From Mobile Games to Apps: Inside Play Ventures' $500M Fund

Well, I think it cuts both ways, right? So, so I think a lot of the consumer founders we talked to I mean some of them are even coming from gaming. Like we see a constant sort of flow of of great gaming talent also looking to maybe we need maybe want to build something in consumer next. I think actually the consumer founders are quite fond of of the background that us and the team bring to the table. They're intrigued by exactly the thing that for the longest time the App Store was the game store. And they want to learn like all the tricks and the tips and and what and the best practices whether it's with user acquisition, how do you do data, how do you do segmentation, how do you build a long retaining product and things like that. It's it's funny you said that because even our investors were asking when we when we expanded into consumer with Front Three is like what do you know about consumer? How can you win these deals? What's your right to win these deals? And for us actually the gaming angle has been a key part of that strong deal flow because that gets the consumer founders excited. We're still a specialist fund make no mistake. We're not a generalist. We are specialist funds that that's

built their their chops in gaming and now we're bringing sort of that expertise to other places well.
What do the founders say who specifically sought out Play because you were a gaming fund? Like we're talking about probably the uh the Fund One Fund Two founders when now Authen and Hendrik are looking so much broader than that of games. What are they thinking?
I think it's like Authen says it goes both ways so apps can learn from mobile games and mobile games can learn from apps. And we have had these summits now you know every year or so and we see cross-pollination between the mobile games companies and apps companies. And well quite often it's about yeah mobile game wants to add a subscription layer is it for a battle pass? Okay, the consumer apps are the masters of subscription. So, cross-pollinate between those founders that learn from each other. Of course I I can see the point from some founders that felt like they were the hottest thing on the planet
[laughter]
and now there's something else quite hot as well and consumer apps being that then or or AI. And then you're not anymore in the center of the universe.

You're somewhere on the fringes. But I think it's been really healthy in our portfolio. And I think we have had a lot of collaboration already now. Is it the marketing creative? Is it LTV optimization? Is it subscription? Is it churn? And kind of both parties kind of is it consumer apps or mobile games? They learn from each other.
Yeah. And then if you bring into that equation then the third pillar which is like the related technology services platform. Picks and shovels if you may. That's also like very synergistic to the whole to the whole portfolio. You know, for example, like an app charging our portfolio or somebody else, you know, there's a meaningful amount of potential sort of what do you call like uh
Cross-pollination.
Exactly. So even that is becomes helpful. It starts to be like an ecosystem of
different parts.
But as a participant in the summits and they were really good in Singapore and in um
In Finland.
Fiskars.
[laughter]
Two very similar places.
Very similar.
Very similar.
[gasps]
I do have to say like the vibe has has

shifted and especially in the beginning as the there were an inflow of consumer apps. The gaming founders were like cuz gaming is not [clears throat] inclusive. Let's be honest. Gamers are gamers and everybody else is of lower stature. And they're like, "What's going on? Like this is like this has been ruined. Like why are these Bible companies Bible talks and others coming in?" But I think Bible Bible chat, sorry.
[laughter]
But as as the as the time goes on I I can see that and and the focus go goes more into how to be a founder, how to grow your business versus like what's the mechanic that you used in your game that we can take in our game.
Yeah, I think so. And and look, first and foremost we back the best best founders. That's where we have the most conviction. And and you know, we keep on seeing amazing gaming founders still come to us. We go to them. And I think there's a lot to offer there. But I think for the gaming founders, it's good to see like the like the consumer founders really getting excited about things that they think is like just like another day at the

office. Because it really also shows how ahead of the curve mobile gaming was in a lot of these things which construct the mobile business as we know it.
100%.
Is there anything that you would back now that you wouldn't be investing, let's say a few years ago?
I would say 5 years ago our thesis had to be evolved so much that we would kind of mainly back teams that have done games for 10 plus years, 15 plus years. Like being really veterans in gaming. They worked together before and made a game and especially looking at the Turkish teams, they're 25-year-old people. And if you look at outside of Turkey, people are older and maybe we are the dinosaurs in in Finland and if you look at the game makers in Finland, unfortunately, everyone's plus 35 of or 40.
40.
Yeah, 40 or 45.
45.
Same same in the US. So kind of 5 years ago we were very kind of like, okay, we need to back these experienced people.
Veterans.
Veterans.
[laughter]
And then you look at what is the outcome of backing the veterans?
Yeah.
It's not so good necessarily.

It's good headlines.
Yeah, yeah, so so now you look at, okay, who are we backing now versus then? We are especially if you go to Turkey, it's much younger teams, much much younger teams, 25, 30-year-olds and maybe worked a few years at Dream or something and then Peak or Peak or Gram Games or or any of these and and and they're kind of like full of energy. They're like they want to change their lives. They want to change their families' lives. They want to change everyone around their life. And they have a drive that we have rarely seen in other markets. And of course you see sometimes, but as a whole, that ecosystem is really really interesting. So our thesis 5 years ago that you have to have 10 plus years of experience, that's not true anymore. Now it's kind of like, okay, what is the dynamic of the team? How hungry they are? Of course some experience you need, but it's it's not that anymore the same that you have to be 15 years in gaming and be a veteran and written a book or two or whatever.
That's almost like a negative.
At least a podcast.
[laughter]
When I ran a studio, I had this saying

