
Company with the “World’s Least Powerful CEO” Makes $2.5 Million Every Day - smalter
http://blog.idonethis.com/post/48277151394/least-powerful-ceo
======
Irregardless
I'm not sure if this is more of a testament to their corporate strategy or the
effectiveness of the freemium model for mobile games.

It's amazing how difficult it is to sell an iOS game for anything more than
$1.99. But, if you give them the game for free and let them exchange real
money for strategic advantages in-game, they'll fork over a small fortune.
Supercell is essentially selling $2.5 million/day in "gems" for only 2 games,
gems that people then trade for resources or the ability to do things faster
(like building units or structures).

A user named 'Panda' on the Supercell forums claims to have spent over $6,000
on gems in Clash of Clans[1]. Based on the responses regarding how quickly he
was able to reach the top of the rankings, it seems to be true. Many other
players in the thread report having spent $20-$40 on gems.

[1] [http://forum.supercell.net/showthread.php/827-How-much-
money...](http://forum.supercell.net/showthread.php/827-How-much-money-have-
you-spent-on-this-game?p=5370&viewfull=1#post5370)

~~~
teej
Supercell is one of hundreds of developers on the App Store trying to make
freemium mobile games.

They're doing well because they picked a winning business model for their
games and then they went on to make _great games_. Clash of Clans was a breath
of fresh air in an environment with tons of clones and uninspired crap. Also,
entertainment is a hits driven business where if a product starts winning, it
tends to dominate.

Picking a business model is crucial, but not sufficient, to be successful.

~~~
greggman
What's your thinking on this opinion that Clash of Clans is actually not a
game

"Yet I look at these products and I don't see games. I see payment machines,
made to look like entertainment."

[http://www.eurogamer.net/articles/2013-04-13-saturday-
soapbo...](http://www.eurogamer.net/articles/2013-04-13-saturday-soapbox-the-
high-cost-of-free-to-play)

------
jcampbell1
For those that don't know, SuperCell makes the top grossing iOS game called
'Clash of Clans'. It is like Farmville meets Warcraft II. Rather the just
growing crops to make your farm better, you grow armies to trash other
people's towns.

Also to put things in perspective, SuperCell makes 10x more money per employee
than Goldman Sachs.

~~~
iskander
>Also to put things in perspective, SuperCell makes 10x more money per
employee than Goldman Sachs.

I'm not sure that the two are comparable, it might be akin to comparing the
metabolic efficiency of yeast vs. an elephant. Could SuperCell scale to make
~$50 billion a year?

~~~
ghotli
Great analogy. Thanks for that.

------
msandford
How long before we see a bunch of startups or consultants trying to cargo cult
their success by simply organizing into teams and wondering why it didn't
work. There's more to this company than simply "we have small cells that are
independent" there was a lot of thought as to who owns what and how they own
it.

~~~
mindcrime
You're probably right, but FWIW, there actually exists some somewhat scholarly
work on this topic. Stephen Haeckel[1] - formerly at IBM Research - wrote a
lot about something he called the "Adaptive Enterprise"[2] and suggested
something along the lines of more autonomous operating units, bound together
using a "commitment management protocol".[3]

And while I haven't explored this in any real depth (yet), my guess is that
some of the research into Multi-Agent Systems[4] and Agent-Based Modeling[5]
may prove relevant to this aspect of organizational design as well.

Another interesting discussion around commitment management:
[http://coevolving.com/blogs/index.php/archive/conversations-...](http://coevolving.com/blogs/index.php/archive/conversations-
for-action-commitment-management-protocol/)

[1]: <http://en.wikipedia.org/wiki/Stephan_H._Haeckel>

[2]:
[http://books.google.com/books?id=pkrFugJBAn4C&printsec=f...](http://books.google.com/books?id=pkrFugJBAn4C&printsec=frontcover#v=onepage&q&f=false)

[3]: <http://www.senseandrespond.com/downloads/Comitmn2.pdf>

[4]: <http://en.wikipedia.org/wiki/Multi-agent_system>

[5]: <http://en.wikipedia.org/wiki/Agent-based_model>

~~~
leashless
Extremely interesting links, thank you. Was anything significant ever built on
this model?

~~~
mindcrime
I don't know if any firms specifically _identify_ themselves as being
"Adaptive Enterprises" or not, but I think there are examples of some
companies which appear to use at least some of the ideas. The firm mentioned
in TFA may well be one. W.L. Gore[1] and Valve[2] are other firms that come to
mind that, while they don't use the term, appear to have structures which bear
at least some similarity to what Haeckel describes.

Back in 1999 when Haecke wrote "The Adaptive Enterprise" he said there were no
full-fledged examples of a firm which was totally based on the idea. Whether
or not there are any today, I can't say for sure.

What I will say, is that I think there is a lot of reason to think that this
approach might be a good idea, and to think that it's still an emerging trend.

[1]: <http://en.wikipedia.org/wiki/W._L._Gore_and_Associates>

[2]: <http://en.wikipedia.org/wiki/Valve_Corporation>

------
mhartl
Ilkka Paananen is a good example of a _very_ powerful CEO. Delegation of
authority is a sign of strength, not weakness.

