Inorganic Growth at Zynga

Not all growth is or should be organic. Mark Pincus founded Zynga in April 2007, a month before Facebook launched it platform and API. Zynga was a first-mover on what would be one of the most successful gaming distribution channels that decade. Many startups have the opposite problem: they find product-market fit and struggle to gain distribution.

Now when you have distribution but lack product, you have a few options. Copy your competitors. Zynga had early success with this (Mafia Wars/Mob Wars, Café World/Restaurant City). But there's another strategy, and that's inorganic growth, i.e. acquisitions.

Farmville came to Zynga through two different acquisitions: the engine from MyMiniLife, the assets from YoVille. Mark Pincus actually had trouble getting internal support for building a farm game competitor - none of the engineers wanted to work on a farm game. Since then, Zynga has spent more than $3 billion on purchasing game studios, assets, and rights. Not only has the company made the shift from flash-based games to mobile games, it's made the shift from Facebook distribution to the App store distribution. That's especially impressive, seeing that at one point in 2011, Zynga made up 19% of Facebook's revenue.