#88 Atomic Scaling: How Small Teams Create Huge Growth

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Hi everyone, and welcome back to the Proteus Leader Show. My guest today is Ludovic Bodin, who is a serial entrepreneur with 3 exits, investor with already 2 unicorns in his current portfolio, and the author of Atomic Scaling. How Small Teams Create Huge Growth. Drawing from his experience in the gaming industry and working with tech startups, Ludovic has developed a blueprint for leaders seeking to scale effectively without expanding unnecessarily. His focus is on efficiency, automation, and creating high-performing teams that thrive in competitive environments. Welcome to the show, Ludovic.

Hi, Marie, and thanks for having me.

Pleasure. First, can you explain high level what is that blueprint for leaders seeking to scale effectively without expanding unnecessarily? I'm curious.

As you said in your introduction, like, atomic scaling is very much about small team and huge growth. And just before I kind of get into the details of the blueprint, if I explain a little bit the history Of scaling, you know, across the last 30, 40 years. Like to reach a billion dollars in revenue, you know, not that long ago, companies like Ford, for example, to reach a billion dollars in revenue, they needed like 43 years and 160,000 employees. A decade plus ago, 10 to 20 years ago, we have companies like Google who reached a billion dollars in revenue with 5,700 employees. So 20x less already employees than actually Ford.

It's accelerating.

It's accelerating. And actually the last 5 to 10 years, especially in the tech, but even more within the tech, the gaming industry, it accelerates even more. We have companies like from Finland, one of the companies that is actually use case in atomic scaling called Supercell. Who literally reached $1 billion in revenue within 3 years with just 120 employees, which is 47x less employees than Google to actually reach $1 billion revenue. So the trend is accelerating. And in my world, which is, you know, these days a lot surrounded by AI, the trend is accelerating. even more. So the question I kind of ask the audience is like, do they believe the trend is accelerating and it's going to accelerate even more, which means we're going to see more and more companies reaching faster, you know, billions and billions of dollars of revenue with teams that are smaller and smaller, and how this is going to impact them as, you know, founders, executives, board members.

Yeah, my bet is that the trend is continuing. So what framework can we use?

Yeah, so the framework we go through at Atomic Scaling actually has been very much inspired by multiple leaders from the game industry that we've been working with. And one of them that I mentioned is a company called Supercell. So the first idea actually within the framework is to keep the team as atomic as possible, meaning that you keep the team as small as possible for as long as possible while you're going for this exponential growth. I talk about Supercell, who managed to get to $1 billion in revenue just within 3 years and just with 120 people. The reality is this company specifically have developed 5 games. Each of these games generated over at least $1 billion in revenue, and each of these games were developed by a team of 5 to 7 people. Actually, as a matter of fact, the first game called Clash of Clans, which is a mobile game, the first one to actually pass $1 billion, so within 3 years after the creation of the company, was developed by a team of 5 to 7 people. And after the game was actually launched, the team was about 25 people. This game up to now have generated over $10 billion in revenue. And they've not done that once, but twice, 3 times, 4 times, 5 times. And since actually then, they even have a game called Brawl Stars that generated even more revenue than Clash of Clans, meaning like way well over $12 billion in revenue. With the same model, team of a few people, 5 to 7 people in the creation, and team of 20, 30, 40, 60 people in the maintenance of the game.

It sounds like magical. I mean, like, what does each person do in order to create such amount of revenue?

Yeah, absolutely. So the way the team are structured is the kind of people you want to attract in this kind of team, we call them kind of, you know, T-shaped. So it's actually people who have like a broad range of skills and who are not necessarily like the experts who only do one thing and don't want to do anything else. There are people who are capable of doing many things. So in the world of gaming, we're talking about usually artists and developers and maybe designers and producer type. So they're looking for people who have a broad range of skills, but also people who actually work very well in small teams, who are aware that You know, the team is going to remain small during the creation of the team. And then they have this magic, you actually use the word, they have this concept of magical pair, which means each of the team, they actually don't look at a team with one leader, they look at building a team with at least 2 leaders. They actually don't look at building a team to build a product. They build first this magical pair, this team of 2 really work really well together, who are very complementary to each other. And then these people will actually come up with a product and build up the team around them.

Yeah. 3 things, because they, first, you know, the profile of those people is multifaceted and they're quite agile, they're able to do different things. Then they're well aware that they have limited resources. And this concept of magical pair, can you elaborate a little bit in terms of that magical pair?

Yeah, absolutely. So magical pair is like when 2 people have this capability to first trust each other and then bounce ideas with each other and kind of build up on each other, kind of amplify each other's intelligence a little bit. If you like to play music, you know, when you have 2 people who start to improv, You know, you can feel like they're getting into this flow and suddenly like it's magic. It's like if the person already knows what the other person is going to, to say. And like some person is like, oh, you know, we could do— yeah, I know we could do— because they already know.

Okay, so it's that 1+ 1 much more than 2, you know? And, and, uh, they amplify each other, they're sounding boards for each other, and, uh, it's kind of helping that creative process.

Absolutely. And, and this team are able to deliver, you know, massive things. Like we're talking about team of 5 to 7 people who are able to create products that generates billions of dollars of revenue. So when you think of their competitor who need 50, 100, 200, 300 people to make similar products, with kind of similar revenue objective, you know, how do you think their competitors are going to perform against them when it comes to spending on marketing, for example?

