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This is my book summary of Finding the Next Steve Jobs: How to Find, Keep, and Nurture Talent by Atari and Chuck E. Cheese founder Nolan Bushnell. Nolan famously was the first person to hire Steve Jobs (along with Steve Wozniak) onto the team at Atari. My notes are informal and often contain quotes from the book as well as my own thoughts. This summary also includes key lessons and important passages from the book.
The Founder of Atari and Chuck E. Cheese, who was famously the first person to ever hire Steve Jobs, shares his approach to finding, nuturing, and keeping creative talent. Over the course of 52 “pongs,” effectively short ideas, Nolan lays out his secrets for helping creative talent flourish — so that your company can flourish too. My favorite chapters from the book are Chapter 28 “Celebrate Failure” and Chapter 29 “Require Risk.”
Today, with the business environment changing so quickly, companies have to be innovative to survive—even if that means changing their risk-averse culture. And certainly hiring a Steve Jobs is part of that change. The truth is that very few companies would hire Steve, even today. Why? Because he was an outlier. To most potential employers, he'd just seem like a jerk in bad clothing. And yet a jerk in bad clothing can be exactly the right guy to give your company the highest market capitalization in the world.
Taking a risk shouldn't be considered an option in the twenty-first century. It is a necessity. Yet too many companies have become so risk-averse that when quick, decisive, powerful action becomes imperative, they can't take it. And that is the primary reason why companies must allow their creatives to take risks—today's business environment changes so rapidly that at any moment another company can come along and take away your customers. A risky move is generally necessary to fight back. But if your company doesn't have a culture of risk-taking, you won't know how to do it when the need arises—and it will.
Simply put, risk taking is compulsory because it is the best way to ensure a successful future.
Almost all types of companies are equally creative dependent. The reason for this dependence is competition. All of your competitors are trying to improve the product, the service, the concept; they’re creating new markets, refining processes to cut costs, and making their businesses more efficient. That’s what good businesses do. The ones that don’t inevitably wake up one day and find they have been outgunned, outclassed, and are out of business.
As management guru Peter Drucker said, “The only source of sustained competitive advantage is the ability to learn faster than your competitors. (I'd argue that more than just learn, you must both learn and invent faster than your competitors.
Neither Steve or I felt that creativity could thrive in the presence of strict ones. The constant application of inflexible rules stifles the imagination.
A good company is a 24/7 advertisement for itself. Your company image is either a recruitment ad or a piece of negative PR.
If there was a single characteristic that separated Steve Jobs from the mass of employees, it was his passionate enthusiasm. Steve had one speed: full bast.
What unites creative people is their passion for diverse knowledge. It is the driver.
Most companies seek homogeneity. But homogeneity does not breed creativity. You don’t want a homogenous company where everyone is interchangeable. You want a company that is spiky. Spiky balls have great singularities. In spiky companies, these singularities are the exceptional people.
Hiring a creative is about embracing risk, not mitigating it.
Why the most confident creatives often win:
Perhaps everyone has creative potential, but only the arrogant are self-confident enough to press their creative ideas on others. Steve believed he was always right, and was willing to push harder and longer than other people who might have had equally good ideas but who caved under pressure.
Don’t be looking to find a round employee to fit into a round hole. Find a talented person and then create a position that fits her. What you want is a collection of amazing people. And if you have a collection of amazing people, they will accomplish amazing things.
Over the long run — if you’re lucky enough to have a long run — every company develops a balancing act between process and outcome. Process isn’t bad. Process that hinders growth is bad.
If you’re not focused on speed, you’re dead in the water. Creativity without speed is useless. Think of a speed as an exponent that multiplies the value of creativity. Creativity with speed that translates into traction is wasted effort.
No matter how successful your business is, maintaining your position requires constant reinvention.
You may be happy selling soap, and consumers will always need it, but the kind of soap they want will alter, as will its container, its smell, and its role in their lives.
