Riccardo Zacconi, Co-Founder of King (Candy Crush 🍭) and Sweet Capital (Masterclass Edition)

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Riccardo Zacconi is the co-founder of King, the developer behind the most popular mobile game in the world: Candy Crush. Candy Crush has been downloaded more than three billion times since it launched in 2012, becoming the most downloaded casual match game of all time. After founding the company in 2003, Riccardo served as CEO for over a decade before stepping down in 2019. Under his leadership, King became one of the largest mobile gaming companies in the world, with over 200 million active users playing its games each month. In 2016, King was acquired by Activision Blizzard for $5.9 billion. Riccardo went on to launch his own fund Sweet Capital with his fellow King co-founders. Sweet Capital focuses on early-stage investments in consumer technology companies.

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Inès Makula (00:00:03) - Welcome to MadeIT Podcast. You're hearing our voices in English because we worked with a group called Italians to produce a series of masterclasses with some of the most influential Italian investors and entrepreneurs on a series of topics that we think will be invaluable for any startup founder. These sessions were conducted live for a select group of Italy based startup founders, but now you can all listen to them on mated podcast. So let's go. This masterclass was powered by Vcg. Unlocking the potential of those who advanced the world is crucial for Vcg, and this purpose has been leading the firm for 60 years now. Over that time, Vcg has supported companies and organizations in their process of growth and strategic transformation. BCG supports startups with the same care to help them develop sustainably and innovate. If you're a founder and are interested in working with them, you can email Emil the Seeds at BCG, all the details in the show notes. Hello everyone, and welcome to our fifth Masterclass in collaboration with Italians. Today we're going to talk about a very exciting topic how to unlock exponential growth with Riccardo Saccone, the man behind one of the most popular and addictive mobile games of all time.

Inès Makula (00:01:21) - Riccardo is the co-founder of King Digital Entertainment, which is the developer behind Candy Crush. Candy Crush. I'm sure you all know that it has been downloaded more than 3 billion times since it launched in 2012, becoming the most downloaded casual match game of all time. After founding the company in 2003, Riccardo served as CEO for over a decade before stepping down in 2015, and under his leadership, King became one of the largest mobile gaming companies in the world, with over 200 million active users playing its game each month. And in 2016, King was acquired by Activision Blizzard for $5.9 billion. Riccardo then went on to launch his own fund Suite Capital with his fellow King co-founders, and Suite Capital focuses on early stage investments in consumer technology companies. Riccardo There's no better person we could think of to cover this topic, and so we really thank you for being here with us today. Thank you so much.

Riccardo Zacconi (00:02:16) - Only one thing actually said down in 2019 after this deal, three years after the sale. Thank you for.

Inès Makula (00:02:21) - Checking.

Riccardo Zacconi (00:02:22) - That out.

Inès Makula (00:02:22) - Okay.

Riccardo Zacconi (00:02:23) - Over 18 years, we have.

Inès Makula (00:02:24) - We have prepared a lot of questions for Riccardo. But as you all know, please use the chat function on Streamyard to ask your questions. And then at the end of the Masterclass, we have kept the last 15 minutes to go through all of your questions, so please don't be shy. Ask your questions and let's get started. Started. Ricardo, can you take us back to the early days? We just mentioned how successful Candy Crush has been, but it wasn't the first game that you developed. By then you had been in the business, the online gaming business, for over nine years. So looking back now, what would you say were the most important things you did in those nine years to get you to build a game like Candy Crush?

Riccardo Zacconi (00:03:02) - It's a long story. Busy We started with a very different business model in 2003, so eight years before we launched Candy Crush and the model was one where you would compete against others in in a short game, a three minute game, and you could play for fun, but you could also win a small business busy.

Riccardo Zacconi (00:03:20) - You could also play for a small stake and against three games of pure skill. And then in 2009, Facebook grew exponentially. And then sorry, games on Facebook grew exponentially also. And they killed the web. They killed that our largest partner, which was Yahoo! So we had to reinvent ourselves. And by then we had developed more than 200 games, which you very shallow games which you could play competitively against others. And we profited from those learnings from having basically developed across all genres of casual and we reinvented the way how you would play these games. And this reinvention took two and a half years and was very busy to very long and tough two and a half years of reinventing ourselves to be able to bring our games to Facebook. And out of that process, we became basically Candy Crush at some point came out and it was not the first game. So we developed a few games on Facebook and we became first successful on Facebook and then we launched at the same games, connected across platforms on mobile.

Riccardo Zacconi (00:04:29) - And the second game we launched on mobile then was Candy Crush, and it was a game that first we launched six months prior on the web, on Facebook. And so it was not a fast success. It was actually a very long road to get to, busy to.

Inès Makula (00:04:46) - Explore because if people don't know the story, they just can think, oh, your first game and you were super lucky to hit the jackpot. But obviously in those nine years you learned so much. And something that was very interesting as you and you just mentioned, is that you the business model changed from, you know, desktop, regular website games to Facebook. But you clearly took a bet that things were going to move in that direction and stay in that direction because it could have also been, you know, Facebook. You didn't know if Facebook was going to stay around for the long term. You know, MSN was falling apart. So did you have to take a big risk to move, you know, the people that were working for you to focus on Facebook at that time?

Riccardo Zacconi (00:05:23) - Well, you know, Facebook launched games in and was it pretty much from the beginning.

