Ohai’s founder and CEO Susan Wu wonders why entrepreneurs aren’t taking bigger bets — particularly when so much is at stake? In the mid-nineties, Wu already had a passion for people’s online behavior when she started her career as a text MUD developer. “I was a philosophy major, and thought they were a really interesting way of testing out different ideas about people’s online identities, and how they built relationships with other people,” she explains. This passion eventually led her to found Ohai and create her own meaningful social games.
Catching the wave
Wu graduated to engineering at JavaSoft, then moved into project management, and business development, and started an enterprise software company that went public in 2001. After serving as the CMO of Apache, Wu became a venture capitalist, where she was involved in Metaplace, which was acquired by Playdom, and Conduit Labs, which was acquired by Zynga.
And then Wu decided she would leave the world of venture capital and start a game company. “I had a real interest in building games that were meaningful, and provided players with a much more exciting and compelling gameplay experience,” she says.
As a venture capitalist, Wu saw a lot of people pitching games that were rote clones, or worse: uninspired, “in the sense that they weren’t making great use of the social infrastructure available.”
To start a game company of her own, Wu partnered with Don Neufeld, a veteran technologist from Sony Online Entertainment. They constructed a platform – or cross-platform – that lives on the web and is accessible through any kind of mobile device.
“We wanted to allow people to play in a common play-space regardless of where they were logging in,” says Wu, stressing the importance of letting people participate in an exciting, narrative world “regardless of where they were logging in.”
The company launched a proof-of-concept in February of this year, says Wu. “We’re now embarking on our first formal launch in a couple of weeks.”
Down memory lane
All the recent developments Wu was sharing also caused her to reflect on how it all started: “Back in the mid-nineties, almost all of web content was one-way.” It was read, but not written-to. “There was very little interactivity, except maybe Usenet forums and some real-time chat on IRC.”
That’s when Wu became interested in communities. “What I was observing in my own behavior was that I was spending a lot of time online, and that my online friends were becoming more real to me, in a way, than my real-world friends.”
Wu wanted to test those boundaries, to see what it meant to live online and be a citizen of another space, parallel to our world.
“MUDs were an ideal way of doing that.” Partially because the codebase was easy, and partially because it was easy to experiment. “You don’t have to deal with large production teams to test out a feature.”
Once, Wu and a roommate spent two days coding a virtual-goods system, launched it, and let their thousand users experiment with it. “It was a really fulfilling way to see how people were internalizing different features.”
Wu was always interested in citizenry online — her MUD was one of the first to try landownership. “Not just as consumers, and not just as participants — but at what point do they actually feel like citizens?”
“I think my whole life is one big experiment in what humanity is and is not,” says Wu. She reads about neuroplasticity, and is most interested in what is cultural construct, and what is biological construct.
And that is the promise of video-games. Wu explains: “If, in fact, a lot of things are cultural and human constructs, it means that we, as game makers, have a lot of ability to shape civilization, in a way. And that’s both an immense responsibility and a great opportunity.”
In a previous attempt to shape civilization, Wu thought the venture capitalist industry would focus on innovation and facilitating rapid change and facilitating rapid pace of entrepreneurship. The reality she found was that traditional VCs might see a thousand ideas in a year, but only invest in one or two.
“The pace of innovation that I was interested in wasn’t there.” By contrast, the entrepreneur’s cycle is constant chaos, constant re-invention, constant survival of the fittest. “That pace of life was more compelling to me.”
The problem of build-and-flip social games
Wu continued to mention recent discussions in the investment community around why entrepreneurs are not betting bigger, and seem to be in pursuit of incrementalism. An influx of angel investors led to smaller deals with less return-on-investment. Still, many feel that any new venture is a risk, and that you might as well make your time valuable by betting big.
Which all comes down to the reason Susan Wu started Ohai. “Because we felt gameplay was quite meaningful. Anything 200 million people are doing in social games is world-changing.”
Wu notes that if you make something that 200 million people use on a daily basis, “…you’re gradually changing how people interact with the world.” She wants to create games that millions want to play, and then use game-mechanics to help them understand things like building deeper relationships with friends, through the creation of large, immersive worlds.
“In a way, they’re almost alternate-reality games, because players still retain their real-world Facebook identity within these worlds – it’s not a fantasy world, but it is an immersive world.” And that leads to a next-generation of game design issues that Wu finds interesting. “Our company is all about building advanced social games.”
Wu further notes that the whole social-gaming industry has been dominated, for the last two years, by people who have been entering the industry to build-and-flip. “I find that really demoralizing.”
“How do you build great products, if your intention is to not continue to service those customers in a year’s time?” You can’t build great franchises if you’re flipping customers and your business, states Wu.
“If our goal is to build franchises that can pass the test of time, like, we want to inspire people so much they think about these games twenty, thirty years later, in the same way that I think of the Seven Cities of Gold…then we have to not build to flip. We have to build a long-lasting, sustainable business that doesn’t require significant outside funding to stay viable.”
The premise suggested by Wu is a strong one, and she concludes by musing that no Facebook-based property has been able to live outside Facebook. There will come a time when the social-network will be the home to an intellectual property recognized across mediums. And it’s just possible that Ohai will make the first one.