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Danny
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Farnoosh Tarabi
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Danny
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Danny
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Danny
What is it all about?
Nolan Bushnell
We were the only company that had all young executives and I've often thought that I basically paved the way for Bill Gates and Steve Jobs, some of those guys, because all of a sudden people said, well, hey, maybe this works.
Danny
Hello and welcome to Tales of Silicon Valley. First of all, let me thank you all for listening, for reviewing, for recognizing, recommending to passing the word to your friends. It's been great. It's made all the work and time and effort gone into the show really worth it. And this is a bonus episode and it features a full length interview with Nolan Bushnell, the founder of Atari, the godfather of the video gaming industry. And if you like it, you can hear much, much more on my sister show, Danny in the Valley. But for now, I give you Nolan Bushnell. Enjoy. First of all, thank you.
Nolan Bushnell
My pleasure.
Danny
Can we start at the beginning?
Nolan Bushnell
At the very beginning, I was born. I was a Mormon boy in Utah. And a magic thing happened to me at Mrs. Cook's third grade class. She assigned one student to present an experiment in science to the rest of the class. And I got the one on electricity and I put the dry Cells together and wound wire around a nail and turned it into electromagnet and did switches and turned on lights and things like that, and I was hooked. I went home that day and set up a card table in the corner of my bedroom, found every old flashlight, battery, light, piece of wire in the house and started to tinker and never stopped.
Danny
So you stayed in Utah?
Nolan Bushnell
I did for a while. Probably the next pivotal thing is in my tinkering. I had a neighbor who was a ham radio operator. And if you were going to be a total geek in the 50s and 60s, you were a ham radio operator. But he also ran a military surplus business, mail order, and he would bid on stuff. And so all of a sudden I had access to stuff. There were these airplane carcass graveyards where old airplanes were being melted down for scrap. But if you snuck in, you could get wire and lights and old radios out of the discarded aircraft. But the reason I bring that the ham radio up is that you wanted better radios, better transmitters, and they were expensive. If you divided the cost of the radios that I wanted the technology by lawnmower money and allowance, you know, I'd get the radios I wanted. When I was 35, that was unacceptable. And so that triggered the entrepreneurship in which I set up a TV repair business.
Danny
How old were you?
Nolan Bushnell
10. In those days, most of the TV failures were bad tubes. Any idiot could take the back off of a TV set and change a bad tube for a good tube. All you had to do is know a little bit about how TVs worked. It wasn't rocket science. And in those days I added washing, appliance repair. Well, it turns out that if you're a little bit mechanical, you can take washers and dryers apart and see what's broken and replace it and put it back together and it works. It was a way that I was making adult kind of revenue as a 10 year old kid.
Danny
That's impressive.
Nolan Bushnell
And what that did is it really insulated this idea that I was not going to work for the man. And so I think that that becomes, becomes pretty important later on.
Danny
What did you study in college?
Nolan Bushnell
Electrical engineering.
Danny
How'd you do?
Nolan Bushnell
I was absolutely last in my class.
Danny
Why?
Nolan Bushnell
I was always working. I became manager of the games department at the local amusement park. My grades always took a major whack during the spring quarter.
Danny
And what'd you do there?
Nolan Bushnell
I started out being just on the midway selling balls to knock down milk bottles. Quit handling for a quarter. That's also instructive.
Danny
Yes, it is. Yeah. I think I know why, but we'll get to that.
Nolan Bushnell
That was kind of my summer job, and the reason I was working there because sounds like it was working for the man. I actually had the campus company, which was an advertising company for universities, in which I took a large sheet of heavy stock paper, sold advertising all around, and had a calendar of events in the middle. And I would give it away at the beginning of the quarter. And the economics were very simple. I would sell $3,000 worth of ads. It cost me $550 to have them printed. But summers in Utah, you could just spend a lot of money hanging out. And so I decided to get a summer job that was fun. That was not very hard. To keep myself out of harm's way, I'd sell advertising during the day and then work at the amusement park night. And then, therefore, I didn't have an opportunity to spend money.
Danny
You were the guy giving the people balls to knock down.
Nolan Bushnell
Correct. And I was so good at it. Next season, they made me manager of the whole department. And so I was. I've always said that was my MBA because I had to hire 150 kids and incentivize them and manage labor percentages and merchandise and training and.
Danny
And so we. You, the guys, and kind of step right up.
Nolan Bushnell
Yep. And then I started to redesign the games, the midway games, so they'd make more money.
Danny
Like how?
Nolan Bushnell
Well, there's a game called over and under, and you had to roll six balls down into slots. And if you were under 11 or over 30. And of course, the one, the one slot was right next to the six. And so if you missed the one, it wouldn't.
Danny
Right, right, right, right.
Nolan Bushnell
It was a game that took too long. So I redesigned it in which you had to get three squares, three circles, what have you, with only four balls. And it increased the revenue by almost 40%. Wow.
Danny
You still remember the figures?
