0:00:00 – (Dan Barnes): You have to actually do that. It has to be built in. It’s very difficult to tack it on because if you think about something as simple as leaderboards, if you add them in after the fact, when the user behavior is already set in games, we call it the core loop. The thing that you do most often is already set. Then changing that behavior is really hard. It’s really hard. The challenge with gamification is it often feels tacked on because it is really what you want to do is you want to build the new compulsion loops, those new core loops very early on in the software, all about the social framework and how you reward the behavior that you want.

0:00:41 – (Matt Widdoes): Today we are joined by Dan Barnes. Dan is an accomplished executive in the mobile gaming industry with over a decade of experience at companies such as network, natural motion, zynga and machine sound. Throughout his career, he’s consistently driven revenue growth, developed innovative technology platforms generating over 1 billion in enterprise value. Over the course of the last decade, he’s deployed over 1 billion in user acquisition, worked with world class ip and raised several rounds of vc funding.

0:01:10 – (Matt Widdoes): In this episode, Dan and I talk about company culture being critical to a business success, live operations and gaming, boosting engagement and retention, applying gamification principles in industries beyond gaming and the benefits of using automation and generation to extend the life of creative output. With that, here’s Dan Barnes. Dan, welcome to the podcast.

0:01:35 – (Dan Barnes): Thanks for having me. It’s great to be here.

0:01:38 – (Matt Widdoes): I’m so excited to have you today. Dan is in the UK. We actually just saw each other about a week ago in the US, but we were unable to do this face to face. So here we are today through the magic of the Internet and all of the pipes that make up the Internet.

0:01:51 – (Dan Barnes): That’s right. Yeah, I’m really glad to be here, man. Thanks for the invite and yeah, I’m looking forward to this.

0:01:58 – (Matt Widdoes): Cool. Well, I think there’s so much to talk about in gaming. I mean, you’ve got background in companies that are outside of gaming, but you’ve done so much at scale, especially taking early stage gaming. Companies like Natural Motion, before they got acquired by Zynga, like Machine zone, before everybody knew about them and they were spending 5 million a day on use acquisition and kind of blowing up all of the other spots. You scaled network and got that to an exit. So you’ve seen a lot from both early stage and when it’s at massive scale and how those changes take place over time.

0:02:35 – (Matt Widdoes): And I think a lot of those learnings apply not just to gaming companies, they apply to kind of any company. But gaming is unique in that it has so many data points and it’s fast moving, it’s fairly low consideration, so you just have a lot more stuff to work with. And so I want to kind of spend today talking about some of those elements and maybe just as a starting point on the premise of starting an early stage company, you’ve built and nurtured so many of these companies from such an early point, and I think consistently, from what I’ve observed, really strong company cultures that have followed, I’m curious if there’s any key elements, in your opinion, to a thriving culture. And then how do you maintain that as the company grows from ten people to 100 people to 1000 people?

0:03:16 – (Dan Barnes): Yeah, I mean, the second half of that question is the really hard bit. You know, I think, you know, it was really interesting being super early at machine zone and going through the cycles there, where, you know, the most important thing was taking an insight to an action in the shortest amount of time possible. You know, we were at the bleeding edge of live operations before it was called that, you know, and that was a super interesting ride and something that we’ve talked about a lot. But ultimately, I think the shining light there, the thing that was super interesting was that there was a clear objective from the very top of the organization.

0:03:47 – (Dan Barnes): And the insight to action, the reactivity, the ability to turn on a dime and be able to create something that engaged and delighted millions of players and then allowed that delight to then flow into both engagement and revenue. And because that was the top, that was the North Star, because that was the thing that was kind of like the single most important thing. Everything flowed from that in a way that was kind of incredibly aligned. You know, like the way that the software was built, the way that the server infrastructure was built, the way that the company was built, in terms of the team structure, in terms of the expectations and the objectives that were set. Like everything was aligned and that was kind of magical. And I think that’s ultimately why machine zone won during that period, is because everything was so deeply integrated towards kind of a common objective. And then obviously the humans were amazing and they had first move for advantage. And there are a lot of other things that went to it on that.

0:04:37 – (Matt Widdoes): Point of insight to action in the shortest time possible, which I think is a great value. And North Star, how do you manage the fact that, especially as you grow, where I’m just picturing a 30 person company one, how do we define insight and action? Because those can have different meanings. How do we know that an insight is worthy of action. What tools do we use to measure that and how do you prevent?

0:05:02 – (Matt Widdoes): I have an insight that is based on facts. Three other people have insights that are based on facts. And we’re working kind of siloed on actions that are maybe counterproductive.

0:05:14 – (Dan Barnes): I think there are three parts to that answer. I think the first one is from a human standpoint, the people that are executing have to be intrinsically motivated. They have to be able to know the objective, know that they are the best human for the job, and simultaneously be able to execute. And that starts with hiring, right? I mean, you know, you have to find those people from the very start. But you need humans who are intrinsically motivated. They don’t require someone to tell them what to do.

0:05:36 – (Dan Barnes): They know, they know that’s the right thing. The second thing is you need unambiguous data and objectives. You need things that are clear and like that. Context has to be super high across the organization in a way that everybody understands. You know, if we fall to subjectivity, if we fall to those things, then ultimately, you know, you get those clashes, you get those moments where this is my idea, this is your idea. And it’s a question of opinions that win out. And so you need objectivity, both in the data that informs those opinions, but also in the kind of objectives that you set yourselves. You should be able to say, look, the most important thing is to lift D 14 average session length by 20% and then be able to say, okay, I know that that’s the objective because that will result in a higher LTV. And as such, this is the thing that’s going to create the highest chance of us, of us executing against that, or the highest chance of us manifesting that outcome.

0:06:25 – (Dan Barnes): And then lastly, and probably most importantly, you need an incredible system of prioritization. You need to be able to, we had this at network, we use this thing called ABC 123. So I know there are a bunch of different prioritization matrices and there are obviously you can shake a stick at probably 20 of them, but we would use something called ABC 123, which was things that we must, must do, should do and could do. And then 123 was now next and later.

0:06:52 – (Dan Barnes): And so you had a one s which are must do now. And those things always rose to the top. And because you had intrinsically motivated humans who also knew their capabilities and their specializations, they could then kind of like take the a one s that they were most equipped for. And because they’re intrinsically motivated, they don’t need someone to help them do it. And then ultimately, you have great humans focused on the right problems with unambiguous data.

0:07:14 – (Dan Barnes): And I think when those three things kind of, like, sit together is where you actually see the magic happen, where the culture empowers the outcomes instead of getting in the way of it. And ultimately, then who does? What isn’t important is what gets done. And that’s really how businesses, I think, thrive.

0:07:29 – (Matt Widdoes): Well, I think the other thing I’d add to that that I’ve observed in my own career, having worked at a bunch of companies with amazing cultures as well, is that because they’re intrinsically motivated, they don’t need other people to help them with it, and they can just go off and run with it. And I think the caveat I’d add is, and when they do need other people to help them, they’ll raise their hand and ask for it.

0:07:45 – (Dan Barnes): Yeah, absolutely.

0:07:46 – (Matt Widdoes): And they’ll also go rally the troops and kind of get people on board with what they’re doing, I think the biggest thing I’ve seen that is something that we really value, and something I’ve seen that has been insidious in other orgs is suffering silently. And so it’s like, well, don’t suffer silently. And that gets back to somebody who’s intrinsically motivated. It gets back to somebody who’s kind of proactive by nature.

0:08:06 – (Matt Widdoes): And I think a guy who is amazing guy named Bob Olson had said a long time ago, earlier in my career, he’s like, you want, he’s like, have you ever see somebody in the office walk past a gum wrapper and they, like, see it and they don’t pick it up? You got to get rid of that person because it’s like, the right.

0:08:21 – (Dan Barnes): We did the same thing when we interviewed people. We would make sure that we would deliberately not pick up the glass of water when we left. And anyone who didn’t take the glass of water back to the kitchen, we didn’t hire.

0:08:31 – (Matt Widdoes): Oh, interesting. So you would, you would leave your own glass?

0:08:34 – (Dan Barnes): No, we would offer them water. They would drink the water. They put it on the table, but we would not pick it up when we finished the interview. And if they picked it up and took it to the kitchen, that meant that they weren’t expecting somebody else to look after them or to tidy up after them, which means inherently, it was like we had all these systems in place to test for intrinsic motivation, and that was really a really strong indicator of it.

0:08:54 – (Dan Barnes): We used.

