This blog post is part of The Founder Files series, exploring the human side of entrepreneurship, where the distinction between success and failure is often a fine line. From founding and scaling, all the way to the exit, we reveal the unfiltered, authentic stories behind entrepreneurial journeys. Ready to hear the truth?

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In 2004, Otaniemi was buzzing about the future of mobile technology. 28-year-old Mikael Hed had recently returned to Finland after studying business abroad for several years. He had heard that his younger cousin Niklas Hed had set up a company with his study mates. This group of 20-year-old computer science students was developing mobile games in their dorm rooms as a side hustle, with no idea how to monetize them. Hed offered to help build the business and ended up buying one-fourth of Relude, later known as Rovio, for €2,500.

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The world of mobile gaming looked quite different back then. Cell phones were not yet smart, and mobile games were not even considered real games. The technology resembled that of the 80s, and there were no actual marketplaces or easy ways to distribute games to end-users. Finding a viable business model in the space seemed almost impossible.

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"At the time, the entire gaming industry was at such an early stage, so it felt that it wasn't necessary to have deep knowledge or be deeply involved in the industry to take action. Even now, I believe everything can be learned along the way”, Hed says.

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In the early days of Relude’s journey, Hed’s father Kaj Hed, an entrepreneur and an investor himself, wanted to invest in the company. The only problem was that Hed had no idea what to do with the money or what direction the company should take at that point. At the time, only one company, Sumea, led by Ilkka Paananen, had discovered actual ways to make money from mobile games in Finland.

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The Relude team started working as subcontractors for Sumea, seeking to learn and understand what they were doing right. Hed began to grasp how the mobile gaming industry operated, and soon, he had a vision for Relude as well: he aimed to build a game studio with its own distribution network. Hed’s father invested in the company, and they had to start to figure out ways to quickly grow their business.

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“We began hiring a bunch of people from the only place we knew where the talent was – Sumea. We presented a better deal by offering them a share in the company. It was a bit of an ugly move, which affected our personal relationships with the Sumea founders for a long time. But to this day, I have not come up with an alternative way to get started. Sumea had all the talent there was”, Hed admits.

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“Suddenly I no longer had a place or a say in the company.”

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At the beginning of 2005, Relude took off to a flying start. The company changed its name to Rovio and things began to roll. However, soon Hed found himself grappling with his first major challenges as an entrepreneur. Rovio reached a crossroads as Hed’s co-founders had a different vision for the company’s future. They aspired to build a game studio that would churn out games like a machine, all with the aim of selling the company as quickly as possible. Hed found the strategy too risky and unsustainable, but his father, owning the majority of the company, opted for it. Before he even knew it, he was ousted as CEO from his own company.

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“Suddenly I no longer had a place or a say in the company. I felt blindsided and it was an extremely difficult time – everything I had built was taken away from me. I celebrated my bachelor’s party, got married, and welcomed our first child during the same spring, but it all happened in a blur.”

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For Hed, it was both a professional and a personal crisis. In his case, a way out of the situation involved a couple of new entrepreneurial projects: publishing comics and flipping apartments. The latter was financially successful, whereas the first one served more as a learning experience in creative business. Yet, similar to many, he couldn't avoid the impacts of the 2008 financial crisis.

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"If I hadn't lived through the 90s depression, the financial crisis might not have scared me, and maybe I wouldn't have returned to mobile gaming and entrepreneurship. Everything affects everything."

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“As an entrepreneur, you will find along the way that you quite often have to put everything you have on the line.”

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Seeing the ups and downs of his father’s entrepreneurial ventures has shaped Hed’s career. In his childhood, he had seen what it's like when a business fails, and you lose everything, leaving you grappling with debt for years and years. 

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“I saw many times how my dad put everything he had into the company, worked hard, and hoped for the best – sometimes it worked out and sometimes it didn’t. As an entrepreneur, you will find along the way that you quite often have to put everything you have on the line.”

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Like he said, everything affects everything.

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In the next part of the series, we will delve deeper into how Rovio managed to avoid bankruptcy and successfully develop a game that ultimately became an internet sensation.

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