Raul Gutierrez of Tinybop Extended Interview

On Lead by Change New York One, Jeff meets up with Raul Gutierrez CEO and Founder of Tinybop. They take a tour of the offices then head over to Red Lantern Bicycles. When they sit down they discuss Raul’s founding story, making games for kids that foster learning, getting noticed on Apple’s App store and take a ride on some rockin bicycles.

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The Interview:

Jeff Martin: Today we’ll meet with Raul Gutierrez, the CEO and Founder of Tinybop. Tinybop is a company that makes iPad games for kids. We’re going to by their offices, check them out, and swing over to Red Lantern Bicycles, talk a little bit more and then hopefully go for a ride.
How are you?

Raul Gutierrez: Welcome to Tinybop!

Jeff Martin: This is the place, huh?

Raul Gutierrez: Yeah.

Jeff Martin: This is excellent.

Raul Gutierrez: This is the spot, and we wanted to have kind of an open space so that everybody can all work together around here. Then we need to have a conference room also so that we could work on projects.

Jeff Martin: This is cool.

Raul Gutierrez: This is where we need to crunch on a project or figure something out. Post-it notes are like our hobby.

Jeff Martin: This is great. You have a lot of Macs.

Raul Gutierrez: Yes. We have a lot of Macs. We make iOS apps, but actually even if we’re doing Android, we’d still do it on Mac. We’re at our core creative studio, so that’s our tool. I’ve collected children’s books my whole life, so –
Jeff Martin: Really? Since you were a child, right?

Raul Gutierrez: Since I was a child. I was the guy in college who had like children’s books in my college room, which didn’t always go really well. I wanted to always have reference, and then also serve as a point of inspiration.
Jeff Martin: You bring kids into the office?

Raul Gutierrez: All the time, yeah. So we test all our apps with kids in the office and we try to go to schools, and I’m the guy at the birthday party like trying to get the kids play the apps, and so yeah we test a lot.

Jeff Martin: It’s cool.
We’re hailing a cab.

Raul Gutierrez: Only outside of New York is that considered anything.

Jeff Martin: Exactly.
Why did you choose this area of Brooklyn?

Raul Gutierrez: We were in DUMBO, which is the this area right where the acronym means Down Under the Manhattan Bridge, and DUMBO is like one of the hot tech areas here. There are over 80 startups in that one tiny little area.

Jeff Martin: Really?

Raul Gutierrez: But the prices have also been going way, way up, and so we wanted to be closer there. We also wanted to be close where everybody lived. We have 20 people. We mapped to where everybody lived on a map, and we said, “Okay, what’s kind of the center of it,” and ended up being here.

Jeff Martin: So let’s start from the beginning.

Raul Gutierrez: Sure.

Jeff Martin: Where did you grow up?

Raul Gutierrez: I was born in Mexico, and I grew up mainly in Lufkin, Texas. Lufkin is this tiny town in east Texas. I always described it as an island surrounded by trees instead of water.

Jeff Martin: Interesting.

Raul Gutierrez: When I grew up there, it was way pre-Internet. There was one channel on television. They had Farm and Ranch News with Horace McQueen. There wasn’t a lot of outlet to the outside world.
Jeff Martin: Interesting. Was tech part of growing up? Did you have a computer?

Raul Gutierrez: My dad at some point got an Apple II computer for his office, and then I started spending a lot of time at the office, playing with the Apple II. Eventually we got one at home and I was just so okay. I started. We had to build your own games back then, and so I would make my own games, and I wanted to program and eventually I started selling little programs.

Jeff Martin: Really?

Raul Gutierrez: Yeah. There was sort of the early version of the Internet with BBSs, and so that was my outlet. I would connect to other people like by these 1-800 numbers that you could get that were sort of I’m sure not legal, but you could dial these 1-800 numbers and then dial into somebody else’s BBS because it was a long distance call and long distance was really expensive in the ‘80s. Anyway, I was an Apple II guy and then later on when the Mac came out when I was in high school, I was one of the very first Mac developers. My version of Inside Mac was Xeroxed. I have handwritten the additions in it. I had some friends who were developers who got a Lisa. They programmed one of the first ShrinkWrap Mac games when I was tentatively involved in Mac.

