How to Scale A Games Company | Travis Boatman, Gigi Levy-Weiss, & Kristian Segerstrale
Funding is just the beginning.
What are the biggest challenges and mistakes made by early stage companies when first attempting to scale?
How does Supercell become Supercell, Playtika become Playtika, or EA become EA? Why not ask some of the people who were there as founders, investors, and key executives at those very companies?
To speak to these issues we have arguably 3 of the best people in the world to talk about this:
#1. Travis Boatman: Travis has held senior leadership positions at a bunch of major gaming and mobile gaming companies including Mattel, JAMDAT, EA, and Zynga. And most recently Travis founded Carbonated Inc. a mobile and PC games studio located in Southern California. Carbonated also raised an $8.5M seed venture financing round led by Andreessen Horowitz.
#2. Gigi Levy-Weiss: Gigi has been a founder, senior executive, and investor in like a billion companies.But some notable companies in particular includes Playtika and Plarium. And Gigi today is a general partner at one of the most exciting venture capital firms NFX (https://www.nfx.com/).
#3. Kristian Segerstrale: Kristian was a co-founder of Glu mobile, CEO of Playfish acquired by EA, was a seed investor in Supercell, was a senior exec at EA, and now is the CEO of Super Evil Megacorp which will soon release their new MOBA shooter called Catalyst Black (https://catalystblack.com/).
Some content, I just record and publish. This one, I’ve watched or listened to 5 times now.
Key issues covered in this panel discussion include:
Biggest mistakes to avoid
Creatively led vs. data led companies… and also vs. technology led?
Impact of data in games
Hiring for cultural fit
Initial focus post funding
Why you need to panic!
How to build and ship culture
Individual contributor vs. manager vs. leader
How to avoid “Day 2”
Full interview also on YouTube and Podcast:
Interview Transcript:
JK Welcome, everybody. Today, we're here to talk about the biggest challenges and mistakes early stage companies have in order to scale their companies and achieve success. So if starting a company and securing that initial funding is day zero, then how do companies figure out this next stage after you secure that initial funding, something that guys like Jeff Bezos calls Day One? And so some of things we'll talk about today are things like biggest mistakes, challenges, issues founders of new game companies will need to keep in mind in terms of specific challenges faced by early stage companies. What are our approaches to winning? We'll also talk about kind of this difference between creative versus data driven companies. And finally, how do you prevent yourself as you scale and get bigger to prevent this kind of Day Two issue? How do you keep lean and how to keep all the benefits of being kind of a lean and smaller company? And so joining us today to talk about these issues, we have first, Kristian Segerstrale, who was co-founder of Glu Mobile, CEO of Playfish acquired by E.A., was a seed investor in Supercell, was also a senior executive at E.A. and now is the CEO of Super Evil Megacorp. And they will soon launch their new mobile shooter called Catalyst's Black. Welcome, Kristian. We also have Travis Boatman. Travis has held senior leadership positions at a bunch of major gaming and mobile gaming companies, including Mattel, Jamdat, E.A. and Zynga. And most recently, Travis founded Carbonated Inc, a mobile and PC games studio located in Southern California. I see you guys have been in the news for raising a lot of money recently from a16z and others. And finally, we have Gigi Levy-Weiss. Gigi has been a senior executive investor in like a billion companies. So many companies I was scrolling down your LinkedIn and it's like, when does this stop? And it doesn't stop. It's hard to get all of the things that you've invested in and started, you know, even with like a 4K monitor. But Gigi, I think a couple of companies that come to mind are Playtika and Plarium. So you were involved in those companies. But I think in terms of your most recent experience, you are a general partner at one of the most exciting, in my opinion… One of the most exciting venture capital firms NFX. Welcome Gigi.
Gigi Levy Weiss Thank you.
JK All right. So maybe we could just start and jump right in and start with mistakes. So kind of when starting out, let's say you started your company, you got that initial funding. And so as you're starting to scale. What are some of the big mistakes that people make as they start from that kind of initial co-founder group and starting to scale out. Maybe starting with you, Kristian?
Kristian Segerstrale Sure, yeah. So, I mean, there's obviously a thousand mistakes that you can make. I think one of the biggest ones is probably simply falling in love with product. I think a lot of the time when you end up fundraising, you typically fundraise off the back of an initial product idea or initial, hey, there's an opportunity to make a combine a match-3 and the RPG and the MMO category into that, you know, wild new type of game that...
Gigi Levy Weiss It's a hybrid. It's a hybrid game.
Kristian Segerstrale Exactly that. It has the depth and it has the approachability. Right. It's all top right. And the point is that you… because you get so used to selling the idea, ultimately you'd know nothing about that idea until you market tested it, until you've, like, started building it, until you start getting some data. And it's really important that even though you've sold it as part of your fundraising process, the second the money's in the bank, take two steps back and know that almost definitely. Like in 90 percent of cases for game companies, their first product will fail. It will fail for a hundred different reasons. It'll fail because maybe the idea, maybe just the execution, because the team is new and everything is new about it. So going into it, knowing that your first product will probably fail and knowing that you will learn a lot and that you need to get it out as quickly as possible and that you then need to be really hard nosed about killing it as quickly as possible. And that, frankly, is regardless if you're an incredibly right brained creative led company or incredibly left brained data led company, it's equally true. Do not fall in love with product, fall in love with building a really successful studio by shipping and learning as quickly as possible.
Gigi Levy Weiss That is so true. There was the period in my life where I thought that every game company should kill their first product before they started. Raise money, tell your investors you killed the product and then you can start.
Kristian Segerstrale Now there's something in that. There's something in it because it is so easy. And in particular, people who've been around for a while and who've killed a lot of product will maybe have that instinct a bit more. But usually a new team is so excited about the product that they want to build. And it's very hard not to get carried away by that.
JK And Travis you... Carbonated has been around for a while and then you kind of raise the second tranche of money. Have you seen any mistakes or are you running into anything right now as you are starting to deploy that capital?
