“If I can end up running a private equity firm after getting expelled from school at age 15 and leaving education with no qualifications, plenty of other people can do just as well,” says Paul Wedgwood, the founder of Supernova Capital. Running it well, Wedgwood might add – Supernova has just completed its first exit, selling the Polish video game developer Flying Wild Hog for $137m, something like 15 times what it paid for the business.
It has certainly been a long and twisting road to this point. Wedgwood is best known as the former CEO of Splash Damage, the games developer he co-founded in Bromley, South-East London, in 2001. But Splash was his third attempt at a start-up – two previous ventures had met with ignominious ends that Wedgwood feared would strangle his entrepreneurial ambitions. “After the second failure I had to meet with the Official Receiver in Croydon and was fully expecting a telling off,” he recalls. “In fact, this civil servant told me to take what I had learned from those failures and give it another go.”
That was an instruction to which Wedgwood could relate. Growing up on a London council estate, he learned some tough lessons about resilience. And after being thrown out of school for “mucking around on the computers”, he talked himself into a field engineering role in IT, despite having little experience. A rapid rise up the ranks saw him work for government and in the City. “It dawned on me that I hadn’t needed a degree in computing to work on the IT system in 10 Downing Street and I began to think about what else it might be possible for me to achieve,” he says.
Splash Damage was the perfect outlet for that ambition, indulging Wedgwood’s passion for video games, leveraging his IT experience in business and the public sector, and providing a new application for the communication skills he had learned during a stint as a television presenter on a video games show. Launching the business with friends with whom he had already been working to develop games for fun was part of the attraction. “That would be my message to anyone wanting to follow my path,” Wedgwood says. “Find the one thing you would get out of bed for in the morning, even if you weren’t being paid, because you’ll have the passion to make it work.”
Still, the business was far from plain sailing. During Wedgwood’s near two decades at the helm, Splash Damages developed a series of huge hits, including Wolfenstein: Enemy Territory, Doom 3, Quake Wars and Brink. But it also flirted with collapse on a string of occasions – Wedgwood reckons there were at least seven periods of crisis where the business could have gone under.
Supernova Capital’s Paul Wedgwood
It was these experiences that sent Wedgwood back to education, albeit on a self-taught basis. He began to devour management and business theory in order to master the basics of running Splash Damages as a commercial success and not just a labour of love. From management accounting skills to HR policy, Wedgwood realised he needed to professionalise the company.
“The most important lesson I learned was that by focusing on staff happiness, everything else would follow – including better productivity and increased revenues,” he says. “That doesn’t mean spoiling your employees, but you do need to understand what drives them and how you can align their sense of purpose with the business’s ambitions.”
Wedgwood also decided transparency and personal integrity were crucial. He began being more open with staff about the company’s finances – even posting details of its bank balance on screens around the business. “If your company is struggling, don’t try to hide it from your staff,” he says. “By telling them about it, you’ve suddenly got 200 minds to apply to its problems.”
It is this focus on staff wellbeing that Wedgwood credits with ultimately ensuring Splash Damages’ success. Of the 300 or so awards the company picked up during his time, the one he is proudest of is its appearance on the Sunday Times 100 Best Companies To Work For list in 2018. “Not bad for a company that had once seen staff walk out because of our autocratic management style,” he points out.
Commercial success followed quickly. In 2016, the Chinese business Leyou Technologies offered to buy the company for around $150m and Wedgwood decided the opportunity to guarantee his lifetime financial security was too good to miss. He finally stepped down from the company two years later.
Enter Supernova Capital, the next act in Wedgwood’s business career. “We’re looking to find companies in the same position as Splash once was: with great ideas but in a stressed situation.” Wedgwood’s pitch is that he has codified the lessons he learned at Splash Damages – including the focus on employees – and that this framework can be used to help struggling businesses to achieve their potential.
The experience at Flying Wild Hog has vindicated this view, Wedgwood argues. The Polish developer was losing money when Supernova acquired it two-and-a-half years ago. By the time of its sale in December, the company was making $10m profit a year and had grown from 90 staff to more than 250. “The big thing we told them was to go back to doing the games they loved, rather than trying to develop things they thought the market would like,” Wedgwood says.
Now the challenge is on to find more of these businesses and to work with many of them for the longer term, with Wedgwood showing no sign of wanting to retire. “I have more money than I need, but I’m just as passionate and I need a purpose,” he says. “We’re thinking about how we can hold on to businesses for longer while still finding ways for managements to benefit from the value they create.”
In the meantime, Wedgwood’s message is a simple one. Anyone who has passion, determination and belief can achieve what he has, he insists. “Everything else you can learn along the way.”