A Serial Entrepreneur's Perspective - Inc.com http://www.inc.com/nolan-bushnell Thu, 14 Jan 2010 10:46:38 -0500 en-us A Serial Entrepreneur's Perspective - Inc.com http://www.inc.com/uploaded_files/image/100x100/Nolan_Bushnell_3082.jpg http://www.inc.com/nolan-bushnell 100 100 Getting Perspective http://www.inc.com/nolan-bushnell/2010/01/getting_perspective.html A recent news item on Inc.com asked the question, "Are your employees afraid to take a vacation?"

You should pose that same question to yourself. It is easy to work all the time because the tasks of an entrepreneur seems to never be finished. But not taking a vacation is a huge mistake.

Tasks are the noise in the system of innovation, and they almost always try to muffle what is more important, which is to take the right strategic actions you need to build your business. Getting away from the office allows you to reconstitute a view of the company without all the daily noise created by tasks, people, and customers.

Of course, it isn't easy to get away. In the early days of Atari, I could not imagine taking a week off and being out of touch. I am sure that the first three years could have been much easier if I had just taken time to view the big picture without all the distractions.

Today, it is even harder to get that distance because of e-mail and cell phones. Can you really get perspective on your business when your BlackBerry hums constantly and pulls you back into the minutia?

Still, you must build the discipline to do it. There will be a payoff, I promise. I remember distinctly a September afternoon in a Paris caf when one of the big ideas of my life was born.

The vacation was nice also.

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Thu, 14 Jan 2010 10:46:38 -0500 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2010/01/getting_perspective.html
New Year's Resolutions for Your Company http://www.inc.com/nolan-bushnell/2010/01/new_years_resolutions_for_your.html This is the time of year to look back on a year gone and a fresh one just starting. Every company has the ability to take hard steps to improve performance. What can we learn from last year? What mistakes were made that lead to problems? What were the triumphs? Is it time to move offices, to junk that old machine, to let go the marginal employee?

Company resolutions are often easier to follow than the every-year personal ones that we make. Take the next few days to look back, to look forward, and to make a list. Get your employees to thinking also and have a shared list. Then put some skin in the game by offering a party a bonus if "X" is completed by a specific date. Objectives can be fun and very helpful if they are thought out and implemented.

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Mon, 04 Jan 2010 10:07:44 -0500 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2010/01/new_years_resolutions_for_your.html
How to Avoid Horrible Presentations http://www.inc.com/nolan-bushnell/2009/12/how_to_avoid_horrible_presenta.html In making a pitch for funding, communicating with co-workers, making a sales presentation, or just giving a speech, a good PowerPoint deck or a set of keynote slides have become a must. Over the years, styles have changed with the advent of new technology features, but there are some basic rules that have endured.

"Less is more" is the most important rule—and the most frequently violated. For example, I just sat through a presentation in which there was so much information contained on each slide that I quickly lost what the group was doing. Slide after slide of more and more and more. The slides were unreadable and the concept was muddled. So I finally did something that I never do which is stop the presentation and simply ask: What are the three things you want me to understand? The presenter couldn't answer me directly, so then I tried the old elevator pitch gimmick—What would you tell a potential customer on an elevator? The CEO started to answer my question and, after about 30 floors of explanation, I asked the members of the team to leave and to e-mail me once they get their business figured out.

Here's a tip: Complexity does not sell. There may be thousands of cool features to your new product or technology, but listing them just puts people to sleep. Find out what the key elements of your pitch are, and then boil down the presentation accordingly. Add graphics, pictures, tables—anything to break up big concepts and communicate them simply.

I think it was Mark Twain that said, "If I would have had more time, I would have written you a shorter letter."

Keep it simple.

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Fri, 18 Dec 2009 12:42:49 -0500 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/12/how_to_avoid_horrible_presenta.html
Is Your Idea a Product or a Company? http://www.inc.com/nolan-bushnell/2009/12/is_your_idea_a_product_or_a_co.html I see hundreds of business plans each year, and more than half of them fail what I call the "Company Test." That is, many of them describe clever products or services, but the idea itself is simply not sufficient to support a whole company. So how do you know if your idea is simply a great product or in fact the basis for a larger organization?

First, ask yourself, is there any way this idea could produce at least $100 million in sales? I pick that number because, to get funding, a company needs to grow large enough to accommodate several viable exit strategies. Few products or services on their own will have enough drawing power to hit those numbers, of course. What is needed for a viable business is a line of new products that draw are able to draw on a continual flow of innovation, or a line of ancillary services that produce recurring revenue and high margins.

Web companies have similar problems if they are advertising-supported, because advertisers require a certain scale that few will be able to achieve. There are ways that small sites can generate ad revenue but they will always have to give much of that back to all the middlemen—ad agencies, ad networks, etc.—that stand between them and the advertiser.

The bottom line is this: If you come up with an idea for a cool product or service, don't stop there. Keep your creative juices flowing and try to imagine a family of products or services. Perhaps then one day you will grow the business big enough to buy the castle on the hill.

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Mon, 14 Dec 2009 13:40:21 -0500 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/12/is_your_idea_a_product_or_a_co.html
How to Create a Million Jobs http://www.inc.com/nolan-bushnell/2009/11/how_to_create_a_million_jobs.html If members of Congress wanted to create a million jobs, all they would have to do is repeal in its entirety the legislation that is known as Sarbanes Oxley. It is the most destructive legislation that has ever been written, causing hundreds of millions if not billions of dollars in waste and problems. It has virtually destroyed the IPO market for midsize companies and caused thousands of public companies to de-list. I know personally of at least 10 companies that have chosen, because of Sarbanes Oxley, to go public on foreign stock exchanges rather than listing in the U.S.

