Caterina Fake started Ludicorp in the summer of 2002 with Stewart Butterfield
and Jason Classon. The company’s first product, Game Neverending, was a
massively multiplayer online game with real-time interaction through instant
messaging (IM). In 2004, they added a new feature—a chat environment
with photo sharing—which quickly surpassed Game Neverending itself in
popularity.
The team knew they were onto something big and put Game Neverending
on hold to develop a new photo-sharing community site called Flickr. Flickr
became extremely popular and was acquired by Yahoo in March 2005.
With...

focus on social software. Before Ludicorp, I worked on or participated in
a bunch of online communities including the WELL, Electric Minds, the
Netscape online communities, and various sites I’d started on my own. At
Interval Research, I worked on a collaborative animation game, which was a
cousin to the Game Neverending idea.
Livingston: It was just the two of you?
Fake: At the beginning it was me, Stewart, and Jason Classon. Jason and
Stewart had started a company together in 1999 that was acquired by a venturebacked
startup out of Boston...

awesome developers (like Eric) were available, who wouldn’t otherwise have
been out on the open market two years earlier. So it was actually really well
timed.
I think that the timing was really important because you could operate in a
much more independent mode. The money was scarce, but I’m a big believer
that constraints inspire creativity. The less money you have, the fewer people
and resources you have, the more creative you have to become. I think that had
a lot to do with why we were able to iterate and innovate...

made businesses in this area, like Ofoto, Shutterfly, and Snapfish. Basically
their model was that photo sharing was a loss leader for photo finishing services.
It was all about the funnel to get you into buying prints. Photo sharing
Catarina Fake 259
wasn’t seen as a valuable enough activity that people would pay for that itself.
So I think that our na?vet? was what made the whole thing possible.
Other things were happening too. Stewart and I were longtime bloggers. I’d
started blogging back in 1999, and had had a personal site on...

Fake: We were extraordinarily fortunate in that the road was pretty smooth.
The tide completely turned for us with Flickr. We’d been trying to get the game
off the ground. Raising money for the game from outside investors had been
really grueling. Raising money is very hard, especially in that market. We were
building something that was not really known to people. If it wasn’t a shrinkwrapped
game sold at Best Buy, they didn’t know what it was.
Livingston: Were you talking with VCs or angel investors?
Fake: At that time we were...