The Helsinki-based Supercell has had five games played by more than a billion unique players. The company’s founder reflected on its 10-year history in a blog post yesterday. Supercell CEO Ilkka Paananen disclosed that the company has 4.3 billion player accounts. If each player had a Supercell game on three devices, that adds up to about 1.3 billion unique players.
With just 328 employees, Supercell makes a ridiculous $4.76 million per employee in revenue, or 3.96 million users per employee. I would guess that makes it the most capital-efficient company in the game industry. That’s clearly why Tencent invested in the company at a very high valuation. But Supercell doesn’t brag about this side of its business.
“When we started the company, we were inspired by companies like Blizzard, Nintendo, and Pixar,” said Paananen in the post. “All of these companies have been able to create successful entertainment products that are loved by millions all over the world. And most importantly, they have been able to do so consistently over decades, in Nintendo’s case, for more than a hundred years.”
He wrote the post as a way of giving back and sharing learnings with other game companies, and Paananen tapped the rest of the staff for ideas. Paananen said that inspiration has remained constant, as is the company’s dream: To create games that are played for years and remembered forever. He said this worked for Supercell, but each company must develop its own culture.
My take: I’ve added my own reaction to what Paananen has said in each of the points below. It’s a great document for companies that are aspiring to be as impactful as Supercell, and yet I have this thought in the back of my head. It’s not jealousy, as I don’t run a game company. I just wonder if other game companies would react by saying these rules are for companies that have billions of cash and wonderfully successful employees and teams. That is, it’s a luxury to be able to run a company this way. That’s unfair, as I don’t see any negative intentions here, like bragging — just a sincere intention to help. So I don’t think anyone should dismiss these ideas. But it is a kind of backdrop, as Supercell is a rare company, and what Paananen says is true: Supercell’s rules work for Supercell, not everyone.
1. Always play the infinite game
Supercell built itself around the idea of creating games that as many people as possible play for years and that are remembered forever. Teams don’t launch games that they do not believe have a realistic shot at reaching the dream. The most important factor that our teams look at when they test our games in beta phase is how long players keep playing the game. Retention figures matter most here.
“This means that we don’t only kill games in beta, we kill good games,” Paananen wrote. “Great examples would be Smash Land and more recently Rush Wars — both very polished, fun games that received positive feedback and excitement early on. But they weren’t games that people would play for years, so their development teams decided to kill them. They decided that instead of developing their games further, their time is best spent developing a new and better game.”
Beyond that, the teams think about what the right long term call would be for the players and the community. This shows in how they treat game updates, and content creation and community events. The teams try their best not to think about the next quarter or the next year, but about the next decade. The Clash of Clans team worked on some big design and technical issues for over two years before the efforts bore fruit. This would never have worked in a company that only cared about quarterly results.
My take: This rule puts Supercell in an exceedingly rare position in the game industry. Most game companies don’t have the luxury of killing games that don’t fit a long-term goal. Blizzard had a similar culture from its founding nearly three decades ago, and it killed a lot of games, just as Supercell has. But quite often game companies have to think about the next quarter, either because they are low on cash or they have to worry about public company investors selling off stock if games are delayed. But if you didn’t have to worry about the short term, Paananen is right. This is what you should think about in the long term.
2. Great teams make great games. Not necessarily great individuals
In 2010, Supercell started with the idea that the “best people make the best games.” However, years later, we realized that it is not about having the best individuals/people, but having the best teams. So the company changed its guiding sentence to reflect that.
“For me personally, the biggest surprise over the last 10 years has been how incredibly difficult it is to put together a great team that can release a new hit game,” Paananen said.
The things that have to fall in place include making the game match player interest at the exact time it is released, have talented individuals with very different capabilities and ways of thinking, getting them to work together well in a psychologically safe environment with complete trust. Paananen said there is no silver bullet for solving this challenge, and it is subject to a lot of trial and error. It starts with a core of two to four people who are a “tight and well-functioning core team.” Even two such people is a “magical pair.”
My take: I think it’s true that games have had some Hollywood envy in the past and have put some leaders into the spotlight as the brilliant makers of games. Hideo Kojima comes to mind. But it really is teams that make the best games, and teams that have worked together for a long time are the ones that are really valuable.
3. Hire slowly, and always raise the bar
Paananen said that game developers are lucky to be in a business where the amount of people does not necessarily directly correlate to achieving better results. In fact, it can be the contrary.
“One of the most valuable lessons that I learned from our first chairman, Petteri Koponen, was his advice about hiring,” Paananen said. “When thinking about whether you should hire someone or not, try to imagine the average quality level of the people at your company. Then ask yourself whether the new hire would increase that average or not. Only hire if the average will increase.”
Other Supercellians said that working with great people makes everything better. If the team is passionate about their game and knows what they’re doing, it will make everything so much easier. The key is that people who own what they are working on will care about the quality, and that feeling is contagious.