The problem with the legislation is the massive cost of compliance and the stilted way that companies need to operate in order to comply with it. All this is waste. The law was put in place in response to the accounting and financial fraud that came to light in the early part of the decade at several companies, most notably Enron. What is little understood today is that people at Enron and elsewhere were successfully prosecuted under the then-current security laws were. The rules in place dealt with the problems effectively. Piling on a huge regulatory burden was totally unnecessary.

We live in a global economy and having companies in the U.S. carrying the added burden of high compliance costs and the inefficiency that entails only makes U.S. businesses less competitive. Companies backed by venture capital have created massive numbers of jobs in the U.S. but because the law has made it harder for them to go public (or to stay public), the amount of VC money has dried up. Newly-formed companies have been denied the IPO exit that all investors want, and the math is quite simple: No exit equals no more investment.

If you want to start a company and some day take it public, contact your Congressional representatives and ask them to repeal Sarbanes Oxley. It was and is a horrible burden on everyone.

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Mon, 02 Nov 2009 16:32:07 -0500 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/11/how_to_create_a_million_jobs.html
An Easy Way to Learn Entrepreneurship http://www.inc.com/nolan-bushnell/2009/10/an_easy_way_to_learn_entrepren.html Today there is no reason for any kid to be out of work. That's because online markets such as eBay, Craigslist, and Amazon.com provide some of the best hands-on training in the world for anyone who really wants to learn how to grow a business.

My 15-year-old son has discovered eBay and he is now up to 6-to-10 transactions per day. He is starting to seriously reduce the accumulations of stuff in our garage--so much so that he is planning to turn to other sources of merchandise as well.

The great thing, particularly for young people, is that the results are very immediate. They can play online markets almost like they would play a video game: Add a well-crafted appeal or product description to your auction page, and you can take a tepid sales volume and turn it into a torrent.

It has been fun talking to him and coaching him not just when it comes to creating ad copy, but also in sales and in pricing strategy. I think that every high school should consider creating an eBay course to teach students the basics of online marketing.

Who knows from which tiny acorns mighty oak trees will grow? A tiny online business today could grow to a major enterprise over time. The secret to success is gaining the ability to get into your customer's head and solve their problems. That is the skill that my son and other young people like him are learning when they sell things online.

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Thu, 29 Oct 2009 08:47:00 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/10/an_easy_way_to_learn_entrepren.html
Why I Love Trade Shows http://www.inc.com/nolan-bushnell/2009/10/why_i_love_trade_shows.html Trade shows are somewhat out of favor these days, and I think that's a shame. The more you know about business, the better you will be at solving new problems. And trade shows are a great way to get an instant education in one particular industry--a look at the competition among the larger and smaller players, the new trends, the new technologies, and the problems that are being solved.

And I find that I can learn a lot from trade shows representing industries other than my own. A trip to Las Vegas is great for this. There are typically several trade shows being held simultaneously, and I enjoy ducking in and out of each of them. By delving into a business that is very different from my own, I find that I can absorb new ideas about marketing and other core processes. Often, there are whole ways of doing business in one industry that have not taken hold in another.

On a recent trip, for example, I spent time at a materials-handling show. The companies in this particular industry are experimenting with some of the most inventive automation that I had ever seen. I actually think that some of the technology they were using could be adapted for my industry, to make some very new kinds of video games. On another trip, I went to a retail-fixtures convention. There, I came up with an idea for a new market for some of our software.

It never hurts to learn and to get out of the usual a rut.

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Fri, 09 Oct 2009 08:55:00 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/10/why_i_love_trade_shows.html
The Fully-Outsourced Start-up http://www.inc.com/nolan-bushnell/2009/10/the_fullyoutsourced_startup.html An entrepreneur is fundamentally an organizer of labor and capital for an enterprise. But that doesn't need one must build an organization in the traditional sense. There are many businesses that do millions of dollars in revenue with no capital in place, no employees, and no facility. In the era of outsourcing, starting a so-called hollow company is a fairly low-risk way of becoming an entrepreneur.

So how to begin? I blogged earlier about the importance of the one pager. Once you have crafted that marketing document, your sole priority should be to go get a sale. You have to be convincing, of course, but I have seen many entrepreneurs make their first sale without so much as a prototype. By making a sale, you have done the most important part of a business by showing that at least one company wants your product.

Once you have a sale, you can move on to the next step and find a manufacturer that will do all the work. There are thousands of these small-batch manufacturers out there that are constantly looking for new products that they can make and sell.

With a manufacturer signed on, your next step should be to establish a sales organization. Rather than hiring, I would advise you to stay hollow and look to the outside. There are many independent sales organizations employing thousands of reps, and they are always looking for a new product or service to represent. Rep firms work on a commission basis, so they only get paid when you do. This is the way Atari grew so quickly. We simply put on a rep force and we had instant worldwide coverage.

As your organization makes more and more sales, there are accounting groups that will take care of billing and cash flow and bonded warehouses if you want to start to hold inventory. You can work with all of these companies on a contract basis. The truly hollow company need never hire anyone. Employees only complicate things. And since you now have nothing to do yourself and no one to manage, you can then turn to the really interesting work, like thinking about expanding your product line to grow even bigger.

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Thu, 08 Oct 2009 10:40:17 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/10/the_fullyoutsourced_startup.html
Funded Companies are Fragile Companies http://www.inc.com/nolan-bushnell/2009/09/funded_companies_are_fragile_c.html There are basically two theories about funding a start-up. One is to bootstrap the company; the other is to pour on the cash. Bootstrapping is always attractive because if the company becomes viable, there is no dilution for the founder and he or she will enjoy a great deal of freedom. Atari started that way. We launched the company with $250 and didn't raise a dime until the business was generating about $40 million in sales. Yes, I went without a paycheck for long periods of time, and I almost lost the company one summer. But we survived and prospered and found out ways to save money on everything. This created a very robust business, because we were simply more efficient than any of our competitors. For us, bootstrapping worked like a charm.

