"Crunch time always SUCKS!"

Games take us into unimagined worlds and immersively merge reality and vision. But developing a 3D action game is an immense undertaking - one that comes with special challenges for founders and developers. An interview with Leonard Kausch, founder of German game developer studio Point Blank Games about entrepreneurship, personal growth, crunch and sustainable team leadership.

A few months ago, I was talking with my friend Robin Rojowiec from Clinomic about expanding our network in new directions. The interfaces of the future would go beyond dull, two-dimensional React components to display content differently, to go more in-depth. We needed to get in touch with a game developer - they would know how to do that. Robin quickly got in touch with Leonard through an acquaintance. We agreed to hang out together in Discord.

I can still remember very well how overwhelmed I was by Leonard's openness, charm and multitasking. Developing a game of the caliber of Stray Blade - that's one thing. On the side, Leonard took care of his still young children during the call, talked about his wife (who by the way is his co-founder and CTO) as well as about the many different departments that are necessary and have to be delegated for video games in contrast to SaaS startups, philosophized with us about the investor landscape and answered my entrepreneurial questions to him - and all this with a joy and motivation that I have rarely experienced in my life so far.

So when I was assigned to interview an entrepreneur who inspires me as part of my SET master's program at Tomorrow University, it was clear: I had to talk to Leonard again.

Me: Hi Leonard! Why don't you start by telling me about your company - when did you start and what did you do back then?

Leonard: We have been around for about 7 years. In the beginning we started with the EXIST Business Start-up Grant, later on we founded Point Blank Games. We quickly realized that the paying customers in the video game industry are in the US. In the end, however, it was the cost of the flights, a standard thing, that we failed at. Sometimes it's such simple things that get in your way. You're motivated, you develop some virtual monsters and you think you're going to distribute the game worldwide and it's going to work. But if you can't shake a guy's hand, you're not going to make a deal.

We then took our fate into our own hands and developed our own game with our own technologies. In retrospect, that was way too ambitious. At the time, the fact that there were accessible sources of funding for such projects in Europe was an argument in favor of this. That's how we secured our first deal to develop Shock Tactics. After that, everything happened very quickly: we grew from two to 16 employees within three months. That was super exciting. However, we crashed the project into a wall. Managing the staff at that speed was too big of a challenge. On top of that, there were heaps of deadlines and, of course, the development itself.

Investors sometimes give extra money so that the game can be released earlier. But many teams don't need that at all. The longer runway is what teams need to develop. You need a good, small team and necessary resources so that you can learn and make important mistakes. Because if you make a mistake with 16 people, then 16 people run in the wrong direction until the mistake is recognized - and that's really expensive. That's full-on disaster. Most of the time, the founder himself is the bottleneck. As a founder, you often grow out of your role as a specialist; I, for example, was or am a computer scientist. You then gradually become less of a programmer and more of a leader. But in the beginning, you still make technical mistakes yourself, especially because you are involved everywhere at the same time. That was the first, big learning for me.

"The whole thing was a kind of borderline experience. A lot learned, a lot suffered."

Anyway, we went through the development of the game hardcore. The positive thing was that we were able to develop as a team. On the following project, we implemented all the findings and were more efficient as a result. Some irons in the fire were forged in the process. Looking back, I don't consider the development of Shock Tactics to be a failure, because all the stress has moved us forward as a company. But we could have had it a lot easier (laughs). The whole thing was a kind of borderline experience. A lot learned, a lot suffered.

After that, we worked on a prototype for Stray Blade for the next four years. Along the way, we kept our heads above water with jobs for trade fair construction or car manufacturers, where we developed games with the Unity Engine, for example. That was also the time when my wife Sara and I were able to really show off our qualifications for the first time, the jobs were really practical - hands-on. We were able to gain the trust of a number of companies with these orders.

It resulted in a deal with 505 Games. Since then, we've been developing the game and now we have 28 people on the team. And believe me, we've noticed so clearly how much we've learned from Shock Tactics. Especially in scaling. We now know which major problems can occur with this kind of development and are able to take countermeasures early on. Still, not everything always goes as planned but you "only" have to worry about the follow-up problems. Now things are running like clockwork. That's good to see.