Travis Boatman Yeah. Gigi brought up a good point about the kinds of companies I sort of have three in my head about video games. There's sort of engineering led companies, there's sort of business led companies and their sort of creative led companies. And, I think knowing who your founders are knowing how that culture is led from the top down and sort of what kind of company you really are? I think is super important. I think for us, when we first started, we had never really worked together as a leadership team. We've all been sort of senior executives on lots of stuff in the industry for a long time, but we never actually worked together. I think we had some really wise advice early on when we first founded the company where we were very, you know, sort of excited and fired up: "We're just going to take over the world." And we got some good advice from folks who just said, "Hey, you guys never work together though, spend some time getting to know each other, understand your culture. Culture's led from the top down. So you need to understand how you guys all work, because that's ultimately how the company will be dealt with from a cultural standpoint. And so I think, you know, for us, it worked really well. I've sort of been fortunate to see inside a lot of other companies. Where it's not gone so well. So it was a good wake up call and a reminder for us that you're kind of who your core founders are. And really knowing yourself as a company and what kind of culture that's going to be based on your founding team was super good advice. The second mistake that we made was when we were first growing, we wanted to operate as a non raised entity, wanted to do work for hire service work to get to know each other as a team and really refine our thesis. We wanted some time to refine our systems. We sort of thought we knew we were right. We wanted to be sure. Maybe that was a little conservative of us. But we've gone on a long time. And from what Kristian and Gigi said, you know, a lot of mistakes are made and you learn those throughout the industry. So we really wanted to take time to kind of refine our thesis. But one of the mistakes we made. Part of that work for hire we took over a small team from another games company and we got to see firsthand how shifts in culture and different types of staff collide with each other. And that was a real wake up call to sort of take that staffing and hiring of folks really seriously. So I could go through a whole long talk about what that looks like when you acquire it and smash two cultures together. We ended up working through it and everything's great now, but it was definitely a year or so of pain, of trying to deal with two different cultures and how they worked together. One thing I'll add is, you know, over my years at EA and Jamdat, we did acquire lots of companies, but we mostly acquired very successful companies who had really, really strong, healthy cultures. When you merge or partner with a company that's in distress, you typically get maybe not the best culture and working through that's oftentimes pretty tricky.
Gigi Levy Weiss I can add a few things. I think that, you know, in general in every industry but predominately in the game industry. It's always true is that the biggest mistake is being slow and being slow, basically is about deciding to build something too big at the beginning. It takes two months to build it until you ship it. And so, you know, you waste half your money or whatever and everybody's committed to it. You put it out, doesn't work. It kills you. So it's not building something small enough, it's not being focused enough. And that all ties back into the kind of speed and the culture of iteration and the culture of putting out something really small, the first playable. That's kind of really small. And watching the numbers and seeing that it's right. And if it's not worth iterating on it. And that's the main thing that I see game companies making a mistake. And I see people that are raising money, raising a few million and now they're taking a year and a half to build something. Why would you ever want to take a year and a half of your life and build something that you don't know if it's going to work? So that's one thing. The flip side of it, which is the other mistake, is that I see very fast teams give up on quality when hiring people. So the only place where we allow for slowness in a way is in hiring, because at the end of the day, every person of your initial team that you're hiring, that is not the best person. That's not just impacting that one person. You know, there's the saying that only A people, only A players can recruit A players. The Bs recruit Cs and Ds. And so if you end up in your first team hiring people that are not the best, you're basically in each one of their positions. You're dictating that everything below them is going to be mediocre at best in your company. And so on. These first hires, that's the only place where I allow for slowness because I want to make sure that you're getting the right people. So this is this tough balance between being really super fast and building something really small and iterative and getting data soon and deciding what to do. But at the same time, when it comes to recruiting people, find the right people that have the right DNA that are excellent at what they do. That's the kind of the area where I see the most mistakes. And this is always true in every company. It's super true in games company because it's so much tougher. I mean, let's be frank. The game industry is the place where you can create the biggest successes in no time. More than any other industry. The flip side of it is it's the toughest industry, always. But right now, even more than ever to succeed in, because there's so many moving parts. And that's why starting a games company is so much tougher, I think, than almost any other company.
Kristian Segerstrale Yeah I think Gigi expressed that really well and I agree with those points if I just get to add a little bit. So I, and actually the thing that I most in some ways I mean, obviously I've run companies, but I also do a little bit of seed investments, nothing quite like Gigi. But even then, it's really interesting. Like the things that, situations I think are the scariest is when startups raise a little bit of money. They get to a prototype level. They haven't yet shipped anything. And then they raise a lot of money because that gives them the time to be super slow, an excuse to be super slow to actually ship. And I think. It's really like one of the mistakes you feel like the learnings that are like, burnt themselves the deepest into my brain through through my career has really been that you almost need that near-death come to Jesus moment, if you like, in your company trajectory to really align the team because people get into a game startup for lots of different reasons. For creative reasons, for technical, like pushing the boundaries, doing all sorts of exciting things. But until it really hits you that we are about to run out of cash, if we don't you know, if we do not channel all of our talent to shipping fast, learning, and making something commercially successful like that moment needs to happen. And even in the most successful companies like Supercell. You know, they had that moment with their very first game Gunshine. And like for us at Super Evil Megacorp, it took us way, way, way too long to have that moment. But ultimately, we ended up having that moment and through there, forging a team that is laser focused on channeling some real unique talent to hopefully some really unique and commercially successful directions in the future. But I think that that's sort of taking away that layer of sort of arrogance, if you like, from a team is incredibly important. Really early on, no matter what it was that you sold originally, you need to almost run out of cash to feel like, you know, this is super serious. Like we've got a ship now, now, now. The other piece, I would say, I agree with the hiring point, but that the complicated thing about shipping fast, though, today in which you have some teams that are really reasonably saying, look, if we want to compete on this platform, on this, in this genre, it just takes 18 months to make the game. You can't make it quicker. And I think the really hard thing is how do you find that middle way where you're, on the one hand, retain that creative sort of depth of vision and the sort of staying true to making something that truly stands out in the marketplace? You sort of have to do it while at the same time testing it really, really, really early. Like, how do you get the first iteration going so fast that you fail quickly? And I think that's a really hard path. I think it's a really hard path for creative led companies because they've got to like there's no way we can ship this early super, super quick version. There's no way. But it's also really hard for the data driven companies because they may be able to ship that really quick thing. But at the end of the day, games are a mix of art and culture and other things that if you want to make something that really blows up in a big way, you probably do need to have a vision that ultimately does take 18 to 24 months to make. And whichever end of that spectrum you start on, you need to find a way to get to that.
Gigi Levy Weiss Yeah... but you can't really get to the point. You know, I don't allow my companies.. I try not to allow my companies to spend 18 month coding before they get any sort of you know, there's so many...
Kristian Segerstrale I 100 percent agree with that. Whether you make fake ads of the game, whether you get a robot...
Gigi Levy Weiss Exactly.
Kristian Segerstrale Whatever it is that you make, you have to ship. I'm not saying you don't have to ship. I'm just saying that you still need to know where the boat is going. Right. Even if you need to ship it like two months to test it out, you need to know what is awesome about it in 18 or 24 months. And I think those are unique, mashing together those skill sets, it's like the secret to the future of the game industry. And it's really hard.
Travis Boatman And I think you mentioned, which is a good point, which is today there's so many new ways. In the old days you build the product, it would take X period of time before you could get customer feedback. Today, liveops has moved from, I remember when liveops used to be ship and then you liveops and then you would get customer feedback post launch. Now, that moved to beta, then it's moved to Alpha, now it's moved to first playable. Now it's moved to concepting. And, you know, when we founded our company and one of the very first things we did before we ever raised money or ever did service work was we made the images of our game. We were testing it out on Facebook. We were going out to various channels, pulling customers in and seeing if there was signal there from real customers. Is the thesis even interesting? Does this work? And we had that signal super early. And part of our thinking was liveops is just moving all the way up the chain. Even to before starting a company. So I think that's true. But, the world's changing such that you can do it iteratively, and ship lots of little pieces of your game and get some of that signal throughout development.