The other common start-up approach is to raise money early and often. This allows a company to rise quickly up a very steep ramp, achieving large market share much sooner than is typical. Founders often end with very small percentage of ownership. As long as the company grows quite large, of course, this is not so bad.

In this scenario, however, the entrepreneur must be prepared to run a much more fragile company. Start-ups are by their nature messy. Management will make mistakes, markets will be slower to take shape than you anticipated, and the technology will be buggy. In a bootstrapped company, you can survive because your expenses are low and you are accountable to no one but yourself. But in a funded company, you must demonstrate to your investors that you are making progress even as cash flow continues to be negative for a much longer time, requiring added rounds of investment.

If you go for the fast-growth model, be sure to raise more money than you think you need. The good news is that, in general, it is actually easier to raise more money than less. You can always argue to investors that a stronger cash position will only improve your company's likelihood of success.

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Wed, 02 Sep 2009 15:15:08 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/09/funded_companies_are_fragile_c.html
The Case Against Government Spending http://www.inc.com/nolan-bushnell/2009/08/the_case_against_government_sp.html Every morning, a CEO or a product manager in the private sector will ask his or her staff if there are ways for the company to save money. Managers know that their survival and bonuses depend of not wasting money. Sure, they also look at the revenue side and try to increase sales. But the two go hand in hand.
The legislator and seldom a governor get up and ask what kind of legislation can make our current government systems more effective and deliver more value for less money. The bureaucrat actually is always looking for ways to increase their budgets, not to drop them. In that lies the problem with government services and why they always fail in comparison to the free market.

As we contemplate expanded government, we should ask why. Is there any government program in any country that is more efficient than private providers? I have asked this question at parties for the past year, with not one example offered. The only examples proffered were using the police power of the state to enact triage or rationing on some scale. Little government wins. Stop the bloat.

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Fri, 28 Aug 2009 10:41:11 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/08/the_case_against_government_sp.html
The Power of a One-Page Marketing Plan http://www.inc.com/nolan-bushnell/2009/07/the_power_of_a_onepage_marketi.html When launching a new product or a new line of business, many companies make the mistake of starting with either engineering or design. This is wrong.

Start with marketing.

The best way to start a marketing process--no matter what the product or service--is to create a one-page brochure, an 8x11 sheet of paper, printed on both sides, that fully describes the offering.

On the front page, write up the big sell, the uniqueness of your value proposition, and the price. The information should be printed in big type and less is more. Shoot for three prime features easily outlined in short, declarative sentence--anything more, and you have a problem. The idea of the front page is to encapsulate the essence of the product so well that a customer who glances at it will be instantly hooked. The front is all about getting a customer to pick up the page and turn it over.

The back page is about specifics, details, and more information. A customer should be able to learn everything there is to know about your new product, find answers to all their questions, and decide if it is something they want to buy.

By addressing in detail the purchaser's wants and needs, the product brochure now becomes an important design document for the rest of the company. A list of features for engineering to build, a synopsis of the necessary market research, an outline of costs for production--you'll find it all right there.

Often a well-produced brochure can save million of dollars in wasted time and money.

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Fri, 31 Jul 2009 17:24:05 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/07/the_power_of_a_onepage_marketi.html
Raising Money is Like Kissing Frogs http://www.inc.com/nolan-bushnell/2009/07/raising_money_is_like_kissing.html Even in this market, there are new companies getting funded, but the process of raising money can seem at first to be quite unpleasant. You have to kiss a lot of frogs before you find your prince--and you will sometimes despair at the companies that you see getting funded while you're still in the hunt. Over the course of my career, I have seen hundreds of entrepreneurs that are on the money trail. Many business plans that I thought were marginal wound up raising huge amounts of money. I have also seen great plans that never got off the ground for lack of funding.

In most cases, success at raising money had to do more with persistence than it did with any other quality. The entrepreneur that would simply not give up always got funded in the end. He or she would often modify a plan, and the ultimate business may have been very different from the original concept--but, nevertheless, they got the money and they got their start.

Even though raising money is like kissing frogs, it's not all bad. Like that search for your true love, the prep work can actually be rather enjoyable. Venture capitalists and angel investors can provide an entrepreneur with a great deal of insight and experience. Look at the process of pitching investors as an education and, even if a group doesn't invest try, to learn something valuable from each of them.

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Wed, 22 Jul 2009 18:26:37 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/07/raising_money_is_like_kissing.html
4 Trends in the Gaming Industry http://www.inc.com/nolan-bushnell/2009/07/4_trends_in_the_gaming_industr.html I am shown new things in the video game business all the time, and love the portal into the future of fun that these demonstrations provide. While some innovations that I see are covered under non-disclosure agreements, I can talk about many that are not. Here are four trends that I find intriguing:

1. Gesture technology is one development that I particularly like. Several camera technologies sample where a gamer's arms, hands, head, body, and legs are in space, and render movements and actions accordingly. This gives a player the ability to "be in the game." The same technology could also be used to create systems that allow for the elimination of a game console or a TV remote control. A viewer might just hold out his hand and, with a few gestures, change the channel or raise the volume.

2. The musician wannabe market continues to attract innovators eager to develop the next Rockband, Guitar Hero, or Dance Dance Revolution. Consumers are ready to devour more intense experiences and new artists now see the value of incorporating their original music into these gaming platforms.

