In 2016 I left my well-paid dream job in one of the best animation studios in the world, to start two companies. It was very risky, full of ups and downs, but it eventually worked out and one of the companies was acquired. This is the story of why I decided to embark on that adventure and what that journey was like.
In 1995 I watched Toy Story by Pixar and I immediately knew what I wanted to do with my life - to make animation. I was 14 at the time. I was eager, I was motivated, and self-taught the craft. Many years later, I have been part of some great VFX and Animation studios, last of which was Blue Sky Studios, where I worked from 2009 to 2016 as Character Technical Director. I had the pleasure to work on some great movies like “Ice Age”, “Rio”, “Epic”, “Peanuts”, and “Ferdinand”. It was my dream job. I had everything I wanted - an excellent salary, promotions, big bonuses, and colleagues (who were also my friends) respected me. Yet, sometime in 2015 - 2016, I decided I couldn’t do this anymore. So what was wrong?
I had this strange feeling at the back of my head which I couldn’t quite figure out. I was basically feeling that my motivation was slowly and steadily disappearing. It was stemming from this nagging idea, that the way we build companies today, somehow causes this dissatisfaction with work. Too much bureaucracy, too much politics, too many secrets, protocols to follow, lack of trust. Many studies that I read at the time, suggested that 90% of people working today are disengaged with work. Ninety percent! This was a number that definitely surprised me. If this was true, then why are we continuing to do what we are doing?
Someone said once that management is not a tree … it’s more like a television set. We invented it. It didn’t come from nature, we actually decided how to do it. And the way we are doing it hasn’t changed much in the last 100 years. We still practice ideas that came in 1910. Yet, the nature of work did change. From assembling line productions to creative work. From predictability and repeatability to uncertainty and complexity.
The nature of human organizing
What I knew about management came from what I experienced in the companies I worked at over the years. I got promoted several times over the course of my career and I just did what everyone else did when having to manage a team. Solve problems and tell the team what to do. I was the thinker and problem solver and they were the doers. But this exact pattern was what I felt was causing my dissatisfaction with work.
I wanted to find out why we decided to organize in such a way, where decisions flow downwards and information flows upward. By doing this, we basically treat employees as kids not capable of decision making on their own. I was interested - were there other companies that don’t conform to these management practices from the 1900s?
- Extrinsic motivation (salary, bonuses, carrots, and sticks) doesn’t last. They are good in the short term, but in the long term what matters most is the intrinsic motivation (doing things for the sake of doing them)
- What drives people are three intrinsic motivators that Dan Pink describes as: Autonomy - our desire to be self-directed; Mastery - the urge to get better skills; Purpose - the desire to do something that has meaning.
I found out about something called “self-management” or “self-organizing”, which basically means that instead of having the usual top-down pyramidal structure we see in most companies today, the company is more “flat” and less hierarchical, there is total transparency of information (and I mean all information, even financials) salaries are more balanced and teams are self-organizing. Such companies existed since the 80s and are still very profitable. Yet, somehow they are hidden from the general public, mostly because they didn’t fit the traditional understanding of how management works.
And remember the three intrinsic motivators?
- autonomy - there is a lot of it, because decision making is distributed throughout the whole company and is not focused at the top.
- mastery - most of these companies track everything, practice radical candor and constant feedback and focus on constant improvement.
- purpose - these types of companies have realized that by having a greater purpose, their bottom line improves as well.
It turned out, that there is a whole new world of management practices that are more human, fairer, and more in line with what I considered a motivating company culture for the 21st century.
- Don’t be afraid to question the status quo. Especially if the status quo is something that humanity invented. Some say don’t reinvent the wheel, but if the wheel was all we were focusing on, then there would be no wings and airplanes.
- If you are a manager, think about which company policies and practices limit the employees’ autonomy, mastery, and purpose.
“Hack and Paint” and Venture Capital
I had already decided to leave my well-paid job and start my own company, but I had to find something that I’m passionate about, which was also in a potentially emerging market.
At the time I was seeing few trends emerging - VR, SAAS in the cloud, and Remote Work. All three of these trends were really interesting to me and got me excited. And in 2016 I left New York with my family and we moved back to Bulgaria (where I’m from) so I can save money as much as I can and focus on making a sustainable business.
