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The irony of all this is that just less than 3 years ago Mark Pincus and Zynga was riding high. Pincus was voted as the CEO of the Year at the Crunchies. He wa

The irony of all this is that just less than 3 years ago Mark Pincus and Zynga was riding high. Pincus was voted as the CEO of the Year at the Crunchies. He was chosen to be the closer to Startup School, he projected Zynga as a place for people to want to go to there: http://news.ycombinator.com/item?id=1041758 http://news.ycombinator.com/item?id=1041758 This is a story parallel to Lance Armstrong's own rise and fall. About how if you were to drill down, really drill down, to find the next ethical, justifiable company that used Facebook to great benefit for humanity you're going to be looking for the 27th, 28th, 29th place organizations. Because frankly, as cynical and as well-duh it is now, what did we spend the greatest of our generations will and brain power on? A Facebook ponzi scheme. Now the tide is turning, pendulum swung, omega alpha etc etc and all those wonderful metaphors. Where to go now? Go fixate on and fix something else. But remember, be nice to everyone on your way up. They're going to be the same people you see on the way down.

bduerst 14y ago
That's not what a ponzi scheme is.
- klochner 14y ago
  Nor is that what irony is, but his analogy to the TDF is interesting anyway.
- DanHulton 14y ago
  Word. Awful, Zynga is. A ponzi scheme, it is not. Let's keep our criticisms to what is correct - there's so much of that to go around already.
  - tatsuke95 14y ago
    While I agree "Ponzi scheme" is tossed around a bit too liberally, Zynga is pretty close: A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. (Wiki) The fact that the early investors cashed out like kings from the IPO, and later investors shouldered all the losses and may not even recover the liquidation value of the assets is pretty close to the definition. All that is missing is the "fraud" part, but that's a bold accusation and hard to prove. Then again, this story isn't over.
    - bduerst 14y ago
      Cashing out at an IPO isn't a ponzi scheme - it's selling assets directly to new investors. Just because the new investors were not smart in their investment does not make it a ponzi scheme.
      - tatsuke95 14y ago
        A Ponzi scheme inolves paying returns to investors out of the investment capital of subsequent investors. That's the definition. The executives and VCs of Zynga built up a product and took their returns from the public by selling the public shares, which is a right to the future profits of the company[1]. Only, it turns out that those with the best knowledge of the inner working of the company probably knew there were no profits to be had, nor any on the horizon. This is made evident by the inside selling and relatively fast decline of the the company's share price. So, while I don't go around claiming Zynga (or any such bust up) is akin to Madoff, I don't think the difference is as large as you think. It's all about intent, and we'll never really know. The rest of the pieces are there. By the way, I'm long Zynga January 2014 calls. They may have been the recipient of loose SV money, and as such got lazy, but there is demand for this product if they can get it together. There's a real business here, so I guess I'm in the non-Ponzi crowd. [1]If you aren't investing with the intent on earning the future profits of the company, but instead are looking to sell at a higher price, you are speculating, not investing. I don't feel sorry for speculators, it's the nature of that zero sum game.
        deleted 14y ago
        [deleted]
        bduerst 14y ago
        By your convoluted logic, the entire stock market is a ponzi scheme. Buying a share does not give you the right to future profits in a company. It gives you ownership and control over a percentage of the corporation, and does not guarantee a dividend. By selling shares to the public, the shareholders are trading control of the company for money with the public investor. Whether or not they bought a lemon is the fault of the public investor. It is _not_ a ponzi scheme, it is the exchange of assets.
- bagacrap 14y ago
  zynga was compared to a ponzi scheme (rightly or wrongly) when early investors were paid off during subsequent rounds of funding. I think that's what he's referring to.
001sky 14y ago
This is a story parallel to Lance Armstrong's own rise and fall. About how if you were to drill down, really drill down, to find the next ethical, justifiable company that used Facebook to great benefit for humanity you're going to be looking for the 27th, 28th, 29th place organizations. -- Interesting. If you look at the data, from 1996-2005 (10 Years) > source: http://www.telegraph.co.uk/sport/othersports/cycling/lancearmstrong/9626520/Lance-Armstrong-How-Tour-de-Frances-recent-past-has-been-decimated-by-doping.html http://www.telegraph.co.uk/sport/othersports/cycling/lancear... TDF: Of those that placed top 3x: 15% clean, ~85% were not. You know you have a problem when you are on the wrong side of the 80 /20 rule, as an entire field. Lets hope the ills that plague Zynga are not like the TDF: Top 3 x 10 years = 30 places Only 5 of these "places" were awarded to "clean riders", of which there were only 3. First - None Second - Joseba Beloki (1) Thrid - Beloki(2), Bobby Ulrich, Fernano Escartin.
- tatsuke95 14y ago
  >"You know you have a problem when you are on the wrong side of the 80 /20 rule, as an entire field." Or, you can not care that these athletes are using science to perform optimally at their sport. That's what I do, but that's another argument.
  - rprospero 14y ago
    If a racer was going to use science to perform optimally, why didn't he just buy a motorcycle? 19th century thermodynamics would push him far past anything he could achieve with 21st century biology. You might argue that it's against the rules to ride a motorcycle, but so was doping. It's also against the spirit of the sport, but so was doping. If the objective was to use the best available science to compete at the highest level, then they failed horribly.
- tsotha 14y ago
  >Top 3 x 10 years = 30 places Only 5 of these "places" were awarded to "clean riders", of which there were only 3. I'm skeptical there were any clean riders. Those three may just be the ones that didn't get caught. Hell, Armstrong was under the microscope for a decade and it took a long time for the truth to come out.