3. Virtual worlds. I am happy to see that there is some game play that does not rely on the slash, slash, level-up metric, which I find boring. I find that virtual worlds are getting richer and more interesting all the time.

4. Micropayment systems. The ability to spend a few pennies or nickels on virtual goods or "passage to the island" is helping to create a new economic model for games. I am on the board of a Seattle-based company called Reality Gap that has developed a cool new technology called MetaTix, which has created a payment system for online games that calls to mind the tokens that gamers use at Chuck E. Cheese. Over time, a new micropayment system like Reality Gap could replace credit cards as the currency of choice for online gaming; credit cards, in my opinion, are great for purchases of $10 to $20, but they are horrible for things costing a nickel.

These are a few interesting developments in my field. I will keep you posted on other new stuff as it comes up.

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Fri, 17 Jul 2009 08:09:00 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/07/4_trends_in_the_gaming_industr.html
What to Do When You Can't Pay a Bill http://www.inc.com/nolan-bushnell/2009/07/what_to_do_when_you_cant_pay_a.html During tough times in any business, it becomes difficult if not impossible to pay all your bills on time, and this can become a source of sleepless nights and worry for an entrepreneur. One summer at Atari, we had an extremely dry sales season and got behind on our payments. Some of our suppliers agreed to work with us. Others sued, and we would up with more than a dozen judgments against us on behalf of them. It was an unhappy period.

If you find yourself facing this situation today, it is important to know that you have many more friends than you may believe. Your key suppliers--the good ones to whom you owe probably the most money--generally want you to survive and to prosper. They really want to supply your company for many years to come. If you go out of business next month, they not only lose the revenue you owe them, they also lose you as a recurring customer. So you have more leverage with them than you may think.

The secret to surviving this situation is to communicate. It can be exhausting, but open a dialogue with your creditors and make sure that you are honest. Present them with a plan, and ask for their patience.

Here's what you want to find out from them:

1. Think about which creditors you absolutely need in order to stay in business, and vice versa. Make sure that you have a way to secure future shipments or services from them in order to keep your business running.

2. Determine which of the rest of your creditors are rational and want to work with you, which ones are also in financial difficulty, and which creditors are jerks who will tolerate no give-and-take.

3. Work out a payment schedule for each creditor and try to be as faithful to that schedule as possible.

4. In general, in these difficult times, don't sweat any payment turned over to a collections agency and don't allow threats of legal action to worry you. It can take years for a creditor to get a judgment and then to collect from you. They know that and now so do you.

5. The most important thing is to keep your business operating and to reduce costs. Business cycles come to an end and make sure that you are there to see that new dawn.

When Atari ran into trouble, none of the competitors who sued us were able to collect a dime until we were ready to pay. That moment didn't come until about 6 months later and, by that time, the market had come back and our cash position had improved. The creditors that helped us through the tough period won our loyalty going forward, while we permanently black-balled all the firms that sued us. And they were very sorry. We survived and made our helpers millions as we grew and expanded.

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Mon, 13 Jul 2009 18:18:04 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/07/what_to_do_when_you_cant_pay_a.html
Look to the Rich for Market Research http://www.inc.com/nolan-bushnell/2009/06/look_to_the_rich_for_market_re.html If you want to know what will be popular a few decades from now, you don't have to engage in expensive or time-consuming market research. Just look at what rich people have, and think about a way to make something similar, although at a much lower cost, for the average consumer.

For example, in the next 20 years I believe there will be automobiles that can operate on auto-pilot. This will give the middle class the benefit of having a chauffeur, but at a fraction of the cost. Think of how great it will be to always be dropped off and picked up where you are going, instead of having to trek to and from some parking lot.

Businesses that provide middle-class people with access to items that previously only the rich could afford are almost always successful. When I look at business plans I ask, does this make people's lives "richer"? If it does, the business has a much higher likelihood of success.

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Mon, 29 Jun 2009 18:57:30 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/look_to_the_rich_for_market_re.html
Parties, Games, and Company Culture http://www.inc.com/nolan-bushnell/2009/06/parites_games_and_company_cult.html In a time of economic hardship, it has become fashionable for companies of all sizes to cut way back on work parties, retreats, and corporate outings. These expenses are viewed as frivolous.

I could not disagree more.

For many people, the closest set of friends they have is at work, and a party is a great way to foster the relationships that help businesses to function. Often, a company-paid party is a wonderful reward for a close-knit group at work that has reached a goal in terms of quality or sales. This can do much to create the corporate culture of shared goals and responsibility.

Mind you, a company party does not need to be expensive or elaborate--pancakes, burgers or hot dogs on a grill in the parking lot work better than a stuffy steakhouse costing $80 per head. And don't forget the games.

Games are a great equalizer. They provide workers with a sanctioned way to turn tables on management. Even though, on occasion, I have found myself roughed up in a game of "touch" football, everyone has a good time.

Games can also be a good way to disseminate information about your company and your staff. I have a couple of restaurants that have touch-screen ordering at each table. We have some great trivia game engines that we customize for company parties. Everyone loves to be asked questions about the company and about their co-workers. It has been an unexpected hit.

Everyday games in the workplace also create a positive corporate culture. Try putting up a weekly list of 10 vocabulary words. Encourage everyone to use at least one of the words in their communications. People can then vote for the person that did the best job of it. Give a prize of a half-day off, a gift certificate, or a free t-shirt. Believe it or not, everyone will develop a richer vocabulary through this exercise. More important, they will have a bunch of fun and walk away with a better feeling about the company. A game can help you work to improve your staff's skills, while also showing them that you are not afraid to make work fun.

