Founders Playbook: Lessons from Riot, Discord, & More
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Right now, when the second to toit, any other gaming Better says we'll .

see gaming ultimately dominate and become the primary entertainment media for the future.

I love the intersection of tech and art and psychology and design and how they interact.

T it's just the coolest industry in the world.

Over the past few decades, gamming has undergone a radical transformation from one of experiences, I came on a disk to viral memo games to now indicate, seemingly never ending on my university, that actually feel like they have more in common with movies or social media than the video games we might remember in the nineteen. These words, tournament fill stadiums, games inspire major TV series.

And the money spent on gaming content alone is five times what I spent on the movie box office. So with all that said, leveling up as a game company should be a right well. It's not that easy with intense competition, distribution chAllenges and high production costs.

And gaining setups are used to playing on hard mode, but they're also pioneers of innovation leading the pack when IT comes to the adoption of everything from smartphones to virtual reality. And these hard one lessons offer insights that can help startups s across the tech industry to power up and advance to the next level. So that's why we brought in some of the tightens of the game industry.

And today, you'll hear them discuss everything from the state of the gaming industry today, how to survive bare market, these strategies that startups in leverage to build and market products that stand out in a busy crowd and the potential impact of AI. These conversations were all recorded during speed run as extensive, extensive games accelerator so ready said, came on. As a reminder, the content here is for informational purposes only, should not be taken as legal, business tax or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any asic cy fund. Please note that a six sense a in a zoho IOS may also maintain investments in the companies discussed in this park recast. For more details, including a link to our investments, please see a six and set outcome slash disclosure.

I'm very excited because I legitimately believe that right now when the second any of the sates .

that was JoNathan, my general partner and founding investor of asic senci games, john previously worked a bite games or he shipped the bright games A P. I. Before the company was acquired by tension, you might also recognize riot as the creators of league afflecks, a game which sees fifteen million players on average every day.

If you started the game company, there's never been more tools and new technology to help you build them. There's never have been more sources of finding and there's more player as a game stated and ever before, there's three milk asia afc. And same time, like we have more distribution platforms are hungry for content.

But now looks are given in the games. I just followed that warmer and various of mass month or like excited about games. Apple, our kid, steam is at all time has there has never been more the man for great content.

Gaming has longer overlooked as an industry, but IT continues to evolve. One of its next day shifts has been its influence on hollywood. Here's a time also general partner at basic sense, e games.

A lot of hollywood are intensely interested in the games industry because theyve just seen in the last year, not just the mario movie, not just what's happened with pop wards, legacy last of us, i've had a tony meetings with everyone from the team around J. J. Abrams about robot people, the issuer, a family route and disney for many years the folks around readily, Scott and rioters obviously been pushing from the gaming side.

IT really feels like there's a tremendous boom that happened in the same way that marvel and the superhero franchise sort of became the core IP that then unlocked basically the last, I don't know, ten years of films. What you're really seeing is just an aging out of the population of folks that grew up watching two hour movies, and that's a primary method of entertainment. As that group ages out, I think what will see is will see gaming ultimately dominate and become the primary entertainment medium for the future.

And it's inevitable just based on consumer watch time and engagement time. If you just measure in minutes and hours and monetization, I think the folks on the business side are starting to really understand that gaming is actually larger than film TV, books, magazines, radio combines. And you can actually build and monetize your IP and have daily interaction in a way that you would otherwise.

And it's not just hollywood that's taking notice. IT started to .

void a smash shift of everyone in the below was talking about for years as but after the fortnight you had in my gas, which almost made the pandemic livable than you had games like out, and been followed by hard, hard legacy by now, power. So now if there's like every year you have like one of two games that just like cures like the culture of fabric and just becomes sustain that everyone talks about, which I find this like really amazing and assigned a game was coming to its own vite as a piece of culture.

if you need any convincing, remember that viral dance move, flossing. While part of his popularity came from the ability to buy IT as an emotional character in fortnight and all this pop culture breakthrough is great news for the industry. Every quest still has its chAllenges, like much of the technology sector games industry investment stock last year following to less than a quarter of its post pandemic peek. But at least according to one industry veteran, a, the market bring its own advice shes.

When we were pitching what we code name, fellowship, the open world cop, free to play game, there are a lot of people who were telling us, like there are dozens of these, they're so expensive, no one's going to want to fund. This going to be ridiculous. And I think if you look at the market two years ago, all that push back was totally right.

That was Steven snow, a four time gaming studio founder, and one of the craters behind games like league flagons, the sides and total aniele tion.