Nolan Bushnell
Yeah.
Danny
So you graduate and then are you immediately like, I've got to get out of Utah?
Nolan Bushnell
Absolutely. Semiconductors were just becoming important. And everybody knew that semiconductors were coming pretty much from Silicon Valley. There is an old saying that if you want to be important in the Kingdom, you got to sit on the right hand of the king. And I figured the Silicon Valley ecosystem was the right hand of the king.
Danny
So you drove out.
Nolan Bushnell
Right.
Danny
I was born in 77. I grew up in San Jose, and actually we grew up across the street from orchards, which are no longer orchards. But what was it when you arrived? Because this is in 60.
Nolan Bushnell
It was in 68 literally, Silicon Valley was just starting. But at that time, Silicon valley was probably 80% prune orchards. Probably for the next 10 years. You never had to buy firewood. You could just go by a place where they were tearing out a prune orchard and there'd be a sign saying free wood. And you just put it in the back of your car and take it home.
Danny
Right, Right. So you arrive, first job. Ampex sign just came down.
Nolan Bushnell
I was sad about that.
Danny
So for those who don't know, what is it? What was Ampex?
Nolan Bushnell
Ampex was the pioneer in digital recording. They invented slow motion, stop motion, the videotape recorder. They essentially could create a TV station 100% using Ampex port parts.
Danny
So what did you do there?
Nolan Bushnell
I was in the videophile division and I was the first person to record digital data on videotape with 1 to the -26th error rate at 6 megahertz 6 megabits a second.
Danny
Right.
Nolan Bushnell
Which today sounds silly, but to put it in perspective, we were working on a terabyte memory that literally used a small warehouse full of equipment for a one terabyte of storage.
Danny
Oh, how things change.
Nolan Bushnell
Oh, how things change.
Danny
How do you end up leaving or what takes you out of Ampex and off to do your own thing?
Nolan Bushnell
Two things. I played a game called Space War at the University of Utah.
Danny
Space War is a big deal.
Nolan Bushnell
Very big deal. It was a game that was programmed on PDP1 by a guy named Steve Russell at MIT. Graduate student from MIT. And I think it was shipped with almost all of the Digital Equipment products. If there was a monitor connected to a PDP computer, it was planespacewar. I got a chance to play it and was mesmerized. As manager of the games department, I had an arcade that was reporting to me. I knew as sure the night, the day that if I put a coin slot on the screen that it would make money in my arcade. Big money. But 25 cents for three minutes of play into a half a million dollar computer in the mansion.
Danny
Work that'd be a very long payback.
Nolan Bushnell
Yeah.
Danny
So because the PDP was, was the, the primary purpose of the big mainframe. Yeah.
Nolan Bushnell
What happened was started working in at Ampex and three things happened at the same time. One, I was playing Go with a fellow at Stanford who was working for the, the Stanford AI project. And after a couple of games he says, hey, do you want to go play Space War at this AI? I said, whoa, yeah, I haven't played that for years. I played at the university. So I spent a night with him playing space war and was enamored with it.
Danny
And spacewar was what, just kind of
Nolan Bushnell
like asteroids, basically two rocket ships against each other at the same time. When you're an engineer, you get these free magazines that are just full of technical gobbledygook and the cost of semiconductors, in a year they drop from 250 a chip to 15 cents a chip. And so that's massive drop in the cost of semiconductors.
Danny
And that was simply because more were being made, technology is getting better, it's more, etc.
Nolan Bushnell
Right. Third thing happened is my project at Ampex caused me to design a little really clunky, cheap computer using these chips. All of a sudden I realized that one, I had the skill to make a computer with these chips. Two, the chips were really simple. And three, I, I knew a business application that needed to be filled.
Danny
Which goes back to your days at Lagoon.
Nolan Bushnell
Right. And so I started a paper design that day of how I would do this. My office made at Ampex. I said, let's start a company. We each put in $250 each.
Danny
So 500 big ones total.
Nolan Bushnell
500 big ones. We capitalized the company, Company Will. And two weeks later, we had a rocket ship flying on a screen. Then I had a dentist appointment. And I was talking to the dentist, my dentist, about what I was working on. He said, you know, one of my patients is in that business. I had no idea. He introduced me. And I called him up, he came over and saw the thing. He says, you got to come show it to my company. They said, you? Yeah, let's, let's license this. And so I, I was making $825 a month as an associate engineer.
Danny
Right.
Nolan Bushnell
Of course, my house payments are $170 a month.
Danny
So sorry, I'm just processing that for a second.
Nolan Bushnell
Yeah. And I was able to negotiate double my salary plus a company car.
Danny
Wow, you had arrived.
Nolan Bushnell
And a percentage of the revenue.
Danny
And so what had you licensed?
Nolan Bushnell
Exactly. The game of computer space.
Danny
Okay. And so what happens?
