Exploding Kittens: Elan Lee. How cat-themed Russian Roulette changed game night forever

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• Elan Lee's early career was defined by an aptitude for creative problem-solving, shifting from a poor program manager to a successful game designer after a physics teacher reframed failure as a puzzle to solve.  Copied to clipboard!
• The creation of Exploding Kittens stemmed from a simple, Sharpie-modified card game concept that gained massive traction when paired with The Oatmeal creator Matt Inman's illustrative talent and a counter-intuitive marketing approach.  Copied to clipboard!
• The record-breaking Kickstarter campaign for Exploding Kittens succeeded by pivoting away from fundraising goals to focus entirely on community engagement through elaborate, story-driven 'achievements' rather than monetary stretch goals.  Copied to clipboard!

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Early Life and Physics Teacher

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(00:08:03)

• Key Takeaway: A high school physics teacher reframed Elan Lee’s academic struggles by challenging him to find and fix errors in a new textbook, fostering a problem-solving mindset.
• Summary: Elan Lee struggled in school, earning mostly C’s, but excelled in physics due to an unconventional teacher. This teacher offered him an A if he could find and correct mistakes in the new edition textbook. This assignment felt like a research project, motivating him to devour the material and ultimately earn an A+ in the subject.

ILM Internship and Titanic Work

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(00:11:04)

• Key Takeaway: Interns at Industrial Light and Magic often handle tedious tasks, such as hand-animating every pixel of breath for characters in the freezing water scene of Titanic.
• Summary: Lee interned at George Lucas’s Industrial Light and Magic while in college. His work included tedious tasks like frame-by-frame animation. Specifically, he hand-animated the visible breath for actors in the famous door scene of Titanic because the scene was filmed in warm water.

Joining Microsoft for Xbox

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(00:12:20)

• Key Takeaway: Elan Lee was hired at Microsoft as a Program Manager for the secret Direct Xbox project, a role he quickly proved unsuited for.
• Summary: Lee was recruited to help define the future of the entertainment industry by working on what became the Xbox console. He was hired as a Program Manager, responsible for schedules and budgets. His boss, Jordan Weissman, quickly identified him as a poor fit for management but recognized potential in design.

Pivot to Game Design and AI Project

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(00:14:15)

• Key Takeaway: After being deemed a poor program manager, Lee was moved to the design team for the original Xbox, contributing to the launch titles, including Halo.
• Summary: Lee was transitioned to the design team for the first six Xbox titles after his boss recognized his design aptitude. He worked on the initial Halo game, which set a high bar for subsequent launch titles. He later collaborated on an interactive storytelling project for the movie AI, called ‘The Beast,’ which used scattered online assets to build a narrative scavenger hunt.

Burnout and Leaving Microsoft

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(00:20:04)

• Key Takeaway: Burnout from console development and a desire to pursue interactive storytelling led Elan Lee to leave Microsoft, prompting his boss to join him.
• Summary: Lee felt Microsoft was not the right environment for the next-generation storytelling concepts he wanted to pursue, like ‘The Beast.’ He resigned due to burnout from the impending Xbox 360 development cycle. His boss, Jordan Weissman, resigned alongside him to start a new venture focused on interactive storytelling.

Founding 42 Entertainment

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(00:22:15)

• Key Takeaway: 42 Entertainment was initially founded to create Alternate Reality Games (ARGs) like ‘The Beast,’ but the service-based model proved unsustainable due to constant revenue hustling.
• Summary: 42 Entertainment aimed to build more alternate reality games, which used real life as the platform for interactive narratives. They secured initial funding but were immediately hired by Microsoft to handle the Halo 2 marketing campaign. The business struggled because it was a service model, requiring constant new projects to generate revenue, leading to financial stress.

Second Microsoft Stint and Final Exit

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(00:27:07)

• Key Takeaway: Lee returned to Microsoft to build content for the Xbox One, but an existential crisis occurred when he saw his own designed game being played by his niece and nephew instead of interacting with them.
• Summary: Lee returned to Microsoft for a year and a half to build content for the Xbox One entertainment platform, appreciating the stable revenue model. He experienced an existential crisis when he realized his work was consuming his personal life and family interactions. This realization prompted his second and final resignation from the company.

Hawaii Trip and Exploding Kittens Genesis

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(00:34:03)

• Key Takeaway: The concept for Exploding Kittens originated during a Hawaii trip with Matt Inman (The Oatmeal) as a physical test of a Russian Roulette app idea, initially named ‘Bomb Squad.’
• Summary: Lee attended a trip to Hawaii where he met Matt Inman. He tested a concept based on Russian Roulette using a Sharpie on a standard deck of cards. Inman suggested renaming ‘Bomb Squad’ to ‘Exploding Kittens’ and offered to illustrate the cards, viewing it as a fun project, while Lee initially saw it as a weekend endeavor.

Kickstarter Goal Setting and Matt’s Prediction

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(00:38:31)

• Key Takeaway: The founders set a modest $10,000 Kickstarter goal based on manufacturing minimums, but Matt Inman immediately predicted they would raise $5 million, highlighting their differing expectations for the project’s scale.
• Summary: The team planned to raise $10,000 to cover the minimum order of 1,000 decks from a local manufacturer. When opening a business bank account, Lee stated the expected deposit would be $10,000. Matt Inman immediately countered that the deposit would be $5 million, showing a massive divergence in perceived potential.

