What Startups Can Learn from League of Legends
On October 16, 2019, Netflix released League of Legends Origins, a documentary by Academy Award nominated filmmaker, Leslie Iwerks. It's the story of how Riot Games began as a fledgling startup and ignited a worldwide phenomenon with the release of their game, League of Legends. For those who aren't familiar, League of Legends, often referred to as "League" or "LoL", is a multiplayer game where two opposing teams comprised of unique characters battle to defeat each other. Ten years in, it is still the world's most popular PC game and world's largest esport, an incredible feat in the hyper competitive world of gaming.
While the documentary centers around the evolution of League and its community, I found that it contained several lessons that startups can apply to their own companies.
Spot the trend before it's too late
Before League, there was Defense of the Ancients (DotA), which was a custom mod for Warcraft 3. Despite requiring players to jump through some hoops to play a match, the game became very popular among the Warcraft 3 fanbase (me among them). This popularity came in spite of obvious shortcomings, like poor matchmaking, sometimes imbalanced gameplay, and lots of hoops to even get up and running.
The founders of Riot Games spotted the growing trend of MOBAs (multiplayer online battle arena) early and saw an opportunity to significantly improve on the experience. As Bobby Goodlatte recently tweeted, some of the best businesses come from communities who see the future. Riot was able to see that future and then make it real.
2/ Find communities who see the future
— Bobby Goodlatte (@rsg) October 22, 2019
Coinbase was ‘obvious’ to those in the Bitcoin community in 2012 (forums, Reddit). What obvious futures are waiting in other communities?
The ability to see what others have yet to see and then deliver something that can appeal to a wide audience is what separates amazing founders from mediocre ones.
Lesson: Look for emergent behaviors, identify a trendline, and imagine what the world might look like if the trend extends for several years. If you are right before anyone else, then you'll get very rich.
Think user-first
Early on, Riot decided to make League free to play to maximize the potential audience for the game. This brought up the question of whether they should charge for in-game items that gave players an advantage against others. While it would undoubtedly earn a lot of revenue, such a move would compromise the experience for those who don't spend any money in the game. Riot put themselves in the players' shoes and ultimately decided to charge only for cosmetic items and champion unlocks, which improved the overall experience and better aligned incentives across the company and players.
Lesson: Don't compromise on what the user cares about. It's hard to go wrong to put yourself in their shoes.
Move mountains to serve your customers
When Riot launched League in Europe, they initially did so through a now-defunct publisher called GOA. Major issues plagued the experience from the beginning: crashes, bugs, poor connectivity, and more. Hordes of players publicly complained about these problems but GOA refused to take full responsibility.
Once it became clear that serious action was required, Riot severed ties with GOA and decided to take over European distribution and operations themselves. They then had 53 days before GOA would stop hosting the game in Europe. All of a sudden, the team had to set up a data center, create a new business entity, hire a team, and prepare for a migration... in less time than some people need to plan a vacation.
To make matters worse, the Icelandic volcano Eyjafjallajökull erupted right before the service transfer, resulting in thousands of flight cancellations and severe flight restrictions. In order to transport hardware from Los Angeles to Frankfurt, Riot had to route through Africa, the Middle East, and Eastern Europe until they finally reached their destination.
The move paid off. By pushing themselves to go the extra (thousands of) miles, the European market rewarded them with fast growth and gratitude from players.
Lesson: Sometimes you have to go to unreasonable lengths to do the right thing for your customers.
Own your failures
During the last quarter-final match of the Season 2 World Championship, multiple network problems prevented the competitors from playing a full game. After several failed attempts, Brandon Beck, one of the Riot Games founders, went on stage to apologize to the audience and inform them that the event would be rescheduled. Yet in what was clearly a disappointing outcome, he managed to turn the situation into a moment of delight. How?
Here's what Brandon did well. First, he made no attempt to hide their responsibility. Even with circumstances outside their control, Riot took ownership of the problem. Next, he shared the plan moving forward, which included a ticket refund, $25 in Riot Games credit, and free merch for audience members. In response, the audience went from boos and grumbling to cheers and people chanting "Riot!"
In the middle of a high-profile failure, Brandon owned the situation and did what was necessary to make things right. The League of Legends World Championship has continued to break records in viewership every year since.
Lesson: When you have failed, own up to it and clearly explain what you are going to do about it. Customers far prefer that over excuses and blame.
Turn your customers into heroes
One of the smartest things Riot Games did was to elevate their players and turn them into real-life heroes. Anyone in the world has the chance to go from unknown to superstar status. This is made possible by some savvy moves by Riot:
Made League competitive by nature, encouraging players to continually get better and climb the public ranks
Hosted high-production value tournaments, complete with prize money, announcers, commentators, player interviews, and more
Rode the wave of Twitch and YouTube, which maximized the reach of both League and its competitive players
When players can become heroes, they not only work hard to raise their status, they also encourage others to emotionally invest themselves in the player and game. This creates a virtuous cycle where some fraction of that audience will become a serious player themselves and potentially attract their own audience.
Lesson: Ultimately, your customers don't buy products; they buy better versions of themselves. Whether it's through product, community engagement, or marketing, the more you can provide a path for users to progress into their greater selves, the more they will buy what you're selling.
Focus on incentives
As communities grow, so does toxic behavior, especially with the often anonymous environment of gaming. An otherwise enjoyable game can be ruined if a teammate fires abusive messages at you every other second. League is no exception, especially with a player community numbering over 100 million. There are plenty of articles that talk about League's toxicity problem.
Improving user behavior is a neverending pursuit, one that requires the use of every available tool. When Riot examined how punishments like bans influenced players, they saw mixed results. If sticks weren't enough, then what sort of carrots might they deploy?
Eventually, they realized that there was a gap in team-wide encouragement. Players weren't receiving enough positive feedback when they played well and so their attention was naturally drawn toward the negative. Upon realizing this, Riot introduced an Honor system where players bestow recognition on others for good gameplay, leading to status and in-game rewards. By simply giving users a way to focus what went well, Riot was able to significantly shift player behavior.
Lesson: dig into the various forces that influence user behavior and then adjust the environment to emphasize the forces that lead to desired behaviors.
Summary
The fast-moving, hyper-competitive world of gaming has many lessons to teach startups. A few of the ones we can draw from the story of Riot Games and League of Legends are:
Look carefully for early trends and seize upon them if you believe they will turn into something significant
Always think about the user and their needs when making important decisions
Move mountains to serve your customers and they will reward you
Take responsibility for your failures and clearly communicate what you are going to do about them
Think about how your product can make your customers become superior versions of themselves
Analyze what forces impact user behavior and craft your experience to skew toward the forces that benefit the user and company