Kristian Segerstrale I admire the casual gaming, err the hyper casual gaming crowd so much because they really pushed this angle so hard. And if you could figure out how to combine the hyper casual gaming crew with, like folks who know how to make incredible games in three to five years, like, if you figure that piece out, like that's the secret.
Gigi Levy Weiss Yeah, I want to add two things. The first thing is that I totally agree to that moment of death or that near-death experience, what we call sometimes, pardon the language, the "fuck it" moment when you understand that everything is going south. And the reason why it's so critical is because I see so many game companies that are starting and they're KPIs are not there. And then they're like, OK, we'll make a small change and that's gonna change something and then make another small change. And that's gonna change something. And, you know, I have the kind of the 50 percent rule, which means that I've never in my life... so all the small changes together change major KPIs more than 50 percent. So if your day... If your day two is 30 percent, then with all the small changes in the world you can make, if you're not, change something big. You know, at best it's going to get to 45. Right. And that's if you're really doing all the small changes. And usually there's like an 80 20 rule on that. And, and so, you know, only at that near the near-death experience do you get the guts to make big changes to really make that tough decision to take out part of the game mechanic and replace it with something else to take out something that you really thought is going to work and try something else. And that is usually the point where a game company start working when you stop being. In love with the first thing that's kind of OK. And you start making big changes. So that's one thing. The second thing is that Travis mentioned the possibility today of putting out ads before you even start a game. And, you know, I just love that it is something we do with all games, with all companies, not just with game companies. And, you know, there is... I wanted to share a funny story from my partner at NFX in games. They they had a game company called Wonderhill that eventually got acquired by Kabam and they wanted to build a game and they didn't know what game to build. And so they decided they're going to take and started the other way around. They're going to start from all the possible names and all the good game names where something of something. And so they had a list of all the somethings and then they had the list of all the places in the world that they could. And they put out like 200 ads, different ads to see what people are clicking on. And they had like warriors', elephants, dragons, Amazons and whatever. And then they had places like Sahara, Atlantis, Moon, Mars, and they put out all the tests. And the one that really clicked the most, that got the best clicks, the best CTR was one called Amazons of Atlantis. And they were about to build a game around the concept of Amazon of Atlantis until one of the engineers said, Guys, you've got it all wrong. People think it's something else when it's called the Amazons of Atlantis. And so they took the number two and number two was Dragons of Atlantis. That became a game of hundreds of millions of dollars. And they basically decided what game to build based on the naming test.
JK That's funny! Guys, we've kind of touched upon this issue of companies that are more creatively driven versus data driven and Travis you mentioned also this third category of being engineering or technology driven and so I know Gigi you've got some thoughts there in terms of how companies...
Gigi Levy Weiss One second. Travis, which is an engineering driven company. Give me an example.
Travis Boatman Oh, man. Unreal, Valve, any Elon Musk companies Space X, Tesla, they're very heavily...
Gigi Levy Weiss In games who is a company where the core capabilities is engineering?
Travis Boatman Valve, Unreal, the original founders of Unity?
Gigi Levy Weiss Yeah but that's not the games part of it. That's the engine part of it.
Travis Boatman Sure. And that's a really important point, is a lot of these companies that are engineering led, let's use Unreal as an example or id Software with John Carmichael, who I know reasonably well, you know, engineering led companies typically innovate on gameplay and on graphics from an engineering standpoint. And so those are culture led from those points. And they typically they're more rare because you tend not to have engineers who throw themselves into the business world. Right. They're not the guys you go out and pitch, but they're ultimately the people and the segment of the industry that disrupts everything else. Usually in the business and the creative side, they're sort of on the margins, but on the engineering side that's where you get breakouts for new game mechanics like battle royale. That's where you get new 3D rendering engines like you see with id Software. That's where you get Unreal, with the Unreal engine. And drives games like Fortnite. But the engineering side is often undersold in this industry. And it's a pillar of what makes games successful and also what drives true innovation. Not taking anything away from companies that are creatively led or business led. Certainly I sort of lean on the creative business side. So from my perspective, I definitely sit there. But I have a lot of respect and honor for the folks that are the engineers who actually drive these essentially software companies. And I think a lot of the friction that I see with startups oftentimes are business and creative folks who really don't understand the technology. They pretend like they do. They can't code. They're not in C++. They don't understand the tech stack and they end up bouncing around on the technology and they typically then move away from technical innovation because it's difficult. There's nothing wrong with that. But there's definitely been sort of almost classify these companies by who has the technical chops and who doesn't.
Gigi Levy Weiss I agree to that in general, I'm not sure that I agree that this is where the core innovation in the game industry comes from. I think that this is where a lot of the infrastructure and capabilities clearly are coming from. But, you know, I hardly see game studios that are engineering led. Right. I see infrastructure companies. Some of them also have games. But for me, at the end of the day, especially these days, the engines that are around are so strong and so good that really I don't expect the next multibillion dollar studio to necessarily be building their own stack from scratch. You know, I don't even think that it's necessarily a good direction for a studio to think about.
Travis Boatman Oh of course not. I'm not suggesting that a games company should build the engine, the back end, the cloud, the infrastructure, multiplayer systems, distribution, monetization. I mean, none of those things. But if you don't innovate, technically, I do think it's a massive disadvantage. Meaning that game companies that discount software engineering and innovation and tech. I think it's a big disadvantage. You know, we we of course, we have a pretty heavily technical innovation side of Carbonated. But we're using Lumberyard, right? We're not building an engine from scratch. We have a deep partnership with Amazon because we believe in all of their cloud technology. That said, we are doing some things that are technically led and technically innovative, which we think is really important. But we're not building an entire stack on our own.
Gigi Levy Weiss I understand. And I think that there is a bit of a disconnect here, because at the end of the day, also the most casual game companies out there, the ones that are theoretically non engineering led at all. All of them have some phenomenal engineering capabilities. You know, beat on personalization or optimization or automatic liveops or a bunch of other areas. This is all tech. This is you know, it may be a combination of tech and data science more than pure technology. It may not be on the graphics side or the rendering side, but none of the companies, the great company that you can think of, be at Playtika or MoonActive or, you know, or Playrix. These are it's true that they're not reinventing anything on the engine side. But they have some pretty awesome technology capabilities to do what they're doing.