Steve Jobs once asked Nolan Bushnell for advice when he was working on the Mac. Nolan's advice:
You’ve got to figure out how to put yourself in the future and ask, What do I want my computer to do? What are the things it can’t do now that I really want it to do?
Many successful companies go out of business because they're not able to change with the times.
Other companies, however, have been able to completely reinvent themselves-and prosper as a result. For example, jeweler Tiffany & Co. started out as a stationery store. Telephone maker Nokia was once a paper mill. Conglomerate-holding company Berkshire Hathaway began life as a failing textile manufacturer.
Kutol Products was a Cincinnati-based soap company that manufactured wallpaper cleaner as well; the cleaner business began to fade, so the company turned the product into a cute little toy, which they eventually called Play-Doh (which has sold more than two billion cans).
Then there's the 3M company which began life as the Minnesota Mining and Manufacturing Company, selling the mineral corundum. 3M has designed and brought more than 55,000 different products to market. The company basically reinvents itself every decade or so. About one-third of the company's annual revenue is derived from products that are less than five-years old.
Nearly all creative ideas sound crazy when first presented. Most people don’t have creative imaginations, so most people don’t get what the creative is saying. And people tend to be fearful of things they don’t understand. That further exacerbated the problem. But if you can’t bring in a few people who seem crazy compared to the norm, then you probably aren’t going to have a creative organization.
Steve Jobs himself had crazy ideas. Consider the iPod. At the time of its inception, Apple was having some serious issues with its computers. Plenty of work could have been devoted to improving its operating system. Yet instead, Steve plowed his energy and resources into developing a music player rather than a computer product — something no other computer company had done, or was even thinking about doing.
"It is quite impossible that the noble organs of human speech could be replaced by ignoble, senseless metal." — Jean Bouillaud, member of the French Academy of Sciences, at a demonstration of the phonograph, 1878
"Heavier-than-air flying machines are impossible." — Lord Kelvin, president of the British Royal Society, 1895
"The horse is here to stay, but the automobile is only a novelty—a fad." — President of the Michigan Savings Bank, advising Henry Ford's lawyer not to invest in the Ford Motor Company, 1903
"I think there is a market for about five computers." — Thomas J. Watson, chairman of the Board of IBM, 1943
"Video won't be able to hold onto any market it captures after the first six months. People will soon get tired of staring at a plywood box every night." — Darryl Zanuck, head of 20th Century Fox Studios, 1946
"The world potential market for copying machines is 5,000 at most." — IBM, to the eventual founders of Xerox, explaining why the photocopier market was not large enough to justify production, 1959
"There is no reason for any individual to have a computer in their home." — Ken Olsen, president of Digital Equipment Corporation at the Convention of the World Future Society, 1977
The problem: Creatives often go down their own personal rabbit holes and fail to finish their projects on time.
The solution: Demo day.
Demo day is an artifice that Steve Jobs and I used frequently.
At Atari, we created soft deadlines called demo days. People were commanded to get their product into a completed-enough state such that everyone could see it, think about it, and critique it.
At Apple, Steve Jobs drove the concept to an even higher level. He would commission many designs for the same product, have them all demoed at the same time, choose which features he liked from the bunch, and then move the project forward to its actual completion date.
Demo days help create soft deadlines that help your creatives make the hard ones.
At Pajaro Dunes, I used to employ one of my favorite tricks for enhancing creativity: I would ask everyone to make a list of all the ideas that had been presented at our meetings, and then have them rank those ideas from good to bad. I would then take the six items on the bottom of the list and say, "Let's suppose we were restricted for the next few months to work just on these six terrible projects. How do we make them work?"
This process reversed people's normal mental dynamic. Instead of trying to figure out what's wrong with something, which riggers people's critical instincts, here they had to figure out what was right with something, which triggers people's creative instincts.
Every time we did this exercise, at least one of the bottom six ideas turned out to be not just good, but great, and eventually became a profit-making machine for us. The best was a gun game called Quack, in which players shot guns at ducks. At first the idea sounded dreadful, but once we figured out how to make the gun work in a really clever way, the game became enormously successful.