0:08:55 – (Matt Widdoes): Or they at least ask, like, hey, where should I put the glass. Right, exactly.

0:08:59 – (Dan Barnes): Or should I. Should I even just. Should I pick this up?

0:09:01 – (Matt Widdoes): Yeah. Yeah. Like, where does this go? Yeah, that’s interesting. This is Martin’s.

0:09:05 – (Dan Barnes): It’s funny on your. It’s funny on your point about the ability to ask. Google did this. Google did this really big survey of what the number one indicator of high performing teams were, and it was psychological safety.

0:09:18 – (Matt Widdoes): Psychological safety?

0:09:20 – (Dan Barnes): Yeah. It was the ability to be wrong, essentially, to make mistakes and to ask for help. And if they felt like they had a culture and a team, because they’re very siloed in their teams, but if they had the ability to essentially ask for help and also make mistakes, their performance was inordinately higher than other teams.

0:09:41 – (Matt Widdoes): I think the other thing, too is that is tied up in that psychological safety is the. And it’s part of that willingness to be wrong, but it is not an aversion to conflict. And conflict doesn’t mean, like, I’m right, you’re wrong. Binary arguments. It’s like, hey, here’s a good example. I tell you, I’m going to have you something by Thursday morning. It is Wednesday afternoon, and I know that’s not going to happen for a variety of reasons.

0:10:10 – (Matt Widdoes): Instead of raising my hand and saying, hey, that’s not going to get done, and here’s when it will be done. And here are the steps I’m taking to do that. And by the way, later we can debrief on how that happened and make sure that the root cause of that doesn’t repeat. I just don’t say anything because I’d rather just not deal with. I’m like, somebody else used this term, which is, it’s like an allergy.

0:10:32 – (Matt Widdoes): What is it? It’s like an allergy to criticism. And so you see this, too, manifest in the opposite of that psychological safety bit where somebody, the slightest criticism, they’re like, well, this and this and this, and they have this, like, really, like ten to one reaction to something. It’s like eating something you’re allergic to, to any form of criticism. And that is like, there’s so much wrapped up in that. And like, you could armchair psychology that to death on, like, why does somebody. We’re just, we’re trying to sell widgets here. Like, I’m not like, at the end of the day, we’re going to go home and we have our own lives and, yeah, we’ll come back to the widget factory, but I was just telling you that the machine needs oil. And you’re like, I know it needs oil. Don’t you think? I know, it’s like, well, yeah, whatever. So, okay, so those, yeah, it’s interesting.

0:11:17 – (Dan Barnes): That radical, you know, the radical gander pieces. Like, you know, it’s, it’s one of the really critical parts of that is that you can challenge directly.

0:11:25 – (Matt Widdoes): Yeah.

0:11:25 – (Dan Barnes): You know, so you, but you must care deeply. So the idea that you, you know, you, you care deeply about not only the human, but the outcomes. So you’re empathetic and sympathetic to the situation they find themselves in, while also having really high absolute standards. So you say, like, look, this is the objective. This is where we need to get to. You don’t use relative standards. Where you say, oh, well, we’re better than yesterday.

0:11:47 – (Dan Barnes): You say, that’s good, but this is where we’re going. And that’s the first step towards, you know, to where we’re going. So it’s really important to have high absolute standards, and then you can challenge directly and both care deeply. And that’s where I think all the success happens. And I really enjoy that framework because if you just challenge directly without caring, you’re, it’s, you know, it’s the obnoxious aggression piece.

0:12:11 – (Dan Barnes): And then if you don’t challenge and do care deeply, you get kind of like, stuck in this place where you don’t talk, you know, you don’t bring up those things. You want to avoid conflict, and that’s equally as poisonous. And so there’s some magical bit, you know, in the middle where those things, those things play.

0:12:25 – (Matt Widdoes): Yeah. And the thing we talk about a lot here, and I’ve seen it elsewhere, is like, you have to care more about the baby than you do about credit and or fault, for that matter. And so, which means that, like, you know, I always use the example. Maybe it’s not a great analogy, but it’s like, imagine we are in a home of ten people, and there we have a newborn set of twins. We’re all in the same family.

0:12:54 – (Matt Widdoes): And you have been, you’re the guy who gives the babies the milk. And I come along and I see that they’re hungry and that it’s clear the milk is in the fridge. You have forgotten it, and you were busy or you went to the store to go get something. And so I heat up the milk and I give it to the babies. And when you come home, any normal person would be like, oh, my gosh, thank you so much. And, like, yeah, I meant to call you and whatever, but, like, thanks for taking care of that. And, like, I’ll clean up and I might even do something for you later because you kind of did my thing.

0:13:23 – (Matt Widdoes): What you see in corporate a lot, I mean, ideally, you see that, but what you see in corporate a lot is somebody comes and says, hey, person who leads user acquisition. I had this idea for a test. Like, I saw this ad this weekend on TikTok, and it was for maybe a competitor of ours, or it was for something that was non related, but I really like this, and it got my attention, and, like, do you think we could do something like that? And the person’s, like, cross armed? Like, that is my. You don’t know anything about ua. That’s my job.

0:13:51 – (Matt Widdoes): What are you doing? Why don’t you, like, you know, while I’m at it, I got some ideas for you on lifecycle, because, you know, I don’t think that’s really great. And the person’s like, yeah, and it shuts it down.

0:14:01 – (Dan Barnes): I mean, ultimately, that’s, that’s why I ended up leaving, you know, a couple of companies that I’ve been at. One of them we’ve worked at together is because people cared more about who did what than what got done. You know, it was more important of, like, this is my, this is mine. Why would you.

0:14:17 – (Matt Widdoes): Yeah.

0:14:17 – (Dan Barnes): You know, it’s my.

0:14:18 – (Matt Widdoes): Why are you here? It’s like my house. I’m here to help you. Like, these. If these things work, you’ll look better. Like, what are you talking about? And it’s all about, I think.

0:14:27 – (Dan Barnes): Yeah, and I think it’s all about complementary intelligences. Right? Like, I don’t know everything. You know? You don’t know everything. There’s, there’s, there’s some. And I think being open to new viewpoints and having complimentary intelligence is focused on problems is ultimately how you win. And so, you know, being close to those things just makes everyone worse.

0:14:45 – (Matt Widdoes): Well, it’s something that we, we valued at Red Bull, which I’ve taken with me, which is they would look for in their people that they demonstrated being lifelong learners is what they called it. But what you want is somebody who’s like, oh, tell me all about it. Or they’re like, you know, their, their knee jerk reaction, actually, you can kind of even just gauge for this in the questions they ask you, which is like, oh, that’s really interesting. I don’t know anything about that thing you just mentioned. Could you tell me about that? How does that work?

0:15:13 – (Matt Widdoes): So there’s, like, curiosity that’s wrapped up in that. There’s also a level of, like, humility and the kind of psychological safety that says, like, yeah, I’m just a dude. Like, I don’t. Nobody knows everything, right? And so if I’m in front of a physicist, if I don’t have any questions for them, I’m missing out an opportunity to learn versus somebody else.

0:15:30 – (Dan Barnes): I’m a five year old.

0:15:31 – (Matt Widdoes): I know what physics is. I can do that. I don’t. That’s. Let me tell you all about me. Um, and so, you know, we’ve done this where, um, it was a measure that we used at Red Bull as well, but in the interview process, we would just simply ask, like, what are you into outside of work? And at Red Bull, you know, people think of that as, like, oh, you need to be like, a skydiver or some sort of, like, extreme sports person. Nope. You could just knit. You could be really into stamp collecting things that are not extreme sports Red bull stuff, but just the fact that you have interests outside of work.

0:15:59 – (Matt Widdoes): I was talking with my, with my wife about this, and they have a kind of a target where they’re looking for. What is it? It’s something that. It’s essentially like, a high appetite for, like, new stuff. They have, like, a better phrasing for it, but it’s somebody who’s just like, yeah, I’m really into this, and I do this, and I’m learning how to garden, and I’m learning how to make sourdough, and I’m learning how to do whatever, like, you name it, and. Or, like, yeah, I’ve got. I got in. I’m taking, like, a circus school thing in San Francisco, which is a real thing, but it’s like, that desire to learn and experience and a high tolerance for that, because there are indicators of some of these other things that underlie that, versus somebody who doesn’t want to learn anything new.