Kristian Segerstrale Yeah. I would actually really agree with that. I think the key is like, where is your technology innovation vector? And like, how is that technology going to make you more successful in that particular category that you're in? And so I actually I do think that many, if not most game companies are engineering led one way or the other it's just where is that engineering kind of where is that engineering focus? And so in the case of many of the hyper casual game companies, or casual game companies, a lot of that is, as Gigi was saying, it's like it's in personalization. It's in like, how can you deliver and learn faster and iterate faster than anybody else in a red ocean category? I think we are talking about Travis, which I believe and I just it's why I get up in the morning is to figure out not just how to execute better in an existing category, which folks like Playrix are incredibly good at. And like taking those incremental steps of figuring out how to combine the blast mechanic with the next best theming and RPG mechanic, but rather how to actually push things forward. And if you want to push things forward in terms of unique look, unique gameplay, something that really stands out in the marketplace, not by being the most optimized from day one, but rather by really looking different, feeling different, providing a fundamentally different experience. I don't think you can do that without having a meaningful tech innovation vector unless you have like a crazy creative that. Like I love Fall Guys and I love Fall Guys because there's nothing technically interesting about that game. You know, it's been a bog standard, engine bog standard, everything. Just a total creative genius of taking a Japanese game show mechanic and putting players into Battle Royale through it like that in itself. You can create just a creatively unique thing, but most other things, like in our case, obviously, we are very heavy technically, and we're very like Catalsyt Black, which is coming out from us. This is like two or three really core big technical innovations around, say, drop-in drop-out matchmaking, allowing you to just go straight into a game with anybody at any moment in time when no friction socially and then having these very large scale battles that you just can't today make with Unity or Unreal in that kind of for that range of devices. So it means that for those kind of generic engines to be able to do that, it'll probably take a couple of years, which means that then we have a couple of years to hopefully be able to take what is a promising idea and do all of the things that the Playrixes and companies that are very good at optimization do in order to ultimately be able to create an incredible experience. So all of these different, I think technology investments give you a slightly different innovation vector, and slightly different way of being able to build a success. But you still need to, I think like from a business execution perspective, I think that's what Gigi was coming back to, like, whichever your innovation vector is, you've got to be able to figure out how do you make the absolute most out of it, how do you ship as quickly as possible? How do you learn as quickly as possible? And how do you know your strengths and weaknesses in terms of what it is that's going to keep you alive and and ultimately make you grow and create a big success? But ultimately, I think it has to do with how like, you know, what sort of company are you building? Are you building, an iterative company that takes small steps forward or are you trying to take a bigger bet outside of what is there right now.
JK And Gigi can we unpack that a little bit? So if you're a creatively driven or data driven, how do you focus or how do you think about your business differently in each of those situations?
Gigi Levy Weiss [00:24:05] Yes, I think for me, the, you know, the world and I've invested in more than 20 game companies over the years. And, you know, some of them have been very much data driven companies. And I found that a few and some of them have been very much creative driven companies and both are valid. And as I said before, you can't be just one of the two these days. You've got to be both because otherwise you're not going to be successful. However, some companies tend to be a lot more based on the data than the creative. And that is, by the way, I think one of the reasons why we see investors kind of flocking into the industry today a lot more than before is because it was very difficult to try and bet early on, on who's going to be a better creator. Who's got a better creative. That's really tough for investors to do. It's like, you know, VCs do not invest movies, for example. And for many years, people thought about games like movies. I need to find the best creator and believe in them. What people are seeing today. What investors are seeing today is that given the high dependency on data and the ability to optimize based on data, if you get the right team, that right team can actually almost always optimize the game to the point of this game being either profitable or having to kill it and move to the next thing. And when you look at companies like, you know, like Playtika that I founded, or Moon Active or others, these companies are optimization machines, which means that there's so much data science in these companies. And by the way, I keep you know, I keep telling my creative driven companies or the ones that are the most successful creative driven companies, that if they had the same data science skills, they would be 10x better in what they do. Right. It's just that the DNA is so different that it's very difficult to convince them to do that mixup. And for me, as an investor, it is, you know, why do we also invest in things that are really out there, like, you know? There is a game company we invest in called the A.I. Dungeon. That is the biggest user, the company is called Latitude. It's the biggest user of GPT-3, openAI's latest. And basically, it's a storytelling game where you basically write a story with the A.I. That is kind of awesome. I mean, I really recommend that everybody try it. And that's one extreme. But at the other extreme, we you know, we invest in companies that are very, very data driven, iterative, where you could almost claim that there's almost no game innovation other than what Kristian said before. I'm going to mix this and that. And, you know, that's going to be my initial starting point. But from that point onwards, you just continue to iterate based on the data until you get it to the right place. And this is so much easier for for me as an investor to invest in today. And I think that, you know, while I as a gamer. You know, I love, I love the creative led businesses. As an investor, I completely not disregard the data driven ones because I think that as investments, they sometimes make far easier and better investments, a lot more predictable. And I also think...
Kristian Segerstrale In general, with the same amount of money, typically the data driven business can have five, six, seven shots on goal.
Gigi Levy Weiss Exactly. And and I think we should in general, not disregard the fact that when you look at how much entertainment value you're providing to people. Right. It's these companies that usually provide a lot more entertainment value to people around the world than the core gaming companies. So I think there's room for both. And I think if anything, what I'm trying to tell my company is, is that the data driven companies must learn a bit from the playbook of the creative driven companies, because if they take more innovation leaps on creative, they're going to be better. And I tell the creative led companies that they should take a playbook, you know, a page from the playbook of the data driven companies, because even when you're a creative led, this really can make you so much better, even at the early stages, not just later. And it's this mixture. It's it's you know, we're... One of the companies that... Moon Active did this branding kind of branding of the corporate. And the one thing that stood out immediately is that it's a company of a mixture of creative and science. It's both. Right, it's this very unique animal that almost does not exist in any other company, no other company. You need both, right? In no other company other than games do you need both. You know, if you are a transactional business and you know, and whatever, and if you're an Uber, that's great. You don't really need creativity. You need the UX to work. But there's no creative element. If you're a content business, a creative business, then you don't really need tech. It's only the game industry that requires this very complex thing, which is why I think most of the game companies fail because they can't create that match. They're either too creative or too non- creative. And that makes it so tough and so exciting.
Kristian Segerstrale I really agree with that. And I think ultimately comes down to like this culture of deep. I mean, one, just having having the talent that covers these areas, but then also figuring out a deep culture of respect between these areas. And it often actually coming back to the near-death moment, like it's actually quite difficult to create that culture where people truly are sort of I don't know how to explain it like naked, as we Finns say in a sauna, you know, naked in front of each other in terms of just that nobody, like, has these great dreams of my vision is X, so I want to be Y, but rather we need to succeed together. Let's. Okay. You date a guy. You explain to me exactly how to do this in the right way. And I will explain to you exactly me, the creative guy of the thing that I want to achieve in like... to create that shared sense of respect between... And frankly, also between engineering to Travis's point earlier, like figuring out like where are the limits of what can be done and what can't be done and where there are... how to do things effectively or whatever it might be and having that mutual respect. And that's why I think culture in game companies probably matters more than in any other kind of company in general, because no one kind of, you know, the poem about the blind men and the elephant or whatever, everyone feels a different part of it. It's very much, I think, it's very much like that. That any one person cannot see the whole picture because they can only see from the perspective of, say, engineering or design or creative or data or whatever it might be. And really senior folks can see more angles, but nobody can see all of them. So the trick really is to be able to figure out how do you create a culture where you can listen enough and still hold onto that vision and then have someone that relentlessly, you know, relentlessly executes and shapes quickly? And these things are just hard, right? You know, as Gigi said I think these are some of the hardest types of companies to create. And that's in some ways, what makes it so much fun is that the industry is moving forward, and it's growing all the time, and there are all these opportunities for different angles.
