Crucible Moments: Supercell ft. Ilkka Paananen

Ep. Title: How an Early Pivot Led to ‘Clash of Clans’ and ‘Brawl Stars’
Host: Roelof Botha, Sequoia Capital
Release Date: November 6, 2025

Episode Overview

This episode delves into the pivotal decisions and organizational experiments that transformed Supercell—a Finnish game studio—into one of the most innovative and successful companies in mobile gaming. CEO and co-founder Ilkka Paananen, alongside team members and industry experts, recounts how Supercell’s early failures, radical structure, and bold pivot from Facebook to mobile gaming led to global phenomena like Clash of Clans and Brawl Stars, and how relentless cultural introspection reignited growth after a period of stagnation.

Key Themes and Discussion Points

1. Redefining Failure & The Supercell Philosophy

• Ilkka Paananen reframes failure as experimentation, stressing that each "failed" project generates critical learning:

  "Are these failures even failures in the first place?... Maybe we should just call them experiments." (00:01)

• The "Fail early, Fail smart" mentality is foundational, encouraging teams to quickly test ideas, transparently share lessons learned, and celebrate efforts regardless of outcome.

  "It's not smart if we didn't learn from it. So we don't hide our failures. Quite the opposite. We celebrate it." – Maya Hoffery, GM of Hay Day (14:57, 15:31)

Notable Moment:

• The tradition of opening champagne to celebrate cancelled games, reinforcing that learning from failed projects is core to progress. (16:50)

2. Upside-Down Organization: Empowering Small, Independent Teams

• Supercell's radical structure flips the traditional games company hierarchy, giving power and vision to small, semi-autonomous ‘cells’ or teams—akin to a record label’s treatment of artists.

  "Instead of the upper management and the leadership owning the vision... what if that vision would be owned by the individual game teams?" – Ilkka (05:01-06:51)

• The name "Supercell" itself embodies this “cells within a larger organism” idea (06:51).

3. Early Strategic Mistakes and the Big Pivot

• Supercell's first game, Gunshine, was a Facebook browser MMO. Despite initial promise, it failed to scale as Facebook clamped down on viral gaming mechanics and competition intensified (08:03-09:30).

  "We decided to kill the game, Kill Gunshine...it was very clear that they were nowhere near reaching that type of quality." – Ilkka (09:30)

Crucible Moment:

• Just after raising Series A funding, Supercell killed their flagship project and abandoned their initial cross-platform vision.

  “It takes a lot of stones to do something like that, right?” – Joost van Drunen, video games industry scholar (11:46)

• The team risked alienating backers with a total pivot:

  “First of all, this game isn’t working out. …We’re going to throw everything…down the toilet and we're going to focus on tablets and mobile." – Ilkka (12:47)

Key Decision:

• Recognized the unique potential of mobile/touch UI and built games native to mobile—ushering in new standards for accessibility and depth. (10:53-12:14)

4. The Fail Early, Fail Smart Ethos Put to Work

• Supercell became known for celebrating not just success, but decisive, data-driven project cancellations. Key practices:
  • Rigorous metric-driven soft launches (e.g., killing Pets vs Orcs when player retention lagged) (16:26)
  • Company-wide, transparent sharing of game performance (15:31)
  • Institutionalizing "celebration of failure" with champagne (16:50)

Host’s Observation:
“Very few do [celebrate failure]…supercell has leaned into that very aggressively and deliberately…which is part of why the culture has been so incredibly innovative.” (17:40)

5. Breakout Hits: Hay Day & Clash of Clans

• Hay Day launches with “incredibly good” metrics (18:28);
• Clash of Clans follows months later, achieving meteoric growth (“10,000…50,000…100,000…10 million…70 million…100 million daily active users…That’s a lot of cake.” – Ilkka, 19:24)
• Both exemplify games with “incredible depth and innovative strategic and social features that keep players engaged for years.” (00:35)

“Without that decision [to pivot], supercell wouldn't be, you know, the supercell that we know today.” – Ilkka (19:24)

• By 2013: $2.4 million daily revenue (20:33)

6. Global Ambition: Cracking East Asia

• Supercell aims to build the first truly global games company, focusing not just on the West, but Asia—a market most Western companies struggled to enter (21:06-22:16)
• Strategy included hiring local talent, humility, and extensive on-the-ground learning before entering Japan (22:16)
• SoftBank partnership provides major investment and insider access in Asia, cementing independence for Supercell teams:

  “I just want to partner with you guys…even if I own the majority, I'll give all the control back to you guys, the founders, because I don't really know much about games.” – Masa Son, per Ilkka (24:48)

7. Ownership Changes, Retained Autonomy, & Tencent Era

• SoftBank acquires 51% for $1.53B (2013) but leaves day-to-day control with Supercell's founders (25:24-26:10)

  “Decisions stayed with the team, with the cells of supercell's organization, and there was no real expectation of going public.” – Joost (25:35)

• Tencent-led consortium’s $10.2B acquisition retains this hands-off approach (2016) (27:15)

  “It takes time to build great things—and it definitely takes time to build great games for really tough markets... partners who have that patience. We got that from SoftBank and it continued with Tencent.” – Ilkka (27:35)

8. Stagnation & Cultural Renewal (2018-2023)

• After Brawl Stars (2018), no new global releases; sales dip, slipping from the top 10 publishers.