Nolan Bushnell
The company was called Many Associates. And after working for them for a year, I realized that they were a bunch of bozos, that they could screw up anything and that I didn't want to really hang my hat with them, which is actually one of the drivers of Silicon Valley. Almost everybody has worked next to somebody who is a bozo who has made a lot of money. When it came time to work on the second project, I said, do you want me to get the next project? We have to renegotiate Our contract and I need to have more say in what.
Danny
So you and Nutting part ways.
Nolan Bushnell
We parted ways with a contract, a negotiated contract to do the second game for them. And I had put my shingle out and I got a contract with Bally for another one. And so I was off. And the plan was that Atari Syzygy at the time was going to be a game designer, a studio, if you would, designing games for other people.
Danny
Your new company. Yeah. Right.
Nolan Bushnell
You know, I had no money and hadn't heard of venture capital. The idea of going into manufacturing was a little specious and what have you. I had these two contracts and so I had enough cash flow to hire my first employee, Alcorn. And I had heard about a video game company called Magnavox that was displaying their products at the Marriott in Burlingame. And so I had to go see it. And I went up to see it and I thought it was shit, you know. But I noticed looking at the other people that were there and they were kind of having fun with this ping pong kite game. Didn't have sound, didn't have score. And so that day happened to be Al Alcorn's first day on the job. And I felt that I needed a simple job for him because we had a driving game. The contract from Valley was a driving game which was much more complex.
Danny
Yeah.
Nolan Bushnell
And so I thought, well, I'm just do simple. And so let's fix all the things that were wrong with Odyssey.
Danny
Right.
Nolan Bushnell
And as we got that going, it just got more fun and more fun and more fun. And then we.
Danny
I remember Pong.
Nolan Bushnell
Yeah. Then we packaged it up and put it on test and it just knocked the socks off. I mean it just earned more.
Danny
Where did you test it?
Nolan Bushnell
Andy Capps Tavern in Sunnyvale.
Danny
A bar?
Nolan Bushnell
Yeah.
Danny
Because it's funny because when I was growing up, we used to always go to this one roundtable pizza that had like three video games. We'd ask my dad for 50 cents, two quarters each. And we all. I was one of four. So we all got. We all could basically stay, get our two turns and go. But it was always like every place. This is mid-80s, right? Had Arcade games.
Nolan Bushnell
Yep.
Danny
Why is it? Just because they were such. I mean, because it's a. It's an amazing business, isn't it?
Nolan Bushnell
We sold Pong games for nine hundred ten bucks.
Danny
For a big stand up machine.
Nolan Bushnell
For a big stand up machine. And in their lifetime in coin drop, they'd make 20 to 50,000 bucks.
Danny
What?
Nolan Bushnell
Yeah. Wow.
Danny
So you start Selling pong machines. Did you actually make them?
Nolan Bushnell
Yeah.
Danny
How'd you do that?
Nolan Bushnell
Well, we found a cabinet maker that would do our cabinets. You know, basically he could was doing kitchen cabinets and pong machines. And so he shipped down the cabinets. We bought TVs wholesale, take the, the back off, modify them, hook them up. We had dumpsters full of antennas and tuners because I didn't use those. And then we created a circuit board, had people stuff them and then test them, put them in together and ship them out.
Danny
Sounds like you were just doing this kind of on the fly. Like you weren't like a manufacturer per se, at least.
Nolan Bushnell
Well, we were. We started out in the garage shop. Thousand square feet. And it was a thing where there was two offices in the front and a roll up door in the back. And they were for small businesses. And then we were able to get the unit next to us. So we expanded, we doubled our space and then we just had more demand than we could. And we rented month to month an old abandoned roller skating rink and got up to building 100 units a day and we were off to the races.
Danny
Wow. Were you actually on roller skates?
Nolan Bushnell
They moved some of the machines around on skateboards. Actually.
Danny
I've seen you referred to many times as like the first kind of T shirt tycoon. What was the, what was Atari? If you walked into it, I imagine it's not like if you walked into Chase Manhattan.
Nolan Bushnell
We were always out of money because we were growing, we were profitable. The company always chews up a lot of money. And we were capitalized at $500. And though we had some royalties and we had some contract income, we were always out of money. So we always looked half assed. For example, when we'd hire somebody said, you get to buy your own desk and your own chair. We'll pay for it, but it can't be better than mine. My desk was this old crappy school desk. Not a school desk, but it was desk. But it had green linoleum on the top and it was a blonde thing and it just looked horrible.
Danny
Very 70s.
Nolan Bushnell
Very 70s. And so I'd say, you can't have a nicer desk than me. And so literally we would probably end up spending $20 a person for a desk and a chair. But they were all mismatched. It was, you know, there was no thing. And when the company got more successful, my assistant kept saying, you got to get rid of that desk. And I said, no, it's my lucky desk. We're going to keep it. You know, and I was out working on a couple of contracts and I was out of the office for a couple of weeks. When I came back, she'd taken my desk, had it stripped, stained, the green linoleum, replaced with good black Formica. I mean, it looked like a great desk.