Jeff Martin: Wow! You were already kind of playing around this game world early on?

Raul Gutierrez: Yeah.

Jeff Martin: Even earlier but before that like toys as a kid. I have five kids and I have experienced kids and their relationships with toys are very different.

Raul Gutierrez: Uh-huh.

Jeff Martin: The oldest, my stepsons like some human toys, meaning that’s what my wife always says, meaning that he likes the interaction with people instead of a toy. My 10-year-old loves like collecting things like even as my old G.I. Joe guys. He likes to collect them and put them in up and really can play by himself with those toys. It seems that since kids are very different in how they played. What types of toys did you play with and –

Raul Gutierrez: I have – compared to today’s children, it’s like very sparse in terms of the number of toys I had. My parents were really good about giving me tools, so I had like my dad’s Pentax camera was by the time I was 7, I was sort of obsessed with it. I was taking a lot of pictures with the camera. I made Super 8 movies, and that I was not supposed to play with but my parents would go out of town. Back in the era when your parents would go on vacation, they’d leave you at home let’s say with our grandmother or something.

Jeff Martin: Yeah.

Raul Gutierrez: And so we would sneak the camera, and I don’t even remember how we bought film, but we would make these little movies. We made this elaborate our version of Star Wars, or I was really into stop motion, so I did these very, very elaborate stop-motion movies and more so than any toy that you played with like those were I was really like I love these tools that you can make things with. We would build stuff like I lived out in the woods, so we built tree houses and we had this elaborate, very, very elaborate set of tree houses that connected to each other.

Jeff Martin: How long you were already early on your engineering and using creativity?

Raul Gutierrez: I like to make stuff. I think my childhood had a lot of boredom, which I think modern childhood it’s only missing a lot of [unintelligible 0:07:11]. We would go out and do stuff, and out of that boredom came this. We had these elaborate games that we would play where we would sort of pretend to be bears and dogs, or cops and robbers, or whatever it was, but it was all in the woods and it was all sort of running around. It was a childhood that was mainly outdoors. I would get home from school and my parents, I would finish my homework, and they would say, “Get out of the house!” I would come back when it got dark.
The other toys I loved were just like blocks. For me, blocks were always the best toys. They are the best toys for my kids. My oldest kid is 10 now and still the wooden blocks are like often brought out and they’ll sort of make some elaborate something.

Jeff Martin: He’s a creator.

Raul Gutierrez: I hope so. I hope so.

Jeff Martin: Did you go to college? Did you go to school after –

Raul Gutierrez: Yeah, so I went to Lufkin High School in Lufkin, Texas, which was the local school, which is not known as being kind of the best school system, but these very dedicated parents would always come tutoring us and bringing people in to teach us things. I learned about engineering from this guy named Joe Byrd, who developed the Mark II, which is that oil pump that sort of goes up and down, and he was retired at the time, and just like an amazing teacher. I learned about art from this woman named Mrs. Shepherd. She was a painter and the daughter of a riverboat captain. She grew up in Buckner, a neighborhood in Buckner, who taught her how to drink when she was 18.
I think because of that and partially because of computer stuff, I got into Princeton. I went to Princeton as an electrical engineer, but I graduated with a degree in art history, and it wasn’t because I abandoned the engineering. It was just because I was always a little right-brain left-brain.

Jeff Martin: Okay. What work did you do before you started Tinybop?

Raul Gutierrez: I have done many things. My career is not sort of a standard career. I’ve always worked. I’ve worked since I was a kid. I’ve always had businesses. I used to write software. I used to cut grass. I used to make museum displays like when I was in high school for our local museum. After college, I was supposed to go to China, but because of Tiananmen Square, I couldn’t go and I landed in a law firm job that I hated, and I had some stuff happen in my life that I lost like my mom and my brother. I spent like 2 years traveling around the world, and after I came out of that, I ended up in Hollywood and it wasn’t any plan. It was just that I had a couple of friends who were there, and just out of luck on my second day there, I got a job with Scott Rudin, who is a very well known producer. Like right away, I was like working at Paramount and going through the Paramount gates every day, which was pretty awesome.

