Gabe Zichermann is an entrepreneur, author and public speaker who coined the term “Funware” to describe the use of game mechanics in non-game contexts. As co-founder and CEO of mobile software startup rmbrME, Gabe is helping to rewrite the rules for networking in a smartphone world. Additionally, as co-author of the upcoming books “The Engaging Web” (Manning, 2009) and “Game-Based Marketing” (Wiley, 2010), Zichermann makes a compelling case for the use of games and game mechanics in everyday life, the web and business. A native of Canada and resident of NYC, Gabe frequently muses about games and the world at http://funwareblog.com
Question: Where did the idea for rmbrME come from?
Gabe Zichermann: I am a pretty social person, so I meet a lot of people. I go to a lot of tradeshows and events and what I found was that after every event I had a huge pile of business cards and more so than the irritation at having to enter the business cards, which invariably meant that I didn’t do anything with them and just pushed them aside, was the fact that I realized that I didn’t remember half the people on those cards. They were fleeting moments. They were handshakes and maybe our interaction was meaningful at the time, but later at my office I didn’t know who they were and then it dawned on me that of course if I didn’t remember who they were, they didn’t remember who I was. So I said well, why can’t we solve the problem of people being able to make a meaningful socially networked connection and remember each other using these incredibly powerful computers that are in our pockets? I immediately took a look at the existing solution, the one that most people had thought about. When I say beaming contact information between phones, most people immediately think of the Palm Pilot, which had this functionality more than 15 years ago and one of the problems with the Palm Pilot solution was of course it was pretty kludge, like you took two phones and you pointed them at each other and you pressed the button and you waited and you didn’t want to shake it. You really have to hold still and then eventually a beep would go off and you’d press a button on both sides and yay, you’d shared a contact. Even if you could get over the hassle of that process, the reality was it only worked from Palm to Palm and that’s what doomed it of course as a nothing more than a gimmicky artifact of that particular era. We said well, there has to be a simple, easy to articulate and even easier to use solution for sharing contact information and discovering people who are meaningful business contacts and so from that came beamME.
I came up with the idea for beamME one day when I was just frustrated about the process. I had a long term friend, a guy by the name of Christopher Cunningham, who is a mobile entrepreneur who had sold his last company around the same time that I sold mine. We were good personal friends and I asked Chris to help me prototype the first versions of the product and at the end of the prototyping process I said, “Well Chris, you know I know that you’re enjoying your sort of relaxed lifestyle, so maybe you could help refer me to someone who might make a good CTO and cofounder.” Chris said, “Well, what makes you think that I’m not interested in doing that with you?” And I was like, “Well, this is a magical moment in our lives because I have a lot of respect for you.” “You’re clearly very technically literate.” “You’re in the right space and we’re friends and so hey, why not do this together?” So we started the company. Chris and I started the business really in earnest in 2007 and got to work here in New York City building beamME.
Question: How do you know when an idea is going to catch on?
Gabe Zichermann: Well let me say this to you. I think I meet a lot of entrepreneurs, and now I speak to a fair number of entrepreneurs, which is a tremendous honor. One of the things that I’ve learned is that the most difficult thing in the world is to move that train one foot out of the station. 99.9% of the population has an idea that is stewing in their head right now and their train is firmly in the station. It’s the very, very small percentage of them who can move just ever so slightly and once you get that first little bit of motion the rest of it is momentum that’s surprisingly easy to accomplish. Ideas in and of themselves really aren’t that valuable. It’s the ability to take that idea and turn that into something meaningful and turn that into a product that ultimately people want to buy, whether it’s companies or individuals. That’s really the magic of entrepreneurship and so what I tell everybody, what I told a group of gay aspiring entrepreneurs, MBA students just this past week in Atlanta, what I tell everybody is that first foot, whatever is holding you back from moving your idea forward set it aside. Do it. Do something. Take it product… do a demo of your product. Build a prototype of your product. Mock it up. Do it. Try it. There is no downside to doing that first step.
Question: Who was your role model?
Gabe Zichermann: My role model is my mom, who is a crazy serial entrepreneur. My mom is literally the best salesperson I’ve ever met in my whole life and I’ve had the privilege of working with some astonishing salespeople. From a very early age my mom had these side businesses, which eventually became her principle [source] of income and effort. She was never happier than when she had her little company selling fancy imported food or cookware, which were the two businesses for which she is probably best known. From a very early age I used to sell with her. From around the age of ten we would go to these markets around Toronto, which is the city where I grew up and you know it wasn’t necessarily the most fun thing process-wise, because it was a 4am start on a Saturday morning. We’d get into the truck, load it up, and drive out to wherever the market was being held and we’d setup our booth. I’d spend a big chunk of my day in the booth selling jam or cookware or whatever it was that we were working on and watching my mom sell was the inspiration, probably, for everything that I’ve done. It’s that moment where you get out of bed and you get up in front of people and you say this is my heart on a plate and would you like to buy it is the moment that you can move forward and the moment that you can accomplish the things that you want to accomplish.