Danny
Right.
Nolan Bushnell
Still lucky.
Danny
That's quite good. So Pong takes off, but you say you're still hand to mouth. What changes? What's turning point for Atari where you really took off?
Nolan Bushnell
In a funny way, I think that it never really changed from being hand to mouth.
Danny
It's so funny because at least growing up, Atari was this huge presence in every person's or every family's life.
Nolan Bushnell
Right. Well, see, there was time before Warner and time after, and we were hand to mouth. And early on we had competition, a lot of competition from people that had real factories and real processes and real accounts receivable. And, you know, we were always sort of making it up as we go along. In some ways it was very cash efficient, but it was not always efficient because didn't have our shit together. You know, we were just making it up and learning. Our core skill was innovation. Everybody else had us outgunned. They could build better, they could build efficiently, they could build cheaply, they had factories, they had processes and everything like that. But we could design new stuff. And once Pong had sort of run its course, then we came into our four in which now we were doing. We did Space Race and we did, you know, Quadrapong, we did Gotcha and we did, you know, we innovated and. And slowly but surely, innovation won the game. We started building home games. Pong and then we decided we needed to do a cartridge based game, which was the Atari. But we knew that we didn't have enough cash. There was just not enough to do that. And so we were planning to take the company public. Well, concomitantly, the stock market kind of went to sleep, you know, wasn't going to work. And so we wanted to get a industrial investor and we talked to Warner and they said, let's buy the whole company. And I was kind of tired, you know, because we didn't have enough cash for.
Danny
Even though you had kind of machines in every bar and you're this kind of ubiquitous company, you're the first real video game company.
Nolan Bushnell
Yeah, we just didn't have any cash.
Danny
How did you end up selling to Warner?
Nolan Bushnell
We needed money for the 2,600. We had raised a little bit of venture capital by then, and one of our venture capitalists introduced us To Warner. We flew to New York. They gave a pitch to buy the whole company.
Danny
Right. And were you immediately. Yeah, that's a good idea.
Nolan Bushnell
Yeah.
Danny
You just exhausted?
Nolan Bushnell
I was tired.
Danny
Right.
Nolan Bushnell
And plus, I was a farm boy from Utah. And all of a sudden I was going to have more money than I'd ever dreamed of.
Danny
How much money were you going to have?
Nolan Bushnell
26 million. Which sounds like nothing now.
Danny
I mean, it's kind of. It sounds like nothing, but still, in
Nolan Bushnell
those days, 26 million is probably equivalent to a couple hundred million today.
Danny
Yeah. Wow.
Nolan Bushnell
And you're what, 30, 32.
Danny
What's not to like?
Nolan Bushnell
What's not to like?
Danny
And so they bought it and you stayed.
Nolan Bushnell
Yeah, for two years.
Danny
But can you talk about the kind of the culture of what, Atari? Because I think that's also one of the things so interesting about Atari is it does feel like it was kind of a model for a lot of the kind of the culture that has come since in terms of how you build a company and kind of giving people freedom and kind of the whole environment.
Nolan Bushnell
Well, understand that this was during the age of Aquarius. The hippie revolution was just Haight Ashbury away. All of us had our hippie outfits and we'd go up and be posers on weekends. Tie dyes, bell bottoms, you know.
Danny
You had the whole get up as well.
Nolan Bushnell
Absolutely. We were the only company that had all young executives. And I've often thought that I basically paved the way for Bill Gates and Steve Jobs, some of those guys, because all of a sudden people said, well, hey, maybe this works.
Danny
But were you sure? Were you walking around in a suit?
Nolan Bushnell
Oh, yeah.
Danny
Okay, so you were checking that box?
Nolan Bushnell
I was checking that box because I was younger than everybody else. I had, I don't want to say an inferiority complex, but I was a little. I was always a little bit feeling like maybe somebody else knew what they were doing, because I knew that I
Danny
didn't know what I was doing.
Nolan Bushnell
But we wanted to create a meritocracy. And in some ways, if your center of gravity is a meritocracy, a lot of things like sex and age discrimination, things like that just go for merit.
Danny
Right?
Nolan Bushnell
And so that was one thing we did. And then it also says, get rid of process, you know, get rid of politics, and so treat people like adults. We didn't care when you showed up, if you showed up, get your job done, then we're happy. And that leads to. We don't care what you wear. You know, come in a bathing suit, you know, start Work at three, get, you know, stay to work until midnight. We don't care. You know, Steve Jobs worked for me and it was taken to Apple. And pretty soon, you know, between Apple and Atari and some of those, we were employing a pretty probably at 20% of Silicon Valley. And they were saying, shit, if it's working there. And so it kind of.
Danny
So can you talk about Jobs? Like, how did he end up there? And do you remember meeting him? And what. I mean, did you see something in him or was he just yet another kind of unwashed techie? Who's.