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Mon, 29 Jun 2009 09:22:32 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/parites_games_and_company_cult.html
The Problem With "No" Employees http://www.inc.com/nolan-bushnell/2009/06/the_problem_with_no_employees.html Over the years, I have found that some people are just naturally negative and often employees that are political use criticism as a power structure. This kind of behavior can really hurt a company. Saying no to a project tends not to reduce an employee's stature because the project he or she brings to a halt is never tested. In fact, the employee who says no all the time may grow in stature as they come to be seen as a discerning authority.

Meanwhile, the risks are generally much greater for the yes employee. No matter how many times managers have been right in the past, when they greenlight a project that fails or underperforms, they will inevitably be subject to criticism and, in the political company, the knives will come out.

This is not as it should be. The process of coming up with new ideas is always more useful to a company than shutting down ideas or doing nothing by keeping your head down. Those that criticize experiments after the fact, when more data are present, are not a help to any company. You will succeed neither in life nor business unless you are comfortable trying things out, and selecting the best option available during the period when a decision must be made. Take chances and then move to the best solutions as they become clear to you.

At the highest levels of a company, how a leader handles a project's failure is more important than how he or she manages a success, because it is the failures that determine how much creativity is allowed and fostered within an organization. In my companies, we acknowledge failures and move on. If you are not failing, you are not learning and you are not innovating. Learn from your mistakes, but don't create a culture that does not tolerate risk.

How do you handle people who raise red flags constantly? Make anyone who says no to the a project put forth an alternative that they think is better. If they have no good alternatives, then I'd advise you to fire tomorrow the "no" employee.

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Thu, 25 Jun 2009 10:29:49 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/the_problem_with_no_employees.html
Science Fiction I Love http://www.inc.com/nolan-bushnell/2009/06/science_fiction_i_love.html After my post on science fiction, people have ask for some of my favorites. It is very hard to make a list because there is so much great stuff. So here are several recommendations with particular no order.

Enders Game by Orson Scott Card
Hyperion by Dan Simmons
Empire by Orson Scott Card
Ring World by Larry Niven
Atlas Shrugged by Ayn Rand--it's true, this book is not really science fiction per se, but it is in the sense that it predicts and explores a possible future.
The Foundation Trilogy by Isaac Asimov.
Diamond Age by Neil Stephenson

I will think of some more, but these should get you started.

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Mon, 22 Jun 2009 15:11:14 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/science_fiction_i_love.html
E3 Highlights: Scaling the Uncanny Valley http://www.inc.com/nolan-bushnell/2009/06/e3_highlights_scaling_the_unca.html In early June, E3 The Electronic Entertainment Expo--an annual video game convention and the world's argest such gathering--was held at the Los Angeles Convention Center. It is always an orgy of sound and sights that continue to be impressive. The best minds in the gaming business come together and show their latest and greatest, and the fare this year was truly exceptional. A few highlights:

' Computerized humans are steadily scaling the uncanny valley. In industry argot, "the uncanny valley" is a measure of believability of a human rendition. In the past, gaming-anmination technology was simply not precise enough to render humans in a believable way, so many cartoons avoided us altogether--the theory being that it's easier for a user to accept Woody from Toy Story as a "real" creature because he's only supposed to be a toy. Likewise, a zombie is easier to render, and for the viewer to accept, while animating a good human with believable speech is amazingly difficult to do. But now, the game Final Fantasy is getting very close and very good at rendering humans. And as they become more real, they become more creepy.

' Cloud rendering and hosting represent important advances, and will perhaps take over most of the gaming market. Graphic-intensive games require massive computing power and graphics cards. By sharing hardware resources in the cloud, it will become possible for any crappy computer or cell phone to operate like a set of ninja hardware. The problem has always been latency (how long a lag is necessary), bandwidth, and fan out (how much cloud computing is needed for how many users). A company called OTOY has solved these problems adequately for almost all games. Latency still is limited by the speed of light, and good gamers can detect 50 milliseconds delay or less. Serving gamers within 400 miles of a server produces nice results, however. This service will be superb for providing several new economic models and opening up opportunities elsewhere in the world for game developers. Is it like a Google for games? I think so.

' The last but not least highlight for me is a little game that I love that has been brought over from Korea. It's called Monato Esprit and it's free to download. The game, which is in final beta mode, awards players a currency called MetaTix, which they can redeem for stuff. I think this is a very fun world and hope you enjoy exploring it as much as I have. Look for it on MonatoeEsprit.com.

The game market is strong and still fun and getting more sophisticated all the time. Get ready to buy a bunch of these games in the fall, when many of them are scheduled for release.

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Tue, 16 Jun 2009 17:01:53 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/e3_highlights_scaling_the_unca.html
How to Fill Your Junk Time http://www.inc.com/nolan-bushnell/2009/06/how_to_fill_your_junk_time.html I am a voracious listener of audio books. I listen to them in the car, exercising, on airplanes, in cabs, doing task around the house, and even at the dentist. My Audible account is a true indulgence, and friends know that the ideal gift for me is to send an interesting CD or to e-mail a choice MP3 file.

What I love about audio books is that they help me fill time that would otherwise be wasted. I love to multitask, and listening to a book makes makes even the most prosaic activity more interesting. Audio books make me feel like I am making my life richer and fuller and getting smarter as I stuff my brain with all sorts of stuff.

And I contend that audio books are essential for the well-rounded entrepreneur. In business, there is never enough time to do all the things one wants to do. There is a massive amount of reading to get through--from trade publications to figuring out various new technologies--with the predictable result that recreational reading of fiction or non-fiction often falls by the wayside. Audio books fix that problem and keeps a person literate while also maximizing junk time.

Several people to whom I have suggested audio books have told me they find that it takes some time to get used to listening to one thing while trying to do something else. With practice, however, they have discovered they love audio books as much as I do. Give it a try.