My take: This is the opposite of what most companies have done. Rockstar Games, for instance, put a team of 2,000 people to work for as long as seven years to make Red Dead Redemption 2. Mobile games are different, for sure. But the usual strategy is for game companies to hire like crazy once they have a hit game and spin up multiple studios to try to replicate the success of a first hit.
4. Stay as small as possible
Paananen’s company has generated billions of dollars in revenue, but he hasn’t used that money to hire huge teams. He believes small teams can actually do better work and higher quality than bigger teams. This matters most in early development.
Smaller teams force people to focus on what really matters for the whole company, one Supercellian said. Larger teams may “invent work that only looks useful,” the person said.
By working with simpler tasks like “gameplay first,” the teams can prioritize what to do next. Paananen said that growing teams prematurely increases complexity and makes changing direction much harder. In some cases, Supercell has had to make teams smaller to get them back on track.
My take: This is related to the point above, but Supercell almost feels like they move too slow. Their reluctance to hire isn’t intuitive. It feels like they are leaving money on the table by not capitalizing on success. I thought that too. But I realize that Paananen has different goals. He doesn’t want to make the most money in the industry (though he is pretty close to that). He wants to make the best games. He believes the way to get there is through small teams, not big ones.
5. Culture is the sum of everyone’s actions, not a slide deck
Paananen said he admired What You Do Is Who You Are, a book by Ben Horowitz, cofounder of investment firm Andreessen Horowitz. Horowitz argues say that culture is defined by actions, not by what you say.
“I would add that in my experience, culture is defined by the hardest decisions,” Paananen said.
For Supercell, that comes down to decisions like killing games that do not live up to the dream of being played for years. It also means saying no to interesting ideas because the company needs focus, or making changes to teams that aren’t working out. Paananen is proud that most of the decisions happen inside the teams, not at his level.
Another team member said that if a person isn’t pulling their weight or acts in a way that deteriorates the team spirit, this person can bring down the productivity of the whole team. Sometimes a change is voluntary, where a team leader gives up a position to someone who is better suited to it, as happened in the early days of Clash Royale and with Brawl Stars. In this case, this is an example of the team taking responsibility for its own culture.
Paananen said it’s rare to hear anyone at Supercell belittle someone else’s idea, no matter how stupid it might be. And that means people have a very low threshold to bring up improvement suggestions, which means that every idea can be heard.
My take: Sounds true. What you do is what matters, not what you say, when it comes to a company’s culture. Stories like the one he mentions are the kind of things that get retold for newcomers, and so they become a way to show new employees what the company’s values are.
6. Replace control with trust
Decisions should be made by the people best equipped to make them. The more decisions the teams make, the better it is. That’s because the teams are closest to what they do and should be able to decide the best course of action. And if teams come to a decision on their own without seeking approval from others, they will execute faster and be happier.
“For me, the best moments at Supercell have been the ones where something amazing has happened, and I have had nothing to do with it and have been the last to hear about it,” Paananen said.
In an ideal world, the teams would make all the decisions which means that Paananen would make none. That’s why he frequently says that his “goal is to be the world’s least influential CEO.” That’s no joke.
One of this team members said, “People are more capable than most companies and cultures allow them to be. Most companies are built with hierarchies, processes, and cultures that may teach people, but don’t let them contribute to their max capacity.”
Trust can also be extended to partners outside of the company, like vendors or outsourcing partners. But trust also does not mean that you cannot give constructive criticism, Paananen said. Feedback, he said, makes ideas better.
With Boom Beach, most people outside the team felt the game should be killed. At a crossroads, the team decided to move forward, and it turned out the team made a good decision.
My take: Trusting people outside of the team and outside of the company should matter too. I’ve seen Supercell do this with the investments it has made in external game studios. It’s a way of dealing with the fact that Supercell is small and can’t pursue every good experimental idea, but it does have a lot of cash and can invest some of that in promising ideas.
7. Overcome fear of failure, be bold, and try new things
Paananen said that the company’s biggest successes were never obvious at the beginning of those projects.
Each of Supercell’s three most recent releases (Boom Beach, Clash Royale and Brawl Stars) faced skepticism internally in their early days. In the case of Brawl Stars, the game spent a very long time in development and in beta before the team decided to release it.
Many Supercellians had mixed feelings about the art style and controls, and even whether Brawl was “a Supercell game” to begin with. But the team kept working hard to improve the game, making massive changes to the game in beta and launched it after seeing the positive feedback from the community.
“In short, I guess we’ve learned over the years that we really do not know much!,” Paananen said. “Much of what we do is really making educated guesses and ultimately trying things out. … I have come to realize that instead we just have super-talented people that care a lot about what they do, coupled with the freedom and independence of the company (which is key), this gives those people the best chance to make great things.”
Part of the point is to grow your intuition. But you should not believe in it entirely or blindly. You’re still making guesses, but educated guesses are better, and you can test your intuition. But Paananen said should not be afraid to use your intuition or take risks. He has tried to create a culture where failures are not only acceptable but expected. And those failures are interpreted as learnings.
