“The sooner you can define the culture and communicate it to people the better”- Supercell’s Ilkka Paananen
The importance of culture, why you need to find ways to renew yourself and deciding to pivot
This post is part of Accel’s Secrets to Scaling series, where leaders from across our portfolio share their learnings and advice with the next generation of European entrepreneurs building global winners.
Last year, Supercell celebrated its 10th birthday and it remains one of the most valuable tech companies to come out of Europe. The culture and values that were the building blocks for Supercell in the early days and the unwavering belief that creating great games is all about having the best teams remains at the heart of the company today. I sat down with CEO and co-founder Ilkka Paananen to discuss how he maintained the company’s culture as it scaled, his advice on dealing with imposter syndrome, the challenges of pivoting and much more...
Let’s rewind to the start of your entrepreneurial journey. What prompted your decision to become an entrepreneur?
The start of my journey was really a collection of incidents and accidents. Growing up, I didn’t know what an entrepreneur was. At university, most people I knew wanted to be management consultants or investment bankers. I did too, until I stumbled across a few courses on entrepreneurship. This got me excited. I thought it’d be cool to be part of a team, building something from scratch. And then I got lucky…
An engineer I knew from a previous summer job told me he was about to set up a games company. Everyone in the company’s founding group was either an artist or coder – people who just wanted to build games. They needed someone to do everything else – sales, finance, administration. But, as they couldn’t afford a salary, no-one was applying for the job. So I got it.
I remember one meeting in the summer of 2000. They were trying to figure out what my title would be. I needed some credibility, so they just decided to call me CEO. I’d just turned 22 and had never had a proper job! I had no experience of running a company - I’d just read about it in books.
At that time, we were trying to build mobile games. Smartphones and app stores didn’t exist, of course. Telecom operators distributed pieces of software which you downloaded from portals on to Java-enabled handsets. We made a huge amount of mistakes, but we learned as we went, and managed to build a distribution network of direct carrier relationships across Europe, in the US and in some parts of Asia.
The company grew profitably as we didn’t have access to VC funding and in 2004 we sold it to Digital Chocolate, a Silicon Valley-based company backed by some well-known VCs, whose founder, Trip Hawkins, established companies including Electronic Arts and 3DO.
Many first-time founders that start companies right out of school and take on the CEO hat initially struggle with imposter syndrome. How did you get comfortable with that, especially brokering deals with large telcos?
Being young and not knowing anything about anything means you’re not afraid.
When you don’t know that something’s impossible, then everything’s possible.
I was living in my student apartment, rent was cheap, and in Finland you get a student subsidy. I was buying student flights to get to conferences and to meet operators. I didn’t really need money and had nothing to lose.
But what really made the company successful was the developers. Although I had no experience whatsoever, I was lucky that the other team members did. They made games that stood out in the marketplace, making it relatively easy for a no-name Finnish company to do deals with major players like T-Mobile, Vodafone, and O2.
What inspired you and the team to leave Digital Chocolate and start Supercell? What gave you confidence?
I spent almost six years at Digital Chocolate learning from people much smarter than me, with much more experience. I call that time my MBA in entrepreneurship and business management. Trip gave me a lot of responsibility and, obviously, I made a lot of mistakes.
One of the things I got wrong was trying to be too thoughtful about the company’s strategy and portfolio planning. I come from an analytical background and thought we could outsmart the competition by putting so much thought into the planning process. What I didn’t appreciate is that gaming is fundamentally a creative industry. A company’s success is driven by its creative talent.
I was inspired at the time by Netflix’s culture of freedom and responsibility. This led to the idea of a new type of gaming company where, rather than management exercising creative control, the true vision-holders were the games teams themselves. We’d turn the organisational chart on its head and build the company around these creative geniuses. The CEO and leadership team would be there just to help the games teams succeed in what they were doing. That’s how the idea of Supercell came about.
Our thinking was to build these teams as individual companies within the greater company. Someone suggested that, rather than teams, we should call them cells. Hence the name Supercell – a collection of individual game development cells.
This is a great segway into culture and values, which I know are extremely important to you. What are the tenets of the Supercell culture, and the values the team continues to focus on today?
The most important values are the independence and responsibility of the games teams. In the Supercell culture, they’re front and centre – everyone else, including me, is there to help enable them to build better, more successful games.
For this type of culture to work, you need people who are proactive and entrepreneurial. I think of Supercell as a company of 340 entrepreneurs or founders. The whole company is built around that principle. And we expect people to behave that way. We think of the people we want to hire as self-driven and proactive – they don’t need a manager telling them what to do.
We want people who have a passion for excellence, always trying to reach a higher bar – one they’ve set for themselves. We look for past evidence of this. It doesn’t have to be work-related, but we want to see how they’ve tried to reach a high bar without anyone telling them to do so.
I love that thinking around finding someone that’s excelled on their own. I know you’re interested in sports. Has that factored into your management style?
I think - as do many people - that the role of a manager or leader in today’s companies is like that of a coach. I’m a huge ice hockey fan, and it’s not the coach that gets on the ice and scores the goals. But they can create an environment where their players can be successful – where they’re free to express themselves and take risks.
More than anything, you need to put a great team together. That’s not the same as a group of great individual players. There’s something magical about how great teams work together, and a lot of that is down to chemistry.
Let’s talk about the early days of Supercell. Your first game, Gunshine, wasn’t as successful as hoped and you ultimately pivoted into mobile-first games. Can you share some insight into how you made that decision? What pressure did you feel, and how did you build the confidence to make that shift?