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Fri, 12 Jun 2009 08:17:43 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/how_to_fill_your_junk_time.html
Why I Love Science Fiction http://www.inc.com/nolan-bushnell/2009/06/why_i_love_science_fiction.html I love to read and listen to science fiction. The worlds drawn and the ideas presented are often very prescient, describing products and services that are just around the time corner. There is little doubt that Neal Stephenson's Snow Crash was 10 years ahead of developments in the MMORPG world, and many ideas from other stories have found their way to market in much shorter time frames. I think that science fiction limbers you mind, allowing easy transition from what "is" to what "may become." This is a true necessity for an entrepreneur who wants to be innovative and create the future.

I love the quote from computer scientist Alan Kay, that "the best way to predict the future is to invent it." One of my goals in life is to make the future happen faster.

Thus, I can hardly wait for the arrival of some familiar concepts from science fiction, including self-driving automobiles, automatic houses, household robots, and A.I. that anticipates my every whim. Would you all hurry up and help to create these? I can't do it all myself.

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Thu, 11 Jun 2009 07:22:19 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/why_i_love_science_fiction.html
Why Every Innovator is in the Toy Business http://www.inc.com/nolan-bushnell/2009/06/why_every_innovator_is_in_the.html A common myth in business is that the market rewards innovation. Strictly, speaking this is true. But here's the rub: the market almost always looks at new inventions as something curious and perhaps frivolous. In short, the market often views a new idea as a toy.

The inventors of automobiles, airplanes, telephones, and even the Internet all went through the process of convincing people that their ideas were not destined to be want-to-haves, but were instead have-to-haves. Each of these products was, in the early days, perceived to be a cool thing that a few people would enjoy--they were not viewed as things that “normal” people would need in their daily lives. Of course, we feel very different about these innovations now. I am not yet convinced that video games have transitioned from being a toy to being a necessity--but my teenagers clearly think of them as such.

If you approach an idea with the assumption that everyone will want it, you are likely to have trouble getting your business off the ground. Finding a small niche of people who become enthusiasts for your product is much safer and easier path to take, at least at the outset. Remember that customer acquisition costs are much cheaper with a well-defined niche, and marketing costs can determine the success of failure of a company much more than nearly any other factor.

So even if you believe your innovation is bound to change the world for the better, keep it to yourself. Position it instead as a fun toy, and wait for its fans to decide they simply cannot live without it.

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Wed, 10 Jun 2009 08:35:00 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/why_every_innovator_is_in_the.html
The Not-So-Golden State of California http://www.inc.com/nolan-bushnell/2009/06/the_notsogolden_state_of_calif.html It has been saddening that California, my home for most of my business life, has become so economically dysfunctional. Having created companies here and watched others do the same for the past 35 years, I am in a position to contrast what it was like to be an entrepreneur in California back then, compared with what it has become. And I regret to say that California is today a terrible place to do business.

To be fair, the state does have many legacy assets: We have some great universities with many bright and capable people. We have perhaps the most livable climate in the country, and great recreation, be it related to the sea or in the mountains. The culture fosters creativity and forward-thinking. Venture capital is available and innovative. And yet these things are not enough.

California's government is the problem. The state is business-hostile. It is merit-hostile. It has the highest tax rates and returns less in services to its average citizens. Massive pension abuses are not dealt with.

Worst of all, the state's crazy regulation structure creates uncertainty, cost, and risk in doing business here. The system is chilling to investment and innovation. This is true for businesses of all types, from technology companies to basic franchises.

Many businesses founded elsewhere now try to avoid for as long as possible doing business in California. Meanwhile, I have watched company after company leave the state. And, as you might imagine, it is much harder to get businesses back than to keep them from leaving. I have several friends who are planning to move their headquarters elsewhere as soon as their current lease ends. I have other friends who are starting their new companies in Texas, Florida, and Washington. Some see more opportunity in these places, while others are simply leaving the state to escape the personal tax burden. Even one of the businesses I founded here, Chuck E. Cheese, has moved its headquarters to Dallas. (I can't blame the company's management: I would not have franchised Chuck E. Cheese here under the current regulations.)

It is often said that as goes California, so goes the nation. The passage of Sarbanes-Oxley--which has not brought to justice any new bad guys, but has cost American business billions of dollars and kept many of them from going public in the U.S.--is a sign to me that California-style regulation may be taking root at the federal level. When the laws governing business become nothing more than wasteful harassment, and companies are punished simply for doing business, everyone becomes poorer. Government, whether at the local, state, or federal level, must provide the framework for the best life for its people. To my great sorrow, my once-Golden state is bankrupt and cannot be fixed with anything short of a total overhaul.

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Fri, 05 Jun 2009 09:00:00 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/the_notsogolden_state_of_calif.html
Fixing the World's Most Dysfunctional Industry http://www.inc.com/nolan-bushnell/2009/06/fixing_the_worlds_most_dysfunc.html I am currently very passionate about education. Our current system is massively dysfunctional by any objective standard and desperately needs fixing. It is an area that will yield greatly to technology, but there are significant market obstacles. It is the largest business in the world that is screwed up. I think the reason is that unlike other businesses that have to be constantly updated to stay in business, education is primarily a monopoly that is focused on teacher rights rather than student rights. The customers (students) are underserved, and they have no options or power, except to opt out into home schooling (which is difficult for many families) or private schools (which are very expensive.) Paying taxes for education and paying--again--for a child's private education seems very unfair.

I hate to complain without a solution. So here's my take: I think that games and software should replace much of the teaching function. I am working on a new school that I hope to open shortly that is jam-packed with a very new way of doing things.
When kids come to my school they will be met with a whole new world of opportunity and interesting experiences and fun. They will come out with a greater understanding of the world, technology and creativity. They will be fit and smart. Stay tuned.

