Sent on March 25th, 2022.

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I often think about what James Gwertzman told me on the podcast:

“That was the great thing about Mitch [Lasky]. He said: I don’t want you to just spend your board meeting on telling me how great things are. I don’t care about that. I want to hear at every board meeting what you’re worried about.”

Mitch Lasky, venture capitalist and general partner at Benchmark, pursued an idea that Jim Collins talks about in his book, Good to Great.

“Kroger and A&P were old companies heading into the 1970s. Both companies had nearly all their assets invested in traditional grocery stores; both companies had strongholds outside the major growth areas of the US. And both companies knew how the world around them was changing. Yet one of these two companies confronted the brutal facts of reality head-on and completely changed its entire system in response. The other stuck its head in the sand.”

The Stockdale paradox

In Good to Great, Jim Collins talks about how Vietnam War POW Jim Stockdale dealt with the fact that he had no way of knowing if he’d ever get back to his family.

“[Other POWs] said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say, ‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”

“You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

The companies that Collins talks about in the book followed a similar process of never turning a blind eye to the facts.

“In confronting the brutal facts, the good-to-great companies left themselves stronger and more resilient, not weaker and more dispirited. There is a sense of exhilaration that comes in facing head-on the hard truths and saying, We will never give up. We will never capitulate. It might take a long time, but we will find a way to prevail.”

“On the one hand, they stoically accepted the brutal facts of reality. On the other hand, they maintained an unwavering faith in the endgame, and a commitment to prevail as a great company despite the brutal facts. We came to call this duality the Stockdale Paradox.”

“Kroger was like Stockdale, and A&P was like the [others] who thought they’d be out by Christmas.”

Building because we wanted to build a successful game

It was 2013. The success of Clash of Clans had just happened. We believed in having a similar game, with some changes. We built a character collector component, where you’d open packs of character cards. It was one of the first “gacha” or lootbox games on mobile, and we felt that this and other changes would lead to success.

But, we never confronted the brutal facts before building Compass Point: West.

In hindsight, the brutal facts were apparent:

We didn’t understand that the core of this game was in is combat core mechanic. Players loved Clash of Clans because the gameplay variability was top-notch. You’d have a dozen different troops, some quick, hard-hitting, some slow, damage soaking, some flying, some only managing to take small amounts of damage.

Similarly, the town defense with the cannons, wizard towers, bombs, traps, etc., was a critical component of the exciting and variable core gameplay. Additionally, attacking the base from four directions was critical to creating lots of extra variability.

We didn’t understand how much the great core mechanic mattered for the audience. We didn’t have the skills to comprehend this. Another brutal fact would have been that we could never become the best in the world at making a game like Clash of Clans.

Time to get out

We spent two years trying to get Compass Point: West to work. If we’d been able to confront the brutal facts upfront by asking

“What kind of game can we make, where we could be the best in the world at?”

To gather insight, another way would have been to ask:

“What are game genres where we can never become the best in the world at?”

If you are in the midst of building something but not feeling that there is a breakthrough coming, ask the questions and make your moves.

I’ve personally seen several studios asking if they can combat the increasing UA costs in mobile and have decided to pivot to web3.

So, should mobile studios, dependent on UA, start leaving? The question would be, “Can we be the best in the world at making and publishing mobile free-to-play games?”

A few issues I know of that can block you from confronting the brutal facts.

Jim Collins talks about the charismatic leader, blocking the truth-tellers from being heard.

“For those of you with a strong, charismatic personality, it is worthwhile to consider the idea that charisma can be as much a liability as an asset. Your strength of personality can sow the seeds of problems when people filter the brutal facts from you. You can overcome the liabilities of having charisma, but it does require conscious attention.”

Similarly, it could be that you’re just too afraid to talk to your investors about your thoughts of pivoting away from a game that you’ve been building for a year. It’s like you are giving up, and what will the investors think?

As an investor, I applaud founders who decide to pivot as long as

a) they’ve gone through the postmortem exercise on what has happened, and

b) have started asking: “What kind of game can we make, where we could be the best in the world at?”

Confront the brutal facts, but never lose faith.

(Photo by Adrian Swancar on Unsplash)


Get my book, “Long Term Game: How to build a video games company” from Amazon. Available on Kindle, audiobook and paperback.

Check it out!

Christian Facey and Wilfrid Obeng — Audio Ads in Games

In the latest podcast episode, I have Christian Facey and Wilfrid Obeng from Audiomob, talking about their journey of building their company, which enables audio ads for mobile games.

In this discussion, we talk about Wilfrid’s and Christian’s journey to team up and make audio ads happen, how they are learning to be company builders and what challenges they’ve faced in starting and fundraising for a company during the pandemic.

Listen to the full episode by going here.

Some useful templates from EGD

Articles worth reading

What it really means to transition from web2 to web3 games — “I’ve had conversations with founders who are transitioning into the web3 space recently, many of whom come with lots of experience in the traditional gaming space. Based on these conversations as well as observations on what various studios are doing, I would like to share my perspective of what the transition from web2 to web3 gaming really looks like.”

8 tips for running better meetings — “The pandemic dramatically increased the number of meetings. Of course we need to talk to our colleagues to build a product or a company, but I believe that because of these new working conditions, we need to be even more mindful about how/when we conduct meetings.”

How does a VC see game discovery? — “What used to be a hobbyist audience running hardcore franchises [has become] everybody with a connected device, which is trending toward just about everybody. And when you think about the type of content that appeals to that many people, the games industry stops being about tiny slices of content.”

Quote that I’ve been thinking about

“What moves me is watching young men bond together and tap into the magic that arises when they focus—with their whole heart and soul—on something greater than themselves. Once you’ve experienced that, it’s something you never forget.”

— Phil Jackson


Sponsored by Audiomob


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I hope you have a great weekend!

Joakim

PS. The DoF Istanbul event is next week. See you there!