Riccardo Zacconi (00:05:29) - But basically Facebook started growing in in 2007. Zynga launched on Facebook in 2008 and 2009 was where it started really growing exponentially. So for us, the question was not whether Facebook would be around the question. It was not a question. I actually was pretty sure that the world outside of Facebook would not be any more existent soon. So but initially when Facebook came out, we started experimenting already very early on, but the experimentation was not with our full, full capacity with the best. But we had the center, etcetera, and we really, without everything we had. But it's only when things started going really, really bad, when we lost 50% of our users of our of our traffic in, in in in less than a year that we had to do things radically different. And what we did was. At the time, we had about 110 people. We divided the team in two parts. 50% of the team started working, continued working on the existing games just to basically make sure that the lights are on and we continue to make money and be able to pay for the for the experimentation.

Riccardo Zacconi (00:06:38) - And the other 50% of the team was divided in five different teams smaller teams that started experimenting with Facebook in a much more focused and I would say much more radical way that we did before. And out of those out of that experimentation, basically one of those teams succeeded. But it was a question of life and death. And sometimes you need that kind of pressure really to crack the biggest problems. And finally, out of that, we managed to come up with a new model to create.

Inès Makula (00:07:11) - The same game. Correct me if I'm wrong, but the kind of the two the two games you develop prior to Candy Crush that really showed you that there was a lot of potential where Bubble saga and bubble witch saga, right. And they were doing really well. And so obviously imagine when you launch Candy Crush, you were thinking, you know, pretty much it's going to it's going to do a little bit better. But like it was still, you know, it wasn't complete virality as Candy Crush had.

Inès Makula (00:07:35) - So I wanted to ask you, where are you expecting for Candy Crush to be this successful? And just to give people some context in terms of your revenue, prior to Candy Crush, you were making $165 million in 2012, and then a year later you reached 1.85 billion in revenue. So obviously the game exploded. Where you expecting this?

Riccardo Zacconi (00:07:56) - Well, you see, you have to go a couple of years earlier, meaning two years before we launched on Facebook, we were listed on the web and there we were making about 40 million. And before it was rather the revenue line was around 40 rather than around the fifth rather than around the 150 or so. So I think the big change came when we managed to bring our games to Facebook where we had the first really big job and when we launched the jungle bubble on mobile, we knew the game was not perfect. As for the mobile interface because it was a bubble shooter. So it's not ideal to play. And we knew that Match three would perform better because it's a wider genre, but we had no idea that it could perform so well.

Riccardo Zacconi (00:08:42) - But you know, it was not a it was not just about the variety. The most important, basically key metrics was retention. The game had phenomenal retention over 65%. They want retention on the back of the retention, we built a very strong monetization and when we launched the game, we were busy promised that we would be featured by Apple. But actually the that Apple feature didn't come. So it was actually very angry about that saying we I was hoping to be featured is a very important launch. But actually we were very lucky that we didn't get featured because then we could really have very clean numbers to analyze and we knew how much was coming from virality because the game was playable across web and mobile. They were fully cross-platform. So we understood that virality, first of all. And secondly, we understood after that when we started doing marketing, we had very clean numbers for and analyzing the marketing performance. And on the back of those clean numbers, we could then ramp up marketing and we applied the chessboard strategy, which is basically to put, you know, 100 of $100 of marketing on the first on the first on the first board, on the first square of the chessboard.

Riccardo Zacconi (00:09:59) - And then we have looked at cohort performance, understand, you know, how is the cohort monetizing of the first users monetizing in the first week and the second week. And then we put as soon as we understood the numbers were good enough to continue investing, then we put twice as much $200 on the second in the in the second and in the second in the on the second cohort. And we then looked at how this the second cohort of users was performing compared to the first cohort of users in the first week. In the meantime, we had new numbers regarding the first users and understood the longer term monetization and then we started again doubling marketing from 200 to 400 on the third on the third cohort of users. And in this way we managed to scale marketing very rapidly, exponentially, and we went from spending very little on marketing to spending another hundred million dollars in the first quarter. So it was not just the virality of the game, it was marketing that was fueling the growth and the virality behind.

Riccardo Zacconi (00:11:03) - And so we went from very few users to adding over 400 million monthly with I think 480 million users.

Inès Makula (00:11:10) - My next question was going to be like, how much of that growth was due to virality and so organic growth and how much was it intentional? Could you? So if you could split it a little bit in terms of like maybe percentages and then what In terms of marketing, what would you say were the most powerful things that, you know, really brought in users to the game?

Riccardo Zacconi (00:11:33) - Everything we did was conduce to the marketing spend. So also virality was part of the marketing spend equation. So it was important to understand that when you buy a user through performance marketing, that you don't just get one user, you get actually other three users with it. And this was built in the in the business model, and I'll tell you about it in a second so that when you when we were calculating, okay, how much can we afford to pay for a for an install, we had already behind the calculation that how much is in is still worth in terms of the user that comes from the platform, from that direct marketing to the lifetime of the of the user, plus how many other users is that user basically going to bring on board and how much is their lifetime? Their life then back and all of that was busy recorded use of to to the to the most important information which rose how much money can we afford to pay for a user and how much time does it take us to make back the marketing investment? Yeah, and that's what allowed us to scale.