0:16:41 – (Matt Widdoes): And I remember asking a person that we were interviewing, I’ll spare the details of the role, but I asked him that question, what are you into outside of work? And he’s like, um, like, my dog, I guess. And I’m like, oh, okay. Like, do you guys, like, do you take your dog to the dog park? Do you go on hikes? Yeah. Do you do. What do you do with your dog? He’s like, just walk. I’m like, oh, okay. Like, what else? He’s like, that’s kind of it. I’m like, you ended up travel or food? Like, just softballs, like, who’s not into travel and food? And he’s like, not really.

0:17:13 – (Matt Widdoes): He’s like, just. Just my dog. And work. And I’m like. And on paper, this person was perfect for what we needed.

0:17:19 – (Dan Barnes): Yeah.

0:17:19 – (Matt Widdoes): And I’m like, who wants to work with somebody who’s into their dog and work? Like, that’s. The other thing is they’re kind of boring people if they just care about work. And one other thing. Kind of thing.

0:17:28 – (Dan Barnes): Yeah, that’s right. And I think, I mean, you and I talked about this when we talked about the network stuff, but, like, you know, putting humans together in a company is a bit like chemical compounds. And if you put one plus one, they can equal eleven or they can equal three, or they can detract from each other because they don’t have any bonds, they don’t have any synergies, they don’t have any commonalities, and they also have personality, abrasiveness. So there’s a sociopath and an empath or whatever it is.

0:17:57 – (Dan Barnes): And so it’s actually really important to not have those kinds of humans. The ones that are kind of energy suckers or.

0:18:05 – (Matt Widdoes): Yeah, energy vampire.

0:18:07 – (Dan Barnes): Well, the vampires, the ones that kind of, you know, it’s like, it should be easy and fluid to create bonds with humans because as you do that, kind of going through the trenches and go through the execution, ultimately the work just feels easier and gets done faster. And. And, you know, if you have too many of those detractors in the. In the organization, it ends up being kind of like, you know, calcifies, you know? Yes.

0:18:29 – (Dan Barnes): It slows everything down.

0:18:30 – (Matt Widdoes): Yeah. And it repels people who are. Who start to ask, like, your best people start to ask, why am I here if that person’s allowed to be here. Right. And so it has these, like, longer term, if it depends on, like, how that’s expressing itself. Right. It’s not just like, a matter of, like, oh, he’s an introvert, I’m an extrovert kind of thing.

0:18:45 – (Dan Barnes): Yeah. And to be clear, I think everything should have balance. You know, I’m sure that should. That should exist. But I think, like, if you want the chemical compounds to kind of have the balance, and you should just make sure as you’re building your teams or your companies that you have the right mix. Something that’s not explosive, because you don’t need that either, but also something that doesn’t react at all.

0:19:09 – (Dan Barnes): It’s not great either. You want to make sure that you have the optimal mix. And I think thinking about those things, there’s nothing more important than the humans you have in your organization. And they’re also the people that you have to take care of the most, and you have the most responsibility to. And I think it’s the hardest problem to unwind, you know? And you want to make sure that you have that stemming from the.

0:19:32 – (Dan Barnes): From hiring all the way through the organization.

0:19:34 – (Matt Widdoes): Yeah. And with each additional hire, you’re creating a number of new relationships. Right. So it’s, like, exponential with every hire, I think you. I can’t remember what it is, but it’s like, if you look at what, we could just do math on it, but you add, like, you go from, like, two people. You essentially just have, like, one relationship. You have it kind of two directions, but it’s kind of just my relationship with you, your relationship with me, two perspectives, and then you add a third, and now that has multiplied.

0:19:59 – (Matt Widdoes): You add a fifth and a 10th, and all of a sudden, now it’s, like, crazy interconnected and. Yeah, super hard to untangle. And it’s not. I think it gets back to the, like, hiring, slow firing, fast kind of mentality. Any other stuff on. On the culture side that you think are kind of must haves or gotchas or traps or things that, you know, really should be accounted for early?

0:20:21 – (Dan Barnes): Yeah, I think we’ve covered a lot of it. You know, I think, like, you know, clear objectives, intrinsically motivated humans, infrastructure that’s set up to enable those people to do great, the best work of their life. You know, the Steve Jobs quote of, we don’t hire smart people and tell them. Tell them what to do. You know, just to round out that last point, though, there’s actually a. There’s a theorem called Dunbar’s theory, which is that essentially, at groups of over 150, you can no longer maintain all of the relationships you need to have a society or a community live together. It’s why troops of apes never get larger than 150 is because it breaks down. They basically bifurcate into other troops. And the way that humans have got around that is you put the structure in place so you have documentation and, you know, you have LinkedIn, so you can remember who these humans are, and you have slack, so you can remember the last time you spoke to someone because you can’t physically hold that many relationships in your head. But it is a real challenge with culture, is you get to around 150 people, and just. Just wingin, it kind of falls apart, you know, and you need to get to what the systems are.

0:21:20 – (Matt Widdoes): And by that time, too, like, as much as you’ve done, hopefully, the work that you’ve put in has resulted in the. In the people making up the culture you had desired. But, like, the culture is whatever. The culture is not what’s on the board. Right. So it’s like, you need to know where you’re heading in order to hit that. But sometimes you might land there at 150, and you’re like, this is not. We’re not observing these things. We. We’d seen that there was an old.

0:21:42 – (Matt Widdoes): I don’t think I’m speaking out of turn here, but there was a value at Zynga, which was like, zynga fast, and it became kind of a joke because at certain points in certain orgs, people did not move that fast. And it would be like, well, it took, like, six months to get the contract signed. Well, that’s Zanga fast. And it became used against them. It was, like, weaponized as a, like, joke, as a parody.

0:22:02 – (Dan Barnes): Yeah. One of the founders of network, his name’s Alan Yu. He’s on the. He’s a wonderful human being. And he would always say that the culture is a garden to be tended.

0:22:12 – (Matt Widdoes): Yes. Yeah, you know, I agree with that.

0:22:14 – (Dan Barnes): Something that you. That you maintain as you grow and each new human adds something new to it. And I think being. Not being inflexible about those things is probably the last. And singly, most important thing is, is that it will update and it will move and it will shift. It will become something you didn’t imagine. And that’s. That’s part of the process.

0:22:32 – (Matt Widdoes): Cool. Great advice there. And, you know, another area you’ve spent a ton of time in is in liveops. And I think for people who are in gaming, they’ll all know what that is. Maybe it’s worth kind of calling out what that means at a high level. But you were kind of really intently focused on live ops well before the rest of the industry put so much emphasis on it. We saw it at bigger companies that were kind of ahead of the curve there.

0:22:53 – (Matt Widdoes): But curious, like, maybe tell us for listeners who don’t know, like, what is liveops? And then what are some of the key elements within that? And are there ways that that might apply to non gaming companies?

0:23:03 – (Dan Barnes): Yeah, I think you probably have to stop me talking on this one.

0:23:06 – (Matt Widdoes): Great.

0:23:07 – (Dan Barnes): So you time me out. So live operations is basically the idea that instead of deploying content, once you deploy content hundreds of times, thousands of times, and it really is tied very closely at the hip with the idea of a free to play business model where you give something up for free, you provide that content for free, and then you regularly deploy content, and that content could be in the form of, you know, in games, it could be new characters, new stories, new events, new levels, new worlds. You know, it can be any of those things, new features.

0:23:39 – (Dan Barnes): And the idea is to deploy those things as often as makes sense in order to retain and engage people for the longest time possible. You know, games are unique in that in a couple of ways, but one is that they normally get better the more people that play them, you know, and that’s not true for, for other forms of media. And then the second part is that the best games in the world can retain people for decades.

0:24:02 – (Dan Barnes): You can, you have people still playing runescape today.

0:24:04 – (Matt Widdoes): Yeah.

0:24:05 – (Dan Barnes): And Eve online. You know, there’s these franchises that really are forever franchises. They will last. I mean, words with friends was one of them, I think.

0:24:12 – (Matt Widdoes): World of Warcraft as well.

0:24:14 – (Dan Barnes): World of Warcraft, like there’s these games that just, this just will be there forever. And the reason for that is because they grow and learn with the community, but also they can regularly deploy new things to keep it interesting and fun. And when you think about traditional media, you know, a movie or a book or a, or a tv show, there are some people that will go back and watch. I’m sure there’s someone in the world that’s watched love actually, a thousand times.

0:24:35 – (Matt Widdoes): So specific. I feel like you might know this person.

