As art of my series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times,” I had the pleasure of interviewing Doug Pearson, co-founder and CTO and Derrick Morton, co-founder and CEO of FlowPlay.
Doug Pearson has more than 20 years of experience as a professional software developer leading dozens of projects for organizations like Real Networks and the Department of Defense. He founded ThreePenny Software in 2002, a successful casual games studio for mobile and handheld devices which shipped more than 20 casual game titles. Today, he is responsible for all technical aspects of FlowPlay’s virtual game worlds as Chief Technology Officer with a particular focus on the challenges of delivering high performance, massively multi-threaded software targeting a wide range of platforms.
Derrick Morton, co-founder and CEO of Seattle-based FlowPlay, has been an entrepreneur, leader and innovator in the digital entertainment industry for more than 20 years. At the helm of FlowPlay for the last decade, he has established the company as the creator of the industry’s most powerful immersive gaming platform. He has identified new opportunities in untapped markets and spearheaded the development of more than 200 digital entertainment projects.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Doug: I’ve been building games from the day I first learned to program — which was 16 for me. I wrote a version of Pac-Man in assembly language, which I thought was cool, but when I first turned it on, it ran so fast all of the ghosts ate you before you could blink! My first real job was nine months as a developer before I went to college, and I think that experience gave me huge insight into what parts of academia would be useful to a later career and what would not. I’ve always been interested in how people think, and that lead me to a Ph.D. in AI. This surprisingly taught me the most about how to work on hard problems that we don’t know the solutions for. Running a company involves solving a lot of novel problems — things you’ve never seen before. Even more so when it’s a technology company, so the Ph.D. turned out to be good preparation.
Derrick: I started in the “entertainment” business as a musician for a punk rock band. I was also getting asked to do film projects, which allowed me to exercise my creative side and develop an interest and skill set in technology. I fell in love with the two combined elements in the early 1990s and soon after started pursuing an MBA at UCLA to become a more well-rounded leader. From there I began working in creative and content executive roles at online game companies, including RealNetworks, which is where I met Doug. Eventually, in 2006, we decided to start our own company together.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Doug: Before college, I had a physics teacher in school who was also an avid rifle shooter. He would go to shooting contests, and in those days all of the record-keeping and scoring was done on paper. So, he recruited me to write a program to replace this process. I was super excited and we set off to a major event. At the end of the first day, all the scores were entered and I proudly generated the list of winners of the different contents. It didn’t take long to realize they were all wrong — some of the people who had no misses weren’t at the top of the tables. A mad scramble ensued as we fell back on the paper copies. I was horrified. What had happened? It turned out my program was “sort of” correct, but I’d assumed that people could type in a list of scores from paper without making any errors. Totally unrealistic. The major lesson being that you need to factor in the human element — I learned it was important to recognize the assumptions I was making about people and make sure they were reasonable. In games development today, we talk at great length about that as we try to understand what will make sense to players and what will leave them baffled or frustrated.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Doug: There are some rather obvious people without whom my life would be nothing like it is today. If I didn’t meet my co-founder Derrick, FlowPlay would never have existed or been half as successful as it is today. If my wife didn’t move into the apartment across from mine in college, I’d never have moved to America. Without the key hires we made early in the life of FlowPlay, it wouldn’t be the same company. I would say very little of whatever successes I’ve had are really down to me directly.
My advisor in graduate school (Prof. John Laird at the University of Michigan) also definitely changed my life. Graduate school is tough, and I came in pretty dumb and green. I think it’s easy for that experience to produce people who are actually quite damaged and insecure later in life. Many academics seem to suffer from that, causing them to remain in the relative safety of a field that they know better than almost anyone else on the planet, but never really making the impact they should. John is unusual in that he’s rocket smart and yet totally unassuming and unthreatened by others. His level of confidence allowed me to try and to fail (which you do repeatedly in grad school) quite safely. I remember giving an important presentation to our research team and about 15 minutes in, I came to a complete stop because I realized the presentation was a total mess. John didn’t castigate me for the failure, he took it in stride, suggested a different way to approach it next time and we moved on. He knew I didn’t need yelling at to try harder. By the time I graduated, I was a lot more confident than when I had entered and much tougher. It turns out confidence and toughness are useful when it’s time to start a business.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
Doug: Over the years I’ve come to see FlowPlay as a quiet experiment into whether it’s possible for a company to succeed while also trying to put its players and its employees ahead of the bottom line. If you decide that the needs of these people are the most important thing, can you also build a successful company? That’s certainly a vision that Derrick and I share, and it’s really largely a vision that comes from him. We see our games as connecting lonely or bored people in positive and healthy communities which can allow them to build enormously important relationships — relationships that in many cases will change the quality of their daily lives. We look to find people who are passionate about building great games and bring them together — giving them control and responsibility for doing that and assuming that if we give them the space to do great things that the right people will thrive in it.