I think when you look at the market today, there's less than ten of these product pitches still alive. Meaning like as the economies kind of gotten more condensed than I heard already talking earlier today about how there are founders who preferred to Operate and a more financially constraining market because that makes IT kind of easier to ignore a lot of the rif rap in the noise. I don't disagree with that. In fact, I would say that we now find ourselves in a very interesting situation where we're one of a few as of three years ago, we were one of so many IT wasn't worth doing.

The cran economic climate offers another potential advantage, the gaming startups in the form of talent as margins narrow. We've seen a wave of master ffs from major gaming studios.

What's happened to us and our overall applicant pipelines over the last sixty days? As we are flooded, we are seeing heads of studios apply for like bed tear leadership jobs. Trust me, if you guys are not checking your email in boxes right now, you're making a huge mistake.

Everybody's email and everyone trying to find a job. And some of these people don't need to. They're just looking to get out of a studio that handled there. I won't name any names, but they handled their folks very poorly. And so if you have cash, just figure out how you want to focus because they'll be so many people who are trying to get in.

But even a market full of big name talent can present its own chAllenges.

The mistake I see so many starts make is go higher. That person from E A, you know, go higher. That person from x box, like, they get really rude by the resume at the early stage area source .

mini is an angle investor and former c mo at.

And there are some amazing people of those two companies. Don't get me wrong, they really are. But the resume alone is not what is actually gonna.

You be successful as I start up, and you can waste a lot of time, a lot of money. These people are expensive. Often, sometimes they are seeking the same salary they got of x box.

And the thing is, they're probably really great in those environments. But when you are a team of ten or less, twenty or less fifty years, it's a completely different bulgin. So all that amazing experience, all the knowledge that they have, all the skills that they are, don't necessarily apply to the early stage.

Now this is just one of the ways that companies are trying to stand out in the sea of stiff competition and is truly a worldwide game. Here is done up in my competition .

is see numbing games even beyond the competition that we see here in the west. Most of asian game companies are, call me here the cancer, that is, they're actually on moving west. And this has been in africa, has been going on for some time.

But I think it's a celebrated here, you know, the crackdown that china has had and gatto boxes and regulated playtime and some support. This is an example. Me hero, I think it's opening. Do we four offices are curing the west coast for one and hire enough a massive number of people.

And so something to think about IT, if you are stored in the game studio to the and having the potentially compete against developers that can feel massive workforces that are working around the clock and have very, very deep understanding of like monetisation underground, free to play economies and so on. I think it's hard to compete with one of these motor guys just purely like our production. That is like what los can pull the basically can head against and come into your space.

So let's give in to exactly that, the tools and strategies that gaming companies are putting into action, get their products onto the leader born, starting with listening to fans.

He used to be that back in the day. Marketing with this combination of P, R, conferences and events and building case studies with your customers and doing field marketing and a sort of this like very repeat playback like a whole industry is getting foundation disrupted.

It's shifting really towards the idea of a lot of B, T, B founders actually instead talking directly to their audience, building direct channels with their customers, building in public, building a sense of a buzz around the work that you're doing. And we certainly see that a ton in AI, where the primary hunting ground for acquiring customers, for attracting funding, for recruiting employees actually has been twitter and linked in and discord and some of these other platforms. And I would certainly encourage anybody that kind of working in A B to b contacts to really consider the same.

Steve and snow learn the power of this approach when him and his team at riot stepped away from their screens and set up a stall at the gaming industry, y's largest convention.

when league of legends made its big announced. We went to e three, and I had a booth at the end of the end of a row in county a hall. We told our community, if you want to do resume reviews come by.

All we had was our community, and no one knew who we were. We were forty five percent studio at the time, but everybody else thought there were three idiots in a garage right on the day started. Super sad is just me and a couple others in the booth.

And within a few minutes, people are showing up that you usually just wanted to talk about the game. And I was like, i'll talk to you about the game, but I have one. Before I talk to about the game, you have to tell me something that completely sucks about legal legends and it's a quality native question.

IT doesn't matter what their answer is, i'm just going to source with them like, oh, that a friction related to match making. They might say, like, take me forever to fly a friend it's like, okay, cool that a matchmaking ing problem is that like a friendless problem? But i'd go through and pull IT all out.

I did IT for three days straight and IT was horrible. And they are just debit catering the product right there, right, just right in front of everybody. And the whole thing I just kept dealing was writing down their feedback, writing IT down. And by the time I got back to the office after that canty a hole to bacco, I had a punch list that was more effective for the overall trajectory of league of legends than if i'd try to sit in a room with our top designers. Yet the end of the day, it's not personal.

They are as angry and as furious about the state of the game because they care, right? Like, that is the secret sauce, right there I got to the point on legal legends released notes I was putting in panthay sis next to the big beats, and we would give them credit for giving us the feedback. There's another detail that's gonna sound completely insane.