Nolan Bushnell
He started out as an unwashed techie. I actually didn't hire him, you know, Alcorn did. But my first interaction with him was I had an open door policy. And he came into my office one time and he says, your company is going to fail unless your people know how to. Can learn how to solder. He had a circuit board and he says, cold solder joint, bad solder joint, wicked solder joint. And I said, boy, you're right, those are really crappy. And I said, why don't you teach everybody how to solder?
Danny
How old Was he then?
Nolan Bushnell
19.
Danny
So he was this kind of solderer trainer.
Nolan Bushnell
All of a sudden he came on as a technician. A lot of people don't understand the power of being a passionate person, you know, And Steve, if anything, was extremely passionate about. I mean, he had one speed full on. I often thought that probably led to his health problems to a certain extent.
Danny
How long was he there and what role did he play?
Nolan Bushnell
He was there for probably a year and a half, and then he wanted to go to India, and so we paid for his ticket.
Danny
Oh, you paid for his ticket?
Nolan Bushnell
In a roundabout way. We had a problem that needed solutions in Germany. The German distributor was always complaining about one thing or another. And so we thought Jobs could probably fix that. Not so much. Any of the technicians could have gotten his problem solved, but I thought that they'll never want Steve to come there again. So we paid for his ticket to Europe, and instead of the return, he could go from Germany to India.
Danny
It was the idea that he was just gonna come back at some point or you didn't know or didn't know.
Nolan Bushnell
And then he was there. I think he was in India for three or four months, got a blood disease, came home, got better, came back to work for Atari for a little while.
Danny
He had a blood disease? Yeah. I didn't know that. Then he came back, worked for you. I think in Adam's book he talked about breakout. Yeah, I spent a lot of time with my. A lot of hours of my childhood playing. Playing Breakout.
Nolan Bushnell
Yeah.
Danny
Can you talk about how that came about and what he did there?
Nolan Bushnell
We believed in kind of sharing the wealth with the people who made it happen. We considered all our engineers to be rock stars and so they could kind of bid on the projects they wanted. Nobody wanted to breakout. Why? The common wisdom was that ball and
Danny
paddle games were over because the industry had moved on. And there's all these cool games now.
Nolan Bushnell
Right, Right. I designed Breakout conceptually, and I just knew that it was the right kind of game for the face, and so I had Jobs do it, but I knew that it was actually going to be Wozniak.
Danny
So what was Wozniak? Was he just orbiting?
Nolan Bushnell
I put Jobs on. On the night shift. Why? Well, because he was kind of disruptive and.
Danny
Was he just a pain in the ass, basically?
Nolan Bushnell
Just kind of a pain in the ass. But I liked it, and I was a little mercenary in that I knew that if I put him on the night shift, that was. Would be there and he'd be playing games and helping. So I'd sort of have two Steves for the price of one. And it worked out as true, and they knocked it out and did a really good job.
Danny
And that was color as well, right? Which was a thing. No, it was not.
Nolan Bushnell
Well, it was what we called faux color. We would put strips of cellophane on the screen.
Danny
That's not true.
Nolan Bushnell
That's great. True. Really? Well, a black and white TV set at the time was about 80 bucks.
Danny
Yep.
Nolan Bushnell
A color screen was almost 400. And a color TV in the video game environment would fail in about a year.
Danny
Going back to Warner. They fly you out on the nice private jet.
Nolan Bushnell
Oh, yeah. You know, the private jet. Stopped in Sun Valley to pick up Clint Eastwood, and he was there with Sondra Locke.
Danny
And you guys were just a couple.
Nolan Bushnell
We were just a bunch hicks.
Danny
Why'd you stay if you have $26 million? Was it like, all right, I'm gonna go live the life?
Nolan Bushnell
You don't need to quit in order to live life. I traveled around and did various things, and, you know, I just didn't feel like I needed to quit. But I didn't work very hard either.
Danny
So Atari at one point, was making more money than all of Hollywood studios combined.
Nolan Bushnell
That's true.
Danny
When was that? Was that the 2600 or was that the 2016?
Nolan Bushnell
That was in 1984.
Danny
So after you sold.
Nolan Bushnell
After I sold.
Danny
And then they just started ramping Up.
Nolan Bushnell
Well, the thing that's frustrating to me is they did no innovation. They populated the company with record executives, and so they didn't realize they were also in the record player business. And so their focus were on cartridges, not on improving the technology. And that's why the industry really imploded for a while, because they hadn't kept the technology getting better.
Danny
But did you have a moment where you're like, oh, my God, I've created this entire industry that is bigger than the industry. Everybody knows best in the world,
Nolan Bushnell
kind of. But, you know, I'm a guy who doesn't like to live in the rearview mirror. And I was working on Chuck E. Cheese at the time and having a great time.
Danny
Chuck E. Cheese was awesome.
Nolan Bushnell
I actually made more money personally in Chuck E. Cheese than I did. Yeah.
Danny
Really?
Nolan Bushnell
I was smarter.
