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Stewart Butterfield and Caterina Fake built Flickr into the first great photo-sharing site on the web. They sold it to Yahoo in 2005 and Butterfield stayed a few years at Yahoo. But 18 months ago, Butterfield returned to the idea of building an online game — the idea that preceded Flickr itself. Today, his new startup, Tiny Speck, unveiled a new web site and trailer for the social game Glitch, which will debut next spring.

The first time around, Butterfield had an awful time getting support. But this time he raised $6.5 million from well-known angel investors. He’s got a team of 16 people, and they’ve taken their time in getting their new online virtual world off the ground. Not many game makers have such luxuries, but Butterfield is trying to build a next-generation social game. We talked to him yesterday about his plans.

VB: Can you talk about what you did before Flickr?
Before Flickr, we started Ludicorp in 2002. The intent of the company was to create a web-based massively multiplayer online game. It was sort of like what we are doing now, but was a lot less technologically ambitious. The core nugget of the idea was the same. It was very social, not about killing but it was also more than just a puzzle game. It was about creating a world that was open-ended. Not so much like Second Life, but enough so that the player had freedom to drive the way the world evolved. The original idea was different from Sim City, with one person running a world from the top down, like a god. This was a bottom up, emergent, more collaborative simulation where all the individual players could contribute and control the society. It is not totally free form, but with game elements such as missions.

VB: What happened?
SB: Well, 2002 was the all-time crappiest moment to start a company. It was in the wake of the dot-com crash and Worldcom and Enron and the 9/11 terrorist attacks. It was not a good time to raise money for anything, but particularly hard for consumer game companies. So in an act of desperation, we developed Flickr.


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VB: You kept this idea for the game on the backburner?
Yes. There are four us who formed the core of Tiny Speck. We wanted to do this ever since then. Flickr was a great product and it was life-changing to work on. It was awesome. But we decided we wanted to do this.

VB: What is the core of the idea now?
The initial experience is as a side-scrolling platform game, hearkening back to Mario games. That lets people get a handle on the basic control of the game. Stylistically, it’s a mix of all different kinds of things with contemporary illustration. It’s different from traditional console games or social games. There are some indie games doing similar stuff. We have a lot of traditional two-dimensional artists. The game takes place inside the minds of 11 giants who are imagining the world. As you go from place to place, the style is different and the world changes. Your imagination brings the different parts of the world to life.

VB: Would you describe it as a virtual world or a user-generated world?
It’s definitely a virtual world, though not as open-ended as Second Life. We don’t just drop you in the world and say, “go crazy.” There are quests and missions. You can earn skill and achievements over time. It’s not user-generated in the sense that users contribute art or animation. It’s possible we would allow some of that in the future. We will put in the time and foot the bill to create the world for people. It is a flexible world, where we can expand the size of the world and add new content.

VB: Can you talk about the Rook, the crow with the bloodshot eyes? It looks like a destructive element in the game.
SB: Yes, it is a balancing element. Part of the destructive element: balancing element. Part of the game is that players develop new locations in collaborative multiplayer quests. The players can unlock a part of the world, and players can choose which direction they want to go in the upgrade. They balance that against the need to protect and maintain the world against attacks from the Rook. You have full-blown attacks. We are still fiddling with the actual way it works. The Rook can appear and attack plants, animals or players in the world. It can warp them, and players have to do some work to heal the injured animals and plants around the world.

VB: That gives players a motive to pull together and go to a section of the world and defend it from the Rook?
Yes, it can be expensive to defend against the Rook. You need a lot of different resources and skills to do that. Some people will have alchemy spells. Others will have medication to heal players under attack.

VB: It’s a web site game, but is it also a Facebook game?
We will use the Facebook applications programming interface, but you won’t be able to play it on Facebook as it is now. That’s because we don’t have enough real estate on a Facebook page, and we don’t want ads in the game. Having said that, the longer-term plan is to have our own API for limited playability. People should be able to participate in the game without launching the whole game from within Facebook, Twitter, email or other apps. There are potential mini games that could tie into the bigger game.

VB: Can you tell me more about the team?
There are 16 people, evenly split between San Francisco and Vancouver. San Francisco is the engineering and Vancouver is the creative production. I am in Vancouver about 75 percent of the time.

VB: Caterina (who started Hunch) is not part of this company?
No, she is not part of this one.

VB: Who are your investors?
SB: Jeff Weiner, the CEO of LinkedIn, is one. So is Rob Solomon, president of Groupon. Brad Horowitz, vice president of product at Google, is another one. Ron Conway is an investor. There are some friends and family as well. We have no plans to raise money. We have money in the bank and are aiming for a higher average revenue per user than most social game companies. We are aiming for deeper engagement and retention. Never say never. But the plan is to become profitable with the money we have raised so far.

