When The Magic Goes

 

The adoring crowd of 300 engineers executives, and reporters fell silent. They had gathered this Friday night in the bright new site of Sente Technologies Inc., in Milpitas, Calif., to pay tribute to their leader, a man many of them regarded as the philosopher-king of Silicon Valley. In the last decade, he had founded an industry and parlayed seemingly outlandish ideas into not one but two multimillion-dollar companies. Now he stood before them, puffing on his pipe and flashing his puckish grin.

"My name is Nolan Bushnell, but I'm not God," he told them. "I need to build factories."

If not God, then Prometheus -- about to be unbound. At midnight on September 30, 1983, a seven-year noncompete agreement, which Bushnell had signed when he sold his pioneering Atari Inc. video-game company to Warner Communications Inc. in 1976, was due to expire, and a grand party had been organized to celebrate his release. Streamers and banners adorned the walls and ceilings. Bushnell mingled gregariously, clutching a can of Budweiser and a little blue notebook with a picture of a clown on its cover. Waving the notebook about like a wand, he declared that it was bulging with ideas for video games far more creative than anything then on the market.

"The game business, much like the music business or the carnival business, gets in your blood," he pronounced. "For the past several years, I have been scribbling down ideas, waiting for today." Sente, the latest in his series of glamorous enterprises, would carry the video-game torch into the future. "My grandchildren and their grandchildren will still be playing video games."

The crowd believed. This was vintage Nolan Bushnell, the Valley's fun-loving, boyish genius, who summoned successful companies like rabbits from a top hat. After Atari had come Pizza Time Theatres Inc., a restaurant chain that expanded so rapidly it twice made INC.'s list of the 100 fastest-growing public companies in America. After Pizza Time came Androbot Inc., which had dazzled the press and the public with a mechanical-man prototype named Bob. There were others, too -- each one a piece of its creator's entrancing vision.

As for the creator himself, his charisma was unmatched anywhere in the entrepreneurial wonderland of Silicon Valley. "Nolan walks in the front door with that smile on his face and puffin' on that pipe, and it's like a whirling dervish walked in," says the former president of a Bushnell company. "People's hair stands on end. Their eyes get like saucers. And they flock around him like J.C. the Man just walked in."

Such, indeed, was his reception at the Milpitas party on that magic night in 1983. Only six months later, however, the magic was gone. By then, Pizza Time Theatres had filed for protection under Chapter II of the Federal Bankruptcy Code. Androbot, touted by Merrill Lynch in the summer of 1983 as one of the country's hottest new issues, had lost more than $4 million. Sente itself had been sold to Bally Manufacturing Corp. in a desperate attempt to raise cash for the parent company. And Nolan Bushnell had lost around $5 million from his own pocket, plus many millions more in the paper value of his stocks.

How did it happen? In answering the question, it is tempting to see Bushnell as he was in Milpitas, clutching his clown notebook and smiling under a shower of accolades: a sort of overindulged child prodigy. But there is more both to the man and to the collapse of his corporate domain. Bushnell's companies weren't ordinary start-ups built around one or another market opportunity. There was a unifying theme to them a mixture of technology and fantasy that Bushnell hoped would elevate him to the status of entertainment mogul the Walt Disney of the '80s, an entrepreneurial sorcerer whose visions permeated American life. That he ultimately turned out to be the sorcerer's apprentice, overwhelmed by his creations rather than in control of them, is his tragedy.

The story of the collapse is also a parable for Silicon Valley, a region increasingly obsessed with technology and troubled by the swift punishments now being meted out in the marketplace. Even more than Apple Computer Inc.'s Steven Jobs or Intel Corp.'s Robert Noyce, Bushnell was the spiritual leader of Silicon Valley. He believed, still believes, that one day all of America will in some ways resemble the Valley, a suburban Oz built from California redwood and Spanish tile, where giant billboards advertise computer spreadsheet programs and where the gas stations run promotional programs with names like "Protech." New technology has always been at the center of Bushnell's entrepreneurial vision; like others in the Valley he came to believe it would never fail him. That he was wrong seems no small lesson in a decade that will likely be remembered not for its wars or its cultural artifacts, but for the dazzling technology it has unleashed.

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