bduerst 14y ago

That's not what a ponzi scheme is.

klochner 14y ago
Nor is that what irony is, but his analogy to the TDF is interesting anyway.
DanHulton 14y ago
Word. Awful, Zynga is. A ponzi scheme, it is not. Let's keep our criticisms to what is correct - there's so much of that to go around already.
- tatsuke95 14y ago
  While I agree "Ponzi scheme" is tossed around a bit too liberally, Zynga is pretty close: A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. (Wiki) The fact that the early investors cashed out like kings from the IPO, and later investors shouldered all the losses and may not even recover the liquidation value of the assets is pretty close to the definition. All that is missing is the "fraud" part, but that's a bold accusation and hard to prove. Then again, this story isn't over.
  - bduerst 14y ago
    Cashing out at an IPO isn't a ponzi scheme - it's selling assets directly to new investors. Just because the new investors were not smart in their investment does not make it a ponzi scheme.
    - tatsuke95 14y ago
      A Ponzi scheme inolves paying returns to investors out of the investment capital of subsequent investors. That's the definition. The executives and VCs of Zynga built up a product and took their returns from the public by selling the public shares, which is a right to the future profits of the company[1]. Only, it turns out that those with the best knowledge of the inner working of the company probably knew there were no profits to be had, nor any on the horizon. This is made evident by the inside selling and relatively fast decline of the the company's share price. So, while I don't go around claiming Zynga (or any such bust up) is akin to Madoff, I don't think the difference is as large as you think. It's all about intent, and we'll never really know. The rest of the pieces are there. By the way, I'm long Zynga January 2014 calls. They may have been the recipient of loose SV money, and as such got lazy, but there is demand for this product if they can get it together. There's a real business here, so I guess I'm in the non-Ponzi crowd. [1]If you aren't investing with the intent on earning the future profits of the company, but instead are looking to sell at a higher price, you are speculating, not investing. I don't feel sorry for speculators, it's the nature of that zero sum game.
      - deleted 14y ago
        [deleted]
      - bduerst 14y ago
        By your convoluted logic, the entire stock market is a ponzi scheme. Buying a share does not give you the right to future profits in a company. It gives you ownership and control over a percentage of the corporation, and does not guarantee a dividend. By selling shares to the public, the shareholders are trading control of the company for money with the public investor. Whether or not they bought a lemon is the fault of the public investor. It is _not_ a ponzi scheme, it is the exchange of assets.
bagacrap 14y ago
zynga was compared to a ponzi scheme (rightly or wrongly) when early investors were paid off during subsequent rounds of funding. I think that's what he's referring to.

001sky 14y ago

This is a story parallel to Lance Armstrong's own rise and fall. About how if you were to drill down, really drill down, to find the next ethical, justifiable company that used Facebook to great benefit for humanity you're going to be looking for the 27th, 28th, 29th place organizations. -- Interesting. If you look at the data, from 1996-2005 (10 Years) > source: http://www.telegraph.co.uk/sport/othersports/cycling/lancearmstrong/9626520/Lance-Armstrong-How-Tour-de-Frances-recent-past-has-been-decimated-by-doping.html http://www.telegraph.co.uk/sport/othersports/cycling/lancear... TDF: Of those that placed top 3x: 15% clean, ~85% were not. You know you have a problem when you are on the wrong side of the 80 /20 rule, as an entire field. Lets hope the ills that plague Zynga are not like the TDF: Top 3 x 10 years = 30 places Only 5 of these "places" were awarded to "clean riders", of which there were only 3. First - None Second - Joseba Beloki (1) Thrid - Beloki(2), Bobby Ulrich, Fernano Escartin.

tatsuke95 14y ago
>"You know you have a problem when you are on the wrong side of the 80 /20 rule, as an entire field." Or, you can not care that these athletes are using science to perform optimally at their sport. That's what I do, but that's another argument.
- rprospero 14y ago
  If a racer was going to use science to perform optimally, why didn't he just buy a motorcycle? 19th century thermodynamics would push him far past anything he could achieve with 21st century biology. You might argue that it's against the rules to ride a motorcycle, but so was doping. It's also against the spirit of the sport, but so was doping. If the objective was to use the best available science to compete at the highest level, then they failed horribly.
tsotha 14y ago
>Top 3 x 10 years = 30 places Only 5 of these "places" were awarded to "clean riders", of which there were only 3. I'm skeptical there were any clean riders. Those three may just be the ones that didn't get caught. Hell, Armstrong was under the microscope for a decade and it took a long time for the truth to come out.