But when we had about fifty all the way up until about two hundred and fifty thousand monthly active players. I would meet with the top tier players, and IT was first come, first serve in a ventriloquist, and IT was kept to two hundred. And I would just go every sunday, starting at four pm. I would just go down the line of the hundred and ninety nine other people and asked them what socked and that was what for the release notes.

Direct user engagement can be a game changer for any technology product, and the team at riot takes their player focus approach a step further by putting players at the heart of everything they do. Michael chow, Stephen former colleague .

at .

ride the holy grail, is the customer, and you just obsess about the customer. And when I showed up at riot, I used to call our customers users, because this is what ever body in consumer technology calls users and column users. I didn't realize how much I hated that until I started calling them players.

And when you think of them that way and you start you seeking languages like that and you envision what they do with the thing that you're trying to give them, IT just changes everything about how you can make great products. And so that for me was like that was a huge inflections. Point is just becoming really explicit, customer obsessed.

You don't make your dream game. You make players dream game. And I think that is a very helpful way of thinking about IT.

I think there are basically two kinds of game developers in the world. There are people who are the consumer tech companies who got into games. Mark pincus, who was here yesterday, was my boss.

I love him deeply. He is passion for the gaming. Basement is not a game developer by trade.

He is in a consumer internet technology product developer. So that's one kind. And then the other kind is what I ve called real games of. These are real game developers. Both are actually really important.

But I think the highest level feedback are suggestion I give any of you is figure out which of those two things you are and then just do the everything. If you consider yourself a consumer internet tech person, you think more about what is the market saying and you're thinking about the customer, which is nice. Actually, that's good.

You really need to tap into the internal part of you that has very strong sense of inspiration and tasks. King, whatever is the product that you're making, really immerse yourself in IT. Conversely, if you are a game developer and don't think of yourself at all as the consumer tech person, you mostly go inside out from your own inspiration and intuition into, like shipping IT out and to the world.

This is like hideo. Koji is like my least favorite example of this kind of developer. All he wants to do is make what he wants.

And if you like IT, then great, but IT doesn't matter, it's about him. That's also a noble way of being. But if that's your way, do the other thing. Learn to be obsessed about the customer in the market and work backwards from their needs rather than your own .

inspiration over at discord, aosis team are focused on talking directly to their users as well, but in their early growth stages, they paid extra special attention to an important subset offence.

Now you're in a world, but you've got your first hundred thousand, ten thousand, fifty thousand years. The question you to ask yourselves is, within those groups, who are your super fans and what are you doing to encourage their behavior? That's the thing I actually think works best for growth, something we did phenomenally well at.

If you were a discord superfan and we saw you, you knew that we saw you, you just knew that you could tell that we were loving you right back. And I remember stand, what always is. So stands.

A C T. O. Describe stand would always say, my favorite thing to do is to get out of writing code and go to packs and talk to the people about the code on writing.

And he loved that. And he would always insist on being there and ask questions and take feedback. And he without his phone and shows some new feature he was thinking about and get feedback, and he just really got into that. And then, of course, on twitter, you know, the same day someone was like, I just want to stand a discord and you show me this cool thing and like, there is a social love and then our social team would be like, thank you so much for hanging out with, as I was just as like, just a few sive sort of a love feel. And so the reason I say this, the reason why those people are your most important asset, from day zero to the end of year one, you're most important asset. They are the ones are going to tell you what you're doing right and what you're doing wrong probably before the world, is that because they are using the product so much so intently, so passionately that they'll know bugs that you don't know about. So embrace them.

Now there is another way to reach sea prefers. There's some of the most infantile people in the gaming world. Streamers.

but we noticed was a number of streams onto which trying to figure out how to Better managed the communities with very clear that that wasn't a great tool for them. They were pasche IT together with everything from trio to team speak to other sort of suit of discord solutions.

And we decided, after we saw some sort of a small uptick from some smallest streamers just invested that a little bit, we thought, hey, if we show them that our tools really good at what he does, we could provide them with some stuff that is stream specific, creator specific, and we can get them to use discord while their gaming with their friends. IT will literally show the world what our pon is intended to do. Disco was really intended for, like you and your tent friends to hang out.

IT was never intended to have hundreds of thousands of people on IT, even though that happens now. The original attempt was like, bring people together through games. Hang out.

Build your small community. So we built a few things we help them link there. Some scriber sort of stand is to special rules and discord automatically.

We handle some other payment gateway ve pieces related to that. We just out of made discord Better tool for them. And anyone who was sort of watch disco group and was also watching twitter the time could see IT. IT was obvious, like all the big streamers were using IT. And the funny thing is, the first few that talked about discord, we didn't pay them.