Gigi Levy Weiss I agree completely. And I think that, you know, there's the saying that I love that in every company you should always prefer attitude to skill, meaning that, you know, if you've got somebody that just ticks all the boxes on skills versus somebody that maybe misses something but has the right attitude. It's the person with the right attitude that's going to bring value to the company dramatically more over time because the one with the wrong DNA is going to be a liability, eventually is going to slow other people around and eventually probably going to leave. I think in game companies, it's you know, it's enhanced 10x. If you don't get people that match the company's DNA, just don't get them. They can look the best on the CV. Just don't get them because it could be such a drag on your company. And I have so many examples like that...
Kristian Segerstrale Coming back to their mistakes. Like my biggest mistakes as a company leader has been not firing those people, not letting them go early enough. The minute that, you know, inside, you know, you have this gut feeling this is not going to work out correctly. And then you're still your brain tells, you know, but we can't possibly live without that person because of X, Y, and Z. And then you take three months or six months or sometimes a year before you do something about it, you know. And. Yeah. Don't do that.
Travis Boatman I was gonna say to pile on to kind of the cultural thing which it depends on kind of your view on how long you want your company to be around, but is a deep intellectual curiosity for what this business is. And my favorite thing is look back at my early career and I started in the games industry on the Philips CVI and then I worked on the Genesis and then I worked on PlayStation One. And if I had gotten really good and sort of settled in on any one of those things, I'd be gone by now. The industry would pass me by. And the rate of change in games is just accelerating. It's getting faster. And it's... You have to sort of also have this culture of intellectual curiosity because there's so many new... to Gigi's point on. I'm not just technical side but business side on new ways of doing, you know, user acquisition or new ways of dealing with funnels or new ways of pretty much across the board. So having all of your team willing to investigate, learn and be intellectually curious for us has been we sort of knew that going in, but we really sort of instituted it more strongly and it's really benefited us in a lot of ways. This industry just moves so fast on all fronts. That desire to learn and keep learning is so important, just like I could talk for hours on that but. But a big deal for us.
JK So maybe we can now talk about, like, initial focus. We've raised a lot of issues like Travis you mentioned culture. Gigi you mentioned the importance of hiring the right people. And so like with all these things where the initial co-founder group can focus their time. As you're starting out, what should be the initial focus or do you just have to get everything right? And maybe, Travis, you want to speak to this with respect to the current experience you're having right now as you're starting to scale up?
Travis Boatman Yeah, I think I think for us, you know, I'm I'm a sort of believer in frameworks, frameworks of thinking. It's something I do a lot. So for us, it's really making sure we have a clear vision that ultimately what the company's working against. We have a very clear thesis that we're running against. We've spent a lot of time refining that. We know it's true as we're working against that thesis, but that doesn't work against that thesis. We want the team to be able have the freedom to innovate and come up with ideas and do all those things. But we spent a lot of time coming up with frameworks that's sort of like, ok well here are the pillars of the games. Here's how we want to operate. These are frameworks that matters to our company and our unique company, and our unique take on the games industry. And so once those frameworks are in place, it helps sort of guide, guide the team in terms of what's sort of in and out of the bucket. And, you know, using a sort of silly example for those folks who aren't in the games industry. It would be a little bit like if you're a Tesla and you're sort of going after electric cars. And so somebody goes"I've got a great idea for a gas engine." And you're like "That's a great idea. But it's not on mission. It's not within these frameworks." So that's just a quick no, don't take it personally. It's just not in our framework that that's a quick note, it's easy to make those decisions. But within certain frameworks, having the freedom for the team to come up with those ideas is super valuable. So that's that's sort of how we run a lot of parts of our company, is keeping that thesis and vision super clear and then building frameworks which the team can operate and putting those frameworks in. We do it with the team as a collective. We talk about what those frameworks are everyone agrees upon them. We put them in place and then people can operate within them relatively quickly.
JK Any other thoughts? Gigi or Kristian?
Gigi Levy Weiss No, I think that's a great way to put it, the way the service put it. I think that in that in any company, but mostly in the games company, having a clear strategy that you're pursuing, you know, the way I think about managing any startup company is that you're starting with, you're starting with setting up a strategy which is kind of your vector, then you make sure that you have the right team for that to run on that vector and then you just let them run. And then you keep getting back to the starting point and say, "Am I on the right direction, do I need to change it? Do I have the best team for that?" And it used to be in the past, it used to be like to do it in an annual cycle, like you ask yourself. And then it turned to be quarterly and now it's probably like weekly, right, every week you wake up and you ask yourself, are we in the right direction? Do I have the right team? And you know, the way it works, it seems to be accelerating even more. But the reality is that as long as you have that factor that everybody know, then treat it critical that everybody knows it, because many times you'd be shocked how many times. And even a small company. Ten people. Twelve people. You asked the last engineer, what are we trying to achieve? And the answer is, I don't know. I need to write that piece of code. Like, how does that piece of code relate to the vision? How does that connect to where we're trying to get to? And they don't know. And when they don't know. And many times that, you know, I will sit with the CEO and I'll call somebody and I'll ask the question. And when you don't know, then you don't know what to focus on, because then, you know, you can you can write this function with that much code or you can write it with that much code if you don't understand what's really important right now. And it can take you a day or it can take you two weeks. And if you don't know what we're trying to achieve, what we're trying to test, what we're trying to prove what you're trying to create right now. And how does that tie into the big vision? Then there's just no way in the world you can be fast and not having that strategy communicated. And that story communicated to the people all day long where everybody can note, especially in a games company where there's so many moving parts. It's just gonna slow you down. And that's going to kill. So getting that right. I think it's really critical for the beginning of the company.
Gigi Levy Weiss Yeah. So I'd agree with that. I think one good device that I recommend overall in getting there is to be like hyper transparent on the really big existential goals for the company. Like, let's say you've raised your three million dollars seed or whatever it is that you've raised. And you now know that the clock is ticking like, you know. You have. You have. I'm making this up. You have 18 months, two years, whatever it is like, you've got to make a success out of this. There is like and frankly, you have to convince someone else if you aren't already making a lot of money, you have to have convince somebody else six months before you run out of cash that they should be investing more money. And at that moment in time, you better have shown if you don't already have a success, you better have shown like a really straightforward line of sight path to a success. And if you work backwards from there, that means, you know, you need to have at least I don't know four shots on goal to that point. And if you work backwards from there, like you literally have three months to prove out this first thing or whatever it is. And it's a really hard limit, you've got to do it. So challenge the team to figure out how to do it and and kind of work backwards and have a transparent set of here's the vision. But we also have these constraints. And if this was easy, everybody would be doing it. So now we need to figure out how do we fit this big vision into these small constraints in chunks like literally how do we do it? And I would like my biggest mistakes overall has been spending insufficient time planning or insufficient time aligning, communicating, understanding and actually brainstorming around how to hit some of these difficult goals quickly because people want to normally just go in and start making stuff and a lot of the time unless you really scope it out well... The thing that you think takes a three months to make actually takes nine months to make. So, like, really scoping out and understanding. Okay, what are the options? Can we be even more creative on how to try this thing out so that we truly can get some data back in three months? Like solving that? And not leaving the room until you have a solve that you all believe in and then say go as opposed to say, yeah, we'll try to figure this out. Let's see what we can do.