Yeah, but if I'm already, you know, a company with 1,000 employees, I mean, how do I tackle that? Like, what do I do tomorrow? Because I don't want to do another restructuring, really.

Yeah, absolutely. So typically the kind of company we work with, we work mostly first and foremost with digital native. So digital native, that means companies who are in the SaaS business or AI or software or edtech or fintech and so on. And we work with companies from the $1 to $10 million revenue and then the $10 to $100 million revenue. So startup and scale-up. We also work with companies who are like maybe way bigger, like $100 million to $1 billion or $1 billion and above. When we work with this company, we usually have like, you know, already like pretty massive team. One of the first things we do with them is we look at, you know, the team size and we see how maybe instead of having 100% on one team, They could have a mix of smaller teams, split basically the big team into a smaller team. Then we actually look at making sure that there is this magical pair at the head of each of these small teams, which actually gives also an opportunity for much more people in the organization to raise into this leadership profile because suddenly you have a lot more leaders because you have a lot more teams. And then we look down, we through a kind of cascade with a full process where we look at team alchemy, the complementary, where we look at, you know, if the size is good and the magical pair is good, if maybe the problem or the challenge associated with the team is at the right problem or not. We look at alchemy. Sometimes everything is perfect, but maybe there is one person in the team that should maybe reallocate it to another team. He's also maybe a top performer, but just not the right fit for this team particularly. You know, that's all these structural adjustments that we do that will increase pretty quickly the performance of a bigger company. Got it.

So you rearrange the teams differently in much smaller groups, and then you monitor that performance and kind of make adjustments as you go, and that should really amplify productivity.

Absolutely. So we look to maybe get a little bit more deeper into the Atomic Scaling Blueprint. We look at actually at kind of 2 components. The first component, imagine like a triangle, and we call it like the business operating system. So the business operating system starts obviously with the people. So within the people, we look at people, but also like team structure. We look at the culture associated. We look at the rhythm or the cadence associated to the functioning of the team. But then we go very quickly into a second element within this business operating system, which is prediction. So within prediction, that means we actually encourage every team leader, but also team participant, to become better and better at making predictions.

Hmm.

The companies who are making the best predictions are the ones that are wasting also the less. which means they are the ones that actually can outperform their competitors. One of the things we look at when we talk about making better prediction is very often quantified prediction.

Got it.

And that can apply to pretty much anything within the organization.

So people, then prediction, leaders need to use data, set targets, et cetera. And third?

And the third is about playbook. So playbook, think about like a sport and, or think about game, and it's about playing, making sure that everyone within the team, and we have by that time already like smaller teams, so it's a lot easier also to make sure that everyone actually play the same game with the same rules and the same scoring system. So everybody understand this is what we're trying to achieve here. This is the rule of the game. This is how we're going to score points. And suddenly, just by making this, you know, creating clarity and alignment, people start to play together a lot better and then more magic happens.

Got it. I mean, that really resonates with Proteus because we, we do vision and strategy. We help teams create a shared vision for the future. And I think that's, this is what you call playbook really, and help them to play well together. So Ludovic, revenue growth is a key part of your methodology and, and we We'd like to leave our listeners with some practical tools that they can start applying today. So what can you tell them about revenue growth?

Yeah, absolutely. So within the Atomic Scaling Blueprint, we talk about the first 3P, you know, people, playbook, and prediction. The second part of the Atomic Scaling Framework are the 3R, reach, retention, and revenue. Depending where you are from a revenue standpoint for your company, Let's say if you are between $1 to $10 million in revenue, you are in the startup stage, then reach, you know, it's all about reach. It's about how you're going to get better at reaching more people to know about your offer and convert them to paying users. If you're in what we call the scale-up stage, which means you're probably between, you know, $10 million to $100 million in revenue, which means you might already be a unicorn, you know, valued at $1 billion by investors and so on, then it's all about better revenue. So better revenue means what? Like faster conversion rate, higher revenue per user. If you're in the $100 million to $1 billion or $1 billion and above, then it's very often about retention. So retention within the Atomic Scaling Framework, we look on how you can actually prevent better churn rather than actually react to churn. We look at how you can reactivate with automation dormant users. And we also use one of the best-kept secrets from the game industry, which is very much related to retention, which is called LiveOps. We go into the details into our training and into the book and so on.

Nice, nice. And I imagine, you know, in terms of area of focus, it's also a mindset shift, you know, for those leaders.

Yeah.

Because if they love reach and getting more consumers, it might be difficult to focus on retaining existing customers. And we know well that it's much more expensive to have new customers or to go after them than to retain existing database. This is so helpful, and our listeners can take an immediate action by going to your website, Atomic Scaling: How Small Teams Create Huge Growth, and complete a free quiz that will help them assess where they are in terms of the 3P3R model. So people, production playbook— that, those are the 3 Ps— and then revenue, Reach and retention. Thank you so much for being with us today, Ludovic. That, that was fascinating.

This was fun. Thanks for having me, Marie. Loving it.

Fantastic. And to find out more about how Proteus helps leaders and their organizations succeed, you can go to our website, proteus-international.com. So thank you for listening, and until next time, here's to creating the life you really want.

We hope you're feeling better equipped to create the career, the business, and the life you want. To find out more about how we support our clients in leadership, learning, and change, visit us at proteus-international.com. Have an excellent day, and thanks for listening. Thank you.