  “We were basically flatlining. …Our teams were just like frankly too small and they were just trying to do too much with too little.” – Ilkka (29:10)

• Ilkka leads a dramatic, honest all-hands presentation confronting the decline:

  "I opened my presentation with a super painful animated slide…year by year I made all of us watch it…ultimately all of this was my fault because ultimately it is the founder and the CEO who was responsible for the culture." (32:01)

9. The ‘Two Birds, Two Stones’ Reorg and Return to Growth

• To foster both new games and revitalize live games, Supercell splits approach:
  • New Games: Treated as startups, with creative autonomy; launched new incubator “Spark” to fast-track innovation (34:03)
  • Live Games: Teams “scale up” (from ~12 to 60+) to resource ongoing content, deeper player engagement, and brand building

“How do we make games that are always relevant? ...We did a very long workshop in which we re-looked at our vision, strategy, where are we going? And started thinking, okay, how do we secure the next 10 years?" – Maya Hoffery (34:48)

• Brawl Stars stages a dramatic comeback, with revenue surging eightfold in 2023-2024 (35:56)
• Squad Busters: First major launch in six years (2024). The company openly discusses its mixed early reception and, in Supercell style, eventually discontinues it. Even so, it earns $100M in 7 months (38:10).

10. ENDURING LEGACY & CULTURE

• Supercell proves that patient funders, empowered small teams, and a fail-fast, honest culture are a blueprint for sustainable creative success—even in a “hits-driven” industry.

  “It's just amazing…if you manage [people] correctly, have the discipline and the courage…That's, for me, the legacy for supercell.” – Joost (39:21)

  “Our legacy is to create games that are remembered forever…as many people as possible play for a very long time and remember them forever.” – Maya (39:58)

  “When you encounter something that feels like a failure, you actually don’t know whether it’s a failure…It actually might be the thing that will lead you to the next success.” – Ilkka (40:21)

Notable Quotes & Moments

• On Failure:

  “Should we even call them failures? Maybe we should just call them experiments.” – Ilkka (00:01, 14:13)

• On the team structure:

  “We start to think these individual game teams as…their own little startups… we start to call these teams cells. …That led us to the name supercell.” – Ilkka (06:51)

• On product focus:

  “The biggest risk is not to take risks.” – Ilkka (12:47)

• On Asia expansion and investment:

  “It was a great outcome for the investors, but it also [made us] even more independent after that deal, which might be counterintuitive.” – Ilkka on SoftBank (24:48)

• On renewal:

  “If we want to be anywhere close to somebody like Nintendo, we have to change.” – Ilkka (31:00)

Key Timestamps

| Timestamp | Segment/Topic | |------------|-----------------------------------------------------------| | 00:01 | Ilkka reframes failure as experimentation | | 05:01 | The “cells” organizational model | | 09:30 | Killing Gunshine / The courageous pivot | | 12:47 | Deep bet on mobile; investor realities | | 14:13 | Celebrating ‘experiments’ — company failure rituals | | 18:28 | Hay Day success metrics | | 19:13 | Clash of Clans' exponential growth | | 22:16 | Entering Japan; learning from local gaming culture | | 24:48 | SoftBank majority deal / retained independence | | 29:10 | Post-Brawl Stars stagnation and candor about flatlining | | 32:01 | Painful top-10 slide and leadership accountability | | 34:03 | Two Birds, Two Stones: new org structure | | 35:56 | Brawl Stars rebound with 8x revenue growth | | 37:31 | Launch and honest evaluation of Squad Busters | | 39:21 | Legacy: "efficacy of small, creative people, well funded" | | 40:21 | Ilkka on failure fueling eventual success |

Final Takeaway

Supercell’s journey showcases the powerful synergy between cultural bravery, structural innovation, and relentless introspection. Its readiness to scrap big bets, empower small teams, and relentlessly focus on player-centricity has defined an enduring model for creative industries. The episode positions Supercell not just as a maker of viral mobile hits—but as the rare company building games, teams, and a legacy that truly lasts.