performer.

If you aren’t good at working with people, should you really pursue a goal of becoming the top salesperson (or multi-level marketer) in your region?  How many of us set goals that aren’t appropriate for either our skillset or our DNA (here I don’t mean our actual DNA, I mean our energetic patterns and what we are intuitively drawn to - Steve Jobs would call it "fate, destiny, karma"). I’m not trying to be negative here, I’m saying that each of us has unique talents and aptitudes.

In his bestselling book, Outliers, Malcolm Gladwell says that it takes about 10,000 hours to become an “expert” at something.  The thing he ignores though is that people aren’t interchangeable; we are drawn to different things and good at different things naturally.   I have a friend who has spent this many hours rock climbing. She’s an expert.  Would I be an expert too if I spent 10,000 hours rock-climbing?  Maybe, but most probably I wouldn’t make it to 10,000 hours because I’m not that interested in it, and not naturally drawn to it.  You might say it’s not in my karma.

This is equally true for startups. I’ve noticed that founding teams in different startups have different DNA (again i'm not talking about actual DNA here, i'm talking about aptitude and experience). As a result, certain business models are just easier for them to follow. Interestingly, they aren’t always the business models that they “choose to follow” because they aren’t being honest with themselves..

As an example, in one of my startups, we were very good at delivering developer tools that we sold for thousands of dollars and customized for many thousands more.  Why? Well, it turns out because we were developers ourselves and really understood this market.

At one point someone (I think it was me!) came up with the bright idea to build an end user tool and sell it for $49 or so.  We went ahead – and while we did an OK job, building end users products wasn’t really what we were good at – the product looked very “developer-y” and we couldn’t provide real end user support.  The point here is not that you shouldn’t experiment with different business models or products, it’s that you need a clear mind to see what you are good at and then play to your strengths.  

VC's will often tell you to "play to win".  But you can't "play to win" if you're playing to your weaknesses.

Sphere #3: What the market is willing to pay for..

This brings us to sphere #3.  If we are good at something, there’s a good chance that someone will pay us to do it, and more importantly – keep paying us to do it!

This may seem obvious, but many people set their sights on doing something that no one is willing to pay for, or they get paid for it once and despite the fact that they aren’t very good at it- they keep thinking that others will keep paying them for it.

The important point here is to define the “market” appropriately.  In your career, it might mean local job market – it might mean any company anywhere willing to hire someone full time – or it might be much more specific: “online e-commerce companies that are willing to pay consultants for”.

For a startup, the way you define of market is crucially important.  For example, if you are freemium model in video games, is your market that’s going to pay consumers or advertisers?  This is an important distinction.  You might find you have a free app that millions of people will download, but no one is willing to pay for it – that’s where the advertisers come in.

Usually, an entrepreneur can figure out what’s in sphere #3 by meeting with potential customers.  Very often, they won’t be ready to buy what you are selling, but if you listen closely, you might hear them say something like: “well, yes, that’s nice, but if you could do X, I’d be willing to pay for it right now.”

By listing items in all three spheres, you can start to look for the “intersection of the spheres”.   Seems obvious? In theory maybe, but in practice, it’s anything but, which is why I recommend you look to people that know you (or your startup) well and ask them what is in sphere #2 - what are you really good at?  If you can do this, you can find the sweet spot that can propel your career or your business to the next level, and make you (and/or your employees) happy in the process.

Like the mysterious "one thing" in the movie City Slickers, I can't tell you what lies in the intersection of the spheres.  

That's for you to find out.