~~~
ritchiea
Definitely, the article is conflating micro-managing and power. I'm sure there
are ways Ilkka profoundly shapes the company and that kind of CEO influence is
likely why he is able to delegate effectively.

------
turtlebits
FYI, They make the top grossing game on iOS, 'Clash of Clans'.

And it's the company not the CEO- the first time I read the headline I thought
the CEO was making 2.5 mil per day.

------
alput
These guys are peddlers of iOS pay-to-win shit games.

Their success is mostly due to the proverbial suckers that are born every day.

~~~
JabavuAdams
I wouldn't describe it as a "shit" game as the production values and
craftsmanship are quite high. On the other hand, it is clearly exploiting a
bug in my wiring.

I've spent over $400 on Clash of Clans. I can afford to, but I don't feel that
it's a good use of my money. This game design is definitely on the intrusive /
addictive end of the spectrum. The obviously wouldn't be making so much money
if it were a flat-rate game like Minecraft.

~~~
jordan0day
I guess we've known for a while (at least since EverQuest or World of Warcraft
at the very latest) that when you combine "polish" with content designed to
scratch some addiction-seeking itch in our brains, bad things can happen. At
least with those you know the flat rate you're going to be paying over the
course of the coming year? I'm sure there's an argument that can be made about
you getting "your money's worth" for that $400 of entertainment... but jeez...
$400? That's an awful lot of money for a video game. If you knew back when you
first installed the game that you'd end up spending so much money on it again,
do you think you'd still go ahead and install it?

~~~
GFischer
I've spent thousands of dollars on Magic: the Gathering cards and stuff
(across 15 years).

I think it's way more than I should have, and I'll never get it back. It does
have the addicting part (packs and drafts are addictive as hell), and a
"collectible" part for rationalization.

I have some kind of personal problem that leads me into these time sinks,
because I've mostly quit, only to replace it with other time wasters (League
of Legends and others).

edit: omonra, your post is dead.

~~~
jacques_chester
> _I have some kind of personal problem that leads me into these time sinks_

Your personal problem is that you're a higher animal. Out of the reinforcement
schedule patterns that maximise conditioning, the "Variable Interval
Reinforcement Ratio" or VIRR is the most powerful.

That is: systems with random payoff schedules are the most addictive to higher
animals. Pigeons, rats, humans: if good stuff happens at random we quickly
become shackled to whatever it was we were doing.

Gambling: random payoffs. Addictive.

Buying MtG booster packs: random payoffs. Addictive.

Many, many computer games: random payoffs. Addictive.

------
bsbechtel
Interesting that the author uses the US as a comparison....especially when
over the past ~30 years, the power of the executive branch has expanded
significantly. At the same time, the US's global influence has been waning...

~~~
richardjordan
Thought the same thing - that the US is falling apart due to structural
failings in its construction. Not sure the analogy of president is right
though. The presidency may have strengthened its role in some ways but it is
still hamstrung by congress and as a whole US government has got less powerful
in recent decades not more, but to the gain of corporations and a small wealth
elected not the people as a whole. Precisely because no branch of government
is particularly powerful it has no effective remedy once corporations and
individuals gain sufficient wealth and influence that they are able to
demonstrate regulatory capture and wield power against any individual branch
which causes problems to their interests.

------
hkmurakami
_> As its name implies, Supercell is organized as a collection of small,
independent teams called cells tasked with developing new games or building
new deep features for existing games. Cells are given complete autonomy in
terms of how they organize themselves, prioritize ideas, distribute work and
determine what they ultimately produce._

Correct me if I am wrong, but this is effectively how Valve organizes itself
right? :)

~~~
no_more_death
Valve doesn't have a CEO. It's an undifferentiated mass of people, at least as
far as power structure goes -- sort of like a slime mold. I think that's a lot
different than having a CEO who prides himself on being an inspirer instead of
a controller (if I'm reading the article correctly). In other words, it sounds
like he is a constitutional monarch. (Of course, that bursts the whole
"American miracle" thing about him being like the president.)

~~~
sopooneo
However, is there an underlying truth at Valve, that if he wanted to, Newell
could fire everyone on the spot? I have no idea if that is true, and if so,
don't necessary think such an arrangement is bad. But if that is the case, it
needs to be acknowledged that authority, even if unstated and unexercised,
still has an effect.

