Tagged: app

Mobile != on the go

Mobile apps are optimized to deliver instantaneous location-based value for users on the go. When tablets started growing, companies started treating them differently from smartphones. The assumption was that its use was mostly at home.  Harvard Business Review has now published a study that included this terrific piece of information:

Mobile doesn’t always mean on the go. New data show that 68% of consumers’ smartphone use happens at home.

The article was focused on the implications of this for ecommerce. Today I would like you to think of what this means for your product. Can you deliver local, immediate experiences for the 32% of people on the go and broader, deeper experiences for the other 68%?

Farmville animals

Farmville animals: cute but not very productive
Farmville animals: cute but not very productive

A lot has happened since my last post. I have a lot to thank to Lisa Chan, Zynga’s blogger, who featured it.

I’ll cover the impact it had in my personal life in a later post. Today,  let’s figure out the economics of animals on Farmville.

Are they there just to look pretty? Should I sell them, ignore them, buy more?

We’ll work with the same assumptions we used for the treeconomics:

  • Investment period and residual value: the animal is sold for its residual value after 90 days.
  • Discount rate: to simplify I’ll do a comparison of investments.
  • Available investments:  at this point only the cow, chicken and sheep are available to purchase.

First we’ll compare the animals among themselves to see which one has the highest daily revenue:

Cost Revenue/Harvest Days to Harvest Daily Revenue Daily Rev/ Invested $ Days to Payback
Sheep $700.0 $28.0 3 $9.33 1.33% 75
Chicken $400.0 $8.0 1 $8.00 2.00% 50
Cow $300.0 $6.0 1 $6.00 2.00% 50

Not surprisingly the sheep wins.  On “bang per buck” (or ROI) both the chicken and cow look better though.

Let’s compare a 90 day investment in a square full of sheeps with some crops and trees. Don’t let cartoon logic fool you, you can actually fit 16 sheeps or chicken in a single Farmville square. Only 4 cows though.

Daily Profit Total Profit Initial investment Residual Value Profit
Date tree square $368.0 $33,120.0 $12,800.0 $640.0 $20,960.0
Tomatoes $174.0 $15,660.0 $15,660.0
Raspberries $132.0 $11,880.0 $11,880.0
Chicken square $128.0 $11,520.0 $6,400.0 $320.0 $5,440.0
Sheep square $149.3 $13,440.0 $11,200.0 $560.0 $2,800.0
Cow square $24.0 $2,160.0 $1,200.0 $60.0 $1,020.0

It seems that animals are not a great investment. It turns out that the best among them is a chicken square, given that the cost is much lower than a sheep square. However, it is still lower than, for example, pineapples.

Animals in Farmville will earn you badges but won’t make you rich. They also make a beautiful gift for your friends.

Farmville treeconomics: is this going too far?

[digg=http://digg.com/playable_web_games/Farmville_treeconomics_is_this_going_too_far]

The farmville date tree. Fill a square with 16 of them and you have a great investment.
The farmville date tree. Fill a square with 16 of them and you have a great investment.

Fred Wilson blogged recently about Zynga, the #1 social gaming company, looking for talent  in Wall Street. He should know, he’s a Managing Partner at Union Square Ventures, one of the VC firms backing the company. I am sure that to many this might seem strange but it shouldn’t. You can put an MBA to good use just to play Farmville.

Adam Nash did just that. He took Farmville economics a step further in his last two posts and Lisa Chan at Zynga took good note of it. The next task in his list is figuring out the economics of trees. I thought I would give it a try.

Like in any financial model we’ll start with a couple of assumptions:

  • Investment period and residual value: like Adam said, people will not be playing Farmville in 2020. Given that the “investment cycle” is daily I thought it was fair to assume that the tree is sold for its residual value after 90 days.
  • Discount rate: I’m a huge supporter of using the NPV investment rule. The problem with this is, like I said, that we have to now find an adequate discount rate. To simplify and given that Adam’s initial analysis was not done on a bang per buck basis, I’ll just do a comparison of investments.
  • Available investments: I still need to level up! Also other trees are available as gifts but cannot be purchased. I’ll base the analysis on the trees I have available to purchase.

First we’ll compare the trees among themselves to see which one has the highest daily revenue:

Cost Revenue/Harvest Days to Harvest Daily Revenue Daily Rev/ Invested $ Days to Payback
Date $800.0 $69.0 3 $23.00 2.88% 35
Lime $750.0 $75.0 5 $15.00 2.00% 50
Lemon $475.0 $41.0 3 $13.67 2.88% 35
Peach $500.0 $47.0 4 $11.75 2.35% 43
Fig $350.0 $33.0 3 $11.00 3.14% 32
Plum $350.0 $30.0 3 $10.00 2.86% 35
Orange $425.0 $40.0 4 $10.00 2.35% 43
Apple $325.0 $28.0 3 $9.33 2.87% 35
Cherry $225.0 $18.0 2 $9.00 4.00% 25

