Outfit7 (A) Human Resource Management and Culture at A Start-Up

IN1556
Outfit7 (A):
Human Resource Management and

Culture at a Start-up
Reproduced with permission, © Outfit7 Limited - © 2010–2018 Outfit7 Limited.

All Rights Reserved. Unauthorized use is prohibited.
02/2019-6459
This case was written by Miha Škerlavaj, Professor of Leadership and Organisational Behaviour at University of
Ljubljana and BI Norwegian Business School, Spencer Harrison, Associate Professor of Organisational Behaviour at
INSEAD, and Žiga Vavpotič, Chairman of the Board at Outfit7. It is intended to be used as a basis for class discussion
rather than to illustrate either effective or ineffective handling of an administrative situation.
Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at cases.insead.edu.
Copyright © 2019 INSEAD
COPIES MAY NOT BE MADE WITHOUT PERMISSION. NO PART OF THIS PUBLICATION MAY BE TRANSLATED, COPIED, STORED, TRANSMITTED, REPRODUCED OR
DISTRIBUTED IN ANY FORM OR MEDIUM WHATSOEVER WITHOUT THE PERMISSION OF THE COPYRIGHT OWNER.
This document is authorized for use by Manasi Bhalla, from 8/18/2019 to 12/30/2019, in the course:
MGMT 612: 001-003 Managing the Emerging Enterprise - Cappelli, Hsu, Hernandez (Fall 2019), University of Pennsylvania.
Any unauthorized use or reproduction of this document is strictly prohibited.
Iza and Samo Login, along with a group of colleagues, had built their start-up from scratch in 2009.
They were experiencing steady growth and were keen to hire top-flight talent that would fit the
skill profile, company culture, and ambitions for growth. By August 2014, after only five years,
Outfit7 had grown to almost 3 billion installs of their mobile gaming apps, Talking Tom and
Friends. They had a constant need for promising candidates with expertise in mobile gaming,
animation, design, and software programming. Now Iza had met one who could not draw, could
not code, and yet wanted to join the company. Something about him interested her, but first she
wanted to ask Samo if they should give him a chance.
How it All Began

Iza and Samo were 17 when they fell in love at high school in Kranj, a small town at the foot of
the Slovenian Alps. They pursued their education in the capital, studying computer science at the
University of Ljubljana. During high school, Samo had started an IT company developing software
solutions for import/export agents. By the age of 20 they owned their own home. In 1996, they
created their first computer game for kids. It turned out to be a shared passion. “I knew that I could
do this all my life,” said Iza. 1
It was not until 2009 that Iza’s wish came true. After completing her computer science degree, she
led projects in two small companies. Unlike Samo, she realized that computer programming was
not her thing:
“I am overwhelmingly communicative, maybe even hyperactive. By now, I have learnt

how to be silent for couple of hours. At that time, though, if I was to be silent for two
hours I could just drop under the table.” 2
Iza had a talent for working with people. After her experiences in small companies she was
headhunted for the corporate world. She took on IT project management jobs with companies like
Novartis (Lek) and Microsoft. 3 She successfully led one of largest IT projects in the region,
integrating pharmaceutical company Lek’s IT infrastructure into Novartis’ system (following its
acquisition), managing 100 FTE’s over two years and a half years. They finished a fortnight ahead
of the schedule and changed the company culture in the process. At her second corporate job at
Microsoft, Iza was responsible both for large projects and the department as a whole. Eight months
into the job, she burnt out.
She re-centred herself by focusing on her passion: founding a consulting company focused on team
development and leadership, and a centre focused on quality of life and spirituality. Since
1 Kos, Suzana: Osebno z Izo Login, materjo mačkona Toma in dveh sinov, Delo, 2.11.2014,
https://www.delo.si/ozadja/osebno-z-izo-login-mati-mackona-toma-in-dveh-sinov.html.
2 Škerlavaj, Miha: Interview with Iza Login, 16.5.2018.
3 Satariano, Adam: Why Did a Chinese Peroxide Company Pay $1 Billion for a Talking Cat?, Bloomberg,
17.5.2017, https://www.bloomberg.com/news/features/2017-05-17/why-did-a-chinese-peroxide-company-pay-
1-billion-for-a-talking-cat.
Copyright © INSEAD 1
childhood, she had experience of volunteering to work with people with disabilities (including
rehabilitation after brain injuries).
Meanwhile, Samo went down the entrepreneurial path and joined Interseek, a start-up that designed
the first Slovenian search engine, Najdi.si, based largely on his ideas. When it grew to reach 100
people, Samo was promoted to R&D director and stayed with Interseek until it was integrated into
Telekom, Slovenia’s largest telecommunications operator.
Through these experiences, Samo and Iza mustered the resources to pursue their teenage dream: to
create their own organization on their own terms. A larger goal was to earn enough money to be
able to finance projects on ecology, independent energy sources and sustainable food at some time
in the future.1 They gave themselves seven years to do so.
In 2008, the introduction of Apple’s App Store opened up a new possibility. Samo gathered a group
of former colleagues, mostly software developers with complementary skillsets, and in October
2009 they founded Ekipa7 (registered in English as Outfit7) in Ljubljana. He deliberately gathered
people with complementary personalities and working styles. According to Iza, this is how Samo
described shaping the team: “One was a geek, second a problem solver, the third could hold the
team together.” Iza assumed the role of a part-time HRM consultant and CFO, in addition to being
one of the founders.
They started the company with no product at all. While serving their notice period at Interseek,
they embarked on a half year of learning through mistakes. Several failed ideas included being tour
guides in Iceland, a football app, and a wealth management app. Looking back, Iza recalled how
Samo realized two things about the App Store. 4 First, the gaming category was already full and
would require high investment in advertising. Second, the entertainment category had large
download volumes but a lack of high-quality applications.
So Outfit7 entered the entertainment category, investing a mere $6,000 in advertising, with Talking
Tom Cat (see Exhibit 1), a virtual pet, launched in 2010 when smartphones and mobile gaming was
in its infancy. Talking Tom was an instant hit (see Exhibit 2). Users could talk to Tom and he
repeated back in a high-pitched voice what was said. They could feed him, poke him, and Tom
responded with gratitude, even farting and scratching the screen. 5 Members of Outfit7 felt a deep
connection to Talking Tom – Iza sometimes referred to herself as his mother. 6
Growing the Start-up (2009 – August 2014)

