Mobile game maker Supercell was one of the big, low-profile breakthroughs in the European startup world. Helsinki-based mobile game maker built an empire out of Clash of Clans, raised tons of cash and attracted the attention of world-class investors and eventually a new strategic majority shareholder in the form of Tencent, valued at $ 10.2 billion.
That was in 2016. How does a hot startup keep its lead?
As part of this year’s virtual disrupt, we spoke to the company’s founder and CEO, Ilkka Paananen, about these and other challenges and opportunities for the company and asked him for his tips and opinion on founding and leading startups in Europe today.
Times are definitely not easy right now: we are all experiencing a global health pandemic and the economy is fluctuating as a result. and there’s an interesting fundamental shift when game companies (along with other content creators) go up against big tech, which is about whether platforms or the games themselves have the upper hand. (The most visible and recent example of this: the counterclaims between Epic and Apple over in-app payments.)
For Supercell In particular, majority owner Tencent is in hot water in the US (an important market for Supercell). and it sits on top of a still popular, but now aging, gaming franchise that could be said to be in the middle of its own battle royale against the many other big games vying for people’s attention (and the power spend to keep playing and advancing). . In short, the company itself, now 10 years old, may be faced with more existential questions: who are we now and what is next?
As you will see in the video below, Paananen is very Finnish about a lot, that is, confident and calm.
Even without Supercell’s previous experience, he has been in the industry for years. Supercell is his second major company: he previously founded Sumea, which was acquired by Digital Chocolate, where he became president during the heyday of the now-defunct larger studio. And he was and is an investor too: Most recently, Paananen supported Zwift, the playful home fitness startup, in its most recent $ 450 million round, in which he became a member of the company’s board of directors. All of this means he can see the big picture.
The Tencent issues in the US, he said, are something the company is watching. But they’re not just unresolved – in fact, it was only this week before the proposed bans on Tencent real estate, and WeChat in particular, that the U.S. government gave more clarity on how people are liable for using WeChat. In any case, Paananen said in the interview that he believes Supercell does not fall under the U.S. executive that is about to close because Tencent is just a shareholder, not a full owner. He’s still waiting to see how it all turns out.
Similarly, Paananen isn’t unduly concerned about the fact that his huge success, while still big, is growing and slowly bringing in less revenue. Judging by the fact that Supercell doesn’t have another successful franchise and has killed a few attempts in the meantime, the process of making a hit still seems so elusive for a company that made one hit already as it is for those who have not.
“It would be nice to always be on a growth curve like this, but the reality is … it’s very much about hits or failures,” he said. “Sometimes the numbers go up and sometimes they go down [so] What is your time horizon? We never think of the next quarter, and very, very seldom, and maybe I think next year is a destination in itself, you know. We try to think in terms of decades. Our dream is to make a game so that as many people as possible can play for a very long time. We take inspiration from companies like Nintendo. And if you take that … it changes your perspective. “
That follows too, it seems like investing in people who can produce interesting games that Supercell can vomit and see if they stick.
It seems that the most valuable thing Paananen has learned is what remains his number one priority: building the right team for the long haul. Making sure you have a group that can work together, inspire one another, and be productive has been the constant. This may mean even more as the company grows and we continue to operate in very decentralized circumstances.
Hear about all of this and Paananen’s opinion on fundraising and more below.