that I sometimes I interviewed people and and also in hiring I was like, if you've been in gaming 10 years and you never created anything successful, is your experience an advantage or a baggage? So that's that's maybe true here as well that if if you are really really experienced in mobile, you haven't worked on any big things from the start, what is the likelihood do you in this market then create something which because the market now is incredibly tough.
Yes.
So it's almost better do you not have the baggage and you are full of energy and full of innovation and drive and then you go. So there's kind of a balance of course. We still what is still true, we back good teams, great teams that there is a great CTO, there's a good CEO, there's a product person, there's a kind of good interplay with them, maybe they worked in a team before. That is all true. What is different five years ago and now is that it's necessarily not anymore an advantage to have 20 years of experience of a field.
I wanted to jump in a little bit on that that one topic because I've seen different types of funds. Like some funds are almost like creators of like,

you know, what's that show? Pop Stars or you know, where you take the best of best and put them together into one group.
Mhm. Creates like all-star team.
Yeah, like all-star team and the results are even though on paper they look invincible, often times they crash and burn because they don't maybe they have the cohesion of working together and they're just there for the loot, but when the hard times hit, they start fighting each other rather than pushing together. And so how do you evaluate that the the founder relationship is strong given that that's the number one reason why startups fail?
I think that's a great point and I think we we overemphasize that a quite a lot. That's a key part of our diligence is always like the founder dynamics themselves, uh, the founder background and so forth. It's interesting to know when you said about like the Istanbul emergence of the Istanbul ecosystem, a lot of those teams actually have team members who've been friends since they were kids almost. And that's that's an interesting dynamic. Almost all of the the the best teams have some sort of like a longer standing relationship, even before maybe professional, which is

interesting. We we've seen the same in Tel Aviv, for example, where they a lot of the founders have gone to the same army unit, for example. Not only working in a professional setting together for a long time, but knowing each other personally, knowing each other's strengths and weaknesses. But also like things I think we've written a few blog posts about like things like vesting schedules and making sure it's about protecting founders also from from kind of one another in in that sense, or making sure that there's cohesion like, "Hey, this is a long journey that we're going on together, even if there's like ups and downs, and there might be disagreements, but still there needs to be like a common common alignment and common visions. You know, maybe even more than anything else, especially early stage, because because what that's the real one thing you can actually back is the people and have conviction the people.
100% and I you know, I'll refer to what you were talking about to the vesting schedule that that Play tends to put in front of the founders is that you vest your first part only two years in your

startup. So, you get the everything by that time, but it takes two years before you get your first bigger set of
Yeah, we often like that because because, you know, the the Silicon Valley standard is the one in four, so one year cliff. But on honestly, when you start one year goes by in a flash. And and you don't want to I want a situation where after the first year has gone by, if there's like material differences of opinion or whatever, that you know, have a founder leave early and then retain a lot of equity. There's We've discussed this at length. There's so many problems related to that, so
And I've used that. It's it's really good. It's It sounds unfair, but
when you're in the thick of it, you actually thankful for it.
Yeah, I I think that's been universally that the feedback we've gotten and I I think it's only also kind of you know, based on our our experiences as founders as well. So, you need that. At least 2 years. I mean, and it's not a lot to ask if somebody's willing to invest millions of dollars in your business and saying, "Hey, can we at least agree that everybody's building value here for 2 years?"
Yeah.
And if if that will already starts to be

a friction point, then then it's at least some sort of signal for us as well.
Yeah, I think it's an incredible filter to to kind of ask the founders that, "Hey guys, are you okay with a 2-year cliff?" And some founders kind of like first get upset. Then they go back to their founders and co-founders come back to us. "Hey, okay, we we are in agreement with this." Some founders just kind of hit the total wall and they can't get past it and this is quite a yellow flag for us because like we said, it's incredibly difficult to create a new startup and usually after 1 year first game failed and every everyone is rambling and thinking, "Well, it wasn't so easy after all." Then if you have someone go and leave with 10% of the shares
Get a new job.
A new job, high-paying job. The rest all the rest of the co-founders investor are totally kind of like in trouble. Like you can't raise capital. So, I think it's a great filter to see kind of tough discussion happen between the co-founders. Can they agree that we're all here for X amount of years, not just one? Longer. If they can't, it's definitely a

a yellow or even red flag for us. The whole reason why we even started with this was that when I had my own gaming company Nonstop Games, we were four founders. We had not worked with each other before. We suggested
And you were all all-stars.
I I
[laughter]
Except me, of course. But but we suggested this to the investors. It was not the investors suggesting to us. We suggested it to Crown demo uh which was our lead investor in the seed round that, "Hey, uh how about 2-year cliff?" We ourselves. It was not them. Uh because it was a way for us to kind of like see that everyone is committed, everyone is on the same boat. And we even had some founders suggest to us, "What about the three-year cliff?" And that the founders suggest. So, to kind of just a way for protect them to protect themselves from each other.
Well, and and it's it's in the benefit of the company company, obviously, to have people who have, you know, conviction in it, whether it's through the use of their time or or or use of from
One more hot hot take I have. I I guess you like hot takes.
Well, this is this is all about hot

