Stephane Kurgan: Lessons Scaling King from 100 Employees to 2,400; How to Find Great Talent | E1041

Performance Metrics & Decision Making

• A manager making 55% good decisions is considered highly effective; 60% is exceptional.
• This implies that 40% of decisions will inevitably be wrong, making failure a core competency.
• Repeating the same wrong decision multiple times is the true indicator of a problem requiring intervention.
• Mark Zuckerberg's philosophy that "failing is one of my core competencies" aligns with the view that the job is to make decisions, not to be right.

Data vs. Intuition at King

• King operated in a data-rich free-to-play environment where data frequently contradicted product intuition.
• Case Study: King implemented a cap on spending for Candy Crush players to prevent vulnerability, despite intuition suggesting higher monetization potential.
• King had 540 million players and 7–8 million spenders, allowing them to prioritize ethical guardrails over maximizing "whale" revenue.
• This approach prioritized player safety (e.g., preventing children from spending parental credit) and employee engagement over short-term efficiency.

Swedish Labor Model & Resilience

• The Swedish model features generous policies: six months of parental leave for both parents, sabbaticals of up to three months, and five to six weeks of collective holidays.
• While initially disruptive, this system forces the creation of robust backup systems, high labor mobility, and interchangeable skill sets.
• The result is a company resilient to shocks, with high cooperation and skills levels, distinct to the Swedish "model of labor relations" rather than just the culture.
• This model removes drama from operations and is considered replicable in other regions.

Leadership Evaluation Framework

• Leadership performance is assessed across four dimensions:
  • Operating/Financial Performance: Beating numerical targets.
  • Organizational Maturity: Team strength, succession planning, and process quality.
  • Corporate Agenda Contribution: The leader's role in the collective leadership "hat."
  • Leadership Journey: Personal development, role modeling, and being a thought leader.
• Founders in early stages often do not fit this grid due to uncertainty; their primary success metric is the ability to build a strong team.
• For founders, the "rate of development" (speed of learning and self-awareness) is more critical than current performance.

Communication & Transparency

• 90% of scaling organizations is attributed to communication and decision-making.
• Communication breakdown typically occurs when trust erodes and political dynamics replace congeniality.
• Radical Transparency: Some companies share all data, compensation, and even candidate names internally to drive trust and efficiency, though this requires high baseline trust.
• King's approach involved making the data warehouse accessible to all employees to treat them as adults, despite the risks of insider trading laws pre-IPO.
• Leaders must "repeat themselves" often to ensure information cascades vertically and horizontally.

Decision Making & Execution

• The framework involves gathering data, consulting widely, and then executing immediately.
• Reversing decisions without new facts is described as "toxic" and a primary cause of organizational paralysis.
• Speed of iteration is critical; long cycles (6–10 weeks for minor features) are insufficient for modern digital businesses.
• Recruitment Unanimity: King moved from a unanimous veto system to a "neutral" allowance, but observed that negative interviewers were often pressured to flip to neutral, leading to bad hires.
• The cost of a wrong hire is magnified in scaling companies as they build cultural pockets that misalign with the rest of the organization.

Culture & Values

• Company values must be revisited annually as the organization scales and changes.
• A core value at King was "Supportive but Demanding," balancing deep care for people with high standards for delivering entertainment.
• Mission statements are vital in early stages to define direction but become harder to articulate crisply at public scale.
• The Sisyphus Analogy: Diversity efforts are hindered by the "Sisyphus myth," where diverse female leaders are developed, promoted, and then immediately poached by competitors, requiring constant re-investment in talent development.

Liquidity & The Seneca Principle

• King sold to Activision Blizzard for ~$6 billion (approx. 5–6x multiple), which was a "huge value arbitrage" compared to current multiples of 15–18x.
• The sale was strategically necessary to provide liquidity to institutional investors who had held stakes for over 10 years and could not exit via the public market.
• Seneca's Elixir: Luck is defined as the combination of opportunity and preparedness; professionals must focus on accumulating skills and networks to seize opportunities when they arise.
• Steph experienced a "dry patch" of 10 years in Europe (2001–2011) following a failed internet bank venture, contrasting with the US culture of second chances for failed executives.

Investment Mindset (Index Ventures)

• The shift from executive to investor represents a change in feedback loops from days to 8–10 years.
• Investor firms operate as "high-performance race car" machines with sophisticated, fluid decision-making processes.
• Challenges for the new investor include restraining the "bias for action" and finding the right balance of helpfulness vs. autonomy when working with founders.

Personal Insights & Quick Fire

• Book Impact: The Tao of Coaching influenced his approach to managing work relationships.
• Changed Mindset: Stopped drinking alcohol entirely in January, describing it as the "single best decision" made.
• Career Goal: Would like to be CEO of SpaceX for the day to "play with rockets."
• Biggest Insecurity: Being unable to keep up with his wife's fitness levels.
• Marriage Advice: Love the qualities and the imperfections of your partner.
• Parenting Advice: "Enjoy every moment" of having a first child, as the opportunity is non-repeatable.