“One of the practical things we do to enforce this is by celebrating the learnings that come from our failures,” he said. “One of my favorite days at Supercell was the all hands Friday update a few years ago where one of the game leads talked about the learnings from killing a game and our marketing team shared a retrospective on a failed campaign where we lost a huge amount of money which led to the first negative month in a very long time at Supercell. I was so proud of these people who were brutally honest in front of everyone about what had gone wrong. That ensured that the entire company learned a lot from their experiences. It is these moments that make our culture stronger.”
My take: Wow. On that last example, this is where companies that haven’t been as successful as Supercell will not have the same willpower, because if those other companies make a bad guess, their whole company can sink. This means this rule should only be in effect if you have small teams, not big ones. Can you imagine what you would feel like if you ran a huge team and guessed wrong?
8. Resist the temptation to create processes and rules
Paananen said that humans have a tendency to try to control situations.
“Most of us feel safer when we feel we are in control,” he said. “In companies, to make us feel this way, we like to establish rules or processes. This happens particularly after we’ve made a mistake. ‘Let’s make sure we don’t make that mistake again! So here’s a new rule. …'”
He said Supercell has found this approach to be problematic. Rules that made sense back in the day usually don’t make sense today, because something has changed since the rule was originally created, he said. People may also have a tendency to do what the process says, not necessarily what makes sense.
As an example, many years ago, the company instituted a rule that all new games had three months to get to a playable version, because the company wanted new games to get to a proof of concept more quickly. Developers then started to game the system by starting earlier without telling anyone to make sure they could get to playable within that time frame.
This created an unhealthy environment where developers were trying to get around the “rules” vs focusing on making the best game possible. Also, applying one rule to all games didn’t make sense because some games needed six weeks to get to a playable and others needed six months. It took a while to remove the role and return to trusting teams.
My take: This learning shows wonderful flexibility in thinking, where the company realized it had a bad rule and dispensed with it when it saw the unintended consequence of it. And this rule of resisting this temptation to create rules probably squashes the ill-conceived notion that your company can be the next Supercell by simply copying its rules. Rules are made to be broken, and they won’t lead you to greatness. This is a bit circular. It’s important to take stock of the last 10 years and write down the lessons but to not believe in those lessons too blindly. But it’s a reminder the world has only one Supercell, and Supercell’s rules are good for Supercell alone.
9. Traditional goal setting does not work in a culture of independent cells
Supercell used to set annual goals for the company. All of the leads participated, spending weeks on figuring out the five most important goals for the year. When they agreed on the goals, they published them. But most team members forgot the goals, or they were not relevant to their small teams. If the teams simply stuck to their primary goal of making games people play forever, then they would be meeting all of the company’s goals.
So Supercell decided to dispense with the goal-setting process. It let teams set their own goals, which made the teams pause and think about their mid-term and long-term goals more. The teams talk about those goals with the rest of the company a couple of times a year.
“Every year, we try to get closer to this dream within the restrictions set by our short term goals and budgets. These days we simply let the teams set their own goals within this framework,” Paananen said.
My take: It makes sense. If you want your small teams to be truly independent, you have to give them full independence, which comes with the right to make their own goals and to fail on their own.
10. Write down your values and define your culture (and revise them)
Paananen confessed that it took him too long to write down and define the company’s values and culture. Now he’s done it. Better late than never. And apparently the absence of this document didn’t hurt the company.
“Supercell had six founders and I feel that we all had complete clarity between us six what the culture we wanted to build was all about. But, it took me almost two years and growing to a team of 40 to write the culture down,” Paananen said. “I didn’t do it sooner partly because putting together a memo or culture deck sounded like a very corporate thing to do, but mostly because I was just so busy doing other stuff (that felt more important and urgent at the time).”
What triggered him to do it was a meeting where someone was talking about “responsibility” (one of our values) but clearly this person had a completely different way to think about it than what Paananen thought was meant by “responsibility” when the founders started.
“This was a huge wake-up call for me. So what I did was that I met with every single Supercellian individually, in an effort to figure out what they thought the values were,” he said. “Then I summarized and wrote them down in a few slides, making sure they were consistent with the company we wanted to build.”
It took time but it was worth it. Now the company’s three-person leadership team meets with every single team and talks about culture and how to revise the written version of it. Paananen’s final learning, borrowed from an employee, was that everyone should enjoy the ride and find people that inspire you to be better at what you do and make you a better person.
My take: It’s good of Paananen to share this around the world, as I’m sure he’ll get some useful feedback. I’d be very interested to know if Supercell takes polls of its 328 employees and if everyone else agrees with these as much as Paananen does. That would an interesting test for his intuition.
I think it is notable that he doesn’t mention the pandemic. And that seems fitting. Great companies don’t change what they’re doing or thinking when a crisis comes along. They adapt to the crisis, but they don’t change their identity because they’ve already thought long and hard about who they are.