takes.
So, so one one thing cuz it can be sometimes on on online calls, specifically very hard to really assess what is the glue between the founders. So, we sometimes ask tough questions. Is that then the CEO, but I actually stare at the other co-founders' faces
Yeah, me too.
when they the CEO answers. Uh and this is a really good because the face tells a lot.
Yeah.
Uh you kind of ask that, "Who came up with the game idea?" Then you look at the other people and they could CEO is telling something and then their eyes roll or their faces go or whatever. It's a very good way to see what is the truth and what is the kind of body language tells a lot.
Yeah.
Uh and of course it's not, you know, bulletproof.
No.
But it it gives a kind of a little bit of how how decisions are made, how they talk to each other and all that stuff. And it's actually quite funny to to do this.
If I if I'm the VC
Yeah.
and Harley's pitching me, I can't look at [clears throat] Henry.
Yeah.
What is his face?
That would be bad. Although I still do it. I still do it a little bit. One another hot take is Sometimes I I

ask the founders like like they have had kind of like let's say a working working progress name for the company. And then I said, "Hey, that How how how about this weekend you get together with your co-founders and come up with a name for the company?" It's a very nice exercise. What are your values? What are you trying to achieve? Maybe I tell the Supercell story of the cells and the Supercell of the collection or whatever for good names. And then next week they come back and okay, come with a name. And then I ask them how how was the session with your co-founders? And if one of them says, "No, no, no, there was no session. I just chose a name." even though the whole idea of the exercise was to work together, that's also a yellow flag. Yeah. So, incredibly hard in three or four half-an-hour calls to suss the founder dynamics. Of course, the best is to meet them, go on a dinner, be at the studio, and that we also do in our DD, but but uh small things like that kind of kind of give you a hum of how how good the glue is.
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There's a lot of perception of what what the job of a VC is.
Mhm.
Some true, some less, but perceptions exist.
A lot of a lot of emails at least. [laughter]
A lot of email, a lot of tweets, and LinkedIn posts. But, what is the something that that you feel that people systematically get wrong about your side of the table?
Look, I I think sometimes when we talk to founders, they don't have a clear understanding, and then it's it's it's for us to explain like what are the things we look for, and what is the scale of a successful outcome that we're expecting. And then sometimes those are not in sync. It's not a right to raise funding, right?
Yeah.
It is a sales process. You're selling, you know, equity in your company to investors. You have to make get people

convinced. We pass on, you know, 99 of the 100 we see usually. I sometimes think that founders get discouraged by VCs saying no. If somebody passes on on your business, that it's a that it's a business or anything like that. And I try to be as constructive as I can cuz we both been founders.
Yeah.
And so we've been on that side of the table. And to explain like why we're saying no, and nowadays trying to be as fast as we can on sort of also saying no. I I I know we we do ghost people from time to time. It's just like the volume of volume of of of messaging is so is is so high.
And the other thing I often tell founders is like even if we say no, and we give feedback, that doesn't mean it's a no forever. That doesn't mean you can't follow up. On the contrary, you should follow up when you have progress because then there's at least a shared context.
But, how much do you say no versus you're saying kind of like a soft no? Like, "Ah, it's still a little bit too early for us."
I the the
Come back when you have a lead.

Look, I think I think it will never that.
[laughter]
Never that. I think I think that That's a good point because when I was a founder, there were I I had many many meetings like that, you know, with with VCs. That to me is like the worst message to give out in a lot of ways. Come back when we have when you have a lead. Oh, it's interesting. Yeah, yeah, yeah. And so I think I think that's one of the things that we've learned over the years to be like quicker and and and and more decisive. Will that mean that we'll miss something? Probably yes. But also like being very clear to the founders if if something is, you know, not for us. On on the other side like this is one of the reasons why we often lead deals because if we have conviction in a company. It's and it's not a 100% we can call lead deals. We can co-invest. We can participate. It's not but often times like it it comes from our own experiences of seeing sort of non-committed soft the nose or yes who we were which one I what is it? You don't even know. And so for us it's been important when

we have conviction is to to lead in and really give the founders like, "Hey, we want to back you."
Yeah, I I I'll give an example. I think um it was Makers Fund that that gave the best no that I've gotten.
Yeah.
They didn't invest first because they said, "We don't think you have a strong enough CTO." And then they broke down exactly what is a strong enough CTO and said, "Well, because of this it doesn't work out for us." And I went out and based on their description got the CTO and said, "Hey, look at this. It's the CTO you wanted." They're like, "Okay, it's an investment." So it was like a very clear no and if and it also gives you a very clear target of what you need to fix.
Yes. Yes. And kudos to for them to come through with it. You might say you might have get a no like when you hit a million ARR come back to us and then when you hit a it's still too early.
Yeah, yeah. And and and and they were also so right because that ended up opening up so many avenues that that the right CTO. Like it was instrumental for the for the company's progress. So those type of very powerful knows not even like a outcome of the business which is

unfair. It's like, "Come back to me when you're making these type of numbers." Like I don't need you when I'm making these type of numbers. Like this is an investment. But these type of us structural things that you probably see from the beginning is like we've like, you know, we've seen some cases where you've said like, I think the CEO is wrong. If we change the CEO, then it's an investment. And then boom, they change the CEO and that's an investment.
Yeah. But that discussion is very hard, honestly.
It It is.
It's It's sometimes we have, you know, and I included have said like openly to the co-founders that that hey, that I think you should switch who is the CEO. But the other person is better at pitching or better at relationships with the investors and and the other one who is CEO currently is better kind of like as a CEO or a product lead. We have had some teams who take it extremely badly and get upset. What right do you have to say who is our CEO? It's kind of It's a very hard on our side kind of like to give the the kind of like the feedback at the right moment that is taken well because in the end of the day we're also in the reputation business.

