In 2011, Vladimir Funtikov became known for building Drag Racing, a mobile gaming franchise. A breakout success, Drag Racing defined its category in the mobile app store.

The road to success was far from easy, however. In this month’s Founders in Mobile, we talked to Vladimir about how he started a mobile gaming business, scaled through growing pains, and continues to generate winning games.

They had been building games for a year and a half. There was just one problem: they couldn’t make any money.

“The first year was awful,” said Vladimir, the Estonia-based entrepreneur. “We started out on Android. It was not a scalable demographic, because Android-users were not the people most likely to spend on games.”

A game that can’t generate revenue is unsustainable. Without connections to the investment space, raising capital was not a serious option for his team. Moreover, the perception amongst investors in Europe in 2010 was that phone games definitely weren’t a good business. They weren’t even a good hobby. 

So the team learned fast. They started to develop free games instead, learned how to run ads, drive organic discovery, and market without a budget.

Taking Action when the Moment Matters

The team’s turning point came when they noticed that the app store had created a new gaming category, Racing, which it had split out from Action. When they looked at the #1 game in the Racing category, Vladimir felt strongly that they could quickly build a better game. 

“We had a month to build something before everyone jumped in,” said Vladimir. The team applied everything they had learned in the past year: They designed the game specifically for a mobile experience. The game could be played in 12 seconds, and players could get through a few rounds and close the game and reopen when it was convenient. 

“It sounds obvious to create a game customized for mobile. But back then, mobile gaming best practices were to port something that works on PC/console to make a quick buck,” said Vladimir. “We were thinking about games in a really different way.”

Drag Racing achieved the #1 rank in its category within a month. It spent 16 months in the #1 rank, and ultimately gained over 300m installs. The team was proud of their achievement, particularly as it occurred before paid UA became a mainstream best practice for rising in the ranks.

The Hidden Pitfalls of Growth

After Drag Racing’s breakout success, the team continued to ramp up winning titles. But the initial ease of success came with a price.

Expansion beyond one or two games meant greater complexity: the technology got more advanced, finances became more nuanced, and hiring and managing a bigger team was a completely different game. 

First-time founders rarely spend time thinking about big organization problems after they’ve struck gold. Vladimir and this team hired whoever they could get. Without pausing to think about company values and their overall HR strategy, the team began to accumulate systemic problems. 

“We quickly gained publicity and became a sort of trophy employer, attracting people who dreamed of perks and quarterly bonuses,” Vladimir shared. “A few wrong people, a few missing links, a bad choice here and there. It seemed like something we could live with while the market was hot. It didn’t work that way.”

Vladimir explained that these problems were not inevitable: There are time-tested, concise frameworks that explain these company growth traps (e.g. the Adizes lifecycle model). But without stopping to think, it took longer for the team to identify their issues.

“We got complacent,” said Vladmir. “We lost our focus and culture. We went from having made all this money, and then went on the brink of bankruptcy a couple of times.” 

Building a Business that Creates Magical Moments

Growth can and does happen in a crisis. Vladimir and the team eventually spent time getting clear on their goals and values.

“Players come for the experience, not the tech or artwork or the story. If we do it right, we can talk to tens of millions of people and truly make them happier,” said Vladimir. “I can’t count how many messages we received from people who went through very dark moments in their lives and found support through our games or the community around these games.

“This scale also means that we have an opportunity to support good causes,” Vladimir continued. “For example, last year we pledged to systematically inform people about climate change by joining the Playing For Planet alliance. A few weekends ago, we raised more than $10k for a charity organization through a themed event in just one of the games.

“I take this seriously and really believe that we were gifted an opportunity that extends far beyond financial gain.”

Setting up for Success

As a result of this reflection, Vladimir created a framework for how his team decides what to build next:

1. Passion: Is this a game or genre we’re interested in? If it’s not a product of passion, we won’t build it. 
2. Market: Is there a big enough market for this type of game? 
3. Vision & Team: Do we have a clear idea of how this specific team will be able to execute at a high level? What value will we create for the player and the industry? What makes us the best team to build this kind of game at this moment?
4. Benchmarks: Games are about the magic of the moment. The best way to know if someone enjoys your game is if they love to spend money to support your product and vision. Given that, what kind of benchmarks are possible? How much work will it take to reach them? Are these KPIs worth investing our time to achieve them? Do we have a shot at one of the top spots in this segment? 

When asked what advice he would share with new gaming founders, Vladimir was quick to note that creating a winning and popular game still requires a little bit of luck – and a lot of hard work. 

“Hits run the gaming business. But most hits happen after a long time of creating and building and trying out ideas,” said Vladimir. “Some of the successful titles we operate fall short of certain common benchmarks. You can’t break the mold if you design based on averaged-out parameters of existing products.

“For example, you could have relatively weak early retention if your product is very niche. But it could resonate very deeply with its audience, leading to lower late-game churn and great sales. It’s important to see the product, not just the sum of components, and persevere.”

Vladimir shared that over time, he’s come to value and enjoy the process of improvement, instead of tying his sense of success strictly to goals.

“Transformation happens when you ask the hard questions and make tough decisions,” said Vladimir. “It’s the pursuit of improvement that makes you better, both as a company and as a human being.”