Riccardo Zacconi (00:12:38) - And initially the payback period of the marketing investment was three months. This means we made back the money we invested in acquiring a user within three months from the from the from the investment. And that allowed us to scale very, very fast because of that. And that was a combination of the of the high retention of the of the key of the monetization of the gain, but also of the reality that was integrated in the business and the business model at the time, which we, which we basically invented was one where the game was a freemium game. This means you could play the game for free, but you had five lives to complete, busy the game and once you lost the five lives, you could either wait 24 hours and then you had to just come back the next day or you had to be $0.99. You could play immediately or virality. You had to invite three friends and if you invited three friends, then we would busy to get free marketing and you could play also immediately. And that's what basically that's how virality was integrated in the model itself.

Inès Makula (00:13:44) - That's very interesting that you are very intentional about creating this virality. And it's not just something that happened because obviously the game was great, but it was very intentional in in how you had developed it. And it's hard to actually, you know, obviously sustain and control virality. But even just growth of a game because, you know, people can play with it. And then after a while, you know, something next comes up. You know, we've seen so many times things go viral. And then shortly after disappearing, one of the example that comes to mind is like clubhouse. You know, it was the number one thing for a few months and then nobody was using it anymore. So how were you able to sustain the growth of Candy Crush for such a long time and how did you manage to maintain that engagement and retention of players over this period of time?

Riccardo Zacconi (00:14:31) - But first of all, you know, I believe in profitable companies. It's the only way for me to sustain the growth is if you have a profitable business model in the in the unit economics, meaning if the unit economics are profitable, then you can scale profitably.

Riccardo Zacconi (00:14:47) - If they are not profitable, the unit economics, then you need to then you burn money. And if you burn money at some point you get to refinance yourself. And if things don't go well, then you have a problem. So I believe in profitable companies at a unit economic point of view, and that was the fundament for being able to scale candy Crush in the long term. Then for the for maintaining the game at this very high level, it was a combination of marketing and of course also product. So we spend a huge amount of resources and brain on how to make the game really fun to play in the long term which meant was a combination of different things for the players. At the end of the game we had to release continuously new levels because lot of especially the best players, the players who play most, they basically play every time they really at the end. So when you launch new levels they actually very fast in in playing the new level so you have to release regularly enough new levels that is fun that you keep them around.

Riccardo Zacconi (00:15:49) - But also we needed we needed tools to review the game before because the first players were actually the best players. The players that came later came were players that were more fringe players. Maybe they were aware that they were not playing so much. So we had those to review all the levels of the game. Also the first levels, some of them making some of the levels easier and changing a bit, the whole playability. So adding different not everything too difficult, not everything too easy, etcetera, etcetera. And also we integrated, we also brought in live ops, busy creating events that were only available for a period of time and they would disappear. So if you wanted to play them, you had to. You had to play them now. Otherwise, if you if you were coming back in a week later, you could not play them anymore. So bringing in this kind of element of urgency.

Inès Makula (00:16:36) - And in terms of.

Riccardo Zacconi (00:16:39) - Sorry and also marketing was essential because also in terms of retaining, of course, there's a long term retention where at some point the users go away, but you have a you have a base of users that stays there forever or for a very long time.

Riccardo Zacconi (00:16:52) - So if you want to continue growing or retaining the users, you need to continue also doing marketing. So it was also part of the equation to, to keep the game up was also to continue marketing and becoming also better and better at marketing.

Inès Makula (00:17:07) - And in terms of like biggest challenges, obviously to sustain such a for a company to grow so fast. So in a very short period of time, it can also, you know, it can be a double edged sword where you can either make it. Or you can also kill you to for everything to grow. So in terms of challenges that you had to face while scaling. What were they what were these challenges and how did you overcome them?

Riccardo Zacconi (00:17:30) - I think the biggest challenge was to scale the size of the team fast enough, but retaining very high quality. So we introduce new hiring processes where every new hire was seen at least by six people and six people which were which were mix not only people from the same business area, but also from other business areas so that you could not only be.

Riccardo Zacconi (00:17:58) - Valued or be basically evaluated from the point of view of your technical competence, but also from the seat with the team. And with very high thresholds. This means that one of the six would be against, then you would not be and you would basically be out of the process and with and also with a very strong selection before being invited to be to any person interview. So I used to say that it's more difficult to get into King than to be admitted into Harvard, just to put it the level very high. And at some point we had to scale very fast because we went from about 110 people before we launched on Facebook to 300 people when we launched on Facebook before launching on mobile. And then we doubled the size of the team every six months so that at the end we were about 2000 people. And to scale with quality so fast, it was difficult because initially the team was already in, in, in Sweden, in Stockholm. That's where the product was. And marketing was done out of out of London.

Riccardo Zacconi (00:19:00) - But we couldn't hire fast enough, enough good people in Stockholm. So we had to open up new offices. So we opened up another office in in London. We opened up an office in Barcelona. We opened up an office, Berlin or bring up an office in in the US. ET cetera. It's actually two offices in the US, So to give you an idea. So we had we had several in the second office in Stockholm, Sweden, and so on. So and that was a challenge. And suddenly I started spending 2 or 200 days a year traveling.

