Zynga went public in 2011 at $11 billion but lost half its users and $400 million in value by 2013. The company chased growth without building sustainable systems, then Facebook changed its policies and cut off Zynga's main user pipeline overnight.
2011.
$11 billion.
Over $400 million in total value.
About 50%.
Why did Zynga, an $11 billion company, go bankrupt within two years of its launch? Zynga was the most successful app developer on Facebook. In 2011, they went public, and at the start of 2012, the company is worth $11 billion. But by 2013, Zynga lost over 400 million in total value and lost about 50% of their user base. Here's why Zynga decided that they were more interested in growing than scaling. They kept doing the same things that drove growth. But then Facebook updated their policies and regulations, making it illegal for Zynga to drive gamers from Facebook to Zynga.com, or allow Zynga users to share their info to Facebook. While obsessing over growth, Zynga had failed to acknowledge the danger of having Facebook as their sole means of distribution. The lesson? Growth is good at first, but quickly. You must learn the secrets of scalable growth or you'll grow yourself straight into bankruptcy.