So if we met lyrical like a twitch corn, and we were just like, hey, here's a really cool thing and like, we can't pay, we don't have money, but we think we built something cool and we love just to get your feedback on our product. That was the conversation. A week later, he gets on stream and says, this is the best built piece of software for what I do that i've ever seen.

And you can just see a lera spyke bb, right? And that was a nice way to sort of value, right, that we should write a witch race. Because there are people on that platform, they think the way we do, which is like let's make great products and let them .

speak for themselves. Clearly, player feedback is a cheap code for identifying opportunities, building great products and finding customers, but a focus on player preferences is also key to tackling. One of the biggest chAllenges in the industry distribution here is Michael.

The industry is in a tremendous lt of flux about channels for receiving your content and channels for paying for your games. I don't think we know how it's going to resolve specifically the regulatory environment.

The diasporic of platform right now is pretty frustrating, like if you want to watch a television show right now, it's your guesses to whether it's on netflix or prime or hou or disney plus, which is now kind of holum but not yet who luu or french rule or picher, whatever. And I think that players don't really want that in their games. I think they're much more discerning as players and games. And there also more religious, which is why you see the divide between steam and the epic game store. And I think that you've got to rewind dock wards from what .

the players want despite players being pillowed in their chosen platforms and floods of contempt available. There may just be one major wave that could disrupt all artificial intelligence. A I is already capable of helping us raise stories, create artwork and builds. Often are some the core components of game development, but IT also presents a host of new opportunities like more personalize narratives and custom ual, gds or AI players that can help test games and even tools for analyzing player activity. Here is john state.

the way we think about our own games, that there's core to be set of two waves of innovation. And so the first wave is making the same games that we have today, but just faster, cheaper, like a greater scale and before. And I think there will be valuable companies that do that and do that well 哦。 But I think long term, the incumbent are actually the most likely to capture valley from the set of faster, Better, cheaper, about the same development.

And then so the second way, which we are even more excited about is the potential for AI to create entirely new markets is like new types of game play experiences, new social experiences involve in agents, new types of genres that use the I as part of its core game that we haven't seen yet. And I think golf maybe like you can create the most value here because if you're successful, you're bring in a net new players, right? Like you're not trying to lize call A D, D, and to actually appealing the people who don't self identity me today, but they might see something so calm there. A R, so hey, that's actually really compelling. And so I thinks the long to be promise that anyone gaming that, we're very excited to our .

and we probably have no conception of the innovation that's on early step.

People often talk about how if you knew that cars we're going to be invented, you could extra that gas stations would be a thing, right? Because that's kind of the first order. And by the way, you know, in a world of lie horses like that, you need stopping stations for your horse to water, whatever to feel like.

Okay, well, cars gonna that IT is really, really hard to go from that and saying, know, wl, mark can exist because of the car. Know where a city like L, A can exist because IT really is something that the urban sprawl of requires, you know, the invention of a car to support that. The second degree aspect, I think, is really difficult.

I think that is why a lot of the what we can imagine is just taking things that exist today and just doing a little bit Better. But the reality is, I think are going to see people compete in a bunch of different avenues they wouldn't have previously, maybe when. IT turns out that we decide as a country, we're going to have trump bee by them again.

Somebody that evening is going to spin up like a mean game, and people are going to play a for like thirty minutes at that evening, and then they're gna thrown away. But I was instantly easy to build. today. You talk about markets, you say alone to build this experience, and it's got to address a market of the millions of gamers. And that's the only way we possibly do that. Well, you know, again, if it's super easy, the same way that you would make a little mean to make fun of someone in your office or whatever not that we ever do, then maybe you would build a little game that's a for an audience of twenty people that's just a free for all you know like thing with the sixteen partners is like shooting at each other maybe would be fun.

When IT comes to A I gaming, there's still a lot of uncertainty, but the gaming community has always been quick to embrace new tools and technologies. So given his track record, other industries would be smart to learn from these pioneers.

The games industry is this really special force with tack, because you look at how the PC came into the consumer household, how G, P, S came to be, how 3d came to be， how VR is happening right now. The games industry is really been this sort of like alpha nerd, kind of earlier adopter instead of technologies that then comes to actually ultimately revolutionize rest of attack street.

All right, that's offer. Now whether you're building directly games or not, be quick to remind you that the industry has long been on the frontier, and we hope this gives you a glimpse into how their solving universal and progressive the next level. If you like this episode, if you meet IT this far, help us for the show, share with a friend.

Or if your feeling really ambitious, you can leave us a review at read this podcast 点 com slash these six city。 You candidly producing a podcast can sometimes feel like you're just talking to avoid. And so if you did like this episode, if you like any of our episodes, please let us know. I'll see you next time.