Inès Makula (00:19:30) - And I can imagine, Yeah. And to keep it's tricky because to keep this balance of super high quality people, but really fast. You never had to make a compromise, would you. Did you make some mistakes in some hiring where, you know, you had to go really fast because sometimes, you know, do you do you prefer quality? But then, you know, going a bit slower or fast and getting some people wrong?

Riccardo Zacconi (00:19:54) - It was a combination of both high quality and fast.

Riccardo Zacconi (00:19:57) - That was the high bar, obviously. Obviously sometimes everyone makes mistakes and we made many mistakes around along the roads and some were people. But it's not about mistaking people, it's just not it's rather the fit. It's not it's not a mistake with the people, I would say. And people are always amazing, but sometimes it doesn't just doesn't feel so. Yes, we had also those, obviously, and it's important to have a very open, transparent process and also to be, you know, very treat people that we want to be treated. So we always said we want to make sure that we always can meet twice by having such and such a process, not only for hiring but also for, for outpacing. Um, but I think the yeah, it was not an easy it was not easy. But I think overall a key component there was not to delegate the hiring only to the jar but you having a jar managing the process. But ultimately the hiring was always done by the leadership team.

Riccardo Zacconi (00:20:57) - And at the beginning, I think for the first 300, first 3 or 500 people, I did all the I was involved as well as my as my as, yeah, as my as many co-founder. But after a while it was basically delegated by delegated to a wider or wider a number of people, but from the leadership so that it was not just, you know, a process happening outside. And we spent a lot of time with hiring.

Inès Makula (00:21:23) - Yeah, no, that's a really good tip because obviously h.r. can support. But if they do all of the hiring but they're not on the job doing that job, they might be getting some things wrong. So it's, it's good to work as a team. What advice would you would you give given that there's a lot of early stage founders listening to this masterclass, what advice would you give early stage founders who are looking to achieve exponential growth for their own for their own business? But in this current context where things have changed a lot, there is not you know, Facebook is not as prevalent.

Inès Makula (00:21:53) - Maybe TikTok is more prevalent right now. So things that have changed a lot. Do you have any tips?

Riccardo Zacconi (00:21:59) - Well, the first tip, everything starts with people. So bring on board the best. It's better to have a smaller team of the best then, you know. So don't be don't be scared of not being the first. And so important is to have is first off, first of all, bring you on board the best. And secondly, it's all about the product. So I think that if the product is innovative, the product is differentiated versus other products, and if the product is useful for the user and useful can be defined also as fun. Obviously, if it's a game, then marketing is cheap. If the product is a metal is similar to and is not differentiated enough, then then marketing is very expensive. So I think it's all about the product and the product. What is key is also to focus on a business model. So from day one, I don't like just selling something that is nice and is fun, but you don't have a business model behind because then it's then it's really it's all about virality and virality can end fast and then suddenly you're stuck in the game of having to convince new investors to invest in the company and do what they want to and say and do what they want to hear.

Riccardo Zacconi (00:23:18) - And I think that if you have a model that is profitable in the unit economics, then you can scale it with marketing. Then the steering wheel is in your hands, not in the hands of someone else.

Inès Makula (00:23:29) - And now switching gears and wearing more like your investor hat. And between yours and Angel, I know you're an angel investor, but also you have your own fund. It's obviously a really hard time right now for consumer businesses to raise after 2022. Would you say you are approaching your investment a little bit differently since last year? Okay. Because you're already very focused on the unit economics and profitability, which I guess not all all investors were.

Riccardo Zacconi (00:23:55) - No, I've always been the better choice. It was once I remember seeing a board meeting with other. That's why I don't join the boards because that would be my own view. So I think that you always have to, in my opinion, build a company that is built on solid economic fundamentals. Of course, if you have a product that is retention, then then you can also build a business model around it.

Riccardo Zacconi (00:24:20) - But I don't think that you should leave. The business model is too far behind. Of course, first of all, they use the product has to be useful, but to ask money for the product from the user is not a bad thing because only when you ask the user to pay for it, you really know if the user is interested in it to the point where they're willing to pay for it. And when they pay, you actually get a very honest opinion because then you know what they're really interested in. So that's in general. But of course then it has to be adapted because if the business model is based around the advertising, then of course you're not asking them to pay. So you try to live off towards the door as open as possible.

Inès Makula (00:24:59) - And what are some of the key consumer metrics that you look for when investing in a business, some things that you really care about? Well, the.

Riccardo Zacconi (00:25:06) - First one is, is the is the is it useful or is it fine? Which means is the user coming back? So for me, the most important key, key KPI is, is the retention.

Riccardo Zacconi (00:25:20) - So is the user coming back, yes or no, and how many users are coming back? So for example, in games, the threshold is 40%. So it's 40% of the users come back the next day to play the game. This means it's a good game. Now, if the threshold, if you are above that, then it can be very good or it can be amazing. So if you're at 65%, the game is fantastic. Really, really exceptional. If it's 40%, it's just that the threshold, of course, in a different product, if it was a social network, you would have probably to have higher retention rates than that.

Inès Makula (00:25:52) - And have you We wanted to ask given everyone listening, is a Italy based startup, have you invested in Italy based startups and if not, what would it take for you to invest in an Italy based startup?

Riccardo Zacconi (00:26:03) - We saw quite a few, and we've done this so far, about 65 investments. And I think I invested personally in or believe in one startup that was it and was food ready, which is about basically a jar, a jar and helping students to think about their future.