The VR buzz was picking up. So me and a few other ex-colleagues (from the animation and game industry) talked about building a remote VR game studio that focused on what we know best - story-driven, almost open-world games. We called the studio “Hack and Paint”. Because of the game business’ nature and how game studios’ financials work, we really needed external capital to sustain ourselves before we release our first game. We planned to raise some seed funding to build the demo of our game, get some user traction, and raise more financing to build the whole game. And our bet and others in the VR field expected that, while doing this, the VR market will grow much bigger in the next couple of years, we will get a lot of know-how in the field and we would be very well positioned once that happens. After raising our first seed round of investments, we spent several months doing prototypes for our game demo that we wanted to present at the Game Developer’s Conference in San Francisco (GDC 2018), where we could pitch to potential investors in the field.
But our biggest bet - that VR will grow to become a huge market in the next couple of years, didn’t materialize. All VR headset manufacturers were reporting far lower selling numbers than anyone in the industry predicted. Users weren’t growing fast enough, and in 2017 and 2018 practically no major VC invested in VR. At all. So we made our demo, we won “GDC Best in Play” with it, we had a runway to just participate in GDC that year and then we barely had money to pay an accountant to close the company down.
I felt bad. For some time after that, I was actually depressed. We failed to build what we wanted to build, I wasted the money and time of my friends who believed in us, we wasted our own savings and for a while, I felt like a failure. It was even hard to talk to my friends and family at the time.
- The more you want something to happen, the more painful the failure from it is. Zen Buddhists say “Do everything with great intent and without attachment to the end result.” Now I understand why.
- You can’t predict how a market will grow in a certain time period. Our bet was that we will start when the VR market is small and there are only few players in that market. Then we will get the know-how on how to build awesome VR games, and when the market grows we will be ready. That didn’t happen. And it still hasn’t happened.
- Self-management works. We made many mistakes, but we did many things right and what was left after all, was the feeling that I have never been in a better company culture, than what we had with Hack and Paint.
Then something happened. One of the co-founders of Hack and Paint was Eriks Vitolins who, a few years prior, had started this side project called “rgbnotes.com” - a platform for feedback over visual media. It was a tool, mostly geared towards remote studios, who wanted to give or receive frame by frame feedback over their animations. “Hack and Paint” was using the tool extensively to collaborate on our game, and I was also helping Eriks with writing the code-base for the platform, while also working on our game. In fact, at some point, we had the idea of merging the two companies into one, mostly because it was distracting to work on our game and also write code for RGBNotes. Our thinking was that we could be a game company that also sells SAAS software. For many different reasons we didn’t go ahead with the merge, which now I see was the right decision. Once we closed Hack and Paint, I and four other co-founders from Hack and Paint joined Eriks as co-founders of RGBNotes and decided that it’s worth focusing all our energy on making this a viable SAAS business. I mostly focused on writing code for the platform and doing sales demos to clients. For RGBNotes, since day one, we decided that it’s probably best if we just bootstrap the company, instead of raising venture capital for it. Building a bootstrapped business without external financing makes you more focused on the product because you don’t have to spend time writing pitch decks and pitching to investors, which is a full-time job in itself. At the same time, it was hard, because we had no financing at all, so we were mostly using all our revenue to just sustain the business and the four of us. Luckily, we have found a product-market fit for the platform, and we were slowly getting more and more clients. We were writing the features they were telling us they needed and it was going in the right direction.
One day, we were approached by another company that wanted to talk to us about a possible acquisition. We debated for over a year with the whole team whether we should do it or not. Eventually, after a year of negotiation, we agreed to the terms and signed them. Long story short, now RGBNotes is part of Amazon AWS.
- You never know what the future holds. If you are fixating on only one goal, you might miss other opportunities around you.
- Getting depressed by your failures is never productive. Learn from your mistakes and start something new. Stoicism is something that got me on the right track.
- Some businesses require some kind of funding, while others can be bootstrapped. Bootstrapping gives you more freedom, while funding gives you more speed. Choose appropriately.
Realizing what matters
After the acquisition, I decided to take some time off and think about what I learned on this journey. At the beginning, all I wanted was to work for a big and successful company, but I didn’t think about what success really means to me, so it was a stupid goal in itself. Some define success as “maximizing shareholders value” and put investors first. Others define success as “maximizing user value” and put customers first. During my time with Hack and Paint and RGBnotes, I’ve come to realize that what matters the most is maximizing value for employees. Building a culture with a great level of collaboration and trust. Removing bureaucracy completely. Because, when companies invest in their culture, their customers are happier and in return, their bottom line greatly improves. Sugata Mitra once said “We engineered a system, so robust that it’s still with us today, continuously producing identical people, for a machine that no longer exists”
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