Editor’s note: Accel Partners’ Sonali De Rycker and Kevin Comolli are publishing a series of blog posts this week to highlight the ‘Nordic way’ of building scale-ups. We liked it, so we’re republishing the interviews on Tech.eu.
First up: Supercell founder Ilkka Paananen
Brave, bold, or even brash – founders need to be pretty fearless, but the line between audacity and arrogance is a thin one. We think there’s another way to do things, and we’ve actually seen it play out time and time again in the Nordics. The region is the source of some of the best and biggest tech businesses in Europe – its share of multi-billion-dollar exits is the highest in the world, relative to GDP. What has been distinctive is the remarkable way they lead their teams, and we’ve had conversations with three of our founders to try and lift the lid on this very Nordic way of building billion-dollar tech businesses. Our first is with Ilkka Paananen of Supercell.
Supercell is one of the most valuable tech companies to ever come out of Europe, valued at around $10 billion last year. But just try asking CEO and co-founder Ilkka about his proudest achievements. Instead he’ll talk to you about what his team learned when they failed. We chatted to Ilkka about his philosophy of leadership – where the less the leaders control, the more powerful their companies become.
– Kevin Comolli and Sonali De Rycker
What inspired – or pushed – you to set up Supercell?
When the co-founders met, we hardly discussed the games we wanted to make. Instead, we talked about the type of company we wanted to build. We talked about trying to run the company like a sports team. We believed the game developers, not the leaders, should be the superstars.
I’d learned this the hard way, by making mistakes at my last company. I studied engineering at university, and I’ve always been extremely analytical. I used to create processes for every single thing. But eventually the most creative people started to leave. I realised that processes exist so leaders can explain to themselves how the company works; it’s about a sense of comfort. But you can’t forecast the creative process. In games, there’s no magic formula or strategy. It’s like books or music or movies – it’s the magic of the people.
At Supercell, the idea is simply that the best people will make the best teams, and then the best games will come from that. We’ve tried to invert the traditional organisational pyramid. I’d read the now-legendary Netflix management presentation, which talked about their culture of freedom and responsibility. They said they didn’t want the company to be like a family – they wanted it to be a sports team. That really stuck with me.
I remember our first meeting in the Supercell office in Helsinki, very early on. Typically a VC would just meet the co-founders. Instead you brought the entire company. Why?
Yeah, that was a nice time – when we could fit everyone in one room! We do have this very distinctive style of management, which is that there isn’t much management. We work in these small cells, mostly of five to ten people. That’s where the name ‘Supercell’ comes from. It’s ultimately the game team who decides whether to go ahead with or kill a game. At one point during the development of Boom Beach, which we launched in 2014, basically everyone in the company wanted to kill it – except the cell who made it. I was thinking, what should we do? In the end, we went with what the Boom Beach team thought, because that’s the culture of Supercell. And thank god we did, it’s been a huge hit.
We also try to be really transparent. For every game, there’s a company playable, where everyone gives feedback. Then we release it in beta. Before it goes live, we always agree on the metrics it should reach – on retention, user engagement, and monetisation – and we tell the whole company. If a game doesn’t hit those targets, that’s it, no matter how much we personally might like it.
You had a tough start in some ways – we invested, then you killed your first game almost straight away and didn’t have one in the market for almost a year.
Yeah, we had to start from square one. Up to then we’d focused on Facebook, and had a passionate core of fans for Gunshine.net, our first game. But the engagement just wasn’t there. The future lay in tablets and smartphones; you couldn’t take a desktop game and port it across. There’s the touchscreen, plus the games need to be fun to play even if you only have a few minutes to spare. So we decided to scrap almost everything and bet the whole company on mobile.
That looks like a good decision now, but at the time it was far from obvious. I remember thinking, ‘How would I feel if I were Accel, having just invested millions of dollars and then six months later, things don’t look great.’ But you and the board gave us so much support; it was a really defining moment.
For us, we’d never invested in a game; it was always about the people. You often see the real side of the founders when the company falls on hard times. How did your move to mobile test the culture?
We have this word in Finnish, sisu. It’s a sort of national characteristic, hard to translate, but captures things like resilience, guts, courage. It’s about never giving up. That’s what we showed here. It was super painful to have to throw away projects that people had poured their heart and soul into. But everyone saw that’s what we needed to do to have a shot at success in the long-term. I’m in awe of the sacrifices people were willing to make for the vision. In fact, one of the cells whose game got killed in the pivot actually went on to build Clash of Clans, our biggest hit so far.
Later on, when Hay Day and Clash of Clans had become global hits, we came under pressure to expand again, to push our games to PCs or consoles, or sell merchandise. But we had the sisu to say no, to hire carefully, to stay focused on mobile, and to be true to our roots: to enable the best people, and the best teams, to make the best games.
How would you describe your personal leadership style?
My goal is to be the world’s least powerful CEO. What I mean by this is that the fewer decisions I make, the more the teams are making. In a dream scenario that means the team is making all the decisions. A couple of years ago, we were working on something called Smash Land. Everyone in the company loved it, and it was so close to meeting its targets but didn’t quite make them. So the team went to a sauna together, talked it out and took the decision to pull the plug. I was travelling at the time, so they didn’t bother to consult me – they just emailed the company to let them know. That’s just how Supercell should work.
A benefit of doing things this way is that decisions get made a lot quicker, because you don’t need approval from anybody. A new recruit once said to me that Supercell was the first company he’d worked where there are no excuses – you can’t blame processes, because there really isn’t any process. And it’s just so much more motivating, because you own whatever you’re working on. Finally, at the end of the day, it’s the developers who are closest to the players, and they know much better than anyone else what the players need.
To what extent is Supercell a product of Finland?
We’re a very Finnish company; I don’t think we could have built this anywhere but Helsinki. There are a few things about Finnish culture that set us apart. We tend to stay very loyal to companies, we’re not always looking for the next shiny object. Money also isn’t that important – it’s a factor, but people don’t pick their jobs on the basis of how much they’re paid. We don’t think about the future in terms of financial success. We believe that success will follow great work, not the other way around.
Finns also have this attitude that everyone is more or less equal. You see that in our secondary fundraising in 2013, where the terms were the same for investors, employees and owners – everybody sold the same share of their ownership. We’ve applied the same principle to the transactions that followed this, first with Softbank and then with the most recent one with Tencent. That’s Finnish culture in action.
I don’t know what’s right or wrong for all companies, but for us you can’t hire rapidly. You’re just not going to find a large number of people a month who are a good fit, let alone be able to onboard and integrate them into our culture properly. And by keeping resources scare, it means you can really focus on what’s most important.
Any advice for other entrepreneurs?
Have courage to dream big and always think about the long term – not the next year but the next ten years. And lastly, while it is important to get advice from others around you, at the end of the day, trust your gut and decide yourself, as no one else knows your company better than you do.
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