0:24:40 – (Dan Barnes): But. But it’s not the common behavior, you know? And the reason why you have to, you pay upfront for all of that stuff is because that’s not the common behavior. You have to monetize them. You have to make money one time from one time consumption. Single, single consumption. And when you flip that thing on its head, the permutations of that become really, really interesting, right? Because you can make something free, which then increases your total addressable market and all of these things. And so we were at the birth of that machine zone.

0:25:10 – (Dan Barnes): When I joined machines own. We were actually called admired. We had two dating apps on MySpace. Add him and add her, and moved into mobile with the creation of the iPhone. And at the beginning, we did what everyone else did and we made paid things. It wasn’t a big business. And then Apple allowed the ability to essentially sell apps within apps, which they later completely killed. But essentially what you could do is you could give an app away for free.

0:25:39 – (Dan Barnes): You could make another paid app and you could put it in the screen, like in one of the screens, so you could give people a taste of the content. And then they could purchase a new app and it would take them back to the app store. They’d have to redownload, they’d have to purchase on the App Store and come back. It was super janky, but that was really the beginning of free to play on mobile, at least. And we were with Neil Young, who was the co founder of Network.

0:26:02 – (Dan Barnes): He was also the founder of a company called Ng Moco, and they had a game called Eliminate. And we were kind of like, this was right at the beginning, back in the day, those two games were kind of fighting it out, and then we had original gangsters and I nights, a bunch of other free to play games. That liveops piece became critical paths as Apple suddenly released the ability to not just have apps within apps, but actually have new content deployment, new ability to deploy new things to players or new levels. And that was really the first thing we ever did, was release a game with 100 levels. And then we’d batch the next ten and the next ten and the next ten, or the next 50, next 50.

0:26:38 – (Dan Barnes): And every time we did that, we see this huge engagement spike. And also, people would come back for that moment because there would be this kind of community swell that would happen there. And then it suddenly became about what the best. Well, the best thing to deploy was, what’s the best piece of content to both engage and acquire new customers. And so data became super important. Suddenly we’re not just caring about, well, how many downloads did we get of the first app and how many purchases did we get of the app we’ve planted in the back, but suddenly we’re talking about, well, if we did this and we did this, what’s the engagement spike and what’s. And so our entire lexicon shifted towards KPI’s that now are kind of commonplace, like engagement and retention sessions and all the other things that we talk about.

0:27:20 – (Dan Barnes): And as we’re going through this, we suddenly work out that we can make people pay for those things. And, you know, Japan is seven to ten years in the future on pretty much anything that’s gaming related. And so they had been doing this on feature phones for a long time, but Gacha came into play and essentially forced rarity was then something that you could play with. And that was really the heyday for Machine Stone, was the ability to essentially have a gacha at the center of customer purchases, and then celebrating that through social frameworks that made people kind of like have fomo about things that were the most rare and tie them into social situations that gave real value to the things that you sell.

0:28:00 – (Matt Widdoes): And for people who don’t know, gacha is essentially, if you think of, if you’ve ever played a game and you come back and you open up a chest and it has something inside it like wiggles and then it pops and you have coins or some new life or whatever. Or if you go all the way back just to simple machines where you put a quarter in and you turn it and something spits out and it’s got like a little sticky slap thing or a character or whatever.

0:28:21 – (Matt Widdoes): That is essentially the gacha mechanic that you see all over gaming that is, ties back to Japan.

0:28:29 – (Dan Barnes): It’s so funny because. So it comes from Gashapon, right? Which is the Japanese. It’s those machines, like you say, with the bolt in them that have, like, you don’t know what’s in it. You turn the, you put the quarter in, you turn it and you, what do you get? You know that. And then there’s some that are super rare and some that are more common. One just opened a Bandai Namco gashapon store just opened in Ealing Broadway, like just down the road from me.

0:28:52 – (Matt Widdoes): Oh, really?

0:28:53 – (Dan Barnes): Yeah. Unbelievable. I can. So, yeah, it’s like a physical gashapon store has entered the.

0:29:00 – (Matt Widdoes): I’ve never, I’ve never been to one. Yeah, next time I come to London, I’ll check it out.

0:29:04 – (Dan Barnes): Come to London or you just go to Japan. It’d probably be much more fun. So, yeah, so then it became about data. It became about that insight to action piece. It became about what’s the content that you deploy? How do you amplify that with the social frameworks? And really then it became about what’s the technology set that you have to be able to deploy these things and how do you process incredible amounts of data?

0:29:24 – (Dan Barnes): And then back to the prioritization stuff. We were talking about. If we wanted to sell umbrellas, we could quite literally make it rain in the game. And so we would create these moments, these situational moments where it’s like, oh, now this is really important. And then you would have new distribution methods to be able to kind of like sell those to the, to the player base or engage them over a long period of time.

0:29:47 – (Dan Barnes): And so then it was about, well, what can you create? You know? And ultimately, then the sky is the limit. And it’s funny, we, when we were at Zynga, I don’t know if you remember this, but. So Don Mattrick was the CEO when we got bought by natural motion. And Don had a friend called John Levin, who is now the dean of Stanford. And he was the dean of economics at Stanford. And he came in a few times to singer to talk to us about the difference between real world economies and freemium economies, where things are free and unab.

0:30:18 – (Dan Barnes): And I honestly think we spent more time not teaching but educating him about what was possible than he did us, because we had no constraints.

0:30:28 – (Matt Widdoes): Right.

0:30:28 – (Dan Barnes): You know, it’s like. And we could literally. We could come up with an idea. We could make the asset, deploy it within, what, 30 minutes.

0:30:37 – (Matt Widdoes): You know, you have digital cows with digital grains, and.

0:30:41 – (Dan Barnes): And if you wanted to make something more valuable, you could just change the world.

0:30:47 – (Matt Widdoes): Yeah.

0:30:47 – (Dan Barnes): You know, you didn’t even change price. You.

0:30:50 – (Matt Widdoes): Right. You can change how it’s consumed. You can change, like, okay, it runs out faster. Like, there’s a million levers. Yeah.

0:30:56 – (Dan Barnes): Or literally just make it really hot in the game. So the cows need water.

0:31:00 – (Matt Widdoes): Right.

0:31:00 – (Dan Barnes): You know, I mean, it’s. You could. You can. You can do pretty much anything, or you could, in CSR two, you could make it so that the entrance criteria was that you had to have a Ford Fiesta. You know, least lease bought car in the game is now most bought car in the game, because the reward for the Fiesta cup was a Ferrari tv, you know, and so. So in order to get the Ferrari, I need the Fiesta. Okay? Now I need to go find the fiesta. And. And so there were all these kind of, like, incredible, incredible moments you could create which would just, like.

0:31:27 – (Dan Barnes): You know, it just results in just incredible engagement and retention over time, which is, you know, which is just the golden metric for free to play games.

0:31:36 – (Matt Widdoes): And I’m curious, like, yeah, any thoughts on how that can apply? Because, like you mentioned, you can kind of. You can make. You can literally make it rain in the game and sell umbrellas. Like, are there lessons and learnings to be had from what we know about live ops that could apply to B. Two B companies or two more standard consumer products?

0:31:58 – (Dan Barnes): Yeah, I mean, I think that the thing is, like, humans are the same wherever they spend time, you know? And humans care about pretty consistent things. You know, they care about what other people think of them, how they’re valued in a social framework. They care about their progression. Right. Whether it’s duolingo learning how to learn a language or how many tickets I’ve closed in Jira. Humans care about progression.

0:32:27 – (Dan Barnes): Progression. And they care about social standards. They care about how they. How they. And then how are they rewarded for those things and how they visualize them. And I think a lot of the things that we put into games are deeply applicable to other pieces, and that’s where this whole gamification rise. Has come from. Right. I think the challenge for most of those pieces of software is that in order to really effectively live operate software, you kind of have to think about doing that from the very onset.

0:32:56 – (Matt Widdoes): You have to actually do that, has.

0:32:58 – (Dan Barnes): To be built in. It’s very difficult to tack it on because if you think about something as simple as leaderboards, if you add them in after the fact, when the user behavior is already set, where you’re in games, we call it the core loop. Right. The thing that you do most often is already set. Then changing that behavior is really hard. It’s really hard. And so the challenge with gamification is it often feels tacked on because it is.

0:33:22 – (Matt Widdoes): Yeah.

0:33:22 – (Dan Barnes): You know, and so really what you want to do is you want to build the new compulsion loops, those. Those new core loops, very early on in the software. And if you’ve already shipped, then it’s really all about the social framework and how you reward the behavior that you want, you know? But there are systems. Those systems are applicable, like I said, to any piece of software.