Travis Boatman I've definitely fallen victim to that myself plenty of times. And I do think it's a great reminder. And a lot of what... I think for the audience that is watching. A lot of this, what we're talking about. These are scars we've earned by making these mistakes over time. And I've certainly made that mistake myself. So, yeah, it's it's really good advice to do that. They’re almost like social OKRs. You know, they're like as a small company, you can't build an OKRs system. So you almost want to do it socially.
Gigi Levy Weiss And a big part of it I think is getting into a paranoid culture very early on, meaning that you should assume the worst if you're not seeing signs that it's the best. And I just had with one of my companies. I'm not going to say which one, but they put out a first playable. And the numbers are not good. They're not horrible. They're not the worst I've seen, but they're not good. And I sat down with the founder and the founder said, yeah, they're not good, we're gonna improve them. And I told them, you know, that is completely the wrong attitude. You should be panicking. You're now... You've now eaten six month into your 18 month of cash. And what you put out is not good. And you should not assume that there's gonna be one feature or one function or one change that's gonna make it good. And you're sitting here and telling me that everything's gonna be OK. I don't want to hear that everything's gonna be OK. I want to hear that you're panicking because if you're not panicking, it means that you're going to take your time. And if you're gonna take your time, it means that your team's gonna take their time and it means that you're gonna spend another six months on small iterations. So why don't we. You know, and I told them, why don't we decide? And I think I got him to the point of understanding, why don't we decide that we have a month of trying the biggest idea you have of changing something that's gonna really make the numbers better. And if in a month's time we don't see that these iterative changes are creating something meaningful, then we're making a big change. We're maybe killing the game. We're maybe changing something really meaningful in it. And if you're just sitting there, calm. Then you're not going to be successful. You need to be panicking from day zero. As we said before, you need to pivot just after you raise the money. This need to be your thinking. You need to know that it's more likely to not work than work. And so don't assume that you're going to be you know, there is like my father once told me when I was a kid, I asked him about winning raffles or lotteries, and he said, "That happens to other people, son. That's not happening to our family." And, you know, we need to work hard. So, you know, as a founder, you should not assume that you're going to be the one person that puts out a game and only make small tweaks and it just explode. That always happens to other people. That never happens to you. And so plan for that. Don't plan for being the lucky one.
JK And it seems like all three of you have talked about culture in some way, and I know like a deeper conversation on culture could take an entire session. But if you guys had some initial advice about how to initially focus or how an early stage companies should focus on culture or establish it. Maybe do you guys have some thoughts or advice in terms of that? Or, Travis, what are you doing right now?
Travis Boatman Yeah, I think I think in some ways cultures really I mentioned this earlier, but I think culture is really is led sort of top down from the leadership. It's sort of almost inherently just is that way. I think you have to be very... it has to be managed and curated. And it is is deeply, deeply important. But I do think it is it is sort of led from the leadership down. And it's hard to change that as much as you can say, I want to change the culture. Leadership drives a culture they represent it every day and everything that they do and how they operate, who they talk to and their emotions and and their work ethic and all those things. It really does come from the leadership down. So I think if you're active in both who you're hiring and shaping the culture, I do think it matters really, really early on. It's really hard to change later on. Whether I was Jamdat or at EA or at Zynga, you can see the culture carries through the entire company over years and years and years and in those early sort of cultures that get set or those really processes or way of behaving. It gets set. I always joke that they solidify like concrete's. It doesn't take them long to solidify like that. So if you're going to change culture or manage culture, you basically, oftentimes, surprisingly, have to kind of go in with a jackhammer. Break up that concrete. It solidifies quickly. So setting it early on having awareness of what it is early on and then managing it early on is the best way to build it successfully. Trying to change it mid-flight is really surprisingly difficult because typically it's the leadership who set it. And then they're trying to change it. But they're trying to change who they are as people. And I think this is challenging. It's not impossible. But it is it is generally set pretty early on by the leadership.
Kristian Segerstrale I guess my experience is that culture gets formed by key decisions and actions. And in lots of ways, I think that until you've shipped something, you don't really have a culture because you haven't been forced to make decisions. Like culture, isn't there, until you're forced to choose between A and B.. If you say, let's see, you know, we'll choose later, you haven't really decided who you are. If that makes sense. So that's why my biggest advice is always just to ship. Find a way to ship something no matter how small. Because that forces you to make those tradeoff decisions. That reveals to you who you are and ultimately that determines who you are. Like to Gigi's point. Like how aggressive are you? How short are your timelines? How do you hold yourselves accountable to shipping and to doing the things you're going to do? That all comes out in the wash. When you actually ship a product and when you're forced to make all of those decisions. So the faster you're doing that, the faster you are telling yourself and you're creating this mirror to yourself as to who you really are. And the faster also you can identify. If the mix of people that you have doesn't have the right cultural mix, that isn't like it's consistent with the type of company the way that you want to win in the future. And you can, because I don't think there's really, unfortunately, a much better way to change cult... Like, you're basically forced to change people in order to change culture once it sets. I really like the concrete analogy. It really does set. So you almost have to change senior people at that moment in time. And and it's super painful. Don't recommend it. And the faster you ship, the faster you understand who you are. And in particular, that day, if you can engineer a near-death moment for the team somehow, that also is a really great breaker of kind of concrete, if you like. And helps you set up a better, more consistent culture with winning over time.