VB: Tell us more about the business plan.
The business plan is established. We have traditional virtual item sales for decorative items. You can customize your house and your avatar. We will also have subscriptions for premium features. We want to try ads in the game. Players can buy billboard space in busy transit hubs to advertise a new company they start in the game or advertise a crazy cult so they can get new adherents. You can buy things that help you accelerate skill learning. We will also have distributable mini games on other platforms. You can have iPhone and Android games that tie into the big game. There could be an alchemy game that unlocks a skill in the big game. We will have a free-to-play MMO as a distribution platform for other games that can be purchased. We will experiment. One of the things we learned was that you have to have multiple options for people. There are a lot of people who would pay us more if we could have them sold them more. There are mini games. There are teleportation tokens to get around the world faster. There are virtual items together. All of those things will blend. We don’t want to hit people over the head with the business pitch.

Our goal is to create a next-generation social game. The first generation blew the world wide open and radically increased the number of players out there. There is also a high burnout rate because the games are very simplistic, partly because there is such an emphasis on driving purchases. That is dangerous. It’s a scorched earth policy. We wanted to avoid that. We want to develop a longer-term relationship with the player. There was a lot of ad fatigue in the late 1990s through now. People created bigger banner ads and pop-ups that drove users nuts.

VB: Can you tell us more about the video trailer. It has a lot of sound and music. It’s zany. Is that the way the game will be?
It has a higher pace of action than the game, but those are the things you will do in the game. The musicians who worked on the music for the video are also doing the game music.The artists are also the same. We are in alpha stage right now. We will be in beta early next year and launch sometime in the spring. It’s still early and we are constantly producing new stuff. But people can get a sense of the style of the game.

VB: It looks like you are putting a lot of emphasis on creativity and originality.
There are tens of millions of people who just got their taste of gaming. People who identify themselves as gamers have been a minority. With FarmVille, that has changed. People have had a taste of gaming now. We are shooting for higher production values for people who want something more sophisticated. Some want quick diversions. But there will be people who want something richer and deeper.

VB: Isn’t it tough to take on Zynga?
I don’t think so. It’s still such early days. The field is wide open. Zynga, Playfish, CrowdStar and Playdom all started early enough. They could take advantage of the news feed posts to get more users. But there was tragedy of the commons. They put too many messages into the news feed and Facebook viewed it as spam. Facebook cut back on that kind of distribution. There is a big enough audience for games now. There is an audience for indie games, beyond those reviewed by the games press. It helps that we have a reputation. It helps getting an initial PR. We are taking a long view. We started 18 months ago and won’t launch for another four or five months. We have been doing a lot of testing. We have gotten a lot of feedback and want to create a real community. This is an uncharted world. Everyone plays in the same world. The strength of the community will matter. We are investing heavily in that. We’ll have new cool features that other people haven’t done before.

VB: It seems like a bigger effort than the usual social game. It took maybe six weeks for Zynga to do FarmVille with a small team.
We are willing to invest. I have no idea whether FarmVille could have been better with more investment. That came at the right place and the right time. I don’t think someone could launch FarmVille today and have it take off. First, the distribution avenues are closed. Second, people have different tastes now. Zynga can launch games that its existing users will play. But that won’t last forever. Zynga has learned that, and they have invested in better games, like FrontierVille. The good thing for us is that people won’t play just one game. They will play on Facebook, the iPhone and other platforms. People don’t have a lot of extra time. But they will spend more time playing games if there are better games to play.

VB: You were outside of the game industry for a while. Now you’ve come back into it. What is the state of the game industry?
We are in the middle of it and it is hard to tell how it will play out. It’s like Netflix, which will not continue to ship DVDs forever. Digital distribution is changing things radically. At some point, you won’t need the relationship with the retailers. People won’t have to go to the mall to get games. Xbox Live and the PlayStation Network are successful. So is the iPhone. The larger companies have been entrenched. But Zynga, Playfish, Playdom and CrowdStar came out of nowhere. They are doing acquisitions or are getting acquired. The usage numbers for all the social games are very high. We are in the middle of a very big disruption. It’s almost like the last two years have been like a compressed version of the shift that took place for the web from 1995 through 2002. People experimented with brand new companies. Google was tiny. Facebook hadn’t been conceived. Now the game usage is moving from the 5 percent or 10 percent of the population to 50 percent or more. Just look at Angry Birds. These games are passing the time. They’re not competing with $60 games.

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