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Thu, 04 Jun 2009 11:38:42 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/fixing_the_worlds_most_dysfunc.html
A Cool New Tool (For Business Use Only) http://www.inc.com/nolan-bushnell/2009/06/a_cool_new_tool_for_business_u.html For the last few months, I have been using a very handy gadget: a pico pocket projector from Aptech that has both a battery and stored memory. The device has a very bright LED with an array that can project, on any surface, either a series of pictures or anything that is on my laptop. I have downloaded several PowerPoint decks into its memory and then I have a visual backdrop that I can put up during any meeting or any chance-encounter. The image size depends on how much ambient light there is but, in most instances, a 24"-to-36" picture is typically adequately bright to work. I have projected on a floor, on the wall of a bar, on a tabletop, or even on an elevator wall. Once, just for fun I wore a white T-shirt, and projected my presentation onto my chest.

What is the business use for a pico projector? I truly believe that a picture is worth a thousand words and to have all your pictures available at a touch of a button is very handy.

Snapshots of your kids, you latest vacation, and your dogs are not as interesting to others as you may think, so don;t load them on your pico. But images that help tell the story of your business can be very cool. I recommend that you get a pico projector of your own, load it up with information, and carry it with you everywhere. You never know when you might meet the person who is in a position to help you do something amazing with your company.

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Mon, 01 Jun 2009 15:27:35 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/06/a_cool_new_tool_for_business_u.html
On Creativity http://www.inc.com/nolan-bushnell/2009/05/on_creativity.html For many years, I have been asked to run creativity sessions for some major corporations. It turns out that many companies think of themselves as not being particularly creative. Often it is the corporate culture that kills off the natural creativity that exists in any group. The more political the corporate environment, the less creativity issues forth. (That's why the government is so bad at innovating.)

When faced with one of these groups, I start out by reminding people that creativity is all about risk. The higher the risk, of course, the more reasons there are to say no to a particular innovation. Companies in peril thus often turn their backs on new ideas.

This is, of course, a bad decision. It is precisely the companies whose markets are going away and whose customers are defecting the most rapidly that need new solutions but, because of fear, they cannot make changes. I call these "frozen stick crashes." When the plane is heading for the ground, the last thing a pilot should do is nothing.

The good news is that creativity is not as difficult or abstract a concept as most people think. More than once, I have taken a room full of supposedly "non-creative" businesspeople and led them through exercises that produced surprisingly good results. By the time the session breaks out (sometimes late in the night), we will have come up with a totally new direction for the organization that promises to create a new line of business that will, in some cases, save the company.

How should you structure one of these creativity sessions? Here are some of my tricks:

1. Ask everyone in the room to think of the craziest business idea possible, and offer a reward for the person with the most far-out notion. This will distract people enough to undermine the politics that are common in the group dynamic particularly in larger organizations.

2. List these ideas on a white board or on a PowerPoint slide, and go through them one by one. Ask members of the group to discuss how, if forced, they would implement these nutty ideas. Often, a very creative solution to a company's problems will emerge when you suddenly take seriously a seemingly crazy thought.

3. Ask the group: Who will be your competition in 5 years? And what will the competition's business look like in 5 years?

4. Then ask: What are your company's core capabilities, and how far will these skills take it, assuming your market, your technology, and your resources remain constant?

If you're starting a company from scratch, you must resist the urge to carry the burden for creativity all on your own. You don't have to have all the good ideas. Get a good team in place as soon as you start, and use them to help refine and articulate the business's creative vision.

Go to trade shows outside of your target business. It is amazing how many good ideas are common practices in one industry while remaining totally absent in another.

Look at two businesses and ask what a mash-up of them would look like. This can be very surprising and help you come up with new ideas.

Finally, embrace the idea that creativity is generally democratic. Everyone has what it takes to be creative in business. My favorite statement is that, "Anyone that has taken a shower has had a good idea--but it is the person who does something when they get out the shower that make the difference."

So go take a shower.

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Wed, 27 May 2009 14:00:00 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/05/on_creativity.html
How to Acquire a Company for Free http://www.inc.com/nolan-bushnell/2009/05/how_to_acquire_a_company_for_f.html Right now, only a few miles from where you live, there is a free company that's yours for the taking. Here's what I mean: There are many businesses (both independent companies and small, local divisions of larger corporations) that, in a recession, move from positive to negative cash flow. When that happens, many business owners would rather just get out than continue to bleed. As a result, you can walk in, sign the papers, and take over a business. All you have to do is to convince the owner that you have the ability to fulfill the lease or to pay the mortgage. You may also be obliged to sign a small note to give the owner some upside.

How can you find a free company to take over? Check out business brokers on the web, Craigslist, and the classified ads in your local newspaper and any trade journals. Or simply go to a nearby business park and knock on every door. You'll be amazed at what you find there. Many business owners do not think that they can sell a struggling company and, therefore, they don't try to market their business even though they very much would like to move on.

But, you say: If the business is losing money, why would I want it? It is the same question that any start-up entrepreneur should ask him- or herself. If you cannot bring fresh ideas, energy, and skill to a business--any business--then it will not succeed. And arranging to take over a free company will actually provide you with a meaningful advantage, because you will be amassing resources and assets at little-to-no cost.

Don't worry about what the business does in terms of revenue right now; look at it as a start--a platform that over time can be morphed into what ever you want.

Go find yourself a free company today.