Gigi Levy Weiss Yeah, so I agree with both and without being too self promoting. There is a phenomenal piece that was written by my two partners, James and Pete, that is called the NFX Company Culture Manual. And what we tried to do is that we together founded more than 10 companies and we tried to kind of crystallize what works for us in creating company culture than what we what we saw is that this is why when we were younger, the process was going to. You know, there's a culture because we're like that. And I agree that this is the core of it. And if you're you know, you can't create a culture that is very different from what you are. You know, whether your employees are only going to be as good as you are. Right. If you're not striving to be good at something, if you don't have this as a value, you can't expect them to have that as a core value themselves. But we have come up with this framework that where we think that companies should from the very get go, spend some time with their culture. And the way we look at it, you're basically... You need to find your company values. And there's a whole process of how you find these company values. And the company values, the beginning is a lot what are the values of the founders? But, you know, being that we're different people, people have different values. And so you need to crystallize that. You need to talk about it, and people need to adjust themselves so that you'll have a coherent thing. Many times we see that the different values between the different team members or the different founders are creating gaps, just like in parenting, right? When two parents have different values, the kids find this gap in the middle and that's where things go wrong. And this is exactly the same thing when founders have different values. If you don't talk about it, the employees are going to fall in these cracks. So you need to, first of all, decide what are your values. Then you need to ship them. You literally need to think about them as a product that you ship them to your employees, you ship them to the existing ones, you ship them to the new ones. And there is a whole process of how you do that. You communicate them, you put them in your job posting, you put them in your meetings and conference rooms and your website and your social sites. They're part of your interview questions. Right. Your e-mails, your company wide emails include them so that everybody knows that they are important. They're something they're part of the signatures. You mention them at the all hands meeting. You need to constantly repeat them again and again and again. And then you need to start programing your culture, because culture at the end of the day is decisions and actions. But it's rituals and it's the rituals that you put in place that are basically determining what's the culture of your company. And so you need to create rituals that are basically helping this culture spread and get deeper and deeper and maintained in your company. And we hold this entire thing around. What are the rituals, what's the storytelling, how you do this? And there's tons of tricks that we can talk about, but we don't have the time for it, I think. And then the most important thing maybe is how you put these cultures into your review processes of employees and into your hiring, because at the end of the day, what you really need to do, once you decided where they are and you ship them and you ritualize them. The two last things you need to do is first thing is that you need to test all your existing employees to see that they fit this culture. And if you see that they don't fit it, you try to adjust them. And as Kristian said, if you can't that requires replacing people. There's no chance. And then to avoid future mistakes, you really need to embed these values into your hiring process so that every employee that joins is both tested based on this, but also knows that these are the values that the company is all about. So that they really, really are not ever in any doubt what's really the company's culture? And there's a whole process around that. And then once you do that, you basically measure and iterate around it because, you know, cultures are not set in stone. And as the company evolves, the values could change. What could be right for one stage may be different for another stage. Some of the core stays, but some of the other values could change. And so you measure and iterate around that and constantly go on embedding them into your processes, into your rituals, into your hiring. And we think that companies that we see doing that early on are concretely are better companies than ones that just let it happen. And then one day when they get ahead of HR, they start doing it in retrospect and trying to find the values of the common denominator. And then suddenly you find out that half your people are not part of your values. So this is really something that, even as an early stage company, worthwhile doing despite this seeming like a distraction, that that's our view of it.
JK Maybe I can ask one other question that selfishly I'm trying to think through right now. In terms of like, so you start off, you have your co-founder group, and then as you start to just begin that process of scaling, I think we're trying to understand how we focus our time in terms of being an individual contributor, then as a manager and then as a leader. And I think all of us will have different capabilities in each of those areas. But do you guys have any thoughts in terms of how we should be focusing our time or how we should be thinking about managing each of those specific roles?
Gigi Levy Weiss I can give you the hard answer.
JK OK
Gigi Levy Weiss So I think that one of the biggest mistakes that I've seen companies as they reach the scaling stage is that the founders are not transparent with each other and they're not open to each other about each other capabilities and the future of their position at the company. And the truth is that it is very unlikely that the people that started the company are going to be the best managers in their respective fields with time. That's just not necessarily the case. So many times if the company's successful, the CEO stays the CEO, although even that changes. But it could very well be that the head of marketing is not necessarily going to be the best head of marketing going forward, because as an individual contributor or the head of engineering maybe is great for one stage. But it's not great for the next stage. And, you know, I think that one of the topics that people speak the least about is the fact that what kills many companies are founder relationships and founder relationships are tough. They're tough because it's everybody's baby. And, you know, having a baby with your partner is tough enough. And having a software baby with a few people, especially if you're a three or four, that's even tougher. You know, try that at home. And the reality is that not being transparent about it and not thinking about it upfront and not basically touching base on it all the time, which is very tough. It's very tough on the relationship side. It's a huge mistake. And what I've you know, in some of the companies I've founded over the years. I think one of the best thing we've done is that we kept on talking about it. And when not always it work, but where we could. And we found out that somebody is not going to be the manager. So they could be the leader of something, but not necessarily the manager of something. What we did was we created a culture that accepted it and a structure that allowed that person to stay part of the top management without necessarily being the manager of many people. And while this sounds very awkward and very non by the book, if you don't do that, you're going to run into huge problems later on because you're going to get with a founder who is whatever head of product that is not really going to be great at managing 20 product people. Right. So he can be maybe the chief creative of the company. If it's a games company, but that does not mean that he needs to run all the game designers of every studio. And so by trying to find a way and by speaking about it openly, it may not always work. But I think in the places it doesn't work, it would have been worse without talking about it. And in the places that it does work, it creates magic because it allows the team to stay together despite this limitation that you were not aware of when you got going.
JK Any other thoughts, Kristian or Travis, or should we move on to our last question?
Kristian Segerstrale I just thought it was a lot of wisdom there.
JK For sure. Very profound.
Kristian Segerstrale But it is true. And it's such a personal journey through and through. And in particular, when you're the chief exec, it is unfortunately on you and it is your personal sole responsibility to take care of these issues because they do ultimately metastasize and become problematic throughout the entire organization if you don't do it. And again, just looking back for myself, these are areas where I've made huge mistakes in the past and it really comes back to bite you in a really profound way. And you kind of put the company at risk if you don't deal with them. And they are hard conversations to have. So I think practicing how to have these hard conversations is important. And then to be clear, like management training or leadership training, all of that stuff, it may polish somebody and make them like five or 10 percent better, you know, but they'll never take a person who is fundamentally a brilliant individual contributor and a brilliant person who should be in some R&D box somewhere to make them into a leader, a sort of a large leader that is capable of scaling...
Gigi Levy Weiss It's just like just like changing small features, never going to change everything.
Kristian Segerstrale But it's so true. Like the idea of, hey, you know, let me put these guys on management training is just not you know, it's not there. So anyway, it's a horrible, lonely responsibility, but this is what you need folks on your board, like Gigi. Or anybody like folks who you can as a CEO reach out to and go, hey, listen, I am really unsure about this. Do you have any advice or thoughts as to how do you know how to deal with this particular thing? Because they are incredibly difficult things. In particular when you're sitting at home in front of your zoom camera, you know, trying to figure out how you should you take care of this correctly?
Travis Boatman The only piece I'll add there, as I mentioned the early days for us at Carbonated was with our founders, we'd never worked together. And that was super important for us to kind of figure that out. I agree with both in that it's very important. Also, one of the reasons why previous teams who've worked together typically get funding relatively easily because they've all worked together. They've all shipped product together. And that's incredibly valuable. And so for us, we as I said, we started out we did some work for hire for the first year or two to really gel the team to make sure we could solve those problems because we really wanted this to work and we went in with eyes wide open. We said, look, we've never actually worked together as a team. Let's do that before we raise money. I can' say that I'd recommend that for everybody. But for us, it was a really good thing to do. So by the time that we did raise. We had worked together, we had shipped things together. We have had a lot of pain together. We knew how to work together. In through the good and the bad before we had ever raised.
