How Atari and Chuck E. Cheese died the same death

Not many people build two giant companies. 

Slightly fewer people have both of them fail. 

So Nolan Bushnell will be the first time I talk about the same guy twice. It’ll be the first time I talk about the same guy twice on my channel. 

Long story short: Bushnell built Atari and basically created the home video game industry. (My video on that.)

Then he did a deal with Warner Brothers, got into a mess with his employers, and everything fell apart. An amazing visionary with a terrible exit. 

Next, he noticed his kids were crazy about Disneyland, specifically the animatronics. 

So he thought: why not make that easier to reach? Make a restaurant that’s basically Disneyland on a street corner? And he built Chuck E. Cheese. 

Another huge initial hit, and IPO'd for around half a billion, 600 locations. But another huge loss followed, following exactly the same script: he over-leveraged on a deal, the business wasn’t ready when the market stopped being so easy, then fell into bankruptcy. A beat-for-beat replay of Atari.

To me, there’s a lesson on human nature here: 

The best predictor of how someone will act is how they’ve acted before. 

"Past behavior predicts future behavior" is something I use all the time when I'm hiring.

Here's how: Walk through every job they've had, in order. What were you hired to do? What did you actually accomplish? What were the low points? And how will your boss rate you 1-10 when I call them?

That last question is key. It's called TORC: threat of reference check. 

When a candidate knows their answers will get checked, you get a way straighter story.

There's a whole methodology for this kind of interviewing that transformed my hiring about 15 years ago. It’s called Topgrading. Start with the book Who by Geoff Smart.

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Michael

P.S. If you're hiring, my company Near places senior professionals from Latin America — same time zones, fluent English, and they've been through our own vetting gauntlet. We handle payroll and compliance too. Book a free call.

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