If you have founders who get upset by our feedback in big masses, it hurts our reputation.
And they And they have their narrative that they will push forward that you're not part of that conversation.
Yes.
They will say Henrik is an
[laughter]
And I'm sure I'm sure someone has said
No, I've never met that person.
[laughter]
Yeah, but that but that, you know, sometimes it happens also we we see a founder that we passed on or gave feedback to and then couple of years later they come back and they might say, you guys were exactly right. Whenever somebody has doubts about what you're doing, like it doesn't feel great.
insult.
Yeah.
It's a personal insult. It's like you're doubting you personally versus your business idea. [laughter]
It's an attack on your personality, right?
Everything [clears throat] that you are.
Yeah.
But that's what That's exactly what you're saying that people don't understand on your side of the table is like, should I be frank with the founder?
Yeah.
Is that actually beneficial for the founder and for my company? You're being frank, you're being honest, and somebody says, "No, he's been an absolute asshole." And tells that to everybody else.
Yeah, look and and there's as much of an

art as there's science for early stage investment what we do. Often times there's not even there's not a product, there's only a very you know, the early team, the founders, maybe a couple of team members. And it's not very scientific, but there's a lot of gut feeling to it as well. And one of the things I think we've learned over the years is like we've had over the years like some sort of not non-negotiables, but things we like evaluate against. But then we might have an outlier let's say oh maybe we don't like like solo founders because of the keyman risk or whatever. And then we we have one now where there's a solo founder and they're absolutely like
Or junior founders.
Yeah, or junior founders, which is another one where we've definitely like moved especially now with the with the emerging like Istanbul ecosystem for example, like a lot of these founders are so young, but they're they're also like so inspiring for us. So I guess what I'm saying is like, you know, I I think we should try to give as candid and meaningful feedback always when we pass. And look, the one thing that I think founders don't realize and

appreciate as well is like the ones we passed on which become massive. I think about those every single day.
Oh, yeah.
Every single day. Every single day. Every single You ask any VC. You ask any VC and and the and the thing that haunts them at night is the is the founders they for some reason said no to.
So you you've been in in in multiple situations where the companies are pivoting, uh crunching, restructuring, founders are leaving or even positive things they're going through due diligence and exits. What's the thing that you feel founders almost never say but should be saying in those difficult situations?
What makes board work for example hard for us if if there's founders who always sugarcoat?
Mhm.
Everything is going well. The game is like the team is fired up and pumped up and we're going to crash it and and in reality something else. Admitting failure is is very hard for founders and I get it. I've been a founder myself and maybe I also sugarcoated.
Or believed in what you were
believed in it. It's better for everyone around the table to kind of be frank and

hey, not succeeding. And okay, we're thinking about the pivot. That's much more useful as a board than kind of telling a story which is not true. Because at the end of the day, the board is supposed to help you and maybe give an opinion that you don't need to follow, but an opinion. Partly related to failing is co-founder problems.
Mhm.
That Those are most difficult.
Those are most difficult.
They're personal.
They're They're They're some kind of stress or stress or disagreement between the co-founders and and they don't tell us that because then they appear weak or they're ratting out someone or or whatever is the reason. I understand that there's loyalty between and I appreciate loyalty. But if someone is not, you know, contributing and and and and there starts to be stress in the co-founding team, it's exactly the type of conversation that should go on on on the board and and and kind of shared with us. And there are then ways to solve it. There's ways to talk with the person. There's ways to change the position of the person or whatever or even removing the

person. But if those don't come out in discussions and kind of sugarcoat it, everything is well. It It Eventually that that company will fail no matter what. And then everyone on that boat is fooling themselves and wasting time if they don't deal with the problem.
From my personal perspective, having had founder issues or co-founder issues, I think it's it's more like you're ashamed as a man that you can't handle a relationship with another man. It's like what's going on? So all my question is more like is is that a more male founder issue or geographical or do you feel like it's the same thing with female founders?
From our experience, it's it's pretty universal. It's hard to admit to your board or your investors that hey, we're not getting along, especially if it's like something that has recently sort of deteriorated. And you'd be probably not surprised, but it's it's not easy to uncover either from a board investor perspective. Our role often times in those as an investor board member, is to mediate and

we're pre-mediators first and foremost. Trying to find what's best for the company where where everybody's a stakeholder.
Yeah.
But but yeah, those those can be like incredibly tough conversations to have.
That's a lot of my work these days, mediating co-founder issues. It's surprisingly common.
Yeah. We've all been there like it's an incredible incredibly stressful position to be in as as co-founders and and and you're dealing with so much uncertainty with everything with with your product, with your team, with the market, with things you can't even control and so
And it's a long journey. People change during like some companies that I you know I work now and have been working over a decade already in a startup mode and found success and found product market fit but and the people who started are now in different place. They're still pushing hard and some of them are thinking about you know taking it more easy or some of them want to take harder and now there's and that even that creates a tension as people grow during that time.
Yeah, startup journey is a long journey.