The Viral Kickstarter Launch

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(00:44:47)

• Key Takeaway: The Exploding Kittens Kickstarter hit its $10,000 goal in just seven minutes after Matt Inman posted the promotional video, rapidly escalating to $3.5 million by day four.
• Summary: The campaign launched in January 2015 and immediately went viral due to promotion on The Oatmeal’s website. They reached their $10,000 goal within 20 minutes. The initial momentum was so strong that they hit $1 million in the first 24 hours and $3.5 million by day four.

Storytelling Stretch Goals Strategy

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(00:47:40)

• Key Takeaway: To maintain momentum after initial viral success, Exploding Kittens converted its Kickstarter page into a storytelling game, tying rewards to audience-driven ‘achievements’ instead of monetary milestones.
• Summary: Faced with slowing funding after day four, Lee decided to ignore further funding goals and focus on the ‘crowd’ aspect of crowdfunding. They introduced ‘achievements’ that required backers to submit creative content, like photos of ‘Taco Cat’ or ‘Batmans in a hot tub.’ This strategy successfully incentivized continued participation for the remainder of the 30-day campaign.

Manufacturing Crisis and Retail Success

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(00:50:54)

• Key Takeaway: The campaign’s success required producing 700,000 decks, a volume that overwhelmed the local manufacturer, necessitating help from the Cards Against Humanity team to secure a large-scale overseas production partner.
• Summary: The 219,000 backers required the production of 700,000 decks, including an upgrade to embed a meowing chip that cost an extra million dollars. The initial local manufacturer could not handle the volume, so the team sought assistance from Cards Against Humanity. With their guidance, they secured a manufacturer in China and delivered all copies by the promised July deadline.

Guerrilla Marketing at Conventions

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(00:56:16)

• Key Takeaway: To compete with large competitors at conventions without a massive booth budget, Exploding Kittens built an elaborate, eight-foot-tall, fur-covered cat vending machine costume that dispensed truly random items, including food.
• Summary: The company spent its initial capital on production, forcing them to use creative guerrilla marketing at conventions. They built a massive, interactive cat costume that functioned as a vending machine, drawing massive lines. This stunt reinforced their core philosophy: telling stories that interact directly with the crowd, even when selling a physical product.

Marketing and Unit Economics (Unknown)

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• Key Takeaway: None
• Summary: None

Second Game Failure Analysis (Unknown)

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• Key Takeaway: None
• Summary: None

You’ve Got Crabs Flop

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(01:05:29)

• Key Takeaway: You’ve Got Crabs failed because its core mechanic of silent, secret signaling did not generate the necessary laughter and engagement during play.
• Summary: The third game, You’ve Got Crabs, launched around Valentine’s Day and disappeared from retail within eight months, considered the weakest design of the early attempts. The gameplay required players to sit in silence sending secret signals, which resulted in awkward table silence rather than fun. This failure intensified the pressure on the team regarding the threat of being a one-hit wonder.

Throw Throw Burrito Success

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(01:09:07)

• Key Takeaway: Throw Throw Burrito became a massive hit by blending card game mechanics with physical action (dodgeball) and brilliant, curiosity-driving packaging.
• Summary: The game, based on an inventor’s concept called Flaming Mangoes, was renamed Throw Throw Burrito by Matt, emphasizing the food fight aspect. The marketing was genius: the box advertised it as the ‘world’s first dodgeball card game’ with a window showing squishy burritos and an arrow saying, ‘just you throw these.’ This generated enough curiosity to drive initial purchases, leading to 500,000 copies sold in its first year, far exceeding the 30,000 copies typical for a new game.

Investment and IP Expansion (Unknown)

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• Key Takeaway: None
• Summary: None

COVID-19 Sales Boom

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(01:16:54)

• Key Takeaway: The COVID-19 pandemic unexpectedly caused a 90% revenue increase in 2020 as families sought alternatives to screens for connection.
• Summary: The pandemic created an unprecedented demand for game sales as families stayed home and looked for ways to connect without screens. Exploding Kittens experienced a 90% revenue increase in 2020, leading to constant crises in production and shipping capacity. The company’s guiding principle during this time was to ensure their games remained available on store shelves when competitors struggled with supply chain issues.

Enduring Fear and Game Design Philosophy

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(01:18:47)

• Key Takeaway: Despite massive success, the co-founder lives in constant fear of the business toppling, relying on continuous creation to mitigate the risk of being a one-hit wonder.
• Summary: The co-founder never reaches a point of zero worry, believing that all products constantly compete with new, shiny alternatives in the market. The strategy to combat this is to continuously make many new games, hoping several will become evergreen hits. The company’s design retreats now require the marketing team to veto any game that cannot be clearly sold.

Daughter Inspires New Game Line

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(01:21:07)

• Key Takeaway: Frustration with the poor quality of existing pre-K games led the co-founder and his four-year-old daughter to co-design four successful new retail games.
• Summary: The co-founder found existing games for his young daughter to be mundane and unenjoyable, prompting her to suggest, ’let’s fix it.’ They spent months designing games together using simple materials, resulting in four playable concepts that were subsequently developed and bought for retail. This collaboration resulted in the daughter’s signature appearing on the boxes of successful games sold in stores like Target.