Me: So you were still learning a lot during the development of Shock Tactics, and you also made mistakes. Still, that was an investment in a product, right?

Leonard: The deal was clearly about the product and I have to say that the cooperation with our partner at the time was superb. We built up the company on the side at that time. That's why it's so important to release the first product, so you can say: Cool, we are a team that can produce something. The investment was not strategic or an equity investment. The agreement was: we develop the game, the partner distributes it. And our partner didn't just say, "We financed the game, give it to us now." We talked very openly with each other. And I've had this experience in the games industry in general, that publishers, investors and developers talk a lot about what everyone wants in the long term, where the interests lie and where the problems are. They support each other very well. It's not like you only meet at milestones and check boxes. That's not how cooperation would work. I think that's the way it is in most creative industries. Otherwise, you're producing a work environment through which the product suffers. You have a common interest, a common work that's supposed to make you a better person. It's common practice in the industry and in everyone's interest for the company to acquire expertise and develop.

Me: When you look at your transition from professional to CEO: What were the specific challenges or the biggest lessons you had to learn during that time? And how has that impacted your current responsibilities?

Leonard: I should definitely have asked myself this question earlier on. You have to think about what knowledge you need in which areas and how you can get it. I should have educated myself ahead of time. Instead, I learned many things the hard way and realized, "Holy shit, I'm running into a wall right now. Maybe I should think about which tools and paths are out there so I can avoid this." Fundamentally, it was totally absurd because I had entrepreneurship at university, among other things. But there it was all about investments, pitches. How you convince people and that you are close to your audience. The typical Silicon Valley stuff. There's nothing wrong with all that, it's fundamental knowledge. But when you have your first employees, what does that imply? How do you deal with it and what is the really important data? That wasn't addressed. In the university context, scaling companies was always just about money. That's too basic of a thinking. Scaling is much more gritty holistically.

I then fell into the classic trap that catches many. You think you can keep working as a professional and everyone around you is doing the same. You extrapolate from yourself to others. And in a way, that's logical. As a founder, you are there from the beginning, you have all the issues in mind. You give 150% to your baby. For someone you're hiring, the range of topics is extremely wide. You have to realize at that moment that your employees need a lot more guidance and structure. Founders often think that context should be clear to others. "Are you trolling me?" is what I thought (laughs). This learning is essential. You have to change your behavior and your mindset. You have to realize that you have to create a good environment for your employees, they have to be able to settle well into your company and find a place for themselves. You can't just rush forward because if you do, you'll leave them stranded.

That can happen to you in the founding team, too. With three or four people, you're also used to everyone ticking 150% and being autonomous. That's why it's so important in scaling to actively learn important leadership skills early on. There are a lot of platitudes in entrepreneurship and people telling you this and that and then you'd already be a great leader and have strong nerves. That's nonsense. You can learn all kinds of things, whether that's fighting, running, writing awesome scripts like The Lord Of The Rings or whatever. But you have to learn the right thing.

I feel like when entrepreneurship comes together with the creative industry, people then don't understand much about what exactly to learn. That becomes difficult in everyday work. You can make progress in programming or biochemistry through trial and error. You learn areas that no one has ever learned before. But in everyday work? In social interaction? That is neither efficient nor necessary. There are great tools for most topics, with which you can tackle 90% of the problems. You don't have to be completely immersed in the subject matter and become a specialist as you would in research. It is enough to get an overview. For example, there are great resources on leadership and team building. With these, you can learn the most important things in two or three weeks. According to the 90/10 principle. Then you have your necessary skillset.

"But then you're suddenly faced with the situation of having to keep up in four other disciplines as well. You're not able to do each of them the way you did at university. It's totally hardcore at the beginning."

As a founder, you usually have a discipline that you're really good at. After all, we come from university (laughs). But then you're suddenly faced with the situation of having to keep up in four other disciplines as well. You're not able to do each of them the way you did at university. It's totally hardcore at the beginning. You have to make your experiences with quickly learned knowledge in order to grow from it.

In summary, it's important to recognize a) the need and b) the right time to educate yourself and prepare for upcoming challenges. You need to internalize this before you bring in employees. Then you will make your life much easier.

Me: But now straying away from more personal start-up topics, perhaps more towards you and your industry. You started in 2014, would you still call yourselves a start-up?