Sometimes you see it is like two-year-old startup sells for hundreds of millions of dollars or even my own was three years. But
Mine was a year.
[laughter]
Yeah. So but but
No, you were nonstop was long.
No, until sale was three years from founding.
Really?
Yes. Uh so
Forest.
[laughter]
So so so but that that is not the norm. It's eight years, it's 10 years and people change, your priorities change. Maybe you had a family additions, maybe you moved around the country, whatever new new countries and
Parents got sick.
Yeah, exactly. Stuff like this can happen and and and then your priorities change and that's normal. Totally normal but it's it's very hard when we invest to know what's going to happen.
So you said something that that founders don't say that they should and and they're they're not sugarcoating, talking real about product and talking real about issues. Is there something that investors don't say but they should?
It's a lot of the same issues but reversed, right? So, I think as as a more sort of outside observer as an investor board member,

there are probably issues you see within a company whether it's in a leadership style, maybe the maybe the leadership itself, maybe the strategy. I think investors should act faster. It's like sometimes you look at a business where you invest and you start projecting yourself a little bit like like how would I run this but but you can't do that. I mean it's like you're you're you're investor, you're a board member, you're not the team has to figure these things out and the and the and the leadership and the founders. It's it's their business, right? Sometimes like calling out certain issues but again like those can be incredibly hard conversations to have. And it's maybe even amplified by the reality that often times we might be one of many investors in the company. And one of many investor voices for example in a board meeting. You have a certain point of view but somebody other might have another point of view and then it's incredibly hard for the founders as well to sort of distill all that feedback into a what is

now actionable and what is not. So, often times when when something maybe goes wrong, then it's easy to go back and you know look at us or look at the other investors like we probably should have you know given some feedback earlier or should should push for a change earlier. Yeah.
Yeah, I think it's uh it's it's
a good question to kind of like there's a very difficult balance of being a nice supportive investor versus the one who actually tells what they should hear.
Value added.
Yeah. Because I I don't think an investor is value added if I'm saying, oh, cool, great, great, supported, supported, supported. That doesn't really give anything. So, so sometimes you know best founders are very impulsive including when I was a founder, I was very impulsive. Suddenly I come up with the idea that I'm going to move the whole company to San Francisco. And luckily, I told this story probably before.
No, you haven't said this. You have told a lot of crazy stories. This
Yeah, yeah, and and and and and then then we are very fortunate to have our pre-seed investor and he said, "Hey,

okay, [clears throat] I like the enthusiasm, Henrik. Can you make the calculations over weekend to make sure what cost and how it affects runway?"
Was this post GDC?
I don't remember.
Probably wasn't a good trip.
Prob- prob- probably, [laughter] probably.
It would have been a severance.
Yeah, exactly. It was so much fun.
Move move the whole company.
Uh, uh, of course you would only have Cuz you are the company, so you
We were five. We were five, four founders and one employee. And we made the calculation it didn't make any sense and then I dropped it.
Yeah.
The same as I was impulsive. We We see some founders are very impulsive with the ideas. We love that. But sometimes good to have a sounding board. And hey, does this make sense? Hey, can have you done the calculations? Then they go back, they make the calculation, and they get kind of a little bit distance from the idea and the impulsiveness. And then sometimes we proceed with those ideas and sometimes we don't. And I think that's a role of a good investor that you kind of give a second opinion. Okay, let's double check that it makes sense for the company. Is it in the best interest of the company or is it in best interest for you? The second part is kind of like looking through kind of like updates of

game development specifically. Is that it's quite hard to give opinions. It's my opinion. It's What is that worth for you?
One player.
But but if there is KPIs and let's say we had a team which was going through the board update and very quickly through the slides and there was the KPIs of day one retention of 4%.
What?
And then we quickly to the next slide and I was calling into that call and then there were some other I think Hardy was in the room. And and then from the speaker phone I was far away in Singapore and like, "Wait a minute. Previous slide." And then everyone in the room probably knew that what's going to happen. And then I was like, "4%? It's so bad."
That was a long time ago.
Yeah, it's so bad. And now it's so bad that this is actually a blessing.
Yeah.
Cuz now you can stop working on this right now and tomorrow you work on something new. And it's very hard to argue is 4% good or bad. Right? And there is no business to
32 is difficult.
Yeah. Yeah, that then it's hard.

That's what probably what I said. Be happy it's not 32 or 20 or 25 or 30 depending on the category. So in that case it's kind of like if you are I think role of an investor sometimes to kind of like see through and it's very easy to argue against numbers. That it's not just my opinion that 4% day one is bad, right? It's everyone can agree that it's very bad.
Universally bad.
Yeah. But then it's
Unless unless they're Roblox game.
But it's very hard. It's it's easy to I think it's good to give that feedback on numbers that you can't dispute. But on if it's like art style, who am I to say what is the art style? No. It's it's let the market decide.
But I I think at the end of the day, you know, you still want to be the founders first call whether it's like good news, bad news, right? I think I think in a lot of ways you've you've been there as a founder. We've been If you have smart people around you supporting you as investors, yeah, you can you can be candid. But also like you you you need that. I mean some of the calls we have with founders is pure pure therapy basically. So so you need that sort of