Riccardo Zacconi (00:26:22) - I think that I'm an optimist in the sense that I think that he has an incredible humility and incredible people. And I think if you look and of course, it takes a bit of time before then, before the ecosystem is developing. But I think now you have several companies that are really very, very successful in Italy. But often I have seen one mistake in Italian companies. So King was founded in in in Sweden initially because we started in Sweden. And Sweden has one characteristic. It's a small country. So no founder in in Sweden would ever think of launching a startup, a new company focusing only on Sweden because the market is too slow. So every Swedish tech founder immediately starts from day one thinking of a product that is global or at least European. This means that when they look at, you know, how can they differentiate what kind of users they want and how they can be? Who are the competitors? They compare themselves not just versus the Swedish companies, but also versus American companies and versus European companies.

Riccardo Zacconi (00:27:31) - While in Italy we are a bit stuck in the middle, so the country is bigger than Sweden. So it's big enough to build a business, but it's not big enough to build a unicorn business, to build a business that is really, you know, concrete that can compete at global level. If you have a company, if you have an American guy starting a company in the US, the US market has three 9 million people. So immediately you have you can build a massive business there that can be that can be immediately one of the biggest businesses in the world just by launching in the US. So what I say to the Italian companies is please think from day one when you think about what do you want to do and what game, what product you want to launch. And when you look at competition, think from day one how you can build a at least a European business. Because in Europe we have 500 million users. So if you build something that is successful in Europe and therefore is more defensible versus a US player, for example, then you can build immediately from the beginning a bigger business.

Riccardo Zacconi (00:28:29) - Because before you launch you already castigated, you already have, you already hamper your entire growth before even you write a line of code just by doing the business plan and trying to convince investors. Because imagine there are two guys, one in the US and one in Italy and the guy in Italy or the lady in Italy comes up with a brilliant idea and presents the idea to the to the investors. The Italian shows a potential of. 65 million people. And the US person shows that potential 300 million people Now, the second one, without having any difference, difference in quality or difference in the idea, we get a much higher valuation because the business plan will reflect a much bigger opportunity, while the Italian founder will only be able to raise much less at a much lower valuation, probably only from local VCs with very bad terms. While if you if they if the Italian founder had developed from day one at least a European plan where he shows that they get that the product is new in Europe or is new in Europe and in the US, he could show a much bigger opportunity code with that business plan, pitch it to international investors and get a much higher valuation and get a much bigger, closer, much bigger round.

Riccardo Zacconi (00:29:51) - That's that's  one thing that I saw missing in the past that I think Italians should really focus on. And then I think we have super smart people and there's a massive opportunity in terms of the most important ingredient, which is smart people.

Inès Makula (00:30:05) - A follow up question to that, because part of the series of this masterclass is internationalization is one of the reason why we launched this series is to help think outside Italy from the get go. But I have a question, more specific question for you because especially when it comes to consumer facing you, you need to think international from the get go. The problem is the language barrier in the markets, Right? So, you know, it's easy. You know, in the US English, you're targeting three over 300 million people. Fantastic. In Italy, if you're launching, you have to if you're launching something consumer facing has to be in Italian, then in French and then in Germany in German. And then and so you have this complication. So would you say would you say immediately do it in English? Would you say immediately have a multi-language platform or to build it in the pipeline very quickly? Like, what would be your advice for somebody who has a consumer facing business?

Riccardo Zacconi (00:30:54) - It's super easy.

Riccardo Zacconi (00:30:56) - It's really it's super easy. You just develop up a an interface or a platform that allows you to translate easily and have it in all different languages. Sometimes, even if the translation is not perfect, it still works fine depending on the product, obviously. Uh, so, you know, we were we were ten people when we launched actually 12 people when we started. And we had immediately our, our website available in five languages from day one. So you don't have to be it's not it's not difficult, especially now with Genii. You can have the transition done even, you know, buy, buy, buy easily and with very high quality. At the time we had the transition done by but done by us and done by students. So it was that's really not, not a difficulty. In fact, it makes it easier if from day one you develop a platform that allows for multiple languages because usually US companies, they develop start only with English. So you have an advantage there because immediately you can launch a server in different countries and marketing is cheaper in fact, because when you're, you know, the first marketing is the one that usually has the best, the best returns.

Riccardo Zacconi (00:32:07) - So you can actually launch in several countries and not just in one country. It doesn't cost you anymore, but in this way you might be able to catch the low hanging fruit at a much busy with a much better performance that.

Inès Makula (00:32:19) - Yeah, I was going to say because then you have to build your community in multiple languages. Like it's I'm asking also personally because I have a business and I'm thinking about these things as well. And it's tricky because in a way, yes, you can have all the translations you want, but then you have maybe a smaller marketing budget and you have to allocate it to certain countries. You can't just with the same money you would use in Italy, use it in France and Spain and Germany.

Riccardo Zacconi (00:32:47) - To create a platform that allows you to have several languages is a lot more expensive. I think is the job of a good CTO to think about scalability from day one. And part of that scalability is also multiple languages, so that doesn't cost you really much more to have translations.