0:33:42 – (Matt Widdoes): Well, and you see it a lot in. In SaaS products, in many products, but you see it a lot in onboarding flows. So somebody saying, you do this, you do this. But, you know, I think an example that comes to my mind in the real world is LinkedIn. And they’re like, hey, your profile is 65% complete. And in order to get it considered 100% complete, you need to add a video and you need to link to a article. I don’t know, but it’s got, like, some series of things that need to be done.

0:34:09 – (Matt Widdoes): And we talk about this a lot in the UI UX world of, like, jobs to be done is like, okay, I have paid to enter the garden. I’m here now. What do I do? What do I do first, how do you reveal that to me? In a world where you may have a really complicated product like Jira, it’s like, let’s create our first ticket. And then it’s like, yeah, like, congrats, you got first ticket award. And someone’s like, okay, and like, you’ve bite size this for me, versus just turning me loose into the world that’s becoming more and more commonplace.

0:34:38 – (Matt Widdoes): But I see it less, like, outside of onboarding and first time user experience.

0:34:42 – (Dan Barnes): Well, I actually think the top voice system in LinkedIn is an equally good example if you’re active on LinkedIn. So what LinkedIn want are for people to post and for those posts to engage with people and for that content to be vibrant. And then for other people to read it and find value, and then they retain. And that’s a positive loop. Right. And if you post often and you post that has good conversion metrics, according to LinkedIn’s algorithm, LinkedIn will reward you with essentially a po op, like a, you know, like a batch that says you’re a top voice in gaming or whatever it is, and then you can lose that.

0:35:21 – (Dan Barnes): So, you know, if you don’t keep doing it. Right. And it’s an almost perfect example of a gamification of a system, because they know what they want the humans that interact with LinkedIn to do. And they have set up a system that rewards that behavior and then socially celebrates and rewards the behavior that they’ve talked about. And those systems exist everywhere. And so the question for me would be, well, what if they put a leaderboard into LinkedIn that showed you the top ten top voices for each industry?

0:35:56 – (Dan Barnes): So now I’m not just fighting against the LinkedIn algorithm. I’m caught. I’m competing against the other nine best people.

0:36:03 – (Matt Widdoes): Well, and if it. And if it showed publicly to anybody who wanted to go see it, the top ten, but it showed me that I was number 142. And I know, like, what’s that delta? I’m not on a public list, but I’m like, ooh, or I’m number eleven.

0:36:16 – (Dan Barnes): Yeah, I know how to get that.

0:36:17 – (Matt Widdoes): It’s like, oh, okay. Like, I’m super incentivized to go from 20th to 10th because now I’ll be publicly acknowledge for whatever the heck that’s worth.

0:36:25 – (Dan Barnes): Yeah, exactly. And then imagine that you could get your followers to help you.

0:36:29 – (Matt Widdoes): Sure.

0:36:29 – (Dan Barnes): I mean, these things get a bit spammy. Yeah, that’s the problem is then you’re. You’re basically trying to hack it by fake engagement. And so there’s some. There’s some balance there to be struck.

0:36:38 – (Matt Widdoes): And that speaks to the general economy and some of these liveops. And just, like, when you start to move it, people will. To that same point as before, people are also natural, kind of like min maxers or like, how do I game this? How do I like. And so then all of a sudden, you’re like, oh, okay. I mean, Google. This is Google search from day one, where people are, like, stuffing keywords in SEO and all this other stuff, and Google wants the most relevant first top page results.

0:37:06 – (Matt Widdoes): But people see, oh, this made me move the rankings. Google’s like, we left. We didn’t think that through. And so you kind of need the humans to show you where you were weak. And then liveops gives you the opportunity to say, oop, we overcorrected or under corrected that. Now we’re going to shift. We’re just going to delete the fiesta. And it’s like, oh, okay. That goes away. Like, okay, it’s funny.

0:37:25 – (Dan Barnes): I think it’s where games are most ahead is in the kind of the thought behind what different behaviors the player archetypes have inside the game, and then what systems design they’re going to use to either encourage or move those behaviors. You know, it’s a real science. Like, it’s the Bartles. You know, the Bartles four. It was like, it’s a thing that’s existed for over a decade. And essentially, this guy created a matrix of four different player archetypes. There was a killer achiever, socializer, and explorer.

0:38:05 – (Dan Barnes): And they said, look, every player in the world fits into one of these four archetypes.

0:38:12 – (Matt Widdoes): And I can see that, by the way, I can see all of those in Red Dead redemption. Like, there’s a clear path. There’s a clear path for all four of those.

0:38:19 – (Dan Barnes): That’s exactly right. And, and so, and games inherently, we just do. We just do this is that we think about those different player archetypes. We think about what their behavior and their kind of, like, unique spin on the core loop is, and then we create systems and environmental moments to reinforce those things, to make people feel delighted, you know? And for me, delight is very specifically exceeding expectations. I think, like, delight has a very specific meaning to me, which is you exceed someone’s expectations.

0:38:48 – (Dan Barnes): And so we think deeply about that. We don’t, that doesn’t happen in other, as often in other industries, you know, where you’re classifying player types and then building systems in order to do that. You kind of have, like, this one fits all funnel, and then you’re trying to just get people as far along the funnel as possible. And so I think that that degree of thought can also be deeply applied to a SaaS product or to, it’s like, what’s your ICP? What’s your idealized customer profile? But then what’s the nuance within that of the top three other profiles that still value to you?

0:39:19 – (Dan Barnes): And then how do you make sure that you have the systems design and the UI and UX and the pricing strategies and all of the other things that kind of, like, encourage the behaviors that you ultimately want?

0:39:30 – (Matt Widdoes): I think the premise of the, like, companies can be asking themselves, what is our version? In some cases, not all client, not all, like, products are going to be, like, this. But what is our version of the Bartles for. For our product? So you think about something. Let’s use Jira again. You have like, okay, I’m a, like, Taskmaster and I’m trying to do that. Or I’m this manager who wants to kind of understand the broader system and intricacies there, or I am whatever.

0:39:56 – (Matt Widdoes): And, you know, we were just recently having a conversation with a large company. I think they’re billion dollar company, but, um, and we were talking about essentially segmentation as it relates to this, like, the jobs to be done and, like, what are their desires and motivations of these various people and various customers? And the knee jerk reaction was thinking that was the other side, thinking about segmentation from, like, the sales. Female. Yeah, female, 35 to, um, 55.

0:40:23 – (Matt Widdoes): And they do these. And I think their position was, hey, we don’t think that that’s very valuable as it relates to thinking about our customers in, like, these chunky bits, because Facebook can just do such a good job of finding these people that we don’t need it. And I’m like, well, that’s for targeting. But then, like, once they get here.

0:40:39 – (Dan Barnes): Yeah.

0:40:39 – (Matt Widdoes): Like, so, like, there is a world where if we look at a certain thing, let’s say prenatal vitamins, and we go and we look at it and we’re like, well, they’re all pregnant women or women that believe they’re pregnant. There are very few men that are taking prenatal vital vitamins, I would guess. And so, sure, Facebook may be able to figure that out and define it pretty quickly, but we already know that. And so if nothing else, you might actually use that to just go direct. Because I don’t, I don’t think we always want to be letting Facebook do full optimization there from a paid perspective.

0:41:12 – (Matt Widdoes): But ultimately, it’s really about, like, what are they hoping to achieve? How are we observing that? How do we decide whether or not they’re in that kind of like, explorer killer path and having those. Yeah. Signals from the product to tell us what we think they’re. What they actually care about based on their.

0:41:27 – (Dan Barnes): Yeah, it’s like, who are the amplifiers who talk about it externally? Like, we have influencers and, you know, referral programs and these other things that exist. But, like, thinking deeply about how your product encourages those things is really, is a really interesting vector for me. You know, you turn your customers into a salesforce is kind of, it’s kind of critical part. It’s a way that a lot of things break out into new ips. Right. New kind of like new brands. And I think, you know, there’s also, like, repeat, you know, the people that repeat do this for past nine months.

0:41:58 – (Matt Widdoes): Yeah.

0:41:59 – (Dan Barnes): And why? You know, there’s probably, there’s probably a bunch of people that are different under and underneath the pregnant banner.

0:42:05 – (Matt Widdoes): Mm hmm.

