20VC Supercell Founder Ilkka Paananen on What it Means To Be The Least Powerful CEO, His Relationship To Wealth and Risk & How To Create Environments of Safety Where Your Team Can Be Their Best and Most Ambitious Selves

In a thought-provoking conversation with Harry Stebbings on "20 Minutes VC," Ilka Parnan, founder and CEO of Supercell, shares his journey from founding a company to becoming the "least powerful CEO," a philosophy emphasizing empowerment and decision-making at the team level. Parnan discusses the importance of team dynamics in game development, the challenges of maintaining a culture of freedom and responsibility during growth, and the delicate balance between taking risks and learning from failures. He touches on the competitive nature of the gaming industry and the necessity of staying focused and humble to innovate. Parnan also reflects on his relationship with money and success, underscoring the sense of responsibility he feels to use his wealth for the greater good and to support the community around him.

• Harry Stebbings introduces Ilka Paananen as the founder and CEO of Supercell.
• Supercell is recognized for creating successful games like Heyday, Clash of Clans, and Boom Beat.
• Before Tencent's acquisition, Ilka raised over $143 million from various investors.
• Ilka is known for coining the term "the least powerful CEO," which will be explored in the episode.
• A thank you is extended to various individuals for their help with the schedule.
• Harry Stebbings expresses appreciation for AngelList's fund admin platform and other services.

"I'm thrilled to welcome Ilka Parnan, founder and CEO at Supercell, the makers of some of the most wildly successful games of the last decade, including Heyday, Clash of Clans, Boom Beat and more."

This quote introduces Ilka Paananen as a significant figure in the gaming industry, whose company, Supercell, has produced widely popular games.

• Ilka Paananen shares his earlier venture in founding a company called Sumea, which was later sold to Digital Chocolate.
• He learned the importance of having a great team in creating successful games.
• Ilka observed that many gaming companies focus on everything but the teams that create the games, often exerting top-down management control.
• Inspiration from Netflix's culture deck led Ilka and Miko Kodisoya to discuss the idea of freedom and responsibility for teams, rather than individuals.
• This concept evolved into giving small game development teams complete freedom and responsibility, leading to the formation of Supercell.
• Supercell's name partly comes from the idea of these independent "cells" or teams.
• The goal was to make Supercell the best place for the best teams to create great games.

"Creating games is all about these creative teams. But then the irony, I think, about many games companies and ours at the time included is that many companies are focused on actually everything else but the teams that create the actual games."

Ilka emphasizes the irony in the gaming industry where companies often overlook the core creative teams responsible for developing games.

• Ilka Paananen explains the term "the least powerful CEO" as a situation where teams make most decisions, leaving the CEO with fewer decisions to make.
• The idea is that if all decisions were made by the teams, the CEO would become the least powerful.
• Teams making decisions is seen as beneficial because they are closest to the players and understand the game development process intimately.

"Well, sort of a simple idea behind that phrase is that it's this idea that the more decision the team makes, then of course, the less I as a CEO make. And ultimately, if I made no decisions and all the decisions would be made by the teams, then I would be sort of the world's least powerful CEO."

Ilka describes the concept of the "least powerful CEO" as a leadership style where the CEO delegates decision-making to the teams who are most informed and involved in the product development process.## Decision-Making by End Users

• End users of games have the best understanding of what is beneficial for the game and the players.
• Decisions made by these individuals are of higher quality and better than those made by higher management.
• Giving teams complete freedom and responsibility allows for faster execution due to the absence of an approval loop.
• Complete trust in teams creates a motivating and rewarding environment which attracts the best creative talent.

"And they obviously know what is the best thing to do for the game and what's the best thing to do for the players. Therefore, I would argue that the decisions that these people make, they are of higher quality."

This quote highlights the rationale behind empowering end users to make decisions, as their direct connection to the game and the players leads to higher quality outcomes.

• Accountability in teams is linked to the type of people hired.
• Hiring the right people with a strong sense of responsibility fosters a culture of accountability.
• Trusting people tends to naturally elicit a strong sense of responsibility from them.

"Well, I think it all comes down to what type of people you hire."

The quote emphasizes the importance of hiring practices in establishing a culture of accountability within teams.

• Maintaining focus on recruiting and culture is crucial for sustaining trust and independence.
• The real test of trust in teams occurs when things are not going well or when there is disagreement with the team's actions.
• Supercell has adopted the phrase "disagree and commit" from Amazon, which supports the team's decisions despite personal disagreements.

"But the real test of that is when things aren't going as well, and especially if things aren't going as well. And then you even disagree with what the team is doing."

This quote captures the essence of maintaining trust and support for teams, even in challenging times and when there is disagreement with their approach.

• Honesty, openness, and transparency are critical in communicating about failures.
• Sharing bad news quickly and ensuring everyone is informed about the company's status is essential.
• Reminding teams of their fundamental strengths and long-term vision helps navigate tough times.
• Having a substantial financial runway allows a company to play the long game during difficult periods.

"Everybody knew how much money we had left in the bank and how much we were burning per month and make sure that everybody knows exactly where we are."

This quote underscores the importance of transparency about the company's financial situation during tough times, ensuring all team members are aware of the challenges.

• Success in the gaming industry can make creating the next hit game more challenging due to increased expectations.
• Teams should focus on the present, act on their instincts, and not dwell on past successes or future pressures.
• Humility and awareness of the competitive nature of the industry are necessary to maintain success.

"The minute you think that you kind of know it all, that's going to be the end of it."

The quote serves as a reminder that complacency can be detrimental in a competitive industry, and staying humble is key to continued success.

• Personal competitiveness should be balanced with a focus on one's own company rather than fixating on competitors.
• Concentrating on creating great products is more beneficial than constantly monitoring the competition.