Riccardo Zacconi (00:33:03) - You know, once you have the interface for translating, you engage five students from different languages. Even if it's not perfect, it's still fine. Marketing wise. You can still focus on one country, you just leave the other languages there. And as soon as you crack one country, you can immediately start doing marketing and testing what works in one country, in other countries. So it's basically it doesn't cost you really much more. It's just something that allows you from day one, if you're thinking this way to scale while if you don't start in this way. And starting from the very basics, which is strategy. If from day one you haven't done your homework in a sense in the sense of analyzing where the competitors internationally not just in in Italy then later once if you want to launch in Germany or in France or in the UK or in the US, we would probably find out, Oh, they're already doing it and maybe they're doing it even better. So I would not start a business that is only new in Italy and everyone else is doing it already outside and it's possibly even much bigger because then they might actually even come in in Italy before you before you actually are financed.

Inès Makula (00:34:10) - Thank you. I wanted to push you a little bit more and thank you for breaking it all down because I think it's very tangible in terms of what everybody should be doing from the get go to think internationally from from the very beginning. So before we open up the floor to Q&A from the listeners, we wanted to ask you a few rapid fire questions. What industry do you see as the most promising for future growth right now?

Riccardo Zacconi (00:34:33) - You know, it's a difficult answer because if you look at it from where we are now, it's actually not easy. But it was never been easy because most industry, most industries are mature. But of course, you know, you would say this is one which is super interesting and generally, but on the other hand, the risk there is you develop a very thin layer on top of OpenAI or other models and therefore it's not defensible in the very short term and everyone can copy you in a couple of days. So you always need to think of how can you have something that is not only new in a in an interesting market, but also is defensible as a model in general.

Riccardo Zacconi (00:35:13) - Big trends. You know, there's a trend in the Western world that people are becoming older, including China. And so I think that that will lead to more people that are older that need to be supported in one side. And I think that I'm not worried about unemployment. I'm worried about employment because there will not be enough people working in the future to maintain the older people, in fact. So I think that's one big trend. But most species, if you ask now where they invest, invest in B2B, they don't invest in B2C a bit because there are not many new platforms starting. You know, there was first there was Facebook that there was mobile. Now, Apple just released yesterday. The new the new headset. Is that going to become the future? You know, we will see. But at this moment in time, there's a bit of a missing big thing that is launching in terms of consumer besides generally with the difficulties that all the earlier. But so I don't think it's about seeing you know what is the big trend you need to or the big industry that is currently being disrupted.

Riccardo Zacconi (00:36:23) - I think any industry can be disrupted. If you think of something that can be done differently and it is useful for the user and there I think all the tools are allowed. Now, for me, one of the most exciting new technical developments is obviously AI. And if you think in a way that this defensible looking at how can you be own data, for example, to build models that are defensible in the long term, then you can create something that's really valuable.

Inès Makula (00:36:53) - And what's your proudest achievement?

Riccardo Zacconi (00:36:55) - My proudest achievement, No. In King, I guess it could be.

Inès Makula (00:36:58) - Personal or professional.

Riccardo Zacconi (00:37:01) - I don't know. I never look, I never look back in terms of proudest achievement. Actually, what I was really proud of. I went a couple of days ago to a King alumni reunion, and I was very, very proud and super happy to see so many had built their own companies. So to see that actually out of King, we had actually spinoffs and spinoffs that now are becoming very successful and building their own startups.

Riccardo Zacconi (00:37:27) - So for me, that was actually something that actually I'm very I'm very happy about.

Inès Makula (00:37:30) - The King Mafia.

Riccardo Zacconi (00:37:32) - Like the proud is maybe the wrong thing because it's not my merit, but I'm very, very happy to see that actually others are following in the footsteps and are doing their own their own companies.

Inès Makula (00:37:43) - And what's the hardest lesson that you've ever learned?

Riccardo Zacconi (00:37:46) - I think that probably the toughest time where those two and a half years where we had to reinvent ourselves, where we knew that our market was basically going down, that we knew where we were, where we wanted to be, basically on Facebook, but we had not cracked it. And to manage expectations both upwards towards the investors and downwards towards the team was probably the most difficult time of my life, I would say. And my key learning there is that, you know, treat others like you want to be treated, which is basically no bullshit, you know, talking openly. And that's how we tried to really manage that time, seeing how things were so seeing what the issues were, seeing what we were doing about them and try to bring everyone on board.

Inès Makula (00:38:29) - Last question of the Rapid Fire. What's your favorite book on business or entrepreneurship?

Riccardo Zacconi (00:38:35) - Bam, bam. Well, you know, I studied. I did economics. So I studied lots of books at the time. But after the launch, not really much time to read about economics. So I then actually do the read other stuff, but I enjoy also music. I'm now trying to learn to play piano. That's what actually gives me the okay relaxes me now. So I've been very much learning by doing, I would say, based on that. But all the things that I learned in during my studies, my four year study is in Italy at that time in economics, Louis actually were very useful. But Ionian, this would be much later. That's good.

Inès Makula (00:39:10) - You were able to apply some of some of what you've some of what you studied, which is not always the case.

Riccardo Zacconi (00:39:16) - Yeah. And one of the most important learnings is came from my professor of statistics and he told me only believe in the stats that you falsify yourself and, and there's a lot of truth behind in the sense that you always have to look at statistics with a grain of salt and always using your gut feel in the sense what do you think this is something that is really useful or not for the user.