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Tue, 19 May 2009 13:10:59 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/05/how_to_acquire_a_company_for_f.html
The Secret to Patents http://www.inc.com/nolan-bushnell/2009/05/the_secret_to_patents.html When starting a company, many entrepreneurs believe that their ideas are of massive value and they become paranoid that someone is going to steal them. So they spend precious time filing patent applications and hire expensive lawyers to craft non-disclosure agreements to protect their intellectual property. They are crazy.

It is easy and expensive to be granted a worthless patent. The Patent Office does a vanishingly superficial job of looking at the validity of a patent, and the only patent with even the slightest potential of being worthwhile has to be litigated. And that rarely occurs except in the drug industry. I know of no business that has made its mark because of patents.

Think of it like this. A patent is like a giant canon: You can point it at someone but, assuming your business is small, the company in your crosshairs will look at you and look at your giant canon and they will almost immediately make the calculation that you are bluffing. Your canon is not frightening because your competitor knows that, to fire it, you must spend $500,000. That's the cost of a typical patent lawsuit. Perhaps if your company gets massively successful you can play that game but, even then, few do.

If you don't have the $500,000 in extra cash you may as well not have a patent. And if you still think your patents are worthwhile just try to get a lawyer to take a patent-enforcement case on contingency. The attorneys know the odds.

I speak from experience. I held the patent for virtually all the video games that were produced from 1970 through 1978 when the microprocessor updated my patents. We chose not to litigate against anyone who copied us and put our money into our business. We dominated the market and never regretted the distraction of lawsuits and litigation over patents.

Few if any ideas are brand new and ideas, by themselves, are crap. It is impossible to own any idea and patents are, in most fast-moving businesses, a waste of time. Creativity can be learned. It can also be shut off. Spend you money of marketing or on production or on other things that maximize market share.

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Wed, 13 May 2009 12:03:10 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/05/the_secret_to_patents.html
Job Security is a Bad Thing http://www.inc.com/nolan-bushnell/2009/05/job_security_is_a_bad_thing.html I have come to believe that job security is one of the worst things a person can have, especially early in their career. Getting fired gives you a chance to reinvent yourself. All of a sudden you have the whole world in front of you and you can now leap to a career that you may love more

Over the years, many people that I laid off or fired have contacted me and, in many cases, it turns out that they took their severance or unemployment insurance time to get another business going. Many times an employee who was easy for me to lay-off was just miscast at Atari. Once they were in the position of creating their own gig, they knocked it out of the box.

If you are a recent college graduate who is nervous about his or her career--but you also feel unprepared to start a business--ask yourself this: What is the probability that someone in their 20s will know, with absolute certainty, which job or career will make them happy? Trying to hold onto a job early in your career is not necessarily the smart move.

And once you have a wife, a kid, a house, and a boat, you will find yourself unable to move from a job that you hate. You'll be stuck. Unless you are lucky and really screw up and get fired or at least get let go in an RIF.

I am really glad that I cannot tell the difference between work and play, and I wish that everyone has that chance in life. If your job is in trouble or you can't get a job or you have just been fired, now is your chance to pursue your dream.

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Wed, 13 May 2009 11:58:01 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/05/job_security_is_a_bad_thing.html
Now is the Time to Start a Company http://www.inc.com/nolan-bushnell/2009/05/now_is_the_time_to_start_a_com.html A recession is a very good time to start a company. I founded Atari during a significant downturn, and that allowed for us to share risk with business partners, which allowed us to keep our costs low. For example, we were able to move into a large facility. Our meager balance sheet could never have supported that rent, but the landlord looked at us a a better option than just leaving the building vacant. Also, our vendors were all willing to provide long terms for payment on their parts and services.

The most important part of all was that I had my pick of the best engineers and managers in Silicon Valley. Since many of their friends were laid off, the thought of moving to a fun job at a new start-up seemed not that much more risky to them than staying put where they were. Our ability to cherry-pick the best of the best allowed us to crush any technical problems we encountered and the talent we amassed powered Atari as not just a game market leader but also a technical super power. We were the first non-government organization to use the N channel MOS semiconductor, and we basically put that technology on the map. We innovated on so many technical levels that by the time I left the company we had a 85 percent market share.

Many things are better for a start-up during a recession. Now is the time to start a company.

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Wed, 13 May 2009 11:39:33 -0400 Nolan Bushnellhttp://www.inc.com/nolan-bushnell/2009/05/now_is_the_time_to_start_a_com.html
Do I Get a Refund If They Lose My Bags? http://www.inc.com/nolan-bushnell/2009/02/do_i_get_a_refund_if_they_lose.html If airlines have now moved to a pay-for-what-you-use business model, do I get a refund if I pay but don't get the services promised? How about lost luggage? My ticket entitles me and my luggage to get to my destination together, that is, at the same time. Yet who hasn't had the airlines misplace their luggage at least once in their travel lives?

But who do you know who ever got a refund for those lost bags?

By "lost" I mean delayed, i.e., bags that miss your flight and arrive after you do. Luggage that's lost is something for which you can file a claim. I'm talking about the luggage you are paying $15 to check.

So shouldn't the pay-for-what-you-use (i.e., a la carte) model work both ways? And shouldn't it be extended to luggage? If not, why not? If yes, when will we see the airlines change?

Shouldn't the airlines be held to a higher level of accountability for not delivering what passengers are paying extra for? From where I sit, the checked baggage fee entitles me to either on-time delivery of my bags or a full refund for bags that get delivered late. But I'm not sure the airlines have thought through that part of the user fee equation.

How about you? Have you ever tried to recover the $15 checked baggage fee when your baggage was late catching up to you?


Road Warrior ' Miami ' www.us.amadeus.com

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Sun, 22 Feb 2009 16:09:48 -0500 Owen N. Wildhttp://www.inc.com/nolan-bushnell/2009/02/do_i_get_a_refund_if_they_lose.html