interaction.
It's it's Well, that that leads to the question is like what is the role of an early stage venture capitalist? It's like sometimes you hear especially new funds as they start, they're talking about how they are operational. We're ex-founders. We're going to help you to operate. And and some of them would say, "Hey, we are just backing good founders. We're not here to run your company for you." Like those would be the the opposite points. And then there's of course specialist funds that give something. But how do you perceive uh the role of a VC in an early stage investor?
Capital is one. They're not much of investor if you don't bring capital. And don't talk to me about sweat equity and all that. That's honestly. Yeah. I don't think you like it like I said with you always back the founders and and they run the business and they're I don't think there's a scalable model where an investor would be hands-on in a in every single part of the business nor would a founder even want it. When you're specialist like us, you can have tangible impact or so early stage

whether it's from understanding like understanding data, understanding UI, understanding you know the product itself. We've helped some of our teams with even with monetization like you've you've taught some teams like how to build monetization through for example gotcha or loot boxes or whatever and how to drive up LTVs but you can't do every single thing. So you have to be like in addition to capital and in addition to being like very aligned cuz early stage investors are very aligned with the founders. We we jump in very early you know the the growth of the company, the growth of the enterprise value. We're in the same boat with with a lot of the founders. You know, with all the founders. And so there's that role of of supporting but you can be very tactical in in in helping out as well whether it's with talent or whether it's with product marketing all that.
What do you think about the the idea Henrik where prominent investors have essentially said that you as an investor need to just focus on the absolute top performing

companies in your portfolio and everything else is just waste of your time and you should just be laser focused and give your maximum attention to the 10 5% of the companies in your
No it's a it's a good question. I mean no when we have over 100 companies we're five partners and and of course we can't spend you know tens of hours with each company.
It would be stupid to spend equal amount of time with everybody.
So what we try to do is that we are there for everyone meaning signing documents, helping them find financing, helping them find UA cohort financing if needed, helping with problems like with co-founders or whatever. But of course when it comes to kind of like focus, I do also myself focus on the kind of like top performers. Is it then app charge that we discussed? Uh helping them find new clients, helping them finding new people to hire. Of course I kind of focus my time on the top performers, but we will not forget about the company totally. Uh it's not our brand. We are a founder-friendly fund and people come to us for that. So we're going to deliver

that, but of course if you're not performing, uh we're not going to spend tens of hours, but we're going to do kind of like what we see fit.
Yeah.
And help you kind of like get out of a trouble or or help help you get new financing, but it it is kind of like I for example spend most of my time let's say on four companies.
Yeah. Okay.
Is there a situation where one of those companies that you felt is like, "Oh, you know, let's just help them when they need help, but I'm focusing on these ones." became actually the breadwinner?
Maybe not like a full 180, but but sometimes, you know,
things tend take time when they simmer and they compound slowly and suddenly like
Surprised you.
And but you know how game game development is like, you know, it's like the new hit might be around the corner made by a team of like, "Hey, let's just carve out a team of three to figure out some something new."
It's not linear.
It's not linear in a in a lot of ways. In B2B maybe it's more linear when there's like you know, clear sort of unit economics and it's based on sales or what whatever, but even there's like a lot of volatility. So And I think gaming history is full of

these sort of last ditch efforts. I think one that comes to mind obviously is is Rovio famously Angry Birds being kind of the last concept that they had money for and then that became the thing. So
If they had investors, they probably haven't had a board meeting in a while.
All [laughter] right, enough already.
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Let's put it this way, if you were starting Play Ventures again in 2018, and you would know exactly

what how the industry evolves till 2025, what would be certain things that you would perhaps do differently, the way you structure the company? Now, I don't mean single bets.
When it comes to the structure of fund, Singapore, having partners in Asia, having partners in in in in Finland and across Europe, I wouldn't change anything. It's been an incredible setup for us and it gives an advantage both in finding deals, winning deals, and also finding investors for our funds. But if it comes to kind of like investments, uh what we kind of like became very clear in the past 10 years that almost like every ecosystem has their kind of like window of grace. So, like uh everything goes so well. And And let's say Finland was between golden era. Golden era. Like 2000 2010 to maybe 2015 16 maybe 17 was golden era in Finland and you have of course super cell, you have seriously, you have small giants, you have many others. If we would have kind of like had the foresight we know now at the kind of like the it shifts very strongly to Turkey uh or

Israel. We would made a play maybe placed boots on the ground in those ecosystems uh already in
Having like a Turkish partner.
Yeah. Yeah. On earlier bets. Yeah. Earlier investments in in emerging comp
Yeah. Having roots on the ground in 18 19. Like Vietnam now.
Maybe potentially.
And I don't know how long this era of gold What What do you call it?
Golden era. Golden era.
I don't know how [laughter] long this golden era will last in Turkey.
Yeah. Uh I think it will last for a while because the brightest are attracted directly from school to gaming right now and it this will continue having the loop with more cash coming in and more know-how and more people and and it I mean it's the number one career you can have
Yeah. In Turkey right now.
And if I don't know in Finland if it's anywhere in the even top 10 anymore.
Yeah.
So, so it's every place has their golden era and and with that kind of like the book we have now I would have placed maybe someone in Turkey and Israel earlier.
The challenging about golden eras is we only know them from history. We write after the golden era has happened that was a golden era.
When things have fallen off.
Exactly. [laughter] We don't see the