Jeff Martin: What kind of roles did you play within Hollywood?

Raul Gutierrez: I started as the lowliest, lowliest assistant, and this was an office that had like a hierarchy of assistants. There were seven when I started and the lowliest assistant had to do just like this very humble job, but little by little, I worked my way up, not necessarily through good work but often through attrition. It was a job in which all do got fired, and eventually I was sort of like his right-hand guy, traveling around. We were working on five movies at any given time and hen also Broadway plays, and so I was on the set from beginning to end.
I think the first movie I worked on was Clueless and the last movie I worked on was Terminator 3. I was there for a little bit of a span and even though it was in a long period of time in my life, I learned a lot because each movie is like a little startup. You start with an idea. You hatch and develop it. You hire a bunch of people. You have to make the thing. You have to sell the thing.

Jeff Martin: And you do that over and over again?

Raul Gutierrez: And you do it over and over again. I didn’t necessarily realize it when I was there, but I learned an awful lot. I learned a lot about managing people, etc. When I left that that [unintelligible 0:12:02] guys were burned out on the hours, I started doing computer stuff again and was building websites for movie studios. Still relatively early on in the Web, studios were just discovering that this was like a good channel, and the most important thing that I did is I connected analytics to the websites. We found that a site could be predictive of how a movie would open, so there was a little like cheerleading movie that I worked on called Bring It On and we went to the studio. We said, “This movie is going to open much bigger than you think it is.”

Jeff Martin: You did that from the moment people were coming in to that website, right?

Raul Gutierrez: We saw it crazy. This was 1998 traffic, but it was like crazy traffic for that era. We said, “You really should develop, put more resources into this because this is going to be huge.”
They said, “No, no. Kirsten Dunst, she’s a child actress. She’s been on television like we know how much they’re worth in the marketplace.” The movie I think was expected to open at like $4 million or $5 million, and it opened at more $20 million and went on to make more than $100 million.

Jeff Martin: It was your kind of first case study to do analytics behind these sites?

Raul Gutierrez: Well, you know it’s this thing then that suddenly the movie studios were like, “This guy knows something.” It wasn’t any rocket science, but it was I knew something a little more than what they knew at the time. And so eventually that led to me working on much bigger web properties, and I worked on The Terminator movies and things like that, in which you would have like a pretty big budget to build like a real property out.
But the problem was the studios always just looked at this as just marketing and once the movie was out, they would just abandon it, so you’d build this thing and you’d build an audience and they would just go away. Eventually all that work went in-house and it became part of the studios. I never really wanted to work in a movie company, so…

Jeff Martin: That came to –

Raul Gutierrez: No, no. After that, I continued to do sort of all sorts of web stuff for people and consulting, web consulting stuff. Here I worked on a startup. It was my first like proper startup. It was this website that sold art online. It’s called 20×200, and I was there from idea phase, and we sort of built that up and do a pretty good business and then eventually I left that. When I left that, I knew I wanted to do my own thing.
I’d worked for other people for a long time, and I knew that I wanted to be in mobile also because I’ve been around the block from the beginning of computers basically or the home computers and it seemed to me the world was going this way and it was just a tidal wave that was happening. And so I wasn’t really – I gave myself a year. I put myself in a co-working space, and I just had a list of ideas that I was going through. None of them actually had anything to do with kids, a lot of things.

It was in the middle of that year that one of my kids came to me. He was about to have a birthday party, and I think it was kindergarten birthday party. He asked me if he could trade his birthday party for an iPhone, and if you know anything about kindergarteners like the birthday party is pretty much like the centerpiece of that year and not only –

Jeff Martin: [crosstalk 0:15:32] That’s the most important thing for a kid then is to have that birthday party, right?

