Guitar Hero recently released a new version of its smash hit video
game that has sold over $1 Billion. To the casual observer Guitar Hero
seems like an overnight success, a stroke of luck and genius. But this
is a story of tenacity, strong-willed entrepreneurs, and patient,
supportive investors. I first wrote this story several years ago when I
met one of the founders of Guitar Hero at the Nantucket Conference. The
recent release of the game made me think of this post, and how the
story is timeless. Here it is one more time.
Eran Egozy, co-founder and CTO of Harmonix Music Systems was on a panel at the Nantucket ConferenceGuitar Hero, the wildly successful video game. entitled “Tipping Point: The keys to getting new ideas to take off”.
Harmonix is the maker of Guitar Hero was an instant overnight success,
10 years in the making, selling over $1Billion to date. Harmonix was
founded in 1995 but Guitar Hero didn’t come along until 10 years later
in 2005.
What did Harmonix do in the first 10 years?
Harmonix founders met at the MIT Media Lab and their first idea was to
create new ways for non-musicians to experience the joy of making
music. Similar to another MIT Media Lab company called HarmonyLine,
this idea never really took off.
Eran joked “For the first
four years we couldn’t sell anything but stock. We knew that wasn’t a
business model, but at least we had money coming in to keep us going.”
Around
2000 they decided to try applying their music technology to video
games. But it was 5 more years until they tasted success. They released
eight video games over that period, with modest results. Eran said “The
trick in the video game business is to make enough money from your game
to keep you going until you can release your next game.”
Most
new video games don’t make a profit. The game business is very much
like the music business, or even the venture capital business, in that
it is a “hits” driven business. One big hit pays for lots of losers.
Guitar
Hero was the 9th video game produced by Harmonix, 10 years after
founding the company, and it put them on the map with more than $1
Billion in sales. They recently sold the company to MTV Networks, a
division of Viacom for $175M.
iRobot a 12-year overnight success. Colin Angle, founder and CEO of iRobot
told a similar story. iRobot was founded in 1990 with the idea of
creating robots to do interesting stuff. For 12 years they did projects
and built products but never really achieved financial success. Colin
said they paid employees once a month at the end of the month. They
never had enough cash at the beginning of the month to meet the payroll
at the end of the month. But they persisted in their dream.
September 11th 2001 changed everything.
They decided to apply their robot experience to help the military in
dangerous situations. DARPA, the research arm of the U.S. Defense
Department paid out grants to lots of companies to develop proposals
for new defense technologies. iRobot won a $200K grant to write a
proposal for a battlefield robot.
Colin Angle said the company
had never had $200K in the bank…ever. So, rather than use the money
to write a proposal they just built the robot. What a concept!! DARPA
had a big meeting to review all the proposals from various defense
contractors. iRobot showed up with their robot and a tiny written
proposal. They won the business and DARPA awarded them a $4M contract
to build robots for use in Afghanistan. They have since sold over $150M
of robots to the military.
Colin said that iRobot entered and
exited 18 different businesses over their 12 year existence before
finally landing on the military robot idea. They have since entered the
consumer market with robot vacuum cleaners and swimming pool cleaners.
Persistence and tenacity
are hallmark qualities of successful entrepreneurs. Harmonix and iRobot
are excellent examples of that never die attitude. There is a fine line
between success and failure. There is no secret formula or obvious path
to success. Just one common trait…an indomitable
desire to succeed against all adversity and doubt. Very few people have
this drive and the leadership ability to attract great people to their
cause. This drive is indefinable but we know it when we see it. It is
sometimes misdiagnosed as being delusional and fanatical. The
difference in diagnosis is success or failure. Succeed and you are a
brilliant visionary. Fail and you are a delusional loser. The line
between them is very fine.
(Image source: news.filefront.com)