JK Great, so last question. Now, all three of you have had incredible experience on both ends of the spectrum with respect to like early stage and starting a company as well as working at the larger companies. And one of the things that guys like Jeff Bezos talk about often are how do you avoid becoming that "Day Two" company like having the speed and effectiveness and the lack of ceremony and various things at the early stage that kind of starts to crystallize and become more prevalent where you become less efficient as a bigger company. And so I was really wondering if you guys could speak to that in terms of, is that just a necessary evil of a larger company or are there ways of being able to maintain some of that speed and innovation and so forth from the early stage to the late stage. And Gigi maybe you can start seeing as you see you shaking your head.
Gigi Levy Weiss So first of all, clearly, I think you can stay fast, especially when you're when you're the ground startup. So, you know, when you're Amazon maybe it's tough, although they clearly continue innovating. But when you are when you're the kind of companies that we're talking about, companies that are growing from, you know, 10 people to 100 people to five hundred to a thousand, but you're still not the one hundred thousand person company. There's clearly no need to start being slowed down the other way around. You're going to start being slow, slow. That's going to kill your company. And in a way, I think the most amazing companies are those that stay startup fast, that around a thousand people these are the ones that are these are the ones they don't want to compete against. Right. The companies that are still and when you look at it, what would really characterize these companies is a very it's very tough to handle contradiction inside a company DNA, which is constantly striving to reach the next peak, which in games could mean could mean revenues or DAU or whatever, but constantly striving to reach and actually believing you're going to get there. But coupled with crazy, crazy, paranoid fear that if you're not going to move fast enough, somebody's gonna eat your lunch. And this is the combination that you see in almost every successful game company CEO. But you also see in Mark Zuckerberg, by the way, and in Facebook. It's this combination of aiming to take over the world, but at the same time fearing that somebody is gonna eat your lunch and having this, you know, both of these sides. That's critical for maintaining your speed and for maintaining your agility. That's one thing. I think that in in game companies, more than any other company, the biggest change that I see is the company that manage to... And it's a huge challenge on the CEO. Is the company that manages from becoming a great single studio company to a company that is running multiple studios successfully. And that is so difficult. But it's also part of the secret of maintaining this agility, because I think that the studio mentality where each studio is becoming a startup and each studio is sort of undergoing all the stages that a startup is undergoing. You know, from the initial love of the product to, you know, getting to the back to the wall and having to iterate and knowing that the parent company is not gonna give them money if they don't really provide the KPIs and everybody working all night to do it. I think that is basically with a healthy competition between studios. There is a tool that many non game companies don't have. And I think that when I look at the most successful game companies, it's this ability of the management team to basically make the transition from a single studio to multiple studios and maintain that agility and maintain that healthy competition. It's what's critical and of course, this is very complex because you keep struggling between having completely separate resources so that you can really have single startups in each one of them, in which case you have zero knowledge transfer and you have zero efficiency and you're just, you know, theoretically wasting a lot of money and you're wasting a lot of knowledge, which is even worse vs. taking everything to shared resources, in which case you're basically making each one of these studios slow and dependent on others and having the excuse that they didn't deliver what they said, then they didn't set up our environments and the marketing is not doing their job well. So this is the core capability that allows game companies to really become better. And last thing on that is that that also includes, I think, having different kind of processes for different stages of studio. So what you should allow your early stage studio is clearly not what you allow in terms of breaking things on your game that's making a billion dollar a year. Right. You know, in one area you can move fast and break things and you can really iterate crazily. Here you've got you know, you've got 20 million customers a month, you know, having this different general good DNA with that desire to, when coupled with being paranoid, but then with different processes and different rules for each one of the studios that I've seen work the most to not get into that complacency.
Kristian Segerstrale I actually have nothing to add to that. I think I will say like and it's interesting that many. I mean, I don't think it's rocket science these days. And that if you look at like it's interesting, like Stillfront's motto: "We do not centralize." For example, it's interesting in a similar way, Zynga, I think, has pursued their M&A strategy incredibly successfully. I think they've also said, look, we're not gonna mess with studio, let's let them do their thing across the board. I do think it's a hard step, but I do think that setting up it's an advantage that game companies have even how Supercell built out from the start was that from the desperate desire to have independence of teams and not have anything centralized? I do think that that is pretty much the way to do it. I don't know that I know of any really successful game company that has been able to scale in any other way than scaling horizontally this way, literally entirely different instances of the whole thing. And then obviously, as a CEO, you're going to be there, kept up all night going. I'm losing money and I'm losing knowledge. How come this studio can't learn from this studio and trying to create these get togethers in these events of people sharing their stuff and, you know, whatnot and being able to borrow from each other? You can do all of that stuff. But I just think there's so many, many more. Much more evidence that independent studios appear to be working better broadly. Although, of course, these big tech stacks, as they become more and more important, be they in U.A. or experimentation or insights or data or game engine or whatever. There's always that temptation of trying to somehow standardize. But, yeah. Nothing. Nothing to add.
Travis Boatman There's one thing I'll throw in there, which I totally agree. And I think one of the interesting things that I sort of experienced in this shift in my career when I was at Jamdat and EA where that wasn't generally the case, but it changed dramatically when freemium and liveops showed up. And the reason why was games went from being sort of individual things to being these services that could last for years and years and years. And when that shift happened, they shifted from being these sort of studios that would make something and move on to the next thing to potentially being a studio that was was essentially its own business working on this product for for years and years, potentially more years, decades now. We have games that are live for over ten years or more. I think that was the big shift that shifted it from these sort of like individual studios that are almost like service organizations that build things for publishers or for other entities. And now there they're really little companies. And I think the folks out there that are doing it the best, as Kristian mentioned, with Zynga and their acquisition strategies and others, is they do treat them like little individual companies and they and they let them run individually. I can give you lots of examples of other big companies that are doing that where they would like to use their own tech, but ultimately let these studios use whatever engines or whatever technology they think is right as their own amost own startup. And I think the other way that you manage these small studios or are these external studios really well is give them the kind of constraints that startups have. And those constraints really drive decision making, speed, innovation, grabbing the latest tools to help efficiency or keep them up to quality. But I totally agree, I think almost all games now, particularly live ops and freemium games that can run for years are all like little companies.
JK All right. Well, I think that was it. I'm sorry we ran it over a little bit, but I personally found this conversation to be super fascinating. If you are interested...
Gigi Levy Weiss It's because you found such amazing people to interview.
JK For sure. Lol. For sure. And I would highly recommend to the audience Gigi's firm NFX... A lot of great resources, blog posts, things like that, and I'll also put in links to Kristian and Travis if you guys want to try and get in touch with them. But thank you very much for your time, gentlemen. And I definitely appreciate all of the insights and wisdom today.
Gigi Levy Weiss Thanks, guys.
Travis Boatman Thanks, guys. Awesome what you do, we love it.
Gigi Levy Weiss Bye, guys.