Riccardo Zacconi (00:39:43) - And when you get different points to different information from your gut feel and from the stats, then you need to really question the stats. And question them. So depending on how you cut the stats, the timelines you look at, depending at how you compress the stats and depending on what stats you take, what user b, what user groups you dig, you can get totally different results. And that's where you need to put a lot of brain and also gut feel when you look at statistics and it's a this sticks are very important for building your business.

Inès Makula (00:40:14) - That's very good yeah it's a very good tip to mix the statistics with a bit of your gut feeling and your intuition for your market and your business. Thank you. Thank you. Ricardo. We will now open up the floor to questions. So the first question comes from Luciano. Right. What about scaling the technical infrastructure so fast? Did you already plan for huge numbers, investing a lot up front?

Riccardo Zacconi (00:40:36) - I think, you know, I had one of the best technical teams think around and an amazing CTO from the very beginning.

Riccardo Zacconi (00:40:43) - And so from day one, even though we had zero users, they were thinking immediately about scalability, how to scale. You know, before doing before doing. King In 1999, we did a company called Spray, which was one of the biggest tech startups in in Sweden at the time. We went from 20 people actually from zero to 800 people in less than in a year. And that's, I think, the school that we all went through and in the tech team, the CTO and then in our tech guys they came from there. So they were thinking immediately from day one about scalability.

Inès Makula (00:41:16) - So was it was it expensive, though? Did you have to put a lot of money? Because imagine the infrastructure costs a bit different if you build for like an MVP or if you build for like a bigger. Well, it.

Riccardo Zacconi (00:41:25) - Was scalable in the sense that. We didn't have to change the core, but we could build on top of it. And of course, when you skin, you need to invest more in servers, etcetera.

Riccardo Zacconi (00:41:35) - But we didn't, we, we, everything was based on our servers rather than on the, on the web. That's how we scale. Now it's much easier actually to scale than what it was at the time when we did.

Inès Makula (00:41:46) - Next question. And I'm not going to pronounce that name because I'm going to butcher it. I'm so sorry, Adam. How long did it take King to reach product market fit?

Riccardo Zacconi (00:41:55) - Well, as I said, it was not it depends which market fit, because at the beginning we were pretty quick to launch the first the first business model with the competitive gaming. So we became basically profitable within a year and a half, and we launched about eight months after we started. We started working on it, but it was the first one and it took much longer to actually reinvent our model. It took us about two and a half years to reinvent ourselves and to come up with a new model. And this was just with the understanding that the game works in terms of retention.

Riccardo Zacconi (00:42:31) - And then it took us another six months to invent the business model with freemium after we had created a game that was already that had high retention. And then from there it was continuous refinement. So I'm not sure if I answered the question, but.

Inès Makula (00:42:45) - Next question comes from Giovanni. Roberto Franzen Hi, Ricardo. I just wanted to hear your opinion on the Apple Vision Pro since you were one of the precursors of the shift towards mobile gaming. Do you believe we will see a similar seismic shift with the world of gaming?

Riccardo Zacconi (00:43:00) - So I, I only saw the product on the internet so I didn't try it. So if you don't try it, you don't know. So from that point of view, I don't know how good it is or how much fun it will be. Let's say my first feedback is it feels still quite bulky and the battery life I think is under two hours, so you can't really use it for the entire time. I think I'm a very big believer in AR versus VR.

Riccardo Zacconi (00:43:29) - I think VR is too narrow and I think the application is not the big game. So think in our think it's going to be day to day life where you have something that is like and has long battery life and you basically use it on a busy on a regular basis. So it's kind of integrated in your in your glasses. But we are not there yet. This will take a long time, I think, before the hardware is going to be ready. So when it's going, when that is going to be the case, I think it's going to be massive. I think it's going to be another massive interface and the new platform, but I don't think it's there yet. So as I said, I haven't tried the new the new Apple Vision Pro, Will.

Inès Makula (00:44:08) - You buy it.

Riccardo Zacconi (00:44:08) - At work? Sorry. Oh, of course. I'm a geek, so I love to buy new tech things. So we're definitely try them. I have the quest, you know, the meta. So and it's an amazing product.

Riccardo Zacconi (00:44:20) - But I think that is is more usable on a busy on a regular basis for a wider set of applications Then then we are.

Inès Makula (00:44:30) - Next question from Giovanni Calabresi. We have been talking a lot about consumers, but not about community. Do you think the two things must go along together or could be separated? And in both cases, what's your take on community driven businesses?

Riccardo Zacconi (00:44:45) - So we talk about consumers when we talk about the product. So who are the users who use a specific product? Now, if you want to build a product that is sticky, I think is always going to be more sticky. If you build a if you build social in the in the in the product and social medias, you build a community, you build the relationships between the different users. These relationships can be their friends, can be other users of the product. So yes, I 100% believe in community, 100% believe that any product becomes much more fun, much more interesting, much more with a much higher retention. If you manage to have a social integrated in the product, if you manage to build out of a group of users, a community of users of some sort.

Riccardo Zacconi (00:45:33) - So yeah, I'm a big believer in that.

Inès Makula (00:45:35) - Next question, we have a few from identity. What competitive advantage can Italian founders have over others?