Danny
How did you make the money? Was it just when you sold it or.
Nolan Bushnell
I can remember getting a $15 million check in the mail. I took the green shoe of one of the offerings. Do you know the Green shoe? It's an underwriter over allotment. And they sold $15 million worth of my personal stock.
Danny
So what'd you do with all that money?
Nolan Bushnell
Oh, I pissed away at various here.
Danny
But you lived well, too, right? I mean, you had.
Nolan Bushnell
I had Learjet and big house and, you know, house in Paris, you know, Aspen condo and all that. You know, my life's been great. I've got eight kids.
Danny
You have eight kids. That's very Mormon of you.
Nolan Bushnell
Yeah, well, that's. People say that, but my wife's also Catholic, so there's.
Danny
Right, right, right, right, right, right.
Nolan Bushnell
You know, we're both failed in our respective religions, but.
Danny
And in terms of the culture, I mean, do you feel. I mean, it does feel. Just reading and just talking with you, it does feel that you kind of. You helped set some of that groundwork for what we recognize even today in terms of that kind of. I don't know if you'd call it the hacker ethos or just the kind of how Silicon Valley works.
Nolan Bushnell
Yes.
Danny
And did you remain in touch with Jobs? Yeah. Did you invest?
Nolan Bushnell
No, I didn't. In fact, I had the opportunity of being the first investor in Apple, and I turned down a third of apple computer for $50,000. I regret it.
Danny
Yeah, yeah, of course. Of course. Why? Do you remember why?
Nolan Bushnell
I didn't think that Steve was a good chief executive, and I think that he wasn't.
Danny
I mean, you were proven right in that sense.
Nolan Bushnell
Yeah.
Danny
But Steve, was he still working at Atari at the Time or had he had already left?
Nolan Bushnell
He'd left.
Danny
Right. And Woz never worked for you?
Nolan Bushnell
No.
Danny
But he was just Steve's subcontractor. Precisely because I've read that that story about the breakout thing where you paid
Nolan Bushnell
him however many 5000 bucks, paid him
Danny
5000 bucks to basically build breakout over a weekend.
Nolan Bushnell
Right.
Danny
Which was kind of a huge superhuman feat.
Nolan Bushnell
Superhuman.
Danny
But Woz is effectively kind of otherworldly genius in terms of the stuff he can.
Nolan Bushnell
He's a savant.
Danny
And you paid jobs 5,000 bucks.
Nolan Bushnell
Right. And jobs paid was 500.
Danny
A glimpse of the future. You do a tar, you leave. And you tried a bunch of other stuff. A lot of it was kind of light years ahead of was all right. But it was all just like kind of bleeding edge stuff.
Nolan Bushnell
Somewhat true. But you know, I mean, if you. I started the first automobile navigation software company, you know, I did the first online ordering system using laserdisc and Kiosk. So in some ways I can't say that I did Amazon. Actually. Had I not sold to Warner, I might have owned the Internet.
Danny
Do tell.
Nolan Bushnell
We were going to do a game network over telephone lines and modems. Atari had the fastest, lowest latency modems in the world.
Danny
You guys had modems?
Nolan Bushnell
Yeah. So using telephone lines.
Danny
I guess I don't understand why you would have even developed modems back then.
Nolan Bushnell
Because we wanted to do an online network. I can remember sitting in the conference room asking, are people, when they playing each other across the telephone lines, are they going to want to talk? And they said, well, we don't have the bandwidth to talk, but maybe they could type. Nobody types. But the IP stack for our network, we were going to have closets of modems in every area code. So it was a free call.
Danny
Alright, because local calls are free.
Nolan Bushnell
Then we were going to link the closets with T1 lines. The protocol that we designed was identical to the IP stack of the Internet. We were going to go Live in 1979 and Warner cancelled the whole thing. I'm convinced that if we'd have done the game network, that it would have morphed into the Internet.
Danny
Did you know you were doing that at the time?
Nolan Bushnell
Kinda. Well, no. I don't know. I always knew that we were doing something kind of important, but we were so busy solving problems every day that it was hard to step back and look at the big picture of what we were really doing other than surviving that day.
Danny
Right. What was your worst day at work?
Nolan Bushnell
When I had to fire an engineer who had been great, but was Just being disruptive and bad because his wife had been diagnosed with stage four cancer.
Danny
That's pretty tough. The kind of the difficult part of startups and doing this, it's actually, it sounds like it's quite lonely. A lot of responsibility and very stressful and a lot of. There's a lot of shitty days mixed in with the amazing triumphs.
Nolan Bushnell
Yeah. I think that any organization you've signed up for the whole package, you know, the good, the bad, the ugly and you would like to have it all be good, but it's. But there's the human condition.
Danny
Yeah. One of the other things I'm trying to get to is why Silicon Valley? Why has it all happened there?
