(Editor’s note: In the mid-1990s, serial entrepreneur Steve Blank was CEO of Rocket Science Games, a video game developer that lived by the motto “Hollywood meets Silicon Valley” . After releasing three mediocre titles – including “Obsidian” and “The Space Bar” – that never sold well, the company closed its doors in 1997. Here, Blank recounts one of the many problems the company ignored along its path to failure.)
Our “Hollywood meets Silicon Valley” story played great in Silicon Valley. They ate it up in Hollywood. And the business press tripped over themselves to talk to us. The story had universal appeal, and we spun the tale and keep the buzz going.
It worked. Judging by the ink we had gotten, we were the hottest company in the game business, with stories in Fortune, Forbes, Variety, The Hollywood Reporter, and the cover of Wired magazine. Yet we hadn’t shipped a single product.
While it felt wonderful at the time, this was a very bad idea.
The theme of our press blitz was all about how we were going to show the old tired game companies the right way to make video games. Our press infuriated the established companies who had spent years building games that sold well, but had zero press recognition. (They all accurately predicted our demise because of our lack of game expertise.) Ah, the arrogance of inexperience.
Fortunately I’ve never been good at lying, to be effective in communicating a story I truly had to believe in what I was saying. At the time I was a true believer that Rocket Science was going to change the gaming world. The positive effect of the tidal wave of press was as a door opener for us to raise money from corporate partners. Companies in the entertainment business around the world knew who we were, and were interested in meeting us, if only to see what the hype was about. Our VP of Business Development had no problems getting meetings and fund raising was easy.
Way before the Internet phenomenon, we had created “Rocket Science – the brand,” which was much bigger in size and importance than Rocket Science – the company. One magazine called us the “Digital Dream Team”, young, edgy and hip, and by the looks of the company (great building, nice furniture, and well dressed 20-year olds) we were trying to live up to the reputation.
All this activity occurring before we actually shipped a product. We were larger than life, but as Roger McNamee, who was a potential investor at one point, told us, “You guys are all hat and no cattle.”
Lots of noise and smoke before a product ships seems to be a toxic byproduct of enthusiastic entrepreneurs. Every generation of new technology seems to find a willing audience in naïve journalists and eager readers. However, when the smoke clears the surviving companies are more than likely the ones that focused on execution, not on creating a cacophony of press releases.
If Rocket Science wasn’t a clear enough lesson in the danger of premature enthusiasm, the dot-com bubble that followed should have been. The only difference between us and the Internet bubble that would follow was that we did branding on the cheap by creating our image with public relations, while the dot-bomb era was to do it by spending enormous sums on advertising (those large venture rounds had to get spent somewhere.)
Hindsight is wonderful. For years the one solace I was able to take from the Rocket Science debacle was that I had got the branding right. Then I watched the criminally expensive dot-bomb-bust branding activities to see how futile and wasteful it was to brand a company before it has shipped products.
In hindsight my failure was that I executed to my strength – telling a compelling story – without actually listening to customer feedback.
It wasn’t that I didn’t know how to listen to customers. It wasn’t that I didn’t have a smart VP of Marketing who was getting early feedback from customers and screaming that the games didn’t match the hype. It’s that as CEO I was too busy talking to the press and raising money to hear customer comments directly.
I had outsourced customer feedback and ignored the input. In fact, hearing input that contradicted the story I was telling created cognitive dissonance. So while the words may have passed through my ears I couldn’t “hear” it. Not being able to hear negative customer input is an extremely bad idea.
A few of the key tenets of Customer Development, came from the ashes. The Customer Discovery lessons of “get outside the building and test your hypothesis with customers,” and “the founders need to hear the results,” came from this debacle.
The Customer Validation lesson of, “no formal launch until you have early sales validating the product and sales process” was also born here. Given the lukewarm feedback we were getting from potential customers and channel buyers we should have dramatically dialed back the hype until the follow-on games could match it.
Given the talented people we had, there’s no doubt they would have done so. Instead the huge mismatch between expectations and reality of our first games diminished the brand and demoralized the company – we never recovered.