The Hyper Growth of Supercell with CEO Ilkka Paananen

Welcome to IVP's Hyper-Growth Podcast. In this series, IVP investors talk with CEOs of the fastest growing companies and discuss the ins and outs of company building in the hyper-growth environment.

In our first episode, IVP investor, Parsa Saljoughian, talks with Supercell Founder and CEO, Ilkka Paananen, about the company's success, his role as CEO, the unique decentralized structure, and the strong international strategy.

Ilkka Paananen, Founder and CEO of mobile gaming company Supercell, got into gaming by accident. Foregoing a career in management consulting, the path taken by many of his classmates, Ilkka opted instead for a low-paying gig at a game development company. The team, made up entirely of game developers and creators, named Ilkka CEO so they could focus on building games. Within a few years, Ilkka successfully sold the company to video game publisher, Digital Chocolate, where he worked for six years. Shortly thereafter, Ilkka co-founded Helsinki-based gaming company Supercell, which today reaches 100 million people per day and is valued at over $10 billion.

The Supercell founding team had a breadth of game development experience across a variety of platforms and business models. Supercell is known for its hit titles Clash of Clans, which has grossed over $6 billion in six years, and Clash Royale, which has grossed over $2 billion. The company's success partly stems from its decentralized organizational structure that gives game teams ( cells ) themselves the power, removing traditional bureaucracy that often hampers creativity.

In this conversation, Parsa and Ilkka discuss some of the key learnings from scaling Supercell through hyper-growth. The episode also includes Ilkka's predictions for Supercell in 5-10 years and advice for game developers in today's climate.

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Get big by thinking small. Less management involvement and fewer layers of process allows teams to operate with greater speed and efficiency.

What if we turned the traditional organizational pyramid upside down?

Ilkka and his founding team proactively implemented a policy of zero bureaucracy. Why? The group learned from its breadth of experience in gaming that when gaming companies hit a rapid growth phase, they often explode in size and implement heavy process and procedure, slowing the company down. Thus, it was critical to reinforce a culture that optimized for speed and where game teams maintained their independence. Ilkka and his team believe that decision-making power should be given to the game teams as they are closest to the product and the customer. 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. Both Boom Beach and Clash Royale faced intense internal conflict but were launched because of conviction from the game leads. Both games ultimately became world-class titles.

Focus on the long-term. Decisions that favor the short term sometimes work but long-term thinking always wins.

You shouldn't care about the short-term business decisions. You should care about what is right for the long term.

Initially, Supercell launched on Facebook with a vision around building a cross-platform games company. However, it quickly became clear that the cross-platform strategy lacked focus and the company's initial title on Facebook wouldn't scale. After numerous team and board discussions, Supercell decided to pivot to mobile as it was the best decision for the long-term. This was a major upheaval for the company as it required them to throw everything they had built away. In hindsight, Supercell views this as the company's most crucial business decision and it shows the power of having the courage to shut down mediocre products and streamlining focus.

Take risks and learn from failure. Companies do not fail because they take risks. They fail because they stop taking risks.

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.

Since founding, 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.

As the first mobile gaming company with two multi-billion-dollar franchises, Supercell has paved the way for many in the mobile gaming industry.

Read more from Parsa Saljoughian about this interview.

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LINK:	https://www.ivp.com/news/podcast/the-hyper-growth-of-supercell-with-ce...
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