Samo and Iza wanted to build the organization their way, capitalizing on their previous experience
with web development, Samo’s visionary tech leadership, and lively inter-personal dynamics. Iza
4 Škerlavaj, Miha: Correspondence with Iza Login, 31.7.2018.

5 Later version My Talking tom has expanded set of functionalities and resembles tamagotchi game with inbuilt
games and videos.
6 Kos, 2014.
stepped down from the consulting company and spirituality centre and joined Outfit7 on full-time
basis as VP of HR, CFO and deputy CEO.
Outfit7’s mobile app business was based on a ‘freemium’ business model, downloads were free of
charge and the company made money through in-app purchases of golden coins, diamonds, and
advertising. 7 Franchising played a supporting role, increasing visibility of the core business online. 8
In its first year, Tom made more than €4.6 million in profits. 9
Staying focused on the business was important and any distractions were unwelcome. Development
was conducted under the radar. Iza rarely gave interviews and Samo minimized his media exposure.
They followed a path of organic growth and rejected investors on several occasions, 10 relying on
their own capital and cash flow from the start. While striving for financial independence, 11 Samo
took pride in creating developmental partnerships with leading global technological platforms.
Talking Tom soon had friends: Talking Roby the Robot, Talking Hippo, Talking Larry, Talking
Harry, Talking Lilla, Talking Santa, and Talking Ben. Iza reflected:
“We didn’t know a lot about brand building and were developing characters that were
not connected. Later on we found out that for telling stories we needed a connected
group and developed cats Angela and Ginger as well as a dog, Hank.” 12
Each had their own games, and in some of them they accompanied Tom. Over time, the games
extended to include racing games (Talking Tom Gold Run in Talking Tom Jetski), puzzles (Talking
Tom Bubble Shooter and Talking Angela Color Splash), a construction game (Talking Tom Pool,
in which Tom and friends play in a pool park), and even a game in which Tom and Ben read news
and sprinkle each other with water guns. 13 In some respects, Outfit7 had reinvigorated the Japanese
genre Tamagotchi. 14
In parallel, Outfit7 created a YouTube channel. 15 In 2011, they developed ten three-minute
webisodes in cooperation with Disney Interactive and two more music videos with Disney Records
in 2012. One of them (“You get me”) had over 300 million views on YouTube. Due to the huge
7 According to Iza Login, in the beginning, half of Outfit7 apps were paid apps and the other one was free apps
with freemium philosophy behind. It was the development of the market that influenced such strategy.
8 Interview with Žiga Vavpotič: How to grow into a unicorn? With an understanding of markets, hard work, the
right values, and an incredible team!, Startup.si, 29.3.2018: https://startup.si/en-us/newstext/395/how-to-grow-
into-a-unicorn-with-an-understanding-of-markets-hard-work-the-right-values-and-an-incredible-team- .
9 Radio Slovenija, 6.1.2017.
10 Intel Software Development Zone: Outfit7 Celebrates Success on Their Own Development Journey, 17.7.2016:
https://software.intel.com/en-us/articles/outfit7-celebrates-success-on-their-own-developers-journey .9
13 Outfit7 webpage; Reporter Magazine, 2018.
14 Jenko, Matej (2017): Game Design is a Way of Life – Matej, Principal Game Designer @ Outfit7 Group:
https://www.youtube.com/watch?v=_Jg0IeQ41C4.
15 https://www.youtube.com/user/TalkingTomCat/about which had more than 3 billion views between 3.7.2010 and
14.4.2018 as well as 5.8 million subscribers.
success of both projects with Disney, Outfit7 decided to start developing their own TV series. By
expanding the universe of Talking Tom and Friends apps to video content creation, Outfit7 became
an omni-media company, capitalizing on its intellectual property.
Its universe of characters engaged users worldwide, of any age and gender. Iza and Samo
emphasized how fans emotionally connected with them. For instance, the in-app features
encouraged users to share their own creations on social media, developing a very diverse and broad
humorous community. The brand rapidly gained more fans as people used Outfit7 characters to
communicate with one another 16 in a casual manner.
The success and growth of the company led to changes. When Outfit7 reached 100 employees,
several of the original employees started complaining “the company is not the same anymore.”
Iza’s response was: “Sure it’s different. It’s also different when your family gets the first child.
However, is it bad? No. Then quit nagging.” 17 In August 2014, the company had 103 employees.