"I try to not to focus on competition too much, and the reason is that I believe that."

This quote suggests that while competitive spirit is natural, the strategic focus should be on internal development and innovation rather than on external competition.## Focus on Vision and Avoiding Reactivity

• Being overly focused on competition can lead to reactivity and limit leadership potential.
• The importance of maintaining a focus on one's own vision and staying true to one's approach is emphasized.
• A fast follower by definition will always be behind others and never truly lead.

"But if you're a fast follower, then by definition, you will always follow somebody else. You will never, ever lead."

This quote by Ilka Paananen highlights the limitations of being a fast follower, stressing the importance of leading rather than following in order to achieve true innovation and success.

• Ilka Paananen does not naturally possess focus but has learned its importance from others.
• Focus involves saying no to many potential distractions in order to concentrate on the most important goals.
• The skill of saying no is crucial for entrepreneurs to master in order to maintain focus and excel in a competitive world.

"Focus is not saying what you do. It's saying no to all of those ten things that are of interest to you and what you would love to do in addition to whatever thing you're doing right now."

Ilka Paananen explains that focus is about prioritizing and saying no to less critical tasks, which is a challenge but necessary for achieving greatness in one's field.

• Companies fail not because they take risks but because they stop taking risks.
• Encouraging risk-taking and dealing with failure positively are essential for innovation.
• Making it safe to fail within a company culture is crucial for encouraging risk-taking.

"I think fail because they stop taking risks."

Ilka Paananen argues that the avoidance of risk leads to stagnation and failure, reinforcing the idea that taking calculated risks is essential for a company's growth and success.

• Celebrating the learnings from failure rather than the failure itself.
• Traditions, like celebrating with champagne, can help normalize and accept failure within a company.
• Openness about failures and their associated learnings can help build a culture where taking risks is safe.

"We are not celebrating the failure. We are celebrating the learnings that comes from that failure."

Ilka Paananen clarifies that the focus is on the valuable insights gained from failures, which helps to foster a culture that is not afraid to take risks and innovate.

• Leaders must be comfortable with not always being liked or approved of by everyone.
• True belief in one's actions and following one's instincts are essential for making tough decisions.
• Experience helps leaders learn to accept that they can't please everyone and must prioritize the company's needs.

"Sometimes it leads to situation where you can't please everybody, and that's fine."

Ilka Paananen acknowledges the difficulty of being disliked as a leader but emphasizes the importance of making decisions based on conviction and the greater good of the company.

• Working with humble people and being in a competitive industry helps maintain humility.
• Success in leadership does not negate the need for humility, which can be inspired by one's environment and colleagues.

"Well, I think, I guess I'm lucky in a sense that I get to work with people who are extremely humble and that's, of course, inspiring and that sort of spreads."

Ilka Paananen attributes his humility to the influence of his colleagues and the nature of the competitive gaming industry, suggesting that humility is a shared value that can be cultivated within a company culture.## Humility in Success

• The importance of staying humble, especially in industries where it's easy to develop an ego.
• The potential negative consequences of becoming too full of oneself.
• Humility is not only crucial in the gaming industry but also in life in general.

"And you just have this feeling that you just can't afford to have an ego. All you can do is to kind of stay humble."

This quote from Ilka Paananen emphasizes the importance of humility in maintaining a grounded approach to success and personal growth.

• The change in the relationship to money over time, from having none to feeling a huge responsibility.
• The sense of duty to use wealth in a beneficial way due to personal success and the success of one's company.
• The importance of contributing to the community and people around us.

"And now I feel that the overarching feeling that I have is that I think that I have this very big responsibility to use kind of all of this kind of wealth in the best possible way and actually do something good with it, because I've been so lucky in my life."

Ilka Paananen reflects on the responsibility that comes with financial success and the desire to use wealth positively to impact the community.

• The multifaceted nature of responsibility, both financially and in leading a team.
• The importance of caring for the company's people and the broader community of game players.
• The personal and corporate success that brings about a sense of duty to others.

"And as I said, there's, of course, being also financially successful as a company and as a person. Of course, that also brings a lot of responsibility."

Ilka Paananen discusses the various aspects of responsibility that come with leading a successful company like Supercell and the personal success accompanying it.

• Passion for company cultures and the impact of leaders who prioritize the company and team over personal interests.
• Leaders admired are those within Supercell who lead by example without necessarily having a formal title.
• The goal of making Supercell an even better place for teams to create games.

"And the leaders that I probably most look up to these days, I mean, they're all at Supercell because, of course, I get the chance to work with them every day."

Ilka Paananen expresses admiration for the leaders within Supercell who demonstrate proactive and selfless leadership qualities.

• The reframing of failures as experiments from which one can learn.
• The approach of treating activities as experiments to foster learning, regardless of the outcome.

"But these days, how I think about them, I think them as, like, sets of experiments. Like, whatever I do, I try to think it as an experiment, and some of these experiments work, and many of them don't. But no matter what happens, I will learn."

Ilka Paananen shares a perspective on dealing with setbacks, viewing them as learning opportunities rather than failures.

• The desire for children to be humble, curious, open-minded, and fundamentally nice individuals.

"I'd like my children to be humble. I'd like them to be very curious and open minded about the world and the people around them. And then I want them fundamentally to be, like, nice people."

Ilka Paananen outlines the personal traits he values and wishes to see in his children, emphasizing humility, curiosity, and kindness.

• A return to Supercell's founding idea of being the best place for creating games.
• The commitment to improving Supercell for its people and teams, fostering an environment for creating the best possible games.

"And quite simply, I want to help our people to make Supercell an even better place for the best people and for the best teams to create the best possible games."

Ilka Paananen lays out his vision for Supercell's future, focusing on enhancing the company's environment for creativity and game development.