Question: When have you felt most successful?
Gabe Zichermann: I think you have lots of moments of tremendous elation and tremendous disappointment. When you’re an entrepreneur I think every single day is a roller coaster and in fact I don’t think there is a day that goes by that I don’t hit some new high and I don’t hit some new low. You wake up and think what am I doing? What did I do with all my money? What am I doing with all these other people’s money? What am I doing with all my staff’s time? This is crazy. We’re never going to get there. Today I spoke on the phone to one of our top customers. I actually personally call each one of our top customers on a sort of rolling basis because I believe in talking to them and finding out what they’re about and you know it was a… It was like Christmas, Hanukah and Kwanza rolled into one experience. I mean he was talking my ear off about how much he loved beamME and how much it had changed his workflow and how it was meaningful and ours was one of the best products he’d ever used in his whole life. I mean what’s better than that? But similarly, when someone writes a bad, annoying review of our applications in the app store I’m on the far opposite end of the scale. Every day is a roller coaster and probably the most meaningful advice that I can give about the actual process of running a company is that you have to be ready for that, and being the CEO of a startup is probably the worst job in the whole world as far as I’m can tell because [when you're the] CEO of your own startup, you’re everybody’s bitch. You are your employee’s bitch. You are your investor’s bitch. You are your customer's bitch. Pardon the expression. You’re absolutely positively moved by what all those people do. You are here to turn this great creaking ship in the direction that you want to turn it in and you don’t get to fly off the handle and decide what you want to do and go to Aspen like everybody assumes you do, like CEOs of public companies do. CEOs of startups cannot act like that. I can’t say what is one my mind. If I said what was on my mind all the time I’d have no employees, investors, or customers. There is a lot of grin and bear it, and in that process you develop a unique skill set to filter what is important and what it not and you stay focused on the big picture or prize. And despite [the] fact that being an entrepreneur is one of the worst jobs in the whole entire world, I can’t imagine doing anything else.
Question: Did you have an initial marketing plan?
Gabe Zichermann: The marketing plan for beamMe really was organic and focused on the virility of our product. I’m also a big believer in traditional PR in quotes and I think that includes getting blog coverage and getting media coverage. If you make apps for mobile devices, probably the most meaningful coverage that you can get is being featured in the app stores for whatever platform you’re working on, so for us early on in beamME’s lifecycle we were featured on the iTunes app store. We were written up in The Times and through a bunch of syndication and we were actually featured on the Apple.com start page, so we got a bunch of initial momentum for the product that way. Then we found a generally pretty good kind of PR air cover and viral ground cover for the distribution of our product.
Question: How does one compete with all the existing iPhone applications?
Gabe Zichermann: Whenever a new platform launches—and I’ve been really fortunate to be around for right on the cusp of the launch of the internet really, the launch of Facebook for example and the iPhone and been involved at Cisco Systems and then my last kind of focus and then now this new startup and each one of those things—you realize that in the very early days [a] handful of developers with good ideas and the right focus take a disproportionate... have a disproportionate success out of the launch of a new technology platform and that is pretty consistent. It’s very unusual for those early succeeders to get to the next stage of the game, and typically the real money is made by the people who come immediately after that first group. The first group is kind of big land grab and then there is some shakeout and then it’s the second group who really seems to make a big go of it. What I would say is especially if you’re developing apps today I think the opportunities are still tremendous. However, the likelihood that you’ll make an amazing single $1 application that will make you millions of dollars, I think, is pretty slim. Those were always corner cases. That was not the norm, even at the dawn of the iPhone. That has never been the norm. That will never be the norm. A handful of people win the lottery effectively by being at the right place at the right time and with a great app. It doesn’t take anything away from that, but the rest of the people, we got to slug it out. Just like any other platform, you got to make great product. You got to excite your customers. You have to market that product well. You need to know what your customers love and keep iterating against that, you know that vision of really solving a customer problem every day.
Question: Looking back, what is one mistake you made during your career?