Your company must make failure a tenable option.
Of course, you never actually plan for failure. But failure happens whenever you try something new. It must. If you’re learning to ski and you never fall down, you never get better. You must take new risks to learn new skills. You have to fail to succeed. Failure is an important teacher.
Furthermore, failures are almost never total.
The truth is that if you’re paying attention, you can learn a great deal from failure. People who are afraid of failure — and afraid of talking about it — will miss out on all the excellent data that results from trying something new and different.
For example, Apple’s early 1980s computer model, the Lisa, was a fiasco. Lisa was slow and expensive. Few people liked it. It didn’t sell. But a great deal of what Apple learned through Lisa’s failure showed up in its next model, the Mac, which was a huge success. The company wouldn’t have figured out how to make the Mac so good if the Lisa hadn’t been so bad.
Likewise, the first Chuck E. Cheese was a flop. We gambled that 5,000 square feet would be enough space for our restaurant. But on opening day we realized that we’d made a terrible mistake. The space was far too small. What an unpleasant situation: Everyone was jammed in on top of each other and the entire place was filled with noise and chaos. I was surprised anyone ever came back. But now we knew exactly what we had done wrong. Our next restaurant was 20,000 square feet—a big, cavernous, wonderful place. We would have never tried something so large for our first one because restaurants had never been that big before. But it turned out that's what we needed, and only by failing did we find this out.
Of course, there’s a right way and a wrong way to fail. Failure is useful, but too many failures can cause you to fail for good.
Everyone knows that risks are necessary. Many of the greatest advances in science, exploration, medicine, and business would never have occurred if someone hadn’t been willing to walk—literally or metaphorically—into uncharted territory.
Think of the Wright brothers, flying into the air for the first time; civil rights hero Rosa Parks, sitting down in the white section of a bus; Renaissance scientist Galileo Galilei, risking death to disobey Catholic Church prohibitions and become the father of modern astronomy; or Indian lead Mahatma Ghandi, also risking death to lead nonviolent resistance in the fight for independence.
Many companies today have survived only because their founders were willing to take risks.
Still, despite the fact that we all tell each other stories about how great successes were made possible by great risks, risk terrifies most people. Why? Because they dread uncertainty and failure. Risk opens the door to both of these possibilities.
Today, we don’t take life-or-death risks, but we do take some that could mean life or death for our business—and people tend to be afraid of them.
Yet one of the best ways a company can create a healthy ecosystem that fertilizes creativity is to include risk.
Risks can be smart or foolish, or anything in between. But all companies should have a budget that allows them to spend a certain amount or percentage on projects that are not guaranteed to succeed, and on ideas that allow creatives to figure out solutions or problems that others might not yet see as such.
Of course, at some businesses—particularly small ones—risk is the only possibility they know. At Atari, our entire business model was based on risk. Our competition was bigger, stronger, and better at marketing, so we were forced to rely on our culture of creativity to survive.
Nolan Bushnell is best known as the Founder of Atari and Chuck E. Cheese. He is often cited as the father of the video game industry. He’s also famous for being the first person to hire Steve Jobs and Steve Wozniak at Atari. Chuck E. Cheese generated more than $900M in revenue in 2022 and Atari generated sales of more than $2B at its peak.
Nolan Bushnell’s Favorite Books
How Nolan Bushnell got the money to start Atari:
“The first game I created was called Computer Space, and to realize it I needed a spacey-looking cabinet. So I sat down with my favorite toy at the time, modeling clay, added a piece of wood, cut out some Plexiglas for the screen, and modeled what I thought was a cool shape. It was good enough for me to show it to my partner, Ted Dabney, who found someone who was able to scale it up into fiberglass. Three weeks later, it became the first video game. I licensed it to a company called Nutting Associates and did about three million dollars in sales. The royalties allowed me to start Atari.”
For more, I highly encourage you to order Finding the Next Steve Jobs: How to Find, Keep, and Nurture Talent and read the entire book yourself.
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