0:42:06 – (Dan Barnes): That you could spend a lot of time thinking about what you want to do in terms of the packaging, the messaging. Yes, of course, the marketing, but also other pieces that’s. That correspond to where your players are. It’s obviously much harder in a hardware or, you know, in a packaged goods universe than it is in a digital universe, because obviously in a digital universe, you can change, change whatever you want, and you can create different versions of that product in packaged goods. It’s obviously much harder. But I do think that it still applies in the idea of, well, maybe your ICP is more nuanced than this pregnant lady.

0:42:41 – (Matt Widdoes): Yeah. And some people are going to have one kind of straight down the pipe use case. It’s a brush to clean dishes. That’s what it does. And sure, somebody might use it to clean their tires, but do we really care about that? Are we going to show somebody scrubbing the brush on their wheel in our advertising? Probably not. But oftentimes, especially with software, there are a number of motivators, or with even like a physical, like a. Not a physical, but a service based business. There’s, like, lots of reasons people are coming to you for different things and what they hope to get out of it. You know what? One other area that you were also ahead of the curve on is in automation and generative tools. I think, you know, I remember talking with you pretty deeply back in probably 2018 about an internal tool for creative production that you guys were building and had already launched and were using and optimizing.

0:43:29 – (Matt Widdoes): I’m curious to hear your thoughts now, what, six years later with the shifting landscape in Genai and the ways that it will or maybe should be applied to the first cohort of businesses in this new era and any mistakes you made early or lessons that you learned. But I think that’s a whole area to unpack that I think you’ve had a long perspective on.

0:43:51 – (Dan Barnes): Yeah, we built a game called Legendary Game of Heroes. It did $250 million a year at peak, and it was puzzle, rpg, and then we lost the fight to empires and puzzles and then broke it. That’s a story for another day. But we had essentially, as we had built, legendary, we had left a technology platform in our wake. So we had all the things we needed to live, operate and to acquire customers for. We had left all those things in our wake in this set of micro service architectures that could do lots of very cool things, data infrastructure and analytics identification, but also things like the user acquisition piece and a segment of that.

0:44:34 – (Dan Barnes): About 2018, we carved out into something called the network scale platform, which was essentially a third party publishing business. And we put other people on top of those tools and technologies, and we. We ran that business for a while, and that was ultimately what got bought by Forte. But one of the really interesting things there was, we had focused a lot on performance marketing. It was where I came from, obviously, where you came from. And we spent a lot of time thinking about what are the things that we needed on top of Facebook ad manager or whatever it was, to be able to create those things. And there were two really big gaps.

0:45:11 – (Dan Barnes): One was what we called Brewster, which was essentially algorithmic dollar deployment across all places instead of just within Facebook. So it would match Facebook against Google and Applovin and unity and all the other places. And we had our own DSP. And so it would then do dollar deployment based on forecast return curves across all of those things. It sat across it on a meta layer. And the other thing was creative, along with Eric, who, you know, we built something called Draper, which was essentially a creative optimization tool, and it made new creative. So you could basically say, we understand that this purple Dragon plus yellow button is doing well on Facebook.

0:45:59 – (Dan Barnes): Let’s make red Dragon plus yellow button, blue dragon plus yellow button, quickly iterate through all those things, and then do purple Dragon plus green button. And we could change any of these. We had these templates that we made. They could be video or static, and then we could create very quickly new versions of those by essentially bulk uploading a bunch of PSD assets. It would then make those things dynamically kick them out, and then we’d auto optimize towards the best by using Brewster at the top level to then deploy those.

0:46:30 – (Dan Barnes): We were doing this all. We built this tool, like you said a long time ago, I wish we had Jet AI capabilities at that time, because obviously, the quality of the assets and the quality of changes we can make, we’re nowhere near what they are, what they are today. But I think the main learnings we garnered from that were creating new things is still really hard. Iteration essentially increases the creative’s lifetime.

0:46:59 – (Dan Barnes): It meant that because essentially what happens is as you show these impressions, you get impression fatigue. People have seen that ad, and the chances that they’re going to click on the ad decrease after, like the third to fifth impression. So you show up one, two, three times, and then after that, the chances that they convert on that ad decrease over time. And obviously, it’s not a hard and hard and fast rule, but, yeah, in that ballpark. And so by keeping the format and the targeting, but changing some of the assets, you could actually extend that creative’s life cycle considerably.

0:47:28 – (Dan Barnes): But all that did was buy you time to find the new concept, the next concept. It still turns out that finding the new thing is still really, really hard. It’s really hard. And the general AI stuff doesn’t actually help with that. The creation is still really difficult. Extending creative lifetimes is really important, obviously decreases. It basically mitigates the rate at which your ECPI rises because it keeps ECPM flat.

0:48:00 – (Dan Barnes): So essentially, that’s. But it doesn’t make it easier to create things. And so that’s the first thing, I think the second thing is the number of dollars you need to deploy. To actually have this be valuable at scale is just insane. You know, it’s just. It’s so much money. You know, it’s. You have to be spending 300 miles a day, you know, and in that case, it’s a great thing to have. Yeah, because that. That’s right.

0:48:26 – (Dan Barnes): Exactly right.

0:48:27 – (Matt Widdoes): Well, your fatigue is so high at that rate, too. Right. It’s like, actually. It’s like, actually a challenge. We were spending a million a day, and I worked with our teams to develop it. We called it Octopus internally, but it was there to predict creative fatigue in advance and stop off the campaigns faster than a human could. To say, okay, like, we’ve seen enough of this diminishing return. We understand our frequency caps. We understand, like, where this is at.

0:48:52 – (Matt Widdoes): And so we’re going to, like, pause that launch, the next best thing in our creative, like, backlog. And there might be a hundred things that could get ripped and put in place, but that also, like, you still need to. This is solving the problem for, like, what gets in that creative backlog. Then there’s the additional problem of, how do we spot fatigue before a human can? And so anyways, like, it’s. These are scale problems, though.

0:49:15 – (Dan Barnes): Yeah, well, that was. Yeah, that was what Brewster was designed to do, was basically, it would detect creative fatigue and then switch campaigns off.

0:49:21 – (Matt Widdoes): Because it would see, and Brewster is also deciding, hey, actually, we’re going to shift budgets from here to here because it’s more performant. So there’s, like, a twofold thing there.

0:49:29 – (Dan Barnes): Because it’s more performant. Yeah, yeah, yeah, yeah. So those two things combined. Very good. And, you know, I think, but I think those two think creation is really hard and the scale of dollars is really high. And so they’re kind of, you know, they’re kind of scale problems. You know, we’ve seen this too, where.

0:49:43 – (Matt Widdoes): Like, I’m speaking with somebody, I guess I’ll keep, keep it anonymous. But they’re spending a lot, a million a day and kind of scale, and they’re getting pushback from leadership on creative production costs. And it’s like you can hire certainly five to ten creatives full time for a million a year, and you’re spending, it’s like one 365th of your budget. Like, and it, and it increases the value. So, like, the analogy I’d use with that is like, we have this Ferrari and we’re just gonna put 87 octane in it because we can save a little bit of money. And then you’re like, are you kidding me? 93 octane, that’s another thirty cents. And it’s like, do you know what you’re killing on the other end of this, though? Like, you were torching money at the top because you don’t. This is like classic Pennywise pound food anyways.

0:50:36 – (Dan Barnes): But, yeah, exactly that. I mean, that’s what I was gonna say is, you know, it’s a. And I think ua is always the first place that you go to for like, performance marketing is the first place you go to for Pennywise and pound. Foolish thoughts because you kind of intellectually understand the idea of positive reinforcement loops, you know, like leadership often do. But objectively, when the scale of dollars they’re talking about is there, they’ll try and scrape whatever they, whatever they can.

0:50:58 – (Matt Widdoes): It’s like, what if we can get 30 million back? That’s.

0:51:00 – (Dan Barnes): Yeah, and I think, you know, those, that, and it’s a lagging indicator that it breaks, you know?

0:51:05 – (Matt Widdoes): Right.

0:51:05 – (Dan Barnes): So it always feels like a validated decision in the moment because you’re like, oh, nothing. Wait. We saved a million dollars off this $365 million budget and nothing changed. Awesome.

0:51:15 – (Matt Widdoes): Nothing yet.

0:51:16 – (Dan Barnes): And then three months later, you’re like, why is our ECPM doubled?

0:51:20 – (Matt Widdoes): It’s like, well, and I think back when I would meet with teams who wanted me to come lead acquisition or something, I would always add one of the earliest interview questions I would ask, and I would ask it often, especially the more senior. The interview was internally, especially if I was meeting with a CFO or somebody is get. I would ask everybody, do you think the organization views user acquisition as a cost function or a revenue function?