We saw that what we were trying to build wasn’t working. Supercell’s open culture meant we were able to have honest conversations internally which made us realise that, while we could continue along this path, it wouldn’t get us to where we wanted to be. At the same time, the Accel team told me they hadn’t invested in Gunshine, but in the team and the new type of company we were trying to build. This and the Supercell team gave me confidence to say that we should kill the game, and pivot to a tablet-first – later mobile-first – strategy. Everyone was aligned – the team, the investors, and the board – and this support gave me the confidence to do it. This kind of alignment is super important at moments like these. Now, not 100% of people agreed with the new strategy and they’d joined to build games like Gunshine so they did the right thing for us and them and decided to look for new opportunities.
Let’s fast-forward a bit. You launched Hayday, which was successful, and then Clash of Clans, which was even more so. What was that moment like when the team realised they’d created something great?
It’s hard to describe! Imagine, the team had worked hard on games for two years, none of which had worked out. But after we’d shipped Hayday in beta, I remember the first metrics coming in and they looked really promising. In Finnish culture, people are naturally sceptical. We tried to downplay the metrics, expecting them to decrease after a couple of weeks. But they didn’t. And we soon realised that we might actually be on to something. Then it was incredible!
Hayday launched globally in June 2012, followed by Clash of Clans in August. Having two massive hits so close to each other was amazing. That period really saw the birth of Supercell as we know it today.
After those two huge successes, how did you keep everyone motivated on creating the next big thing?
It comes from the culture, not from me. Our team has always wanted to reach higher and do better work, building better games and creating better experiences for the people that play them. It’s a fire that burns inside them. And, of course, a critical mass of this type of people soon becomes self-reinforcing.
Despite its financial scale, Supercell has stayed relatively small in terms of its team size. How have you made sure the culture is as consistently strong across multiple offices as it was when you were much smaller?
It all comes down to being focused on the company culture.
The sooner you can define the culture and communicate it to people the better. And it’s not enough to define it just once.
I used to believe these things were set in stone and thought it was a bad thing for culture to change. Now I’ve realised that, as you keep learning, the culture can change and get better.
You should constantly talk about a company’s culture and values. You have to make it part of your annual planning. There need to be moments where the entire company gets together and discusses the culture and how it can be even better. Are the values we used to believe in still true? Are there new aspirational values we should include?
The hiring process is important, too. Ours is very thorough – probably between 10 and 15 interviews per candidate - and involves a lot of people. It’s slow but that’s by design. And, as crazy as it sounds, I still interview every single person who joins Supercell. It’s not that I consider myself the ultimate gatekeeper, but I do want to keep my finger on the pulse of the type of people joining us.
Looking at the lessons you’ve learned over the years, what do you know now that you wish you’d known when you were getting started?
Given how focused on culture and values we’d been since day one, it’s incredible to think it took two years to define what our culture was and formalise it in writing. It was always on my to-do list, but it fell to the bottom all the time.
I remember talking about one of our values - responsibility - in a meeting, and someone described it completely differently to how I’d envisioned it. This was a real wake-up call to me to formalise our culture, especially as we now had 50 people in San Francisco and Helsinki. I scheduled a one-on-one meeting with every person to figure out what the culture was, and wrote it all down. This is now a routine. We revisit the culture every year or so and talk about it more frequently.
I’d advise every founder to talk about their company’s culture from day one, and put it in writing.
It may sound like a big corporate thing to do, but it bears fruit once your company starts to scale. Had I done this when we were just six founders and not 50 people, it would have been faster!
Great advice. What do you think about your role as CEO? In my book, it’s one of the toughest jobs out there. It’s lonely, there’s lots of anxiety and pressure. What have you done personally to deal with that?
Having great people inside the company that you can talk to is the biggest stress reliever. I’m very lucky with the team we have at Supercell. They inspire me. If I have a bad day, talking to them will re-energise me.
It’s also good to have a couple of people outside the company you can talk to – maybe some fellow entrepreneurs that can offer you some external perspective. It’s important to take care of yourself, too – basic things like sleep, nutrition, and exercise.
I agree. What’s been the hardest part about building a business you didn’t anticipate?
I used to think that when you start to build a company, it’ll be hard at first but at some point you’ll “make it” and it’ll suddenly get easier. But it’s the other way round. As your company grows more successful, things get harder.
One of my colleagues says the only way to grow is to take bigger risks. The worst mistake is to play it safe. There’s a temptation to stick to the formula that made the company successful in the first place. But at some point, the market will change, and you’ll be dead in the water.
The challenge is finding ways to renew yourself and apply a beginner’s mindset to everything you do so you don’t get stuck in the past.
Let’s ask the flipside. What’s been the easiest?
When you have the right team in place, magic will happen. You don’t need to do all that much. In fact, I’ve never told anyone what to do – things just happen. It took me a while to appreciate this, but it’s been happening for more than 10 years. I’ve become a believer.
Is there any topic regarding entrepreneurship you think should be more openly discussed?
Those entrepreneurs who haven’t “made it” deserve more appreciation. Luck has played a big part in my success. But there are tons of people who haven’t made it despite probably being smarter.
The unsung heroes of entrepreneurship, who I most respect, are those people who start a company, fail, but get up and start another company. Maybe they’ll fail again, but they’ll still start over. We should find a way to celebrate these people more – they certainly have some valuable learnings to share.
Read our Secrets to Scaling interviews with Miro's Andrey Khusid here and Trade Republic’s Christian Hecker here