Raul Gutierrez: Yeah, and so not only was he willing to sell out all his friends, but it was his favorite toy, and that moment like really made me stop and made me not so much as a business thing. I was just wanted to understand as a parent because, I, as a parent had sort of troubled relationship with screen time. I didn’t like I felt like it was sort of keeping kids away from parents and that sort of interaction.

Jeff Martin: The woods.

Raul Gutierrez: Keep me away from the woods. They’re not building things. I felt like they were just consuming, so I wanted to understand it. I went through and I really started tracking everything he was doing and I downloaded like the top 100 like kids and educational apps, and I played with them. At the end of that, I think I realized that the form, it’s just a tool. It’s a tool like those tools that I used to have. It’s like no different really from the camera or Super 8; in fact, it’s both of those things. But it was also all these other things. There were very few people in the kids’ world creating kids content that I thought were deserving of my kids’ attention. There were a lot of things that were really disposable and that were just essentially trying to stimulate them into some sort of game loop that involved them buying more coins, and it looks like a monkey pressing. I want to do the opposite of that. Kids nowadays don’t have the woods like even if they live in the woods, they probably don’t go out in the woods just like in the way that we used to.
I wanted to create like a set of apps that will allow them to sort of explore the world and like maybe understand a little bit more about the world and to bring up questions in kids, to drive them closer to their parents. And so, out of that, the first series that we developed called The Explorer’s Library came up, and these are big subjects that every kid everywhere needs to know about – the human body, plants, the Earth, where the weather coming out, spaces, on there. What’s great is that we start each of these apps by asking what does the kid know about the subject, how has it been taught in the past, and you find out that kids actually don’t know that much like most 6-year-olds don’t know that there’s a tube that connects our mouth from the other end, you know.

Jeff Martin: Yeah.

Raul Gutierrez: Like kids, it’s some sort of weird magic; they don’t understand that. When you reveal that, they suddenly understand something about themselves that’s really important. The feedback we get from parents constantly is, “Oh, my kids are like actually asking all these questions.” And so, it’s not something that drives kids away from parents. It actually brought kids towards them.

Jeff Martin: Your first app was, which one?

Raul Gutierrez: Our first app was Human Body, and it sort of set the template for this Explorer’s Library series. Well the original sort of inspiration were those old dictionaries or encyclopedias that have the transparencies of the body, and we thought like wouldn’t it be cool if we do that and then bring it to life. All of our apps are what we call Explorable Explanations, so they’re not really game in the traditional sense. It’s simulation, so feed the body. If it goes in one end, comes out the other end. Feed it too much, it will throw up. If you feed it something fizzy, it might burp. We also use the device a lot, so like you can, the eyeball, the camera is the proxy for the eyeballs, so we show how the images project on the back of the eye and how the eye dilates, all that stuff.

Jeff Martin: Yeah. What I really noticed recently is the games that are really successful and the ones that my kids enjoy the most are replications of things I used to play with as a kid. I was watching my daughter and son playing Minecraft the other day. I looked at it, and I said, “You know what, this is Legos.”

Raul Gutierrez: Right.

Jeff Martin: Like you guys are playing Lego and not new Lego because this is old Lego where you build whatever you want to build versus I believe you told me one day is Legos today are like toys that have been pulled apart.

Raul Gutierrez: Yeah, I mean I think so our second series is called the Digital Toys, and basically, that was built on my frustration with modern Legos. Modern Legos, like to my mind these disassembled toys. They teach kids to follow instructions. You get to a single endpoint. It’s the opposite of creativity.

Jeff Martin: Yeah. It’s opposite of what Lego were originally, right?

Raul Gutierrez: It’s the opposite of what they were originally.

Jeff Martin: You get all these pieces and you build whatever you want to build.