The date tree is the winner, but if we were to rank it on a daily revenue per dolar spent basis (bang per buck) it would look quite different:

Cost Revenue/Harvest Days to Harvest Daily Revenue Daily Rev/ Invested $ Days to Payback
Cherry $225.0 $18.0 2 $9.00 4.00% 25
Fig $350.0 $33.0 3 $11.00 3.14% 32
Lemon $475.0 $41.0 3 $13.67 2.88% 35
Date $800.0 $69.0 3 $23.00 2.88% 35
Apple $325.0 $28.0 3 $9.33 2.87% 35
Plum $350.0 $30.0 3 $10.00 2.86% 35
Orange $425.0 $40.0 4 $10.00 2.35% 43
Peach $500.0 $47.0 4 $11.75 2.35% 43
Lime $750.0 $75.0 5 $15.00 2.00% 50

As a side note, also the crops would look different on a bang per buck basis:

Daily Investment Daily Profit Daily Rev/ Invested $
Super Berries 300.0 900 300.0%
Watermelon 36.3 51 140.0%
Artichokes 21.3 30 140.0%
Wheat 16.7 22 130.0%
Cotton 30.0 39 130.0%
Pineapples 55.0 66 120.0%
Yellow Bell 45.0 54 120.0%
Squash 27.5 33 120.0%
Eggplant 20.0 24 120.0%
Soybean 30.0 33 110.0%
Pepper 85.0 77 90.6%
Rice 120.0 72 60.0%
Pumpkin 135.0 69 51.1%
Blueberries 390.0 156 40.0%
Strawberries 150.0 60 40.0%
Raspberry 420.0 132 31.4%

Back to our analysis. Let’s compare a 90 day investment in a square full of date trees with some crops. Believe it or not, 16 date trees can be squeezed in a square.

Daily Profit Total Profit Initial investment Residual Value Profit
Super Berries $900.0 $81,000.0 $81,000.0
Date tree square $368.0 $33,120.0 $12,800 $640.0 $20,960.0
Tomatoes $174.0 $15,660.0 $15,660.0
Raspberries $132.0 $11,880.0 $11,880.0

Does a date tree square make sense? Sure. The catch? A square full of date trees costs 12,800 coins, you need 35 days just to pay the investment back. If you are looking to optimize your farm on a per square basis it’s perfect. Given that space and not coins is the key constrain in Farmville, it does make sense. Also, the longer the investment period, the better it will look.

Is this over-analyzing and going too far? Maybe, but in a blog about digital media, gaming, VC and randomness, this post fits great. If you need financial modeling to Excel at these games (pun intended), you do need to look in Wall Street to manage them.

Update: you can now see the analysis for Farmville animals here.

Super Berries 300.0 900 300.0%
Watermelon 36.3 51 140.0%
Artichokes 21.3 30 140.0%
Wheat 16.7 22 130.0%
Cotton 30.0 39 130.0%
Pinneaples 55.0 66 120.0%
Yellow Bell 45.0 54 120.0%
Squash 27.5 33 120.0%
Eggplant 20.0 24 120.0%
Soybean 30.0 33 110.0%
Pepper 85.0 77 90.6%
Rice 120.0 72 60.0%
Pumpkin 135.0 69 51.1%
Blueberries 390.0 156 40.0%
Strawberries 150.0 60 40.0%
Raspberry 420.0 132 31.4%

The iPhone apps VCs want to see

I just came back from the iPhoneDevCamp where Chi-Hua Chien, a partner at Kleiner Perkins Caufield & Byers and Stanford GSB alumn,  was the Friday keynote speaker.

Chi-Hua is actively involved in the iFund, KPCB’s $100 million iPhone investment fund.

Chi-Hua first gave a quick overview of how the iFund came to be and how it is going today.

I found particularly interesting  where they think the big iPhone hits will come from, the big ideas:

  • Mobile commerce
  • Real time everywhere and anywhere
  • Local search
  • Healthcare
  • Augmented Reality
  • Real-world gaming

Chi-Hua was quite disappointed by the fact that most of the current top apps fail at the three criteria he values most:

  • innovation
  • value creation
  • significance

These criteria and the previous themes frame pretty well the iPhone apps VCs want to see. Unfortunately, right now the top free app is probably the opposite: Do Not Press the Red Button. The market (and hopefully some intervention from Apple) will certainly correct this with time, just like it in the case of Facebook applications.

Update: the slides of his presentation are now available below:


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TapDefense – Casual Game Informer Interview

The Tapdefense icon. All you need to press before time flies by.
The TapDefense icon. All you need to tap before time flies by.

Just published a new interview on Casual Game Informer:

TapDefense from Tapjoy has been one of the most successful casual games for the iPhone. Ben Lewis and Lee Linden, the creators of the tower defense hit carved out some time to talk to Casual Game Informer.”

You can read the rest here. Let me know what you think.