Derrick: Like Doug said, creating truly social games and a great workplace were our key purposes from the beginning. These continue to guide our company, and as we’ve grown, we’ve maintained the essence of what we started out to do. Alongside that, we’ve also developed a strong philanthropic program to help our company, employees and customers give to causes that matter to them.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
Doug: Keeping an even keel is important. When good things happen, not getting too excited. When bad things show up, keeping calm and working on solutions. People want to know that their opinions will be heard and that decisions will be explained. A leader cannot guarantee that the company is on a path to success, but they can guarantee how people working at the company will be treated. Honesty and openness go a long way to helping handle the inevitable challenges and uncertainties that any company faces.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
Derrick: No, we did not consider giving up in the early days, nor any time since. Our most challenging times have taught us how to leverage each other’s strengths and weaknesses, and balance our dedication to the vision with the need to adjust to changes in the market. Our approach with FlowPlay, and the company’s resulting success, runs contrary to most other technology companies. Instead of scaling quickly, we have focused on steady growth. Rather than chasing the latest trend, we remain true to our company vision. We’ve been deliberate about staying two steps behind the hottest trends to remain three steps ahead of failure. All of these decisions have led to incremental wins that reinforce that path we’re on and motivate our team.
What would you say is the most critical role of a leader during challenging times?
Doug: I would say one of those important qualities in any leader is consistency. How you lead in difficult times should be the same way you lead when times are good.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
Doug: Giving back is a core value for FlowPlay, and one that continues to inspire our team. This is especially important during turbulent times. When the COVID-19 pandemic hit, our team rallied around this culture of giving toward employees and the local community. Our company did not take a financial hit from the pandemic, so we were able to be swift in our support of fulfilling local needs. In addition to a May fundraiser with the American Cancer Society, which provided $55,000 to reopen Hope Lodge facilities for frontline health care workers, our company donated tens of thousands of dollars to various local Seattle organizations, including Northwest Harvest, Seattle Theatre Group, UW Medicine Coronavirus Emergency Fund and local restaurants. This gave our team something positive to focus on, and confidence in the health of the company, despite the unsettling effects of the broader crisis.
What is the best way to communicate difficult news to one’s team and customers?
Doug: Transparency is critical. Co-founders need to show a united, calm front, and be open. Don’t try to sugarcoat or hide from the reality of the situation. Be direct and ready to answer questions.
How can a leader make plans when the future is so unpredictable?
Doug: Just like in buying stocks, don’t try to “time the market.” Figure out what it is that your company is particularly good at, and focus on that. Then adapt as the future unfolds rather than trying to predict it and base your future path on what you believe may come.
Derrick: We follow a barbell strategy at FlowPlay, and it is a good way for leaders to find balance between reward and risk. In a nutshell, it’s about focusing on a mix of high-risk and no-risk ideas (or products, services, investments), but not spending time or money on mid-level risk ideas. This strategy has allowed our company to remain stable and grow steadily over a long period, and remain mostly insulated from the impacts of unpredictable events.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Doug: Put your employees first. It’s that simple.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
Doug: The most common mistake is not being open. If the situation is bad, it’s best to share that, explain the plan for how you hope to address the problems and make things better. Hiding that it’s bad never works, because people are simply too smart. They will suspect there are problems and once they realize that they are not being told the truth, then there’s no way to regain that trust. At that point the only solution is to replace the leadership team.
Derrick: I think businesses in trouble often make the knee jerk mistake of blanket layoffs to save money. This has so many negative repercussions, and beyond leaving people unemployed, is very demoralizing for the employees that remain. Instead, company leaders should ask employees to make sacrifices across the board. For example, can everyone take a pay cut to share in the burden, so everyone can stay employed, versus eliminating jobs and creating more work for the team?
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
Derrick: It’s important for companies to live within their means for one. Another effective approach is to follow Nassim Nicholas Taleb’s antifragile concept. Companies that are antifragile are primed to do well in negative situations, which is more relevant than ever in our current environment. FlowPlay has followed this practice for several years.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
- Keep calm. You can’t lead well if you are buried in anxiety and stress.
- Be flexible. Rigidity in response to an unexpected challenge is a sure path toward more challenges, or in worst-case scenarios, failure. Be committed to your key values and vision, and also be ready to pivot when needed.
- Be proactive. Before lockdowns went into place in Seattle where our company is headquartered, we began encouraging employees to work remotely and provided every employee with a 30-day supply of freeze-dried meals for emergency needs. We also checked in with every employee directly to understand what supports and office supplies they needed to continue working effectively. As soon as global news made it clear that a real crisis was headed to the U.S., we began to take action and make sure our company and employees were ready.
- Have empathy. For many companies, the pandemic has highlighted strengths and weaknesses. People have been isolated and alone at home, and may be relying on their colleagues in new ways. Working parents are spread impossibly thin and need extra flexibility. This is an opportunity for company leaders to demonstrate empathy and show employees they are truly valued. We’re offering employees flexibility in their hours and encouraging them to take time off when needed, and put their own health and wellness first.
- Practice anti-fragility. As mentioned earlier, we follow this concept. Zoom’s huge success since COVID-19 hit the U.S. is another great example. Tech and business professionals, and companies, should be asking: how can we plan for success in the worst of circumstances, and be ready for the unexpected?
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Doug: I have two. From my mother, “You know more than you think you do.” It’s great, because it’s an invitation to be bold. To take chances and to trust that you will figure it out as you go. In life we rarely regret the things we do, even if we fail at them. We regret the things we never tried to do.
The second one is from President Obama, “Be kind and be useful.” It’s so simple, but really aren’t those the keys to life? I love that it puts the act of being kind right at the top of the list. Kindness is often underrated — but is actually a core principle to live by.
How can our readers further follow your work?
Doug is on LinkedIn at: https://www.linkedin.com/in/douglasjohnpearson/
Derrick is on LinkedIn at: https://www.linkedin.com/in/derrickm/