IVP Hyper-Growth Podcast: 6 Lessons from CEO Ilkka Paananen on Scaling Supercell During Hyper-Growth
We are pleased to kickoff IVP’s Hyper-Growth Podcast series where we interview CEOs of the fastest-growing companies to discuss the ins-and-outs of company-building in the hyper-growth environment. In this podcast, I interview Co-Founder and CEO of Supercell, Ilkka Paananen. Supercell is a Finnish mobile games developer known for its hit titles Clash of Clans and Clash Royale which together have grossed over $8 billion since launch. The company is majority-owned by Tencent and is currently valued at over $10 billion.
In this episode, I discuss with Ilkka the company’s founding story, the crucial early pivot to mobile, Supercell’s decentralized structure, and the strong international strategy that has enabled Supercell to reach over 100 million people every day.
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Below are some of the major takeaways from our discussion. Read more here on IVP.com. Hope you enjoy!
1. Make decisions that are best for the long-term
Supercell was initially founded as a cross-platform games company but made an important early pivot to mobile. The dream for Supercell is to create games that people play for years and remember forever. Initially, the company saw quite promising metrics on its Facebook title, Gunshine, but it was quickly apparent that the game wouldn’t scale. The longevity and long-term retention metrics just weren’t strong enough. The management team also realized that building cross-platform was not a focused strategy. It would be impossible to create the best possible experiences on every platform.
The team made a bet that tablets would be the “ultimate gaming platform” of the future. They extended this to cover smartphones and very quickly adopted a “mobile-first” approach. They discussed this decision as a team and were transparent with the board that this was the best decision for the long-term. The board agreed and shared the conviction that there was a lot of opportunity on mobile. This was a major upheaval for the company as it required them to throw everything they had built away, even projects they had worked on for several months. Ultimately it proved successful and shows the power of having the courage to shut down mediocre products and streamlining focus. Less than a year after the pivot, Supercell launched its first two mobile titles, including Clash of Clans, which remains a top 10 grossing title worldwide after six years.
“One of our dreams is to create games that people play for years and remember forever.”
2. Small and independent teams lead to better decisions and quicker execution
In a traditional company, the vision and decisions are made by the leadership team and CEO. The assumption is that the leadership team knows best and can make the right calls. At Supercell, they believe that no single person has the crystal ball and it is impossible to know exactly what the customer wants. The power is given to the game teams (cells) because they are closest to both the product (games) and the consumer (players). Not only is it more motivating for creative people to work in this environment, but this structure also results in better decisions and quicker execution. Ilkka’s goal is to be considered as the industry’s “least powerful CEO”.
Ilkka shares two examples where this structure benefitted the company greatly. Two of the company’s five titles, Boom Beach and Clash Royale faced strong internal opposition. However, the leads on both games were positive. While it may have been the right business decision in the short term to fold the games and work on other titles, this decision would have killed the company’s independent team orientation. The company launched both titles, with Clash Royale having since grossed over $2 billion in two years. Ilkka notes that the most radical innovations in the market aren’t obvious early on.
“In most companies, the vision is held by the leadership team, but we started to ask ourselves what if the vision was held by the game developers?”
3. Hire people who put the company first
While one core component of Supercell’s culture is independence, responsibility is the other side of the coin that keeps the culture in balance. The game teams aren’t responsible to Ilkka as the CEO, but to everyone at Supercell. Ilkka is focused on hiring people who are incredibly talented but also who believe in putting the company first. To game teams, this might mean being honest and killing a title that doesn’t meet the company’s expectations even after 6–12 months of development. Taking a title to global launch means tying up team members for 5+ years to support the game. Other companies may launch near-successes but this would jeopardize one of Supercell’s core values of keeping the company small. Many developers at the company have never shipped a game, even ones who have been there for quite some time. However, as long as they are striving to make an impact, the company wins.
“We want to hire people and put together teams that always think Supercell first and about what is best for the company. We are so lucky to have all these amazing people who do exactly that.”
4. Failure isn’t fun but is necessary for success
Supercell has killed dozens of titles. While killing titles is a “failure” for the company, Supercell’s success depends on its developers’ tolerance for risk and freedom to fail. Many companies may look at continued failure as a cause for concern, but Supercell views this as a positive. These moments are learning opportunities.
“Failing isn’t fun… it just isn’t fun. You dedicate 6 to 12 months to a game and it turns out not to work. We don’t celebrate the failure, rather the learnings that come from those failures.”
5. Don’t change the soul of your product when launching into new markets
International markets, specifically Japan, Korea, and China, are very different than the company’s core markets and have long been known as the “great graveyard for Western gaming companies”. While it is important to provide a product that meets the needs of local customers, Ilkka notes that it is important to not compete with local companies by trying to be more local than them. Ilkka is most proud of the fact that Supercell never changed the soul of its games when launching into these markets. Instead of seeing the differences in its games as a disadvantage, he viewed them as a source of strength. It was important, however, to localize everything around the titles, putting real effort into every detail no matter how small.
“Our approach is to stay true to what our game is about in its heart and soul but then to localize everything around it. Take care of every little detail no matter how small.”
6. Stay true to your core values during hyper-growth
According to Ilkka, the hardest thing about managing the company’s hyper-growth has been staying true to Supercell’s core values. This means keeping the company as small as possible and maintaining the culture of “independence and responsibility”. It also means remaining 100% focused on games and not getting distracted by all the other opportunities that present themselves along the way. After all, gaming is the company’s core DNA.
“We have to remain 100% focused on games because we are a games company first and foremost.”
As the first mobile gaming company with two multi-billion-dollar franchises, Supercell has paved the way for many in the mobile gaming industry.
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