Because of yesterday's comment about Veggie Tales, I spent quite a lot of time reading up on the company history. Before I go anywhere, let me make it perfectly clear that Vischer was capable of building a $40 million company. Yes, reading his account brought back vague recollections of Roc Games, but I'm not going to kid myself. Roc never made $1 million in sales. Roc never made $1,000 in sales. While I didn't see the figures, during the four months I was at Roc, I doubt we had a total of $200 in sales, and to be honest, that's probably highballing it by a lot. Of course, Roc was eventually sold to Inner Circle Games, and they seem to be doing good things with it.

And Roc didn't start with a $60,000 loan. The four months I was at Roc were four months of getting ten or fifteen product lines ready to sell, and actually releasing two. It was spent setting up the eCommerce infrastructure, and handling lots of strange details. It was also spent trying start a conversation with the market. It was a wonderful experience, and to be honest I'd love to give it another go if I didn't have all the adult responsibility I have now. If I did give it another go, I'd probably take up polyphasic sleep.

Back to the story. Reading about Big Idea's fall reminded me of Lucid's fall (PDF, starting on page 182, which is labeled page 177). It also reminded me of TJIC (by the way, if you missed this, you missed a lot), Coyote, Paul Graham, Joel Spolsky, Eric Sink, and several other companies and people that didn't fall.

Paul Graham got forced out of his company because his new MBA CEO read Crossing the Chasm, which recommended that the founder leave a company when it was trying to get past that dangerous ground that killed Big Idea (of course, the MBA CEO killed Lucid even so). Then again, Eric Sink swears by Crossing the Chasm. But following the advice in Built to Last seemed to help push Big Idea over the edge.

Vischer wrote

We were proposing to double our staff size, without increasing our ability to produce films. Of the 165 hires being requested, only a handful were in the animation studio. Ninety percent were in finance, HR, marketing, licensing and design. So at 315 people we would be able to produce no more videos per year than we had produced five years earlier with a staff of 10.

I know what you're thinking: "don't add people without adding value, if your 165 hires weren't going to make it possible to make more movies, they weren't needed; leave a position unfilled for three months before deciding if you really need to hire somebody, etc." On the other hand, Big Idea was making $40 million per year at this time, and hadn't had anybody really watching the books. General Motors was the most profitable car manufacutrer during the Depression because Alfred Sloan (as in "MIT Sloan School of Management") decided to hire hoards of accountants in the 1920s, and those accountants were able to figure out that something was up before the big stock market crash. GM was able to react to the market before other manufacturers even realized something was wrong. And Competing on Internet Time says to build the infrastructure of a big business early, and grow into it (so does Business at the Speed of Thought). Then again, Coyote says that MBAs teach you how to run big companies with big accounting departments; his Harvard MBA doesn't help him at his "small" business.

Which is right? Well, clearly it depends on the specifics. You often need to make business decisions like the ones facing Big Idea in 1999 without the privelege of having all of those important specifics. Which, by the way, is why I would love another go at running a business. Maybe some day.