Riccardo Zacconi (00:45:43) - I think the competitive advantage can be that are just nice. And I think that, you know, I once met a VC, I think it was a VC, and he was telling me that, you know, Italian advantages, it's just that they are nice. I think the fact that you're used to have a bit of not taking yourself too serious, I think is a competitive advantage because I think hiring good people is fundamental. And if you want to hire good people, they can where they actually like to work, it's not because you pay them more, it's because they like to work with you. And I think part of that is to have a culture where you don't think you don't think you're the best, where you can have fun and fun is. Being at work, but of course, always in a professional way, right? So finally, it doesn't mean you organize the best part.

Riccardo Zacconi (00:46:32) - It means something that is fun to work with you because you're a nice person to work with. And part of that is also, to be honest. So to treat others like you want to be treated so. I think that big hamper of Italian sometimes is that the English is the language. So I think my advice to old Italians is, number one, get your shit together and learn and learn the language. And number two, be open to go outside, outside of Italy, to build connections to also outside Italy is really going to be very, very important. Learn in companies that are successful already on a global scale so that you learn how to do it on a global scale and then you can build your business. And don't be afraid to take your time to build quality. So don't be in a rush. So don't be the rush to build your startup. Do it when you have the right idea and have the right people. But otherwise, to do that, to get the right ideas and to get the right people working International company is where you learn how a successful tech company is, is built and is run on a global level.

Inès Makula (00:47:38) - We have a few more questions from Eduardo Perez. You have emphasized several times how the team has made a difference in your story. Do you have suggestions on how to create a company, environment and culture that can attract and retain top talent?

Riccardo Zacconi (00:47:51) - Yeah, it's very simple. You have to leave it by example. So you know, it's not by going to a branding company and writing down what the, you know, what the vision is and what the culture is. And you put it on every, every world in the company that you build the culture in the company, but is basically by leading, by example, by you create the culture, you create the values. So it's like children in brackets. And basically children always look at the parents and the parents. They tell something, but then they do something else. It doesn't work. So you have to imagine every new person that counts enjoys the company. Look to the people that are in the company and how they behave to understand what is licit.

Riccardo Zacconi (00:48:34) - Was it? What is not licit? How should I be give? At what time should I come to work? At what time I supposed to be at work? Stay home. Stay for what? If I make a mistake and talk about it? What happens then? And should talk about mistakes or not? Everyone makes mistakes. So it's not about avoiding making mistakes. It's about how what you do when you make a mistake. So in all of this, basically, it depends from, first of all, from the CEO and the founder. So if the CEO does say something but then does something else, people will not follow what the person says, will follow what the person does. So and you have to do it in anything you do, including details, including small things. So give me an example. When we were about 1000 people, 1500 people, I went to the toilet and there was Polaroid. It was not cleaned. So I sent an email, 2500 people saying, taking a picture, saying, Look, would you do this at your home? Yeah, no, because it's a it's an acid test.

Riccardo Zacconi (00:49:30) - It shows if people care or not. So if I care and then I want to show that I care. So others should also care. And if someone doesn't care, it's not okay.

Inès Makula (00:49:38) - Next question. Oh, think we're done? Sorry. We're done with the question. Have my Raja in the in the behind the scenes where selecting the question. I do have one last question for you because it's usually one question that we end our podcast interviews with, and I would love to ask you this question is how did you do you do you think that being an Italian has given you a competitive advantage in your success?

Riccardo Zacconi (00:50:00) - Well, you know, in some ways in Italy, you're used to things not working. So there is always a solution fundamentally, there is always a way around. And I think this mentality that, you know, there is nothing that cannot be solved I think has been very useful. So I think there is always a solution. I just need to think hard enough about it and to and to and to find a way.

Riccardo Zacconi (00:50:22) - So from that point of view, I think so. And the other thing is also not to take myself seriously. I try to basically help others to shine rather than I don't need to be at the center of it. I think it's important. So and by the way, I love Italy so I'm a big, you know. Yeah. Think the I know everything about it and I wish I had of everything about it. And I wish I could be back.

Inès Makula (00:50:51) - Well, thank you so much, Ricardo. Thank you for. Oh, sorry. Nicolo Santini is asking you last question before we wrap it up. What do you think about 100% remote companies?

Riccardo Zacconi (00:51:02) - Do you go to. Thanks for the question. So I don't think it's good. I don't think 100% remote works. Think you still think personal interaction is important. So, yes, you can build a company that is virtual, but even if it's virtual, it's important that you organize for people to meet physically, at least from time to time.

Riccardo Zacconi (00:51:23) - And I think probably the answer, you know, initially we didn't think you could do a a you could work remotely then then we were all proven wrong because with Covid, everything had to be changed. I think the truth is probably somewhere in the middle. I think that you don't think you should. I think you should do what is right. Meaning sometimes. Personally, I love to work at home and I I'm able to reflect much better without interruptions. But on the other hand, it's also nice to meet people because when you meet in person, you can actually, especially for creative processes where you have team creativity and, and, and brainstorms, it's much more efficient to do it in person rather than virtually. So I think the right answer, in my opinion is to do what works, which is probably a combination of both.

Inès Makula (00:52:11) - I think we are ready to wrap it up. Thank you so much, Ricardo. It was super useful as usual. This masterclass will be then published on Made It podcast so you can all re-listen to it and hopefully a lot more people can listen to all of your incredible tips.

Inès Makula (00:52:25) - So thank you from everybody listening as well.

Riccardo Zacconi (00:52:28) - Thank you so much. Thanks to everyone.