We don't see the fall of Rome.
Yeah. When the those good years that we thought was great, that was actually the golden era cuz we compare it to today. So, it's challenging.
Exactly. But yeah, to to your point I think I think like the decision we made early to be a global fund and invest in all emerging ecosystems. I think I think you you know we didn't see back then that it would be a a certain ecosystem like like you know clearly Istanbul has has become one. But I I do think we we already knew from from like the Finnish success stories that that great global gaming companies can come from anywhere. With this people with ambition and ideas and and a laptop and a unity piece of unity software or whatever it is. And so that was probably some one of the best decision we made and not to be focused on specific geo. Uh because being a specialist is sort of you know focused enough in itself. We invested in in game found in 2019 in the Roblox ecosystem. Now looking back I think we should have been more more active there. I you know it's been been

amazing to see
The the growth factor.
the growth factor and the place where kids spend most of their gaming time and it's you know couldn't couldn't maybe see that one coming. And also the the secondary effect of that. Maybe that's one of the reasons why there's less and less young talent going to companies because of many of them are actually building Roblox games from from since they were since they were kids. So no more QA department first and then climbing your way up. But it's just like let me build my own games on.
And and it's a totally different different vector. Interesting. And with the first fund be as operational as it was because I remember during the first fund like with I would say every fund the the founders are very operational, very much in the founder mode. The thesis pivots to like actually we back great founders cuz that's the only scalable thing. Minimum input and maximum output is the perfect investment, right?
Yeah, when you start scaling as as a venture firm you you suddenly understand that you you just don't have time to

to do every single thing and and I think but that's natural but I think going back to where we started with fund one it's just me and Henrik and then we had Felicia join in early as as an associate and then joined originally as an intern and now both of them are partners eight years later which I'm very happy about sort of like that homegrown talent that we've been able to produce but it's also like evolved our our firm into a full partnership. So it's not just the two of us anymore sort of making decisions and making Kendrick with with another Kendrick with the with the web three fund obviously and and then and then Flo Flo as a principal in the investment team and and and we have like a fantastic operational team as well. So we've we've become more institutional which is which is great because it it it gives us much more sort of uh
And shout out to Joe for being talented.
Exactly.
He is watching his life.
Exactly. Joe Joe's been Joe's been amazing for us on the talent side and and and but but I would say like then we have to make a decision as well like you

know, I I think this is this is the way we want to operate. We're still pretty boutique. We're very focused. And I know there is we have many venture peers who become absolutely massive platforms of of capital and and that's probably not where where where going to go with Play.
We've talked a lot about how founders have issues and those are very difficult but you're also the founders of a fund. So how did you resolve your issues because you were fully remote when before remote was cool.
Like
Yeah.
Like one is in Singapore and the other one is in Espoo
Yeah.
[laughter]
which is the Finnish version of Singapore.
Yeah.
Yeah.
Pretty much.
Exactly. Look, I I I'll I'll I'll tell a I'll tell a story here which I think is is is very instrumental in in in how we how we came about. I think we start discussing this maybe late 2016. 2017 we're start trying to figure out like hey, what would it look like if we were to raise a fund? We met somebody from venture like somebody we we respect quite a lot.

And he had one one piece of advice for us. He's like get to know your partner very well before you guys go on this trip together. And we hadn't worked together, obviously. We had known each other for for a while. And then I traveled to Singapore to to see you and 2 weeks we lived in his apartment
with mold.
with mold
moldy apartment [clears throat]
to pay for all the lunches.
[laughter]
But but it was it was such a like like I think I think those 2 weeks, when I look back at it, it was like, okay, you know, we lived in the same apartment, we worked together, you know, we had fun together and it's like and for me that was like, okay, I knew professionally that we would fit very well, complementary the two of us. But that was also like from a personal perspective like
boot camp
Yeah, and it's like 8 years ongoing now. Um and and you have to have like absolute trust uh and candor. And that means, you know, we can we we obviously can and and do um

have different opinions about a lot of things, but at the end of the day it's a partnership and now expanding the partnership to Felicia Anton and Kendrick.
Well, well, and that's that's another one like I'm interested in like how did you resolve in practice like the issues in the beginning? And how were you able to build the fund the way you've built it in terms of like the people cuz like you probably didn't start it off with with culture deck.
No.
[laughter]
No.
You probably still don't have one. Yeah, or a coffee mugs. These are like you didn't sit down with like, what are our values, Henry? Like that would probably wasn't the conversation. And and how did you get that through? Like how do new people who joined not not Felicia, not Anton or that were at the beginning, but how do they join and get that become part of Play?
Yeah.
It's a very good question. I mean, it's true for any studio for that is not just a VC fund, but can I like this we have a culture of I think of of of candor. We have a people I and Harry has some wild idea of a

