Serial Entrepreneur Steve Blank On How Losing $35M Sparked His Success
Who is Steve Blank? He’s gained notoriety for being in a league of his own when it comes to business acumen, and championing the Lean Startup Movement, the methodology behind statistically driven, iteratively based innovation towards gaining consumers.
The Russian-American, California-born Blank was an originator in Silicon Valley prior to the dot.com bubble burst.
In fact, when addressing an audience at the CUNY Graduate Center in New York he recalls that in the nascency of the tech haven where he had at the time been, the CEO of the now defunct Rocket Science Games, Blank faced his most tumultuous period in his life as he came crashing down from the proverbial sun.
Blank, then a featured CEO on the cover of Wired in 1994, would come face to face with the reality of a failed business when Rocket Science Games was on the brink of bankruptcy.
The company, formed with a cacophony of engineers and talents who were unfamiliar with the game industry, naturally spiraled in the purgatory known as development hell (a stall period in where development cycles are strained and unable to produce any semblance of the product).
According to Blank, the company had previously managed to raise $35 million in investment capital to create a stable and functioning games company, but was unable to produce any games or proof of concepts.
Blank, as reported by Inc, recalls the conversation he had with his mother and her terror for their situation stating,
“I said, ‘Hey, Mom, I thought I’d let you know that I just lost $35 million. There was a long pause, and she goes, ‘Oh, my God, the country we came from [the Soviet Union] is no longer there. There’s no place for us to go!”
But Blank had nothing to fear, as being a prominent businessman who had participated in the formation numerous successful tech businesses prior to Rocket Science, and having a infinite rolodex of connections with other prominent businessmen allowed him to secure another $12 million to form another company despite the loss of the $35 million.
“I had a public, humiliating failure, and still the people who lost the money had enough confidence [in me] because it was an honest failure,”
Blank allows us to see that in business, and economics, fortitude allows success to spring from failure, and determination allowed Blank to achieve billions in returns for his investors in spite of his folly.
Steve Blank is the truth – he shows us that regardless of small defeats, if you’re determined, and your money is green, everything is golden. For him, it helped that he was honest.
“You can make small mistakes, and you can make big mistakes–as long as they’re honest.”