0:51:48 – (Matt Widdoes): And if you heard cost function cost more than once, it’s like, okay, we can’t be successful there because it’s like, versus somebody. The other question is like, I’ve talked about it a lot where it’s like most people would say like, oh, yeah, I worked at King and managed 350 million a year and spend. The reality is like, I managed 450 million a year in revenue, right? So it’s like, well, how much do you want to make?

0:52:12 – (Matt Widdoes): So not how much do you want to spend? So if somebody says, okay, we’re going to, we want to reduce our media spend from 350 to 100, it’s like, you might as well just say we want to reduce our revenue from 450 to 150. And it’s like, oh, okay, well, I guess we’re foregoing revenues for some reason.

0:52:26 – (Dan Barnes): Yeah, it was that big thing at Zynga when, when we got there, which was like, you talk to the product guys and they’re like, those users that marketing are driving just like really low quality. We can’t hit our revenue targets. And you talk to marketing and they’re like, the retention on that product is just not good enough. We can’t acquire profitably for this. I think every company that has ever, I think your chances of failure are exponentially higher if you don’t have product and marketing aligned like sat same boat, going in the same direction, thinking about the same baby. Thinking about the same baby. That’s exactly right.

0:53:06 – (Matt Widdoes): Yeah. Because, well, and you add in, in a lot of, especially enterprise SaaS, but in a lot of other companies, you add in sales to that mix. And so you have sales saying, well, if marketing would get us better leads, we would close more deals. And then marketing says, if product would get us more feature parity with our competitors, we would be able to better market and get attention. But so and so competitor has a way better offer than we do, and product needs to go build the product. And then product says, well, if sales would sell more, we’d have the money to go build those product features.

0:53:36 – (Matt Widdoes): And it’s this like vicious cycle of everybody pointing to the left and right. And meanwhile, shareholders or the CEO or, you know, others are like, who, why aren’t you guys all just trying to solve this?

0:53:47 – (Dan Barnes): Yeah, well, that’s, that’s the, and it comes back to the first thing we, you know, we talked about, which is like, what’s the company culture that enforces the behavior you want, not the behavior that humans inherit? Like, humans are inherently territorial, right? They’re kind of like, this is mine.

0:54:01 – (Matt Widdoes): It’S my island of space, self protecting.

0:54:04 – (Dan Barnes): And it’s, you know, and that is just like genetically, that’s how we’re coded up, you know, that we want to protect our own, feel better at home than we do anywhere else. And I think that all the things we talked about at the beginning, they come down to these actual moments, which is like, well, how does a company culture manifest the outcomes that you want in terms of everyone being aligned, intrinsically motivated to execute against the objectives and be incentivized and rewarded for the execution that they have?

0:54:32 – (Dan Barnes): And if you can answer those questions and these things, they don’t become a problem. And if they do, you’ve hired the wrong people or you’ve put the right systems in place.

0:54:41 – (Matt Widdoes): Yeah. And I think that to the, you know, I think people can ask the same question. When you think about growth generally, as far as, like, kind of every function of the business, something we talk a lot about, is growth being a philosophy, not a function. So you can’t, if you’re saying, like, well, let me go ask my growth guy what’s going on there. Yeah, and, like, that’s the person, then you’re already losing. Like, the whole premise is lost on some level. And so, but it’s like, where are the opportunities for these tools, like Brewster Draper tools that are externally available, that make your legal teams faster in red lines against competitors, that make your finance teams faster at collecting and paying or delaying payment, for that matter?

0:55:24 – (Matt Widdoes): Like all of these various areas where technology can be applied to streamline or, like, more rapidly iterate and test in product or in sales or whatever, versus just some singular point of failure at the upper part of the funnel that says, well, let’s just put all the energy right there, when in reality, like, the bucket underneath, it matters as much as the water going into it.

0:55:44 – (Dan Barnes): Yeah, I think it’s all about friction. You know, it’s all about because there’s a finite amount of energy that you can put into winning, right, into creating something incredible. And creating something incredible is really hard. And so any place where you have inherent friction between where you are and where you want to be, it just makes everything harder. And those things compound really quickly. And you get to organizations that calcify very quickly. And so, you know, it’s. Your point is like, look, how do you make sure that legal, you know, they have all the systems in place to turn on a dime with the best possible outcome because their objective is not the best lawyer speak, but it is the best legalese, you know, but it is actually empowering the human who needs their support to go and execute against their mission so the company can be successful.

0:56:34 – (Dan Barnes): And I think like that subservient culture, you know, it’s like subservient leadership is really important, but just, just a, just a culture where you’re trying to empower everyone else as often as possible is just really important and that just reduces inherent friction. And the companies that, the challenge with that is scale, because as you get bigger, you have to rely more on process and more. But I don’t think, I think the major mistake people make is they like, I respect process a lot, but it has to be lightweight but incredibly rigid.

0:57:10 – (Dan Barnes): It has to be very clear what it is, but very easy to use. And when you have people whose sole job is to manage the process, you have ultimately failed. Like that is my general read on these things is if you have a PM that manages the process that’s driving the outcomes, you need to take a, you know, you just check yourself. Let’s just go and have a look at that. Because those processes should not become projects in and of themselves. They are built to empower execution.

0:57:40 – (Dan Barnes): It’s really interesting, at network, we decided not to have a central technology group. You know, obviously you have these like central games technology, CGT or, you know, whatever it is where. And it’s just they’re completely diametrically opposed in terms of what they’re trying to do to what the games teams are trying to do. Because the Central games technology group are trying to ship perfect code because their outcome is actually the best possible platform.

0:58:07 – (Dan Barnes): It’s not delighting end users. It’s like, here’s a piece of technology that’s great, and games teams just want to ship games. They just want to get it out into the hands of their customers. You have these two organizations that fight against each other where one’s trying to make perfect code and perfect is the enemy of good. And then you have people who just want to ship things and they, their timeline gets docked to the timeline of the central technology group.

0:58:31 – (Dan Barnes): And so we decided to essentially have the technologies all be in like a central melting pot where people could pull them out, iterate on them and then put them back in and that would then improve it life for everybody. So legendary had built this system called the vip system. It was essentially Amazon prime for games. It was actually built by one of the client engineers at network, which is proof that the culture is great, is that an engineer PM’d and built one of the things that generated maybe 15% to 20% of all the revenue on legendary.

0:59:03 – (Dan Barnes): And when he did that, his name’s Shu. When he did that, he took that out. He built the ability to have subscriptions inside of the software. Because one of our assumptions in the data was that you had to be in the software to be able to make a purchase, because that was a really easy way for us to counter hacking. Because if you were on bluestacks or something, you weren’t in the software. You didn’t register as a client.

0:59:25 – (Dan Barnes): And so because of that, we would kind of refuse the payments or we would not recognize the revenue of the payments. But suddenly, with subscriptions, you could be on holiday in the Bahamas and your subscription payment would go through. You’re not in the software. And so we had to build all the infrastructure to be able to kind of recognize payments outside through subscription models. And the minute that she did that for legendary, it then became available to every other game. So immediately all the other games could go and build those things. We didn’t have a central technology team that built that. It was like the game had a need.

0:59:54 – (Dan Barnes): It improved upon the systems that did that. So the system was called Alfred because it managed all the money. It’s Batman’s butler. We called all of our central services after Butler’s. And Alfred then was improved. And then every other game that we were building could then just immediately use that improvement that we put in. And what it meant was, like, the games were responsible for writing great code, improving the systems, and it was on a needs basis, but we didn’t have any central technology group that owned that. And I think those things where there’s risk of diametric opposition, of incentives and objectives, again, you just want to avoid those things like the plague as much as you can.

1:00:35 – (Matt Widdoes): Well, one last question for you, and it’s very gaming specific, but the gaming industry generally has seen pretty significant shifts in distribution models over the years. I’m curious, how have you seen companies or have you yourself adapted to these changes? And then what do you think the future of game distribution looks like as we sit here today?

1:00:56 – (Dan Barnes): Yeah, it’s something I think about a lot at the moment. Machines, and we had server to server integration. We were plugged into everybody. We literally had APIs and plugs to everybody. And then we moved into attribution, and we had this beautiful era of just full data. We had user level information about everything. And because of that, we could basically shotgun approach everything and then just pick the two things that worked and then rinse and repeat those things until there was no more left. And it was actually incredibly data oriented. And that meant that all the creative, all the ads on mobile sucked.