They were organized around four pillars: production, marketing, sales, and support functions. C-
level officers were located in Cyprus, marketing and sales in LA, London and Seoul, with much of
the interaction via videoconferencing.
While Samo was in charge of product development, Iza took on running operations as a whole,
with a special eye to creating a strong culture based on the following values: No limits, Have fun,
Work as a team, Make it happen, and one added later – Own your #hit (see Exhibit 3). The emphasis
was on going the extra mile (for the company and others), the joy of work and life, collaboration,
implementation, and responsibility. Staff used this language to describe the company and to
experience a culture of focus, meritocracy, passionate belief in ‘manifestation’ (believing in
success leads to successful outcomes), a global mindset, joy as a driver, and being casual 18 to access
everybody from a child to grandmother, as well as strong sense of responsibility towards the user
base. 19
Iza described her own personal values as follows: a strong sense of justice, 'picky' and perfectionist,
a strong sense of detail, passionate about art and design, and an admirer of the movie ‘The Truman
Show’ – “We are all actors of our own lives.” Elaborating on the idea of manifestation, she
explained: “We are responsible for everything that happens to us. Only 3% is conscious, and 97%
subconscious, result of family patterns etc.”
16 Weiss, Geoff: With Billions of App Downloads and YouTube Views, Talking Tom Spawned an Entertainment
Empire, The Entrepreneur, 26.5.2015, https://www.entrepreneur.com/article/246484.
17 Škerlavaj, Miha: Interview with Iza Login, 16.4.2018.
18 Škerlavaj, Miha: Interview with Žiga Vavpotič in March 2018; Škerlavaj, Miha: Interview with Jure Prek and
Žiga Vavpotič in April 2018; Harrison, Spencer & Škerlavaj, Miha: Interview with Žiga Vavpotič in April 2018.
19 An example of My Story: Interview with Senior Art Director Eran Albhor,
https://www.youtube.com/watch?v=d4wxWpWXKbw.
She added (of Samo) “We both have qualities of bulldozers and cannot stand inefficiencies.” 20
According to the Strength Deployment Inventory, 21 a tool widely used at Outfit7, bulldozers (red)
enjoy completing projects; blue indicates altruism, helping others grow and enjoying seeing them
progress; green indicates an analytical approach. Samo is red-green, Iza red-blue.
Outfit7 focused hiring on cultural fit. Iza was deeply involved in defining the hiring process, while
the senior director of HR, an experienced psychologist, took care of the recruitment and selection
of new hires. They used psychological profiling to categorize applicants as relationally-focused,
process-focused, or execution-focused to get the right blend of complementary people focused on
the same task. 22 Iza described how such practices were designed to create an organization with a
higher level of consciousness, 23 e.g., seeing hierarchical positions as symbols of responsibility
rather than status, intensive onboarding of employees, training programmes for developing
relationship skills, and tools aimed at increasing collaboration and ‘giving’ behaviour. 24
At Outfit7, leadership was not just about status or salary, but higher responsibility. Career paths
were not determined by hierarchy but meritocracy. During onboarding, new employees attended a
full-day presentation on the company culture, followed by a three-day boot camp, which provided
a deep dive into the history, presentations on each departments’ work, and discussions on the
organizational culture. Employees completed the Strength Deployment Inventory (SDI), and got
feedback on their motivational and thinking profiles. These were shared with colleagues, who were
encouraged to adjust their way of relating in accordance to their profiles.
After six months at the company, employees attended Core at work 25, a three-month long
experiential learning training (seven half-day sessions in total) with a strong emphasis on
relationship skills and ‘box theory’ – when dealing with conflict they should question whether they
are in-the-box (self-centred) or out-of-the-box (centred on others and the problem). At Meet to Give
meetings, employees were encouraged to invite a colleague to get together and ask ‘What can I do
for you so that you could work better?’ Half of all employees set up meetings. At Mix Lunches,
HR organized lunch with a random set of people from different departments to share experiences
from their work and personal lives. Outfit7 also had a buddy system for mentoring.
20 Miko, Klavdija: Oba imava kvalitete buldožerja, Ona Plus, 7.2.2017.