Gabe Zichermann: I make a ton of mistakes. I mean I’m going to be honest with you. I make an absolute ton of mistakes. I make mistakes every single day. I make mistakes multiple times a day and if you listen to my business partner or my life partner or my parents they’d probably have an even better list of mistakes they could share with you. I’m so hypercritical of myself and the world around me that it would be difficult for me to really single out one thing I did wrong. One thing I can tell you though is that in the context of a life full of mistakes, the smartest people in the room are the ones who know they’ve made a mistake and without hubris turn away from that, acknowledge it, move on, close that door, open a new door when they need to do that without getting stuck somewhere like Afghanistan or Iraq. At some point you have to say I made a mistake, this was the wrong thing to do and I’m moving on. If there is one, well it’s not really even a mistake, but if there is one experience in my past I think is interesting... you know I like to be liked, I suppose everybody likes to be liked... I remember in Trymedia, which was my last startup, I had one business meeting with someone that I thought was a pretty good meeting, maybe tough, but a pretty good meeting. Afterwards I heard back that that person, who was a client we were trying to close, the president of that company had said: “Under no circumstances will I do a deal when Gabe is around. He needs to never be there. I never want to see him again. I just think he is terrible and obnoxious and I just don’t want him involved.” At the time I was crushed. I mean I did all this business development. I’m a fairly well-known figure in the games industry and I’m like this is crazy. What did I do to piss this person off? I was probably really fractured by that for a long time. I would say certainly that I took that much more personally and much more to heart than I probably should have and it turns out this person doesn’t remember that at all and now I know him and we talk and it’s all cool and he is like, “What are you talking about?” It’s sort of funny in retrospect, but I’m still carrying it around and it’s been a solid ten years and I still think about it sometimes like gosh, that was a terrible moment. The mistake that I really made in this case was to harp on somebody not liking me when being liked is really not that important. You hear that a lot. You hear that from self help coaches. Your parents tell you that when you’re in school. “It’s not that important that you be liked.” You should be respected. That is what is really important, but of course everyone wants to be liked, so we’re deluding ourselves if we think we don’t want to be liked. When you encounter a situation in which somebody has expressed a dislike for you in a business context, I think the best thing to do is turn away from the situation. Move on in a different direction. Stay away from it. Don’t harp on it. In the end they’ll get over it. That’s what I’ve learned.
Question: What are some challenges of being a gay entrepreneur?
Gabe Zichermann: It’s funny because I was talking about this with a woman named Amy Errett [ph] who was one of the cofounders of E*Trade and Olivia Cruises. The other day we were on a panel together at a gay MBA conference and we were talking a little bit about what does it mean to be a gay entrepreneur and what are the challenges. Both of us asserted that there really weren’t any as far as we could tell and principally I believe that there is still a ton of homophobia in the world and there is a ton of homophobia in the business world. But because I’ve been very out and very explicitly out in my life, in my professional life from the beginning I just don’t hear it. If you don’t like me because I’m gay or you don’t want to do business with me because I’m gay, then I probably don’t even know that because you’re steering clear of me. It’s when you’re closeted and people don’t know that you’re gay that you hear and see the things that are otherwise unsavory. I don’t necessarily want to change everybody’s mind in the world about homosexuality or Judaism, as I’m a Jew, or any of the things that I’m passionate about. What I do want is to be in an environment [where] I’m respected and have an equal opportunity to be successful and I’m creating that every single day by putting my parameters out there and saying this is who I am, gay, Jewish, chubby, in my mid thirties. This is who I am and you know you can self select out of my world if you’d like and so be it.
I think one of the challenges for all gay professional people is this idea [that] you’re going to be faced with a world that’s hostile to you and you’re lifestyle. Really it ends up being more quotidian than that. I mean when you’ve worked, especially in the corporate world, when you work in the professional world most of the hassle factor being gay is that… on Monday morning you come into the office and your friends are talking about their kids and their spouse and what they did for the weekend and the golfing that they did. If your lifestyle is not those things, if you’re not a gay person with kids and a spouse and golfing then you’re sort of forced to interpret what part of your life the other person does or doesn’t want to hear and what is contextually relevant. You know what is or isn’t going to make them uncomfortable and I think that’s actually a complicated dance at first. Over time, what you realize is you gain traction on that, so not being Pollyanna I am saying that I think single straight people have some of the same issues in a culture where you’re around a lot of married people or married people with children. There is a sort of expectation that people who are married with children can go home at 4:00 because they have to attend to their kids and of course who would say no you can’t go pick your kids up from school whereas the single person or the person without kids doesn’t get to do those things and that I think is more like a family status, a quality fairness issue than it is a sexuality fairness and a quality issue. My observation has been that most issues related to sexuality in the workplace are actually issues of family status and gender rather than sexuality strictly speaking, and that once you put those things into context then there is a layer certainly of explicitly sexuality related issues, but most of it is about family status and gender.
I have the benefit of being an entrepreneur and the benefit of living in the technology business and the games industry and being an entrepreneur in those environments. In the context of entrepreneurship and technology and the games industry of course I can be out. It’s my company, so in that way I can build a corporate culture that matches the environment that I want to work in and built with people who I respect and who respect me and who I feel comfortable with and with whom I want to come into work every single day and enjoy the relationship that I’m building with them. That is a degree of control that I don’t have in many other aspects of being an entrepreneur, but I certainly do in terms of who gets hired to work at my company. That’s definitely one thing that is rewarding about being [an] entrepreneur that you don’t necessarily get when you work in the corporate world. I appreciate it if you’re just starting out in your career and you want to go work at some big finance company or the Department of Defense or something crazy like that, then your considerations are probably different from mine, but I try to live a… I work so much I try to integrate my life as much as possible so that I can enjoy all aspects of it.