Nolan Bushnell
I think the hippie movement and sort of the, the whole kind of countercultural vibes that San Francisco and Marin county did, it was. People have joked and said somebody took the United States and shook it a little bit. Everybody that was a little loose fell to California.
Danny
That's quite good.
Nolan Bushnell
It feels right somehow.
Danny
Yeah, yeah, it does, it does.
Nolan Bushnell
And I think that when you have people doing interesting things, they attract other people who are interested in doing interesting things. The human being is in fact a pack animal. I think that there is a. There's some tribes and there's kind of the Hollywood tribe and there's kind of in New York there's a literary tribe and of course in Washington D.C. there's Potomac fever and the political tribe. Silicon Valley represented this countercultural tribe that had various spawns of the rock music tribe and the countercultural sort of, you know, whole earthquake catalog tribe. And then there was the hard tech tribe. They tend to be self reinforcing.
Danny
How important were drugs or not really? Were they impediment or is it just kind of something that was in the ether?
Nolan Bushnell
Innovation is about rule breaking. If you were happy with the status quo, you don't break rules and therefore you don't innovate.
Danny
Yeah. 2019, here we are. Do you despair of where we are? Are you hopeful? Are you pessimistic?
Nolan Bushnell
I am so excited about what's going on right now.
Danny
What are you doing? What is X2?
Nolan Bushnell
Okay. I always like to live on boundaries. Like when two tectonic plates collide, you get earthquakes and volcanoes. Right now there's a interesting convergence of games, movies, AI, smart speakers, networks that we have tools today that are truly remarkable and you can achieve things that are wonderful. For example, right now we're doing a series of board games that are Amazon Echo mediated. We've got a whodunit called Saint Noir in which you are the detective and you're going around this town interviewing suspects and the suspects answer you through Echo and they're answering you. And the suspects have to tell the truth. Unless they're the perp and then they can lie to you. Then we're working on a project for a made for TV movie in which we break the fourth wall and have Amazon Echo be a character in the show so we can program Echo to respond to what's going on on the screen and be a advisor, a narrator, yenta, a pain in the ass, what have you. It's just really cool stuff. Like I've got five, five of my boys. They're all in some level of technology. I've got one son who's doing a virtual reality escape room that's reskinnable and he's 24 years old and he has already sold one company and he's got a game right now that is. It's like Pong. It's out earning every other game. On the midway.
Danny
On the midway.
Nolan Bushnell
Have you been to Two Bit Circus? No. Two Bit Circus is 50,000 square feet in downtown LA.
Danny
Okay.
Nolan Bushnell
Of a amusement park, bar, restaurant. Think of it as Dave and Buster's on steroids.
Danny
Yep.
Nolan Bushnell
That's my other son, that's Brent and Wyatt, which is my youngest son, has two of his games in there. Both of them are the number one earners, which translated I think he's got a couple of projects that are, that right now are worth 50, 80 million bucks. Now he's doing this escape room he thinks he can rescan. And do you know that there are 800 escape rooms in the United States right now?
Danny
I did not know that.
Nolan Bushnell
I mean, neither did I. And he says that the average escape room has a life cycle of between four and 10 months and that now he can reskin with software and get a percentage of the revenue. He's really got a good business.
Danny
Yeah, yeah.
Nolan Bushnell
Now this is a kid starting his business the day he got out of high school. I would say the day he graduated from high school. Except he didn't.
Danny
He didn't graduate.
Nolan Bushnell
No. One day he came back and he says, I'm not going to school today. It's just a waste of my time. Because his brothers were all in tech, he'd been programming from the time he was 10. Had a chance to work for Google when he was freshman in college. In high school,
Danny
as you do, as one does, just a couple more things. You also had a personal robot company.
Nolan Bushnell
Yes.
Danny
That apparently appears to be on the horizon. Much closer on the horizon now. Yeah, you did in car navigation in the mid-90s, right? Video games, right. Chuck E. Cheese, which for our British listeners is kind of like a video game kind of.
Nolan Bushnell
I don't know, it was like a arcade supported, you know, that disguised itself as a pizza parlor.
Danny
Exactly. They also had the animatronic giant mouse and his friends singing songs. And it was an amazing place. I had a lot of my birthdays there.
Nolan Bushnell
I had a toy company for a while that was a total mistake. And then I tried to do a Chuck E. Cheese again called Ewink in which every table had a touchscreen ordering system. And all that talk about bad timing. Each table costs us about 15,000 bucks. Two years later, I could have done the whole thing with a $400 iPad.
Danny
Is there one or two technologies or things that you think are that you're most excited about, that you think will be reality in five or 10 years? Now that would make us today think like no way. Oh my God, that's amazing.
Nolan Bushnell
I'm on the board of directors of a self driving automobile company. Software got the best software stack out there. A lot of people don't realize it, but auto drive cars are more important than world peace because more people are killed on highway accidents than there are in any of the wars. And the wonderful thing about self driving driving cars is it basically changes the economics of transportation in some wonderful ways. Think of the number of auto body shops that will go out of business. Think of the insurance. Huh?