Raul Gutierrez: Originally, you have a bunch of blocks and your parents or you would just have a context to say I want to build this space station, or zoo, or whatever and you just built it. That’s sort of the term of origin in the education community is the Sandbox app. You have a bunch of things and you make things.
Our second series is basically that idea, so each of them is a set apart and a context, so the first app in that series is a Robot Factory, so you need a whole bunch of robot parts. You have spider legs and human legs and like different kinds of faces and heads and we’re not telling you how to put them together. Kids put them up together and at the end of it, the output of that is that the kids are telling you a story like the story is the output, so it’s giving the kid agency. It also means it’s something they’ll play over and over again because they’re building this selection of characters that like lives in their imagination.

Jeff Martin: Are they problem solving or they’re just building?

Raul Gutierrez: There’s a little bit of problem solving in that there’s a world that you can put your robot into and depending on like let’s says you have spider legs and you have like a million spider legs all around, your robot might just sort of just go into a circle and die. So we have like different obstacles in the world, but it’s very low impact. It’s not like we want the kid just to play and have fun, and so it’s yes if you build a very bad robot, your robot will fall over and die.

Jeff Martin: And then you learn something from it.

Raul Gutierrez: They learn. They can rebuild it, but we’re not like taking away points or anything, and so that app has only been out a couple of months, but kids have already built 7 million robots with that app like little virtual robots –

Jeff Martin: Wow! That’s –

Raul Gutierrez: That exist out there in the world.

Jeff Martin: What was one of the big first milestones for the company?

Raul Gutierrez: Well, I mean getting the first app out was a pretty colossal task. In the beginning, there were only four people, and I think our goal for the first month was 10,000 downloads, and we had 8,000 downloads in the first day, so that was sort of one milestone; then eventually it got to 1 million downloads and now we’re sort of many millions of downloads. But we didn’t know it was going to work in the beginning. The App Store is this amazing distribution platform, and you can hit a button and reach everywhere in the world and we’re heavily localized. We’re in 50, 60 languages. When we hit that button the first time, we didn’t know like if it was going to connect. I think we got back the numbers on the first day and we said that there were three downloads. I was like we were sunk. I got to do the rounds.

Jeff Martin: That sounds like a rough day.

Raul Gutierrez: Yeah. It’s like we made like $6, and then I noticed that those three downloads were like in the last seconds like they’ve just gotten under the wire of the last seconds of the day. And so, the actual number for that first day was like 8,000 downloads. It’s pretty good.

Jeff Martin: It’s awesome.

Raul Gutierrez: And then we’ve done other things like we did this thing called Free App of the Week with Apple where we gave the app away for free. What can we expect from this? I said, “Well, maybe if you did well, you’ll get like 100,000; really well, you get 300,000 downloads during the week. On the first day, we had 800,000 downloads.

Jeff Martin: Wow!

Raul Gutierrez: Over the week, we had like 4 point whatever million.

Jeff Martin: What’s been like the largest challenge as a company like Tinybop? What is the thing that you struggled with maybe for the longest period of time that you think you might have solved now?

Raul Gutierrez: Discovery is always a challenge like having people find you and sort of understand what you are.

Jeff Martin: Discovery within the App Store?

Raul Gutierrez: Discovery within the App Store is a huge challenge because you’re up there with a million other apps. A lot of those other apps are like big company marketing something or there are things you know built by a single guy, gotten his app up, and so there’s like very little differentiation in terms of quality.

Jeff Martin: They’re all in the same platform?

Raul Gutierrez: They’re all in the same platform and there’s very little sort of way. There are already things that are sort of we’ve risen above in that you get like editor’s choice and are like Robot app got iPad App of the Year for last year. There are things like that that kind of differentiates you a little bit. But ultimately for us, it’s really been about this slow building of brand, having a parent trust you because they bought one of your apps and their kid was asking good questions or kids building something with the other app. That means that each time that we put out an app, people buy into the system more, and so it wasn’t sort of one particular lightning bolt. It’s just in this like long hard slug that it means that every time we put out something new, they have higher and higher amplitude opening with more people coming into the system. It also means our survey in-between numbers, our everyday numbers are higher because of that.

