Asymmetrical Information - Megan McArdle

04.25.13

Lessons from Curt Schilling's Failed Business

Stick to what you know

Jonathan Mahler has a very entertaining roundup of Curt Schilling's adventures in corporate life.  It seems that Schilling assumed that if he was good at being a pitcher, he'd probably also be good at running a video game company.  This was not the case:

Schilling had no idea how much time and money it took to build the software required for such a game. And he didn’t exactly help matters by weighing in with suggestions of his own. There was, for example, that instance when he mentioned in an e- mail that it might be cool to have mounted combat on flying pigs. The design team worked on nothing else for a week.

Indeed, Schilling didn’t know the first thing about the world outside baseball. That’s not hyperbole: He once asked the president of 38 Studios if employees got weekends off. Another time he suggested that they work 14 days straight so as not to lose their momentum. (No need for travel days when you’re playing only home games!) Schilling was so clueless that he had to be told by his wife’s uncle, a retired corporate executive, not to personally guarantee the company’s lease.

Schilling filled his board with family members and, to the dismay of his president, promised employees half of 38 Studios’ (notional) profits. He also insisted on retaining majority control of the company -- which became something of a problem when he started his search for outside investors.

There are a lot of lessons in there, but the most important one is for everyone who thinks that they could run IBM if they weren't so darned busy teaching Freshman Comp: competence is not a general quality.  It is domain specific.  Being very, very good at one job does not mean that you will be even mediocre at something else.  

It's a lesson that Washington wonks, in particular, should pay attention to.