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 2009, Mikael Hed, the co-founder of Rovio, was lured back to the company after being ousted a few years earlier, in the hopes of steering the company away from impending disaster. Rovio had placed all its bets on developing a game suitable for multiple platforms, but the gamble didn’t pay off. Newly returned Hed and his co-founders retreated to a meeting room for weeks, reevaluating their game plan, both literally and figuratively. Eventually, they stumbled upon an unexpected stroke of luck in the form of a small device across the pond.

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“It was the iPhone that made all the difference”, Hed reveals. 

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At that point, the iPhone hadn’t yet achieved widespread success, but its marketplace was superior to any other. Rovio’s new strategy focused now solely on one device, eliminating the need for endless optimizations for various screens and operating systems. Moreover, the AppStore only took a 30% commission from developers, which was unheard of in the mobile game industry at the time.

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Following the new strategy, Rovio started to develop and publish small games exclusively for the iPhone. The plan was to repeat the process until one game struck gold. To discern the winning formula, the Rovio team identified three common traits among top-selling AppStore games: regular updates, touchscreen optimization, and a strong brand.

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“While many developers at the time prioritized basic gameplay over storytelling, our plan from the beginning was to create a strong, recognizable brand with a narrative. Additionally, we needed constantly new content to lure people back to the game and keep our retention high.”

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In 2009, Rovio published its most well-known brand: Angry Birds. Here, Hed’s background in comics proved invaluable, as crafting an engaging gaming experience meant delving into narrative questions as well: Why were the birds angry? What was their backstory? How could the story unfold to maintain player interest?

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“Building a solid brand around Angry Birds began with character design. Jaakko Iisalo was the mastermind behind the characters, but his initial idea of the game mechanics didn’t click. I take a lot of the credit for getting that part right. It’s all about how the game feels”, Hed reveals.

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Finding the right game mechanics for Angry Birds broke the budget and took numerous test rounds, but eventually, the Rovio team succeeded in creating an engaging experience tailored for touchscreens.

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“The pressure was immense: if the game didn’t break, we would lose everything.”

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By late 2009, Angry Birds exploded on the AppStore, propelling daily sales from a mere couple hundred bucks to 10,000, then to 40,000, and so on. However, the company was still chronically out of cash.

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“My father had put all the money he had into the business, even pawning his last property – the house he bought for his parents. The pressure was immense: if the game didn’t break, we would lose everything.”

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Fortunately, the risks began paying off. Angry Birds indeed broke through, eventually becoming an internet phenomenon. By 2011, Rovio was already experiencing remarkable growth. For Hed, scaling at such speed presented new challenges, including organizing daily operations and establishing an internal hierarchy, as direct reporting to the CEO became impractical.

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“When scaling the business, it all boils down to finding and recruiting the best people in the field to manage things. But even though possessing strong industry knowledge is important, I believe that as a leader, it is essential to identify the roles and situations in which each person shines the brightest.”

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“The pit in your stomach never truly goes away, so, to succeed, you need to bear with it and keep taking risks.”

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But even though Angry Birds quickly became one of the most downloaded games in history, as a CEO, Hed found little time to savor success, as the company’s achievements increased the pressure to reach even greater heights.

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“The pit in your stomach never truly goes away, so, to succeed, you need to bear with it and keep taking risks. Fortune favors the bold, as they say.”

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Hed views entrepreneurship as a form of gambling, where one must be willing to take risks. However, to manage and tolerate those risks, he recommends maintaining a constant inventory of industry knowledge, personal skills, available funds, and the reasons behind a product’s potential success, either in your head or on paper. And sometimes, ignorance can be bliss, too.

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“Often, being a total novice in the field has proven to be a true blessing in disguise. When you have no idea of how challenging the industry is and how little you know, you also remain oblivious to the slim odds of success. That’s why Angry Birds plays a pivotal role in our story – it was a huge risk and a massive brand to build.”

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In the next part of the series, we will uncover the real story behind Rovio's successful acquisition and delve deeper into how Hed’s personal life changed after the exit.

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