Rocket Science 3: Hollywood Meets Silicon Valley

What do you mean you don’t want to hear about features?
I was now a CEO of Rocket Science, and having a great time building the company (more about that in future posts.) Unfortunately, while I had gone through phases of video game addiction in my life, in no way could I be described as even a “moderate hard-core gamer,” which ruled me out as a domain expert.  So I got out out of the building to meet and understand our customers and distribution partners. I remember after a month or two of talking to 14-22 year old male gamers (our potential target market,) I realized that for the first time in my career I had no emotional connection to my customers or channel partners.

I was about 90 days into the company when I began to realize there was something very different about this business. In previous companies I could talk about technology details and how the product features could solve a customers problem. But people didn’t buy video games on features and they weren’t looking to solve a problem.  I was in a very, very different business.

I was in the entertainment business.

There couldn’t have been a worse choice for CEO in Silicon Valley.

Alarm bell one should have started ringing – for me and my board.

Rocket Science logo

Hollywood Meets Silicon Valley was an Oxymoron
A key premise of our new company was that our video compression and authoring technology would revolutionize how games were made and played. We believed that by putting full motion video (i.e. movies) into video games we could tell stories, build characters, have narratives and bring all the 100 years of craft and cinematic experience of Hollywood to the sterile “shoot and die” twitch games that were currently in vogue.  (This wasn’t just some random Silicon Valley fantasy. My partner had convinced several major Hollywood names that this was the inevitable consequence of the merger of Hollywood and Silicon Valley.  And at the time it was a plausible scenario.)

But in reality our passionate belief that video would transform gaming was just our hypothesis. There was zero proof in the marketplace that was the case. And we weren’t going to be bothered to go out and prove ourselves wrong with facts.  (Why should we – our VC’s had already told us what geniuses we were by fighting to even get into the deal to fund us.  Never mind that no one on our board was in the game business or even played games.)

Alarm bell two should have started ringing – for me and my board.

Swing For the Fences
Since we were so smart we were going to ramp up and build not one game, but an entire game studio based on this hypothesis.  Why shouldn’t we.  Doing one game and seeing customer reaction meant a) acknowledging that some of our assumptions might be wrong, and 2) wasting time.  We were all about scale and swinging for the fences.  That’s what VC funded companies do, don’t they?

Alarm bell three should have started ringing – for my partner and me.

Tools Are the Not the Product
We were going to build an easy to use authoring system that would revolutionize how games were made. (My partner had convinced several of the key members of the Apple Quicktime team to join us.) Our tools group became as important as our content group. Unfortunately, the market was going to remind us that games are about game play.

Customers don’t care about your tools regardless of what business you’re in. Customers of software applications don’t say, “wow, elegant code base.” In movies theater-goers don’t leave talking about your cameras, just whether they were entertained, and in restaurants diners don’t care about your cooking implements, what matters is what the food tasted like.  The tools may provide efficiencies, but what customers care about is your final product. (Later on, way too late, we’d remind ourselves it’s the game stupid.)

Alarm bell four should have started ringing louder for me.

Lessons learned

  • Never, ever, start a company when you’re not passionate about the company, product and customers
  • Always validate your key assumptions on what makes your company tick
  • Swing for the fences is your VC’s strategy.  Make sure it is yours.
  • Don’t confuse your passion for your tools with why your customers will buy your product.

8 Responses

  1. Steve,

    I can’t remember if the first alarm bell is on your book “Four Steps to the Epiphany”, but it is first and foremost reason that an entrepreneur starts a company. You’re very right on that.
    I’d like to see your insight into that, i.e. is this something we can grow into?
    I saw lots of businesses have been started when some smart guys see an opening in the market. They probably don’t have all of the passion at first, but they sure can execute to get their business off the ground. What’s your take on it?

    • Tim,
      Some entrepreneurs can do a startup based on recognizing an opportunity and executing.
      There’s no right answer. It matters what gets you excited and out of bed in the morning.
      I needed a startup where I loved the technology, the opportunity _and_ the customers.


  2. It may be a little late at this point, but I think it’s important to consider that gamers don’t really want to change. As a matter of fact, I know many gamers who hate sitting through cut-scenes – especially lengthy ones.

    Your only solution is adding some form of interactivity with the movies, though as you covered in this article, those types of games haven’t been very successful.

  3. I think has actually measured quantitatively that gamers are less engaged/interested when sitting through a cutscene 🙂

  4. Hi Steve,

    I didn’t see a general comments area to this site but wanted to know if you are planning an updated/new version of your book.

    Also, are you available for talks at a Silicon Valley networking group for job seekers. There is talk about trying to make a “vision” into a non-profit. Kind of interesting in that the work is all volunteer and the volunteers are job seekers so attrition rates are high.


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  7. […] out the video game market with me (in hindsight a business that none of us knew anything about and shouldn’t have been in). Our board meetings were collegial and often […]

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