Danny
Gas stations.
Nolan Bushnell
Well, think about highway patrol. No more need. What about parking lots? All of a sudden they become redundant. And now you're going to be able to pave over every street, you know, because you can put all the transportation underground. And so your typical city becomes a park without all the visual clutter of parked cars everywhere.
Danny
When you were back at it when you were a carnival barker, did you have like a go to like saying to get people to come in?
Nolan Bushnell
Well, I would just basically say you can do it, you can win. This is fun. The main obstacle with any of these things is the self confidence of the player. And an awful lot of life success is about the self confidence. Because if you don't have the confidence of succeeding, you don't have the confidence to try. And if you don't try, you definitely fail.
Danny
There is no try, there is only do, as Yoda would say.
Nolan Bushnell
Yeah.
Danny
And with Jobs, why do you think he was so successful?
Nolan Bushnell
Steve Jobs had one rising belief structure that turned out to be very right and that was ease of Use of normal people. And so there were MP3 players all over the place. But they took level of tech. You had to be a technical. You had to take your CDs, you had to rip them and then you download was a problem. And Jobs always says, let's make it easy to use and transparent. And so if you look at the ipod, it fulfilled that goal. The other thing, that in order to understand Steve Jobs, genius. And not enough people give this part credit, but he was a master negotiator. You've heard about the Jobs derangement syndrome, where he could convince you. Where Gates would say, I don't like to have a one on one with Steve. I always end up agreeing to do something. It's not in my own best interest.
Danny
And did you see that back then,
Nolan Bushnell
back in the day? Yeah, very good.
Danny
Even when he was showing up unwashed
Nolan Bushnell
and well, see, understand that Steve always had a somewhat missionary zeal about him. He believed whatever. He believed so thoroughly that it was almost like defying gravity to disagree with him.
Danny
Yeah, I was reading, so I think it might have been an Adams book. He was on some. He'd found some diet, some kind of starvation diet. He ended up passing out Atari.
Nolan Bushnell
Oh yeah. I mean he was always on some weird shit.
Danny
Did you ever see him pass out at work?
Nolan Bushnell
No, but I do know he would have. He had a futon under his desk. He would very often do all nighters.
Danny
Yeah, he's a hard worker. Sounds like very hard worker. Right?
Nolan Bushnell
One speed all on.
Danny
What are you waiting for? Subscribe to Tales of Silicon Valley right now on Apple Podcasts Foreign this episode
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Episode: Atari's Nolan Bushnell "I started tinkering in third grade and never stopped"
Date: September 24, 2024
Host: Danny Fortson (with cameo by Katie Prescott)
Guest: Nolan Bushnell (Founder of Atari, "Godfather of Gaming")
In this bonus episode, Danny Fortson sits down for an in-depth, candid conversation with Nolan Bushnell, the legendary founder of Atari and creator of the modern video game industry. From his beginnings as a curious Mormon kid in Utah to building tech empires in Silicon Valley, Bushnell charts a journey of relentless innovation, DIY entrepreneurship, and shaping the very DNA of Silicon Valley’s culture. The discussion traverses Bushnell’s early hacks, the rise of Atari, the launch of Pong, his insights on Steve Jobs, and a host of ventures—some astronomical successes, others ahead of their time. It’s an oral history brimming with anecdotes, lessons, and the infectious curiosity that continues to propel Bushnell into new frontiers.
On Pioneering Company Culture:
“We were the only company that had all young executives...I basically paved the way for Bill Gates and Steve Jobs.” (26:34)
On Early Tech Limitations:
“We were working on a terabyte memory that literally used a small warehouse full of equipment...” (11:19)
On Arcade Economics:
“We sold Pong games for $910...and in their lifetime in coin drop, they'd make $20–50,000.” (19:15; 19:26)
On Steve Jobs’ Power:
“You’ve heard about the Jobs derangement syndrome, where he could convince you. Where Gates would say, I don’t like to have a one-on-one with Steve. I always end up agreeing to do something.” (50:42)
On Regret:
“I had the opportunity of being the first investor in Apple, and I turned down a third of Apple Computer for $50,000. I regret it.” (36:40)
On Innovation:
“Innovation is about rule breaking. If you’re happy with the status quo, you don’t break rules and therefore you don’t innovate.” (42:38)
On Encouragement:
“The main obstacle...is the self-confidence of the player. An awful lot of life success is about the self-confidence. Because if you don’t have the confidence to try, you definitely fail.” (49:13)
Bushnell is candid, humorous, and pragmatic—the voice of an open-minded experimenter always chasing the next big idea. Danny brings enthusiasm, reverence, and sharp, insightful questions. The resulting conversation is both reflective and forward-thinking, operating with a blend of nostalgia and relentless optimism for the future.
For anyone interested in Silicon Valley history, entrepreneurial hacks, or just a great story of how obsession and scrappiness can invent the future, this episode is essential listening.