Leonard: In Silicon Valley style, we should have been at today's stage four years ago. In terms of the way we're growing as a company, you could still call us a startup. But we're not really one anymore, because we know exactly what we're doing. However, we still face some of the typical challenges, like scaling by leaps and bounds. You do your thing and then suddenly boom, 12 more employees.

Me:?I can imagine that startups in the gaming sector function differently than, for example, a SaaS company because of the high effort involved.

Leonard: There is some serious competition in the video game industry. A SaaS company often has one main product around which the business revolves. That gives stability. You have a product, a company, you have income - awesome. And you can prototype lean and iterate a lot. Of course, you need sales, front-end and back-end developers, the brand has to be good, and so on. As a game developer, it's different: You make a good game, everything is fine. You make a bad game? Then you're broke again. That means you're always facing the entrepreneurship problems. That's also why big game developers use the same IPs. The risk is minimized. Assassin's Creed, for example, can hardly flop. With small studios with 30 to 80 employees, it's different. A flop can kill you completely. And you have that risk with every new product if you don't have a well-known IP to fall back on.

Game developers also need a lot of different professionals: everything from artists, voice actors, writers, people for cinematics, motion capturing, visual production, hardcore tech server backend people - and then after quite a lot of them. There is basically no digital craft that is not represented in this industry. But exceptions always prove the rule, especially in the creative industry. It can also be that you build a small game, hit a nerve, just fucking genius and boom, success.

Me: How small-scale can you then iterate and test at all on such a scale? If you say: Okay, we need so many people, we have so many areas. Then you are already a kind of tanker, even if you don't have that many people yet.

Leonard: This is an exciting topic. As a founder, it's fun to deal with the question: What is a game prototype? You have to identify the essence of your game, then you can prototype more leanly. Rarely do you have a brilliant idea, pitch then mic drop - and back. This is rather rare. You don't need all the virtual levels in such a case, you don't need all the features. There is a good example: walking simulators, a hype. You can set them up super basic at the beginning. You build a paper prototype that people can navigate on. Then the users get told a story and are shown nice pictures in the process. That can work because the user experience gets across.

You have to identify what's unique, what's awesome about your idea, and then you have to prototype. Period. No Achievements in skateboarding simulators, no city, no spray logos. Just the skatepark, players, board and tricks. You can scrap everything around that. And with the tools of today, you can move on quite quickly as a result. In the past, it was a nightmare. You then started using rendering engines to connect to whatever else and programming controller drivers. Today you can prototype extremely well.

Me: The subject of effort is always an exciting topic within the industry. Especially with large development studios, there are always public voices for more air, because the conditions in which developers have to work are criticized. I'm talking about crunch, hardcore overtime, which is common in the industry. You actually address the problem right on the home page of your website, saying that it's important to you to encourage personal growth, have mutual support on a day-to-day basis, and that you simply don't burn out your employees. If this is such an industry-wide problem, how can you be more sustainable than the standard?

Leonard: This is a tricky topic. You can see that there is a correlation between extremely successful IPs and crunch allegations. That can be quickly inferred. Framed positively, you could say: they knock out successful products because they push their employees to go beyond their limits. But the question remains: What then? I can tell you what happens then: The people are burned. Sustainability is missing. Crunch is SHIT. I've never met a founder who wants to build a company that is hated by all its employees. No one wants that, but it happens. The bigger companies get, the harder it is to prevent.

It's admittedly hard to build a company where you're genuinely always trying to put the employee first. But I am personally convinced that it is possible. That it can be done sustainably. But you need courage to do it. You have to actively challenge yourself and say: No, we won't work overtime. It doesn't matter, the update won't come until next month. No, Christmas is family time. If you don't challenge yourself as a founder at this point, you won't find solutions. It's way too easy to just let your employees work overtime. I don't accept that approach. I want to invest in my employees, retain them for the long term, and not let them burn out and leave. We would then lose the know-how. The next employees would then have to be retrained. That's why I think everything comes back to you at some point. Crunch is short-term thinking at companies that do crunch for a single product. But that doesn't mean it's not successful. Like really successful. Because if they put out a game that grosses 400 million, then they don't care in the grand scheme of things that they broke their company culture for it.

