good article, but it seems like lots of the problems come down to "spend too much money on a startup". most of the other problems arose from that. we also don't know if the lack of outside investors was because of schilling's unbridled enthusiasm, distrust of the plan / spending, or not being able to gain the proper equity deal (ie. the 20% that was reported in the article).

i worked for a very small startup computer company almost 20 years ago. the big perk that we initially had was unlimited soda. a new president stopped that practice soon after he was hired, because we had zero revenue coming in. that decision made lots of sense.

there was one moment when i was let go - the president left me with this:
"you have to decide what you want to be - the person who works a 9 hour day and then goes home and watches the kids' baseball game. or the person who comes in earlier than eveyone else, stays around in the office even if there's nothing to do, and waits until after the boss leaves to go home."

that stunned me then, and obviously stuck with me 20 years later. luckily, i'm doing fine now AND i get to watch the kids soccer games.

The thing that stunned me was that Schilling still owned 83% of the company at the end. That is crazy.

I want to play the game depicted in the illustration.

This is incredibly damning:

One former staff member vented his frustrations on Facebook, writing, “I’d like to honestly know why I was hired in the first place on January 16th, 2012…when members of the company knew they were behind on bills and not doing well economically? I moved my pregnant wife, sold my house for a loss of 18k, relocated away from all my family and friends for a company I thought was honest and forthright to their employees. What did I get in return? An unpaid [$10,500] relocation package months after it should have been paid, a pregnant wife who found out our insurance had lapsed from our doctor, a ton of bounced checks and payments to bills when we found out our paychecks had not been paid through the media and a large debt to my unemployed father to help us survive.”

Just awful.

schilling's unbridled enthusiasm

Ah, so it's a Bill Mumphrey story.

#2 - my guess would be schilling overvalued the company and / or didn't want to give up voting rights / board seats. it's a lot easier to get away with that stuff when people are begging to invest in you rather than the other way around.

there was one moment when i was let go - the president left me with this:
"you have to decide what you want to be - the person who works a 9 hour day and then goes home and watches the kids' baseball game. or the person who comes in earlier than eveyone else, stays around in the office even if there's nothing to do, and waits until after the boss leaves to go home."

I'd like to be the person who punches that guy in the face. I'll probably just go home and watch baseball, though.

#4 ....Criminal even....why are these jackasses allowed to do this to people again?

why are these jackasses allowed to do this to people again?

Mitt Romney says hello.

By mid-March, a year and a half after moving to Rhode Island, 38 Studios had received $50 million from the state and had burned through nearly all of it. Because of the way the deal was structured, that would be all they ever got. So Schilling put up $5 million worth of gold coins as collateral for another loan, this one from Bank Rhode Island.

I don't know why, but I always smirk when I picture someone having that much in gold sitting around.

At the news conference, Chafee also revealed two pieces of information that to that point had been confidential: the anticipated release date of Copernicus — June 2013 — and that 38 Studios was spending about $4 million a month. Schilling was outraged, believing that the info would help 38 Studios’ competitors plan against the game. Schilling insists that Chafee, who opposed the 38 Studios loan guarantee when he ran for governor, was pursuing a vendetta against him. “There was a concerted effort to make this not succeed,” Schilling tells me.

I totally get where he's coming from on this. Throughout the article it's clear that Schilling was sure the company would succeed simply because he had the will for it to succeed. What Chaffee said was a reflection of reality, not of the vision Schilling was trying to will into reality; but Schilling's belief that it would work itself out needed to be unanimously shared else the vision was doomed. Therefore Chaffee's comments were an attack on that vision.

As TFA says, Schilling thought he was this close to getting the investor he'd completely failed to get for the prior six years. Someone being that close to investing, with the company in that condition, when nobody would do so earlier, I find implausible.

- - - - -

#2 - my guess would be schilling overvalued the company and / or didn't want to give up voting rights / board seats.

I get the sense from TFA that the equity stake was simply because he wanted to be the owner. He wanted to get the lion's share of benefits when the company hit it big, but he lacked a fundamental understanding of business. You can have an 83% equity stake in a farm, with lots of manure and seeds, but if you don't nurture the seeds to the point of bearing fruit you just have an 83% stake in a pile of cow ####. IOW he took for granted that the fruit would grow. He owned the company but never managed it like he wanted a result. He assumed the result, and managed the company as though the result was his destiny.

If he wanted the glory of building the bestest MMO company ever, he didn't need the huge equity stake. He wanted to be the Bill Gates of MMO and you don't do that by giving up ownership. OTOH, you can't do it the way he went about it, either, regardless of whether he retained the huge equity stake or not. It doesn't matter whose money it is, the company is doomed if it continually outspends its funding.

- - - - -

Curt Schilling the baseball player had a vision, and a will for it to become reality, and the skills and exogenous assistance to make it happen. Curt Scilling the businessman had just the vision and the will, and thought the rest would fall into place as a product of his vision and will. He thought success was his destiny, and managed the company as though it was a foregone conclusion. He is simply a high-profile failed businessman, not unlike thousands of failed businesspeople every year.

good article, but it seems like lots of the problems come down to "spend too much money on a startup".

Not only that, but it seemed like they pretty unreasonable expectations about when they would start to generate revenue. If they'd released the game when they'd originally planned, they may have skated by, but they were wildly optimistic.

If Lenny Dykstra had been into MMOs and wanted his own, it would probably have played out just like this. Possibly with a bit of indecent exposure thrown in.

As a consequence, I'm downgrading Schilling from "lousy businessman" to "deluded psychopath" with a negative outlook going forward.

