Zynga's chief executive, Mark Pincus, got an earful from employees last month. In dozens of e-mails to a company-wide list, frustrated workers complained about the long hours and stressful deadline periods. The quarterly staff survey solicited 1,600 responses, with plenty of criticism, including one person who said he planned to cash out and leave after the IPO.
Pincus took note, going through the comments and highlighting select excerpts. At a Zynga meeting several days later, he read some of the most acerbic words. Pincus said he was aware of the problems, but needed the staff's guidance to fix them. Few Internet start-ups have grown as swiftly as Zynga, creator of a sprawling network of virtual farms, cities and poker tables that is preparing to go public in one of the most highly anticipated offerings this year.
Led by the hard-charging Pincus, the company operates like a federation of city-states, with autonomous teams for each game, like FarmVille and CityVille. At times, it can be a messy and ruthless war. Employees log long hours, managers relentlessly track progress, and the weak links are demoted or let go.
But that culture, which has been at the root of Zynga's success, could become a serious liability, warn several former senior employees who agreed to speak on the condition of anonymity because of fear of reprisals. As the discord increases, the situation may jeopardize the company's ability to retain top talent at a time when Silicon Valley start-ups are fiercely jockeying for the best executives and engineers. It could also hamper deal-making, a critical growth engine for Zynga, which has spent about $119 million on acquisitions in the last two years.
"Zynga should be an example of entrepreneurship at its best," said Roger McNamee, a co-founder of the venture capital firm Elevation Partners. "Instead it's going to be a Harvard Business School case study on founder overreach - this will be a cautionary tale." Already, signs of trouble are emerging. In July, Zynga lost a bid for PopCap, a mobile game company. Zynga offered $950 million in cash.