🦉 The army you have

Philosophy Monday - Edition #2

Hey, happy Monday. Welcome to a new week of the GameMakers newsletter!

Every Monday, I will write about a philosophy, insight, or principle I believe maximizes the chances for successful project outcomes or helps bring insight to a particular business problem.

Some of these thoughts may be controversial, so feel free to discuss and debate with me.

Let me know what you think in the comments!

The army you have

Donald Rumsfeld was the former Secretary of Defense for the United States military. He was once famous for the following observation about going to war:

You go to war with the army you have, not the army you might want or wish to have at a later time.

This is also very true for many startups and startup game studios. Not every team can be the best; not every company can acquire the people with the right skills and experience required to achieve success. At least at the start.

The tricky part for any startup is making do with what you have. How do you win with the cards you’ve been dealt?

Not even large companies have infinite resources; for startups with even scarcer access to resources, achieving success with what you have is critical.

Hence, just as the Rumsfeld quote, if you are starting a new company or games studio, you will build your company and products with the team that you have, not the team you might want or wish you had.

Many of us who will start a company or engage in a challenging project, will ask ourselves two critical questions related to “the army we have.”

1. The Go/No-Go Decision: Should you even go to war with the army you have?

2. Winning Against the Odds: How do you win with an inexperienced team?

The Go/No-Go Decision

The Dilemma: Starting a company is tough. Projects in the gaming industry are notoriously challenging. There's always a moment of truth where you ask, "Is this journey worth embarking on with the team I have?"

When I was a high-level executive at companies like Sega or NBCUniversal, many friends in the gaming industry with vast experience and exceptional talent had expressed interest in working with me.

However, when it came time to actually start with limited funding, lack of support infrastructure, lower compensation, high risk, and especially when it came to building in India, the team available went from many to almost no one.

India, in particular, was a challenge as availability of experienced talent making new games (not just live-ops) in the region was, and continues to be, scarce. Further, many experienced game developers in the West did not want to join if they had to go to India. In some cases, even if it meant for a single week out of the year.

The company we started and built today comprises the best available people mainly from India, but not really qualified people, who wanted to take on an ambitious challenge. The army we have.

Should you take on an ambitious challenge with a limited team?

This is a very personal question that really boils down to a deeper personal meaning for each person.

What are you seeking from your life?

In an interview in 2019 Elon Musk stated he was originally very pessimistic about Tesla’s chances for success, “I was actually always fairly pessimistic about the outcome of Tesla, all the way from the beginning.”

In multiple interviews, Elon has stated he viewed his chances of success for both Tesla and SpaceX to be very small:

I thought, we have a maybe 10% chance of success.

Elon started those companies because, “If something is important enough, even if the odds are against you, you should still do it."

Conclusion: Is what you are working on important enough for you even with a low probability of success and without a team currently capable of achieving success?

One other important concept to understand in considering a go/no-go decision is the notion of assymetric outcomes.

A familiar concept in finance and investing, an assymetric outcome refers to a situation in which the potential for gains significantly outweighs the potential for losses, or vice versa. The typical structure for taking on these kinds of bets are options contracts in which a small amount of money is put at risk (and typically lost). However, these options contracts can be worth many multiples of their at-risk value offsetting the potential for loss and sometimes creating positive “expected value.”

In other words, what if you could bet $100 with only a 10% chance of success to win?

However, what if the payout in success was $1M, or worth that much to you in some way, would you then take that bet?

Winning Against the Odds

Unexpected Victories: Stories abound of startups that have defied expectations. So, how do they do it?

A notable recent example of achieving success without an experienced team is the Pocket Pair team’s success with their new game, Palworld.

In a blog post published three days ahead of their game launch, Takuro Mizobe from Pocket Pair wrote:

The road to this point has been long.

Looking back, I feel like I took a really long detour.

It's a series of unnecessary failures.

I stumbled over and over again in places I shouldn't have stumbled over if I had known.

I didn't know things that industry experts should know.

Because we were a group of amateurs.

"How am I going to do this?"

I started out not knowing everything.

Since its launch, the game has achieved remarkable success, selling over 12 million copies and becoming the second all-time concurrently played game on Steam, with a peak concurrent player count of 1.86 million.

This performance places it ahead of major titles like Counter-Strike, Cyberpunk 2077, and Elden Ring.