Oh, come on, Dykstra is worse. Dykstra would never have released a game, and he would have been in jail for embezzling his own company.

anyone familiar with failed startups knows this story. but a lot of the behavior described died out after the boom/bust on 2000/2001 because all the vets of that experience now know better and even if they are rank and file tell their bosses 'don't do this' or 'don't do that'

If Lenny Dykstra had been into MMOs and wanted his own, it would probably have played out just like this. Possibly with a bit of indecent exposure thrown in.

Possibly?

If Lenny Dykstra had been into MMOs and wanted his own, it would probably have played out just like this.

I just assumed "Grand Theft Auto" was an MMO that Lenny Dykstra had designed, based on his life story.

Dykstra's record with women is really, really bad. A lot worse than indecent exposure bad.

That Schilling is not nearly the criminal and creep that Dykstra is doesn't stand as a particularly strong defense.

i forwarded the article to one of my buddies in the ipo/startup business. his response:

Wow. That’s nuts. RI is run by idiots. They deserve to lose their money.

Throughout the article it's clear that Schilling was sure the company would succeed simply because he had the will for it to succeed. What Chaffee said was a reflection of reality, not of the vision Schilling was trying to will into reality

I think this is a result of poor baseball analysis. Schilling became a very good/great pitcher because, yes, he had the will, but mostly because he had abundant talent, good work ethic and he listened to his coaches. Yet, the way folks talk about sports, he was successful only because of his will.

So, I doubt he ever stopped to imagine that he may not have as much talent in business and game design as he did in baseball.

Schilling put up $5 million worth of gold coins

Now, is this a Glenn Beck thing, or a "I wish I could live in a D&D game" thing?

Now, is this a Glenn Beck thing, or a "I wish I could live in a D&D game" thing?

That would be easy to find out, just see what they say, whether they were minted in South Africa or Minas Tirith.

What do they do now? Can you continue development and recoup losses while you are winding down a bankruptcy? If the game is 90% complete, would it make sense for a bankruptcy trustee or whomever to allow them to continue to operate until the game is finished and can at least be sold for something?

. . . would it make sense for a bankruptcy trustee or whomever to allow them to continue to operate until the game is finished and can at least be sold for something?

And the money for that would come from? Any assets/product can be sold, but without any revenue there doesn't appear to be any way that the company can emerge from bankruptcy as a going concern.

If the game is 90% complete

If they claim its 90% complete, that means its 50% complete.

I'm only on page 3 and I must have thought, "Oh Curt." about 10 times.

If the game is 90% complete, would it make sense for a bankruptcy trustee or whomever to allow them to continue to operate until the game is finished and can at least be sold for something?

Why can't they sell it for something when it's 90% complete? Presumably a product that close to completion has value to someone else in the business. Obviously they can't take it to market at 90% complete, but there's no reason another game company couldn't take it to completion.

Presumably a product that close to completion has value to someone else in the business.

It says in the article that Schilling was worried because the game wasn't fun, and that nobody on the dev team played it except when they were being paid to do so. How much is something worth if it fails at its primary function?

Finally finished the article. My main question is: has Schilling ever had a single successful business transaction? The only financing he received was from his socialist buddies

It says in the article that Schilling was worried because the game wasn't fun, and that nobody on the dev team played it except when they were being paid to do so. How much is something worth if it fails at its primary function?

That's a separate point from the one I was addressing. Theoretically, a product that's 90% complete has value to someone who can oversee the final 10% and bring the product to market. Practically speaking, if the product at 90% completion is terrible, then it's probably going to be terrible at 100%, which would render the original hypothetical in #22 irrelevant.

That's a separate point from the one I was addressing. Theoretically, a product that's 90% complete has value to someone who can oversee the final 10% and bring the product to market. Practically speaking, if the product at 90% completion is terrible, then it's probably going to be terrible at 100%, which would render the original hypothetical in #22 irrelevant.

There is also a rule of thumb in software development that 90% of the work remains when something is 90% finished.

Why can't they sell it for something when it's 90% complete? Presumably a product that close to completion has value to someone else in the business. Obviously they can't take it to market at 90% complete, but there's no reason another game company couldn't take it to completion.

If it was a normal game then a publisher would probably pick it up and give to a developer to finish, but the game is an MMO. Those are expensive and finishing the game is only the start of the costs because you also have to maintain the associated infrastructure while continuously adding new content if you want people to keep playing.

The only financing he received was from his socialist buddies

It's not socialism when he does it.

why are these jackasses allowed to do this to people again?

Mitt Romney says hello.

Hi, Mitt. Isn't it tiresome when jerks blame you for every bad business decision made by anybody ever?

I don't think that was the point of "Hi, Mitt". It's not Mitt's fault, but it is the fault of people like Mitt, who cavalierly take risks, and when things go awry, shrug and say "we tried to create jobs. Stuff happens." When "stuff happens" guys like Schilling recover more easily than the guy quoted above who lost a lot of money relocating to buy into Schilling's pipe dream.

I doubt we'll ever know how much of a bath Schilling took here. I tend to doubt it's as bad as reported.

edit...I don't think Mitt's a bad businessman. he's obviously a very good businessman. I meant that Mitt would cheer on people like Schilling, before knowing whether or not Schilling had a sound business plan, as Schilling could be held up as an example of a "jobs creator".

Bump Tripon...

Hi, Mitt. Isn't it tiresome when jerks blame you for every bad business decision made by anybody ever?

I wasn't blaming Mitt for Schilling's poor business decision. Mitt's a loathsome person so anytime a loathsome act is committed, Mitt's available for blame.

The man doesn't have an honorable bone in his body.