My personal take: crunch is sick, always sucks and is bad for people. Who wants to build a company that is bad for people? What are we doing all this for? Then we can also be like in Lord of War and sell weapons to make a lot of money. So I have a clear attitude about that.

Me: How do you deal with the development of corporate culture, especially in times of pandemic?

Leonard: It's hard to get anything started when everyone is in home office. We usually get together in the summer in a gravel pit, shooting bows and throwing axes. That's awesome. Since Corona, we've been doing less. As things loosen up, we want to get back to eating together regularly. To make matters worse, we don't currently have a shared office. We did have that at the beginning of the pandemic but when we noticed that all the plants in the office were dead we thought, ok cool, we can cancel that now. We are currently in a transition back to more real culture development as soon as circumstances allow. Finding an office in Berlin with almost 30 people is also not as easy as it was when we just sat down in the basement with five dudes (laughs).

Me: What about topics like sustainability in the gaming sector?

Leonard: As far as I know, sustainability is not a big issue in the gaming sector. We've had it on the agenda from time to time, but it's never become a big action or company policy. The fact that we don't have an office makes it more complicated. Once the infrastructure is concentrated in one place, you can take meaningful action. As long as the employees are sitting in the home office I can't change much. In general, you have to say that game development is quite a killer when it comes to electricity. So in your offices there are 20 washing machine equivalents running all day long. There's not really much potential for saving electricity. With alternatives like laptops, you can save a lot of energy. But we need graphics cards, and they suck up power like crazy. That's the problem.

Me: I would argue there aren't that many gaming studios in Germany building 3D action games, especially ones promoted by Sony. What do you think is the reason for that? Piranha Bytes or Crytek come to mind.

Leonard: A few years ago, Ubisoft moved to Berlin. The thing is, there were no video game investors in Germany. You see that historically in quite a few industries in Germany. Period. It's not that nobody wanted to develop games in Germany. Just like in other countries, there were creative people here who were up for it. We're just Germans, that's the problem (laughs). Generally speaking, Germans are not very risk-averse. You can see that in the start-up mentality and also in the investment mentality. But it's slowly changing, and that's a very good thing. This history has kicked us hard into the stone age as far as the IT and creative industries are concerned. And it was also hard in many places to get investors into Germany for the games industry. There had to be a hell of a lot of articles written by big magazines before anyone checked it out. Oh, the games industry has overtaken the film industry? Surprise! That was crazy. Such a negative, historical development as the risk aversion in Germany related to investments is hard to reverse. Canada, for example, started promoting the games industry like crazy ages ago. Now they're really reaping the rewards and Germany is trying to catch up.

For maybe five years now, German funding has really wanted to change, because that's what makes international money so sexy. And at that moment, infrastructure is also growing here. You can now go to international investors and say: Look, you give me one euro and I'll get an extra one from the state. If an investment suddenly brings twice as much company value, then that's pretty crazy. And that's how these structures and usability for the German games industry develop for international money flows. And that solves the problem. The reason why Silicon Valley rocks so much is because founders and money have found each other there.

Me: Thank you so much, Leonard! Finally, do you have 1-2 tips that you would like to share with young founders?

Leonard: When you have a product that is very costly to prototype, it always gets ultra hard. The classic is to read Lean Startup by Eric Ries. Maybe a bit of a lame recommendation but it works. Because you have this problem with people who have a complex product and are starting out, that the biggest mistake they make is to disappear into their basement for ages and do specialist shit instead of rapid prototyping. Business students don't have such a problem with that, but the business student often can't build the prototype. That means it's important that the mindset of prototyping a product, not a technology, gets to the people who are the hardcore professionals. You have to think about or research the product first, then the technology. I always thought the one example with the mobile laundry was so cool: they put a washing machine on a truck and then went to the village to offer the service. And then people found that very confidence-inspiring because they saw the washing machine. But that shit didn't work at all, they then drove the truck and the laundry to another town and washed it there at the laundromat and then drove back (laughs), genius. That way, with demand and customer communication, they could test everything, tested the whole thing without having a product. They just had a broken washing machine on the truck! That's the mindset you need. You have to think, what do I need to test my product. There's a lot in that.

Point Blank Games is hiring Artists and Game Developers. Find out more.