There are many notable examples of small startups that have achieved success in seemingly impossible situations against much larger, entrenched, and better resourced competitors.

Inexperienced teams can win.

How?

When I joined FunPlus in 2014, the company was best known for farming games on social platforms and had never made a mobile 4X game in its history. At that time Game of War was the dominant #1 top grossing game in the market and no one believed the game could be dethroned. Even further, no one believed an upstart Chinese company with a team that had never done it before could win.

Even further still, I had never led a team of over 80 people and never worked on a 4X game before as well.

In time, King of Avalon and its reskins/retargeted SKUs such as Guns of Glory and State of Survival would generate billions in revenue. And King of Avalon did become a #1 top grossing game.

Even as the overall lead of that team, I initially had doubts and, in fact, most of the team doubted our success even to launch.

I believe there are four characteristics of inexperienced teams that enable them to succeed (over time) against long odds. This is based on what I experienced at FunPlus, what Takuro Mizobe discusses in his blog post, and what I have observed from the experiences of other successful companies and entrepreneurs.

#1. People Improve

The army you have cannot be the army you will have and that ultimately enables your team to succeed.

There needs to be a way in which dramatic improvement in your team and capabilities can improve over time.

This generally happens in three ways:

1. Development: Your existing people learn and improve over time. Most startups, however, need results quickly, often don’t have training programs, and improvement for most people can come slowly. Hence, to some degree, this doesn’t occur as often as I would hope to observe, but it does happen, and in some cases, the improvement observed in some people can be dramatic.

2. Experts: You bring in specific area or discipline experts to help guide the team or train leads in the areas your army needs to improve the most.

3. Upgrade: Over time, if your existing people aren’t improving fast enough, you need to bring in people who can help upgrade the team based on specific company needs. Also, people may need to be upgraded when a company’s next stage of progression requires different skill sets.

By the way, don’t underestimate the potential for development and for smart, ambitious people to become critical contributors to your company or project.

Also, to some degree, hiring inexperienced people over time can be beneficial.

In an interview with Tim Ferriss, venture capitalist Jason Portnoy discusses how, as an early employee at Paypal, he met Peter Thiel, who projected Jason’s potential rather than evaluate him based on his current capabilities. Peter made Jason CFO of his next company after Paypal, Clarium Capital, despite not knowing what a hedge fund is.

According to Jason, at Paypal:

You hire for general capability than for specific skillset.

People who didn’t have specific experience in the industry that the business was in.

Which sounds counter-intuitive.

Paypal merged with X.com. and X.com had a lot of former financial industry people. And over time, gradually the executives from the Paypal team, who had no experience in the financial services industry, wound up ascending in the corporate culture and hirearchy.

They weren’t weighed down by legacy ideas by how things should be done.

Takuro Mizobe from Pocket Pair makes the same point about the advantage of amateurs over time:

That detour led me to make connections with people and form the team I have today.
It was because we were a group of amateurs that we were able to create a method that was not bound by industry conventions.

One important note is that for people to improve and exceed the potential of current industry experts, they must, as Jason Portnoy suggests in his interview, “be exceptional.”

Hiring talented people with the capability to learn and develop quickly is critical and finding those people who, coming to my next point, “deeply care.”

#2. Deeply Care

In my experience, the teams that have outperformed and achieved success have a number of members, not all, but a core group of members who are “shepherds.”

Shepherds deeply care and will do what it takes to succeed.

In the bible, John 10:11-15, there is a biblical passage that speaks to the difference between a “shepherd” and a “hired hand.”

I am the good shepherd. The good shepherd lays down his life for the sheep. The hired hand is not the shepherd and does not own the sheep. So when he sees the wolf coming, he abandons the sheep and runs away. Then the wolf attacks the flock and scatters it. The man runs away because he is a hired hand and cares nothing for the sheep.

I am the good shepherd; I know my sheep and my sheep know me— just as the Father knows me and I know the Father—and I lay down my life for the sheep.

Early last year, I was at dinner with Stephen Lim, aka Slim, basically the creator and lead of Valorant, when he was at Riot. Over dinner, I asked Slim the following question:

• “What does it take to launch a successful shooter game in today’s market?”

Slim’s response:

The answer is actually love. You have to have teammates who love the game and love the audience. This is the only way to access the hundreds or thousands of decisions that improve features or quality of life that I believe is too difficult to conjure at arm's length.