Jeff Martin: So you solved that with resilience and just going at it, right?

Raul Gutierrez: No, it’s just like walking carefully over the glass.

Jeff Martin: What do you think the challenges will be 5 to 10 years out in this space?

Raul Gutierrez: I think for me this sort of interesting thing is happening is that we’re getting to a point where basically every adult on Earth is at least going to have a smartphone. Very soon after that, there’s going to be virtually every kid will have a phone because they will get all the hand-me-down. Our goal is really to reach everywhere like you can buy all of our apps like we have right now eight apps, next week nine for like $20. That’s the product of 20 people working very hard, and researchers doing a ton of research, and like artists doing a ton of – essentially the entire K-6 curriculum of science, you can grab for this very low cost, much like cheaper than even a single extra book. And so, think our challenge will be getting this thing that we’ve made and pushing it out everywhere like we’re already in many other countries. Already more than half of our sales come from other countries but we could still go much further.

Jeff Martin: Changing gears a little bit, if you were to look back at your 25-year-old self, knowing what you know now and enjoying the work that you’re doing today, what advice would you give your 25-year-old self?

Raul Gutierrez: You know I’ve been asked that a couple of times. My path has never been linear, and I’m a fairly resilient person and I’m somebody that I’ve always enjoyed the projects that I’ve done. But I think the advice that I would give myself and to anybody that’ s in that phase of their life is that to build equity in yourself because there were many things that I did in which I was building equity in other people and in which other people were sort of taking credit for something that was a lot of my work, and not to take away of what other people are doing.

Jeff Martin: Sure.

Raul Gutierrez: But to make sure that you’re taking care of yourself. I think when you look for a job like we try to do this in our company, we try to make sure that the people in the office are known for the work that they’re doing and we know that because of that, we will lose good people. But if you create an environment where the best people want to come with you because they can grow, then you have a really healthy place to work.

Jeff Martin: Excellent. What do you do outside of work? Do you have a passion that separates you from your day-to-day work?

Raul Gutierrez: The funny thing is I’ve sort of melded a lot of things I love in the work. I mean I do a lot of photography. I’m known a little bit online as a photographer. I used to have a very popular photo blog and I still do that. All the stuff that I used to love to do when I was a kid, stop motion and all that stuff, a lot of that I kind of do with my work now. But I also do a version of it with my own kids.
I think the big difference with kids these days is when I was a kid, my parents would say, “Go out the woods,” and you’re on your own. Now the kids really expect you to play with them. It’s really fun for us, but I do also want them to be bored sometimes and to have time when I’m not sort of giving them the context and they’re sort of coming up with things. With my own kids, it is funny because they both have like this sort of unique interests that are moving beyond the stuff that I’m interested in. But that’s my most fun thing is to do creative projects with my kids.

Jeff Martin: I have one final question.

Raul Gutierrez: Uh-huh.

Jeff Martin: And the question is looking back, is there some advice that someone gave you that helped got you through your journey and maybe still helps you today?

Raul Gutierrez: Yeah, I mean for me one of the things that was really powerful in my life was hanging out with my grandfather. My grandfather was a shoemaker, a loan shark, in Mexico. I used to travel around with him and he used to collect all the things he needed to make shoes, leather, and there were like dyes and you know different parts of things. He, at the same time, was doing his loan shark business in which he was sort of maybe collecting somebody’s ring as collateral and so on and he would bring me along like little.
Sometimes when he was doing loan sharking, there would be these emotional scenes and he was always incredibly kind to people. He was not the type of loan shark that was going to break you his leg. It was just like well he was going to have your wedding ring, so like if you didn’t pay him back, and he was always kind to them, and I think even when people were not necessarily being sort of nice to him back. He always told me that if you’re kind to everybody and if you try to do that, then people always think well of you and that it will make your business easier. I don’t know if that’s like sort of overriding principle, but I try to do that. I try to do that in my company.

Jeff Martin: That’s great. Well, thank you so much for being kind and being on our show.

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