Question: Describe your concept of Funware.
Gabe Zichermann: In addition to doing everything else that I do, I’m the author of two upcoming books, The Engaging Web and Game Based Marketing. They espouse a theory called “fun ware” for which I’ve become associated. This is the premise that basically everything in the world could be more fun than it is today. You can take the lessons learned from the games industry around points and badges and levels and challenges and achievements and bake those into any kind of life experience, whether it’s getting money out of an ATM or working a suicide hotline. Games can help improve the outcomes in every aspect of life and increasingly we’re seeing those trends around us. So “fun ware” and the fun ware blog, which is where I talk about fun ware topics, is a sort of interesting way to package up this movement in society around game mechanics in non-game contexts.
Question: How would you make a suicide hotline fun?
Gabe Zichermann: The suicide hotline example is a good example. I was giving a talk at a conference and one of my co-panelists said, “Well Gabe, this fun ware idea of baking game mechanics into everything you do sounds pretty exciting, but it would be absolutely inappropriate at something like a suicide hotline.” I said, “Well okay, I can concede that adding games to a suicide prevention seems distasteful at first, but I’ll tell you what I do know.” “Here is what I know.” “In any call center setting if you add a game mechanic like a competitive environment where you achieve more if you answer more queries and sell more stuff, people will answer more queries and sell more stuff number one. Number two, I know that it’s a very, very serious matter in which successfully selling an idea, aka, not killing yourself is actually a matter of life and death. While I can’t tell you that it will work because I haven’t personally seen an example of it working I can’t find any evidence that suggests it won’t work.” So would I try it if I was running a suicide hotline? Absolutely, it would be the first thing I’d want to do [as] some kind of incentive structure to get the people answering the phone in the right headspace.
Question: What about ATMs?
Gabe Zichermann: Consider what would happen if tomorrow Bank of America ATMs starting dispensing hundred dollar bills at random when you make a withdrawal. What would happen? Some people would say, “Okay, I hate paying the fee, but I’ll go [to] the Bank of America ATM if I already have to pay the fee because I’m not near one of my banks, might as well have a chance to win.” All the way through to the other opposite reaction, which is I’m going to sit there and play that ATM like a slot machine to see if I can win the hundred dollars. The bottom line is what we know about the ATM fun ware example is that in every single case it’s going to produce a reaction, which is something that you can’t say about any form of traditional marketing. There is no other marketing technique I could bring to bear to guarantee some degree of reaction in people to go use a Bank of America ATM except for the slot machine.
There are lots of possible downsides. There is a gambling issue and of course there is the legal issue, but I think one of the things I think about a lot is the fact that I have yet to see an experience or personal experience, anything in the world, that couldn’t be made more fun. I haven’t played a game that is the ultimate expression of fun. I haven’t filled out my taxes and felt like it was fun. I haven’t ever had that moment where I said we have reached the maximum point of fun and therefore I know that there is plenty of opportunity to do more in the area of making things more fun. While initially it doesn’t necessarily make sense to blur the lines between work and fun, I’m confident that as time goes by and the current generation, which we call Generation G, today’s tweens, grow up to be older, they’re going to expect everything to be more fun. Things that aren’t fun aren’t going to get done.
Topic: The downside of relocating to NYC
Gabe Zichermann: Oh, God. I love New York City and I’ve lived here now for four years. After I sold my last company, my partner is a fashion designer, and we thought San Francisco is no great place to be a fashion designer unless you’re really into polar fleece, in which case it may be the best place in the world to be a fashion designer, but we thought well, we can move to New York for his career and I can start a tech company anywhere because I knew I was going to start another one. It turns out that New York has been great for my partner’s career and it’s pretty difficult to start a tech company here, but I love New York City and can’t imagine culturally or intellectually wanting to move back to the West Coast. But I cannot get over the terrible, terrible Mexican food, terrible, horrible. Every time I go back to San Francisco or L.A. and I’m fortunate to be there almost monthly, my first stop is Lateckaria [ph] in the Mission or Mexico City in Los Angeles, where I get something delicious. Despite combing the edges of the five boroughs in New York, I haven’t found anything good. I often liken the experience [of] eating Mexican food in New York to running into your first love on the street after not seeing them for 20 years. There is no upside. Whether they’ve gotten really cute and you don’t feel so cute or they’re hideous and you feel really cute. The bottom line is that run in is going to sully the beauty of the memory that you had of them. All I do now is politely decline every offer for Mexican food in New York City and save my needs until I get back to San Francisco or L.A. or San Diego.
Recorded on October 22, 2009