~~~
hkmurakami
Gabe Newell apparently owns more than 50% of Valve's equity so yes, he can do
whatever he pleases with the company.

[http://www.eurogamer.net/articles/2012-03-08-gabe-newell-
is-...](http://www.eurogamer.net/articles/2012-03-08-gabe-newell-is-worth-
USD1-5-billion)

------
seivan
Good games and low cost operations ALWAYS make money.

Just hire developers,graphics artist and/or sound guys. No suits, no hr, no
nothing else other then content creators. If you _HAVE_ to hire non content
creators, make it count.

~~~
coryl
No they don't. You know how many smaller indie devs are out there trying to be
the next Supercell?

A lot of them have great games but lose money for any number of reasons.

------
adaml_623
So the obvious question is where is that money going?

How much are they paying the developers and designers?

~~~
jakerocheleau
I'd be interested in this too but I doubt the information is public. They must
be doing something right for such a small operation.

~~~
enra
Actually the company is registered in Finland where everyone's tax records are
public, but you need to wait for the next tax year.

I guess that like usually in Finland, salaries are rather modest compared to
Bay / US in general (around 40-100k eur), but because of the functioning
society, many things are free and taken care of (education, healthcare,
daycare), your standard of living can end up higher.

Equity/stock options for employees are almost unheard of and I wish more
startups would pick it up. Supercell is also an exception in this regard, that
they now offer stock options for everyone (they started it after the last 100M
round).

~~~
geon
> but because of the functioning society, many things are free and taken care
> of (education, healthcare, daycare), your standard of living can end up
> higher.

If it works anything like in Sweden (i suspect it does), the employer pays a
high tax too. The employer pays about twice of what ends up in the pocket of
the employee.

So I guess the salary levels are comparable.

------
trcollinson
I have noticed that in big businesses (at least the many that I have been
associated with) management sees agile methodologies as a "gimmick" used to
keep the masses happy. Rarely have I seen it work from the bottom up (or top
down, however you'd like to look at it). Although the article didn't
specifically call what they are doing "agile" it seems like the spirit of the
methodology. It's really nice to see a company that embraces that sort of
working methodology and uses it to be successful. I would be interested to see
if they find their environment to be less stressful as well. I wonder what it
would be like if every company trusted their employees to do what was best for
their company and then empowered them to actually fulfil their vision.

------
ktr
I'm really interested in how organizations are organized. Does anyone have any
suggested reading material for things like this? I've only ever heard the term
"cells" before as it relates to terrorist groups, but I'm not sure if this is
a similar concept. But I often wonder if organizing a business more like a
democracy would yield better results in the long run ...

------
jacobquick
Isn't "a game company that empowers its employees" the same story as Gabe
Newell and Valve? It's cool that there's another company doing it but that
management style has plenty of previous examples, some basic research would've
made for a better article.

------
desireco42
I think their secret sauce, aside from obviously being attentative to
customers, is to have small teams, 6-7 is considere ideal team for development
of games and I would project that to pretty much anything. Just enough
talented people to get the job done and nobody to interfere.

------
waylandsmithers
Definitely an interesting story, but I hate the "$2.5 Mil per Day" framing of
the headline. This isn't anything noteworthy-- lots of companies have annual
revenues of over $900 million.

~~~
no_more_death
They don't want to report daily revenue because it would average out to a lot
less than $900 million a year, I think. Two weeks ago they were making over 1
million a day, now it's over 2 million a day.[1] To me, that growth rate at
this kind of scale is more meaningful than a yearly figure (or a daily figure,
to be honest).

Of course, the reason they use "2.5 million per day" is to give you a classic
Scrooge McDuck kind of visual, with a big semi trailer packed with money
entering your palace every day.

[1] <http://techcrunch.com/2013/03/28/supercell-2/>

------
Geee
Damn, interesting article suddenly turned into American propaganda.

------
rawrly
I'm surprised no one has attempted to connect servant leadership practices to
tech companies. It seems like it would work well.

------
DustinCalim
I love the top voted comment at the end of the article.

------
wilfra
When I saw the title I assumed it was Valve. Interesting that it's also a
gaming company. There must be something about this kind of corporate structure
and gaming that go really well together.

~~~
msandford
It's more about the freedom necessary to make good art. Movies are done in a
very similar fashion. No director runs around telling grips how to tape things
or how to run wires. Doesn't happen. Micromanaging kills (or slows) creative
processes.

~~~
wittyphrasehere
Considering that a large part of software creation is, well, creative, I'd
love to see more of this in the tech industry—like Github, for example.