investment and someone who is not even in investment team says that this is the stupidest idea I've ever heard. And I know oh, then yeah. [clears throat]
Maybe it is. You're fired. But that wouldn't be true.
[laughter]
So so so we do have that and of course a very kind of no hierarchy and we have a uh for example people might find it kind of like funny sometimes when talk to our investors we have an investment committee. There's five partners on it and everyone's vote is as valuable as it doesn't matter is mine or Hardy's or the other partners.
Yeah.
But we actually don't even have democracy. We have we have two we need two votes out of five to do a deal.
Oh wow.
So you need to convince one more. And we have had deals where Hardy has been only yes vote.
Yeah, yeah.
And everyone else is a no.
And I can tell you it doesn't feel good when you're the founder of let's invest in this and
It really works. Uh and I think sometimes it's all yes votes, sometimes it's two votes, sometimes three, we have had four votes and the end and one vote. We have even had processes where the person who is sort of like the kind of

the sponsor uh who is the partner who brings it to the IC and kind of like by right should be a yes vote in the heat of the discussion and going through everything it changes to a no vote. So then it's zero out of five. Even had that. So I think we have a kind of like the culture we we don't have words on the walls or coffee mugs, maybe we should, or socks uh with with bold words, but socks we do have.
But it says play.
Yeah, that's true.
Culture you create from your actions and I really believe that and and and it's kind of like how do you resolve a no vote? If you Hardy would have gotten an upset and oh, I need to get this through. Then it destroys it. Then it destroys the culture. So it really is the actions you do uh that defines the culture and I think of course we have a small team, we're 12 people. Uh that helps. It's easier to keep culture
Is that conscious? Like do you think about that?
Yes.
I mean it's like and it comes naturally. Like the fact that we are a small team. We also involve like so many people in the day-to-day, e- even like evaluating

the investments. And it it also like even to some of our support functions like Joel on talent or Ellie or who does events or you have who works across the portfolio. Like all of them constantly, you know, see everything that's happening which actually helps them then align their sort of support functions in a way that play operates. And that this is one of the reason why I think it's very hard if you scale a venture firm to many hundreds of of investors or or or that because then it then it becomes harder and harder harder to sort of have that organic value set which is which is comes through the day-to-day actions.
Mhm. Fascinating. Well, 2036. 10 years from now. So, the fund would be 16, 17 years by then. What would you like people to consider what Play stood for that it doesn't get credit for now?
I think we have a we have a established brand or very established specifically

in gaming. We start to be also established in consumer apps. Our kind of philosophy has always been like a small is big or small is beautiful. And like we are boutique and we will keep it boutique. And but that doesn't mean that we couldn't have big impact. I mean, we are investors for example now in in Yellow Yellow in in India which is really smashing it with their drama TV app. And and we are global and we have this like very big companies that hopefully are billion-dollar companies. And maybe Appcharge one day we ring the bell.
Hopefully.
Very I think it's very likely.
Yeah.
So, I'm an optimist. So,
Inshallah. [laughter]
So, so, just because you're small doesn't mean that you don't get an impact. And and that's maybe the Finn in me that Finland of course is a small country and we made some cool things including of course the Oura Ring. But I think we are only eight years in the fund. 10 more years, we are every year compounding their reputation, the founders, the the network, you know, having a B2B company now, we can refer

them 80 clients. And it's it's like Harri said that it's I feel it's almost easier to help a B2B company than a game studio.
Of course.
Each company in our network that we have built for both of us 20 years in gaming, they trust us and you can get a C C-level discussion directly and and that's a game-changer for a kind of new B2B Play Ventures is there to stay. That's my goal. This is not my and Harri's fund. It's the collective of Play Ventures.
when you are out of Play
You know, they can't. I wanted it to live on. Very much like uh Apple or whatever. It's maybe a stupid uh
Benchmark.
Benchmark. I was just about to say Benchmark is our kind of benchmark.
Benchmark fund.
[laughter]
The the fund lives on even after its founders. That's how we build a firm as well right now. That's why we have five partners. That's why we invest in our partner. That's why we invest in our employees. Uh we have off-sites to bring us together two times a year, build

culture, go through everything. We give carry across the team, which is not normal. Everyone in Play Ventures has carry. Uh so so kind of stuff like that is very important to kind of create this perennial fund management company and Benchmark is kind of what I want Play Ventures to become.
Sustainable.
Yeah, sustainable.
And in the right way. Well, um just for my own perspective, it's been amazing to see the two of you build this fund from Rodeo VC, that was the original working title.
Not our first rodeo.
Not our first rodeo, to Play Ventures, which is for sure a sustainable fund. And how has it evolved from a small gaming fund focused on mobile gaming primarily to a technology fund essentially that $100 million dollars under management, hundreds of portfolio companies, hundreds more to come. And what I personally have really much enjoyed working with you, too, is that I can be as frank with you as I want. I

can have an a heated conversation and that will not break the relationship. And that is the the candidness that I think every founder should be looking for is is getting the investors that are fighting about issues but never about the other personal aspect. So, it's been pleasure of knowing you, Henrik, for 15 years and how did I fall
You were like 10 months. Yeah, yeah, about 10.
I think we're close to 20.
Yeah, yeah, I think we're close to 20.
Let's not reveal our real ages. We're at 32. Uh so, uh can't imagine how awesome the fund will be in the future. So, you you built something truly sustainable. Thank you so much.
Thanks. We work We work hard.
And humble.
Thanks everybody for listening and for your funding needs,
check out PlayVentures.
Thanks, Miko. Thanks.
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