MAY 9, 2014
Pivoting
Rob GlaserFounder, iCeo, RealNetworks
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• Grew up in New York
• Started at Yale 35 (!) years ago – Fall ’79
• Started my first company in Fall of ’81
• Ivy Research, made games for original IBM PC
• BS Computer Science, MA Economics ‘83
• Microsoft ‘83-’93
• Started RealNetworks February ’94
• I talk fast
90 Seconds on My History
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RealNetworks’ First Rocket Ship Ride: 1995-2000
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Tech Bubble Bursts 2000-2002
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RealNetworks Revives: 2003-2008
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• After running Real for 16 years, I stepped down Jan ’10
• We misfired when hiring my successor
• Twice
• As a result, Real stumbled
• I came back to run Real in July 2012
Then the Great Recession Hit
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77 RealNetworks Confidential
• Real = a parent company in 4 different businesses
• RealPlayer Group
• SaaS
• Games
• Rhapsody (45% owned)
• We will run each business group independently, focused on maximizing the success of each business group
• Businesses that don’t fit into 1 of the 4 groups will either be sold, spun out, or run as independent mini-entities.
• We will move a number of functions from the parent company into the individual businesses
Real’sTop Level Strategy (from 9-6-12 Real Company Meeting)
88 RealNetworks Confidential
Top Level Strategy, Continued(from 9-6-12 Real Company Meeting)
• Each Business has a Core Focus/Strategy
• RealPlayer Group: X-platform RealPlayer
• Saas: Integrating Carrier & D2C RBT
• Games: X-platform Casino Games
• Our strategy today is fundamentally the exact strategy we laid out 18 months ago
• Some of the names changed as business models developed
• X-platform RealPlayer -> RealPlayer Cloud
• SaaS -> Mobile Entertainment
• Integrating Carrier & DTC RBT -> LISTEN
• Cross Platform Casino Games -> Slingo, GameHouse Casino Plus and Golden Dreams Sweepstakes
What Happened over the next 18 months?
• A Lot Of Good News
• Some Not As Good News
How Are We Doing?
• We are building and shipping great products again
• We have succeeded in achieving “first mover advantage” with our major initiatives
• Our new products are resonating with consumers
Good News
Move, Watch & Share Your Videos
RealPlayer Cloud: Great Reviews
“I've been testing RealPlayer Cloud on all these devices… I think RealPlayer Cloud is well-designed
and makes storing and sharing videos easy across different devices.” – Walt Mossberg, Wall Street
Journal
“RealPlayer Cloud… designed to facilitate seamless sharing and online storage for all of your non-
DRM protected video. It's actually quite slick.” – Andrew Tarantola, Gizmodo
“The best thing about RealPlayer Cloud is its integrated SurePlay technology…. With SurePlay built
in, RealPlayer Cloud can play just about any video file on just about any device.” – Jaymar Cabebe,
CNET
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RealNetworks Confidential
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TM
• The turnaround will take longer than we originally thought
• It will cost more than we originally thought
• In hindsight this was very predictable
The Not As Good News
• Start-ups are hard, but rewarding
• Pivoting is also hard, and also rewarding
• Both require some core attributes:
• At least 1 great idea
• Passion
• Persistence in the face of setbacks
• Sufficient resources to enable persistence
• Teamwork & Collaboration
Lessons/Conclusions