Does the army you have consist of members who are shepherds and who love what you are working on?

#3. Work Hard

In my experience, I have not personally experienced a team that achieved great success on a challenging project without a hard work ethic. I’m sure there may be counterexamples, and I wish I’m wrong on this. However, from my own personal experience, I haven’t witnessed it.

At FunPlus, when I worked on King of Avalon, I worked from 9 or 10 AM until 11 PM or later every day, every weekend, and every holiday.

Today, at my own company, I do the same. I’m trying to change, but it’s very difficult.

Many years ago, the two founders of Instagram gave a talk at Stanford about their entrepreneurial story that I attended.

They talked about how they initially worked out of a San Francisco-based incubator with about 40 startups called Dog Patch. They then discussed how so many entrepreneurs want the image of being an entrepreneur but don’t live the lifestyle required for entrepreneurial success. They mentioned that at Dog Patch, only one other startup worked until 10 PM and on weekends. From that batch of startups at Dog Patch, all of them failed except for Instagram and the one other company that worked late and weekends like they did.

Look, don’t get me wrong. I’ve discussed quite often that I strongly support companies who offer work-life balance:

Companies that support work-life balance and promote a hard work ethic are both necessary. Further, people should choose for themselves but also realize a hardcore work ethic really isn’t for most people.

You should choose!

I also realize many of you are not Elon fans, but he has built some of the most significant companies of our lifetime and perhaps in human history. He puts it this way:

Work like hell. I mean you just have to put in 80 to 100 hour weeks every week. [This] improves the odds of success. If other people are putting in 40 hour workweeks and you're putting in 100 hour workweeks, then even if you're doing the same thing, you know that you will achieve in four months what it takes them a year to achieve.

I think most successful startups are likely not doing 100 hour weeks from every employee or even founders. However, the main point is that some level of extraordinary effort and some level of sacrifice is necessary in order to take an inexperienced team to success.

I wish there was another way to succeed against challenging problems with “the army you have.” Unfortunately, I personally don’t know how to do it another way.

Who knows, with the advancement of AI, we may finally have many companies that only require creative ideas and not hard work to achieve success against very challenging objectives.

#4. Don’t Give Up

I was never supposed to lead the King of Avalon team at FunPlus. I had been hired to start a new game project that I was extremely excited about.

When I first joined FunPlus, I traveled to Beijing, and ahead of getting my team together for my new game project, I was put on the King of Avalon team temporarily until I got my full team together.

On a Friday night before the week I was supposed to start my new game project, Andy Zhong, the CEO of FunPlus, visited the studio team. I had been working with the team for a few weeks and was excited to move on to my new project.

I stopped Andy and told him there were a number of things he should know before I transitioned off. On a whiteboard, I outlined all the major issues and problems with the project and the need for a pretty extensive restructuring to succeed. With that, I told him good night and, after a time, left the office excited about the next week.

Saturday morning, I woke up to a text message from Andy: “Hey, can you come on a walk with me?”

It was a fairly eventful walk.

We discussed a number of things but in the end, he made it clear he had decided to make me the new overall lead of King of Avalon. To be honest, I was devastated. I hated 4X, and I thought the project was in complete disarray. However, as I was then and am today, I was always a good shepherd. I would do what is best for the company.

Over the following weeks, I expressed a lot of doubt about our ability to succeed until, one night; I was finally convinced.

“You don’t understand,” Andy told me, “I am committing to this game. I don’t care how much more it costs. I will keep spending money on this game until we succeed.”

And then, I understood. This guy is not going to give up. FunPlus is all in, and so I need to be too.

Steve Jobs once said:

I'm convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance... Unless you have a lot of passion about this, you're not going to survive. You're going to give it up. So you've got to have an idea, or a problem or a wrong that you want to right that you're passionate about otherwise you're not going to have the perseverance to stick it through.

In the case of FunPlus, I cared about helping my company achieve success as a good steward, and today, with my current company, I hope to build a company that can help me achieve something meaningful in my life.

One of the great lessons from Elon Musk is his determination and repeated attempts to solve challenging problems.

A big lesson we can all learn from him is his relentless try-fail cycles until he finally achieves success.

In building SpaceX, Elon Musk said, “Optimism, pessimism, fuck that; we're going to make it happen. As God is my bloody witness, I'm hell-bent on making it work.”

How far are you willing to go? When is it finally over?