21 SDI stands for Strength Deployment Inventory, a tool that Iza describes ‘a psychology in four hours’ and is still
widely used at Outfit7. It is based on research by Porter, E. H. (1985). Strength deployment inventory. Personal
Strengths Pub, and used as a tool for raising self-awareness, motives, and dealing with conflicts. A video
describing the inventory can be reached here:
https://www.youtube.com/watch?v=F98OWspZwfM .
22 Kos, 2014.
23 Login, 2015. – Iza has been using the term conscious organization on several occasions, and comes from the work
of Reinventing Organizations by Frederic Laloux.
24 Login, Iza: Outfit7: Kako mi razvijamo talente? BEEP, 25.11.2015.
25 Core at work is inspired by a book that Iza read and immediately implemented into the Outfit7 culture and
processes: The Arbinger Institute, 2009: Leadership by Self-Deception: Getting out of the box.
To Hire or Not to Hire?
Iza was considering ‘Candidate A’, who was active in non-governmental organizations, youth
politics, and entrepreneurship. Despite his young age, the list of his engagements and roles was
long. A graduate in political science, economy and sociology, in his early career he had contributed
to UNICEF, co-created Zavod Ypsilon (institute for youth representation), and initiated Simbioz@
(nation-wide intergenerational collaboration project). He had contributed to the Center for Social
Entrepreneurship at University of Ljubljana, cofounded ABC Accelerator (entrepreneurship
accelerator), as well as the Institute for Corporate Social Responsibility. In addition to strategy
consultancy, he had experience as a journalist at Slovenian National Radio. At 24, he published
“My Very Own Book” (In Slovenian: Sr(e)čna knjiga), with blank-pages for people to write their
own story. This had led to his first contact with Iza: she started selling his book via her consulting
company. With his active citizenship experience, clear voice and frequent media appearances, he
had become a public figure.
Candidate A had originally invited Iza and Samo to give a speech at Zavod Ypsilon, an institution
he co-created as a voice for young people. When they declined, he suggested collaborating with
the foundation on corporate social responsibility, knowing of their passion for the cause. Aware
they had very little time, he suggested a meeting to kick off the collaboration. Not surprisingly, Iza
began the meeting by clarifying the company values first. However, it then turned into a job
interview.
Iza: ‘What can you do?’

Candidate A: ‘A lot.’
Iza: ‘Can you draw?’
Candidate A: ‘No.’
Iza: ‘Can you code?’
Candidate A: ‘No.’
Iza: ‘What should we do with you?
As he plainly admitted, he had no clue about animation, design, nor software coding. In fact, he
had very little experience with gaming even as a user.
What should Iza and Samo do – was Candidate A a good fit with Outfit7? What would you do?
Why?
Exhibit 1
Talking Tom Cat and My Talking Tom
Exhibit 2
Talking Tom and Friends: geographical reach
Source: Outfit7: https://outfit7.com/videos/ .

Reproduced with permission, © Outfit7 Limited - © 2010–2018 Outfit7 Limited. All Rights Reserved. Unauthorized
use is prohibited.
Exhibit 3
Cultural values of Outfit7
Source: Outfit7
Reproduced with permission, © Outfit7 Limited - © 2010–2018 Outfit7 Limited. All Rights Reserved.
Unauthorized use is prohibited.

Outfit7 (A) Human Resource Management and Culture at A Start-Up

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Outfit7 (A) Human Resource Management and Culture at A Start-Up

Hochgeladen von

Copyright:

Verfügbare Formate

IN1556

Human Resource Management and

Reproduced with permission, © Outfit7 Limited - © 2010–2018 Outfit7 Limited.

How it All Began

“I am overwhelmingly communicative, maybe even hyperactive. By now, I have learnt

Growing the Start-up (2009 – August 2014)

4 Škerlavaj, Miha: Correspondence with Iza Login, 31.7.2018.

20 Miko, Klavdija: Oba imava kvalitete buldožerja, Ona Plus, 7.2.2017.

Iza: ‘What can you do?’

Source: Outfit7: https://outfit7.com/videos/ .

Das könnte Ihnen auch gefallen