1:01:34 – (Dan Barnes): They all sucked. With the privacy era, I think the method that we used to use to go and find users has gone away and distribution is fundamentally broken for games. I think the number of games that are on the app stores is about the same as it’s ever been. The number of games released every week is about the same, but the number of successful games is significantly down. And that’s mostly because finding players is almost impossible now.

1:02:00 – (Dan Barnes): You’re either an old ip like Call of Duty, or you use monopoly, or you’re lucky like helldivers or Palwald. And I just hope is not a strategy and luck is not a strategy. And so I think there is a new way to not just think about distribution, but actually to think about games. You know, like, I believe that I see a lot of these things about the everywhere game. You know, like a game that meets the audience where they are, irrespective of the platform or the medium.

1:02:30 – (Dan Barnes): And I think, you know, gaming is going to evolve from, it already went from single platform to cross platform. I think the next logical step is for it to go to ubiquity, where you can have meaningful and deep interactions with games, irrespective of the medium that you find yourself on. You could make progress via text or find a clue with an audio on a podcast. I think that that world is moving. And it’s funny because gaming has tried this before.

1:02:58 – (Dan Barnes): There were a couple of games back in the day, Majestic, made by EA.

1:03:02 – (Matt Widdoes): I remember that one. I was a part of that in 2001, early 2001. It was crazy. For anybody who doesn’t know about Majestic, it was like, this is pre iPhone. You get texts, you get phone calls. You’re basically like a international spy. You’ve been like looped into something. And I think the whole premise of it is like, at some point you’re supposed to question whether or not this is like a game anymore, or if you actually are a thing.

1:03:30 – (Matt Widdoes): And you’d get these phone calls that were like, alright, I need you to listen to me. This and this and this. But it was like pre recorded. Yeah, if my memory serves. Yeah, but I remember thinking like, you could do that with voice actors. Like, you could just do that with. Well, now you could do it with something like eleven labs in a way that is. And with AI in a way that actually is super interactive where it’s like, hey, listen, like, yeah, yeah, I know you got a ton of questions right now. Like, listen, just shut up for 3 seconds.

1:03:54 – (Matt Widdoes): I need you to go to the corner of this place or go to this very specific place in Austin, which is where I was at the time, and go to the Capitol building. And there’s a QR code. I want you to scan that and that that QR code could exist in real life. And you’re like, okay, I’m going to do that, like, tomorrow or something. Or it’s like, hey, I know you haven’t scanned the QR code. You’re getting texts like, did you go to the. Did you go to the Capitol building?

1:04:15 – (Dan Barnes): Like, yeah, I think, you know, everyone didn’t have a phone in their pocket. The Internet wasn’t as fast as it is now. Content creation tools were much more difficult to make. AI didn’t exist for, like, generative kind of scripts and storylines.

1:04:28 – (Matt Widdoes): We were on, like, 56k modems, like, seriously.

1:04:32 – (Dan Barnes): And yet it broke the fourth wall for a lot of people.

1:04:35 – (Matt Widdoes): Yeah.

1:04:35 – (Dan Barnes): You know, it took people from it, blurred the lines between kind of like a game and the real world. And in doing so, it meant that it could meet people wherever they were. And I think there’s a huge opportunity to go revisit that with the technological advances that we’ve made right now and really kind of like, question, uh, what actually is a game? You know, I think the budgets for triple A games are just getting ridiculous.

1:05:01 – (Dan Barnes): The hit rates of things are getting lower. The risk of making a game today is higher than. I think it’s higher than ever it’s ever been.

1:05:09 – (Matt Widdoes): You know, especially for a studio that doesn’t already have, you know, a billion records.

1:05:14 – (Dan Barnes): Exactly.

1:05:15 – (Matt Widdoes): Like, like, they don’t, you don’t have, like, a first party audience. You’re just like, kind of coming out cold from the ground.

1:05:19 – (Dan Barnes): Even if you do, Microsoft just proved that that doesn’t matter. They shut down studios that have just released games that were objectively successful. And I think gaming needs to rethink what an interactive experience is and then through that lens, what the optimal distribution is for that. And that’s where I’m most interested at spending my time right now, is rethinking from the very beginning, similar to the way that we talked about live operations being hard, because they feel tacked on. They feel like after the fact, I think building games built inherently to be distributed, so to be amplified by their customers the same way that the beast was amplified by the Microsoft community, what they called cloudbreakers, at the same time as majestic.

1:06:06 – (Dan Barnes): How do you get your customers to become a salesforce? How do you get your players to be so engaged that they want to share externally, but also Pokemon go, right? Exactly. But how do you make sure that content lives on the Internet in a way where it is absolutely zero friction to have deep and meaningful interactions with them? And I think there’s this confluence of, like, the technology coming, the real serious challenge that the gaming industry is going through right now.

1:06:31 – (Dan Barnes): And I think it will birth a new type of interactive experience which just further blurs the line between traditional media and interactive media. And that is ubiquitous, that is consumable anywhere. And it meets the kind of, like, new generations delight cycle expectations, you know, the tick tock generation of I need something every 20 seconds. I think you can meet them where they are. You can meet the expectations of those. Of those future players, and you can build something that is inherently kind of surfs upon this wave instead of getting crushed by it, you know? And that. That, to me, sounds.

1:07:09 – (Dan Barnes): Sounds super exciting to go and build, you know, the next. The next iteration of games, the next genre of games in the lens of the challenges we face when I think.

1:07:19 – (Matt Widdoes): Like, there’s always been, you know, again, I mentioned Red Dead earlier, but they, like, they put, like, a map on an app, and they’re like, there we go. Now we’re. That’s it. This is a companion app. And people have thought about that, but it’s, like, always like this, like, piddly afterthought. It’s like, okay, we have extra budget, I guess. Let’s do a companion app is, like, what it feels like versus having something that’s maybe integral to the game to that point, by the way, and to the point of majestic, have you seen or heard of the movie brain scan with Eddie Furlong?

1:07:51 – (Matt Widdoes): Okay, so you have to pull it up. It’s from 1994. Let me just read the synopsis. A teenager is part of an interactive video game where he kills innocent victims. Later, the murders become real. So anyways, the brain scan I remember seeing in, you know, when it was out, and it’s, like, 6.1 on IMDb. It’s not. It’s. It’s not a well liked movie, but you should watch it. I think. I think now it actually, at, what, 30 years old? It would be hilarious.

1:08:18 – (Matt Widdoes): Highly recommend it, though, just based on what we just talked about. And I remember when Majestic came out, I was like, oh, this is, like, brain scan. And the movie was, like, really far ahead of its time because it starts off, I think, in this kind of, like, virtual reality type premise, and he’s, like, walking through somebody’s kitchen, and he’s meant to in the game, he’s meant to, like, murder somebody in their home.

1:08:39 – (Matt Widdoes): And then, like, he wakes up the next morning late for school, and he’s like, oh, my gosh. Like, that was so real in his mind. And I might be making this up, but he has, like, mud prints by the front door where he’s like, wait, was that. Where. What was that? And, like. And, like, the whole movie kind of evolves. And I don’t actually remember how it ends or any of that other stuff. But I would highly recommend you hunt down.

1:09:00 – (Matt Widdoes): I’m sure if you find it’s on streaming, let me know, because I’d like to add that to my list as well.

1:09:05 – (Dan Barnes): Yeah. I will either thank you or shout at you.

1:09:08 – (Matt Widdoes): You’re going to love it. With how I’ve set it up and knowing that it’s a six, you might be ranking this a ten.

1:09:15 – (Dan Barnes): Yeah. Well, there you go. You see? Under promise over delivery.

1:09:17 – (Matt Widdoes): Exactly. Well, yeah. And my memories of it are fond. Either way, you can’t take that for me. Although I might take it for myself if I watch it again. Cool. Well, Dan, thanks so much for the time. I think we could go. We could probably spend hours on some of these subjects, and maybe we should. But really appreciate the time today and look forward to the next one.

1:09:36 – (Dan Barnes): Yeah, you too. Thank you so much for having me.

1:09:38 – (Matt Widdoes): Yeah, of course. All right, chat soon. That was Dan Barnes with a terrific conversation about gaming and performance. Don’t forget to subscribe to growth at scale wherever you get your podcast to get new episodes every week. To learn more about Maven and how we can help help drive growth for your company, visit maven.com mavan.com. i’m Matt Widows. Thanks for listening. We’ll see you next time.

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