Chasing The Shiny New Thing Might Kill You
Atari: A Case Study
I see this pattern constantly: a startup has a solid product, a growing customer base, actual momentum, but then someone decides they need to add the hot new tech to their offerings. I have seen machine learning, blockchain, data science, and now a lot of AI. Or whatever the investors are excited about this quarter.
Suddenly, they're six months into a pivot they don't have the expertise to execute, they've promised features they can't deliver, and their actual strengths are gathering dust. Customers who liked what they were doing originally start to leave. The new capabilities never quite materialize. The founders can't figure out where it went wrong.
I'll tell you where it went wrong: they promised something they couldn't deliver because they were chasing an opportunity instead of being honest about what they could actually do.
This isn't new. Nolan Bushnell nearly destroyed Atari the same way in the 1970s.
After Pong became a hit, Atari met with Sears. This was a big opportunity, Sears was selling home pinball machines for $200 and couldn't keep them in stock. Atari's manufacturer said they could produce 25,000 units. Bushnell told Sears they could do 75,000.
Sears ordered 150,000 units by Christmas.
Atari had six months to build factories, hire and train people, develop the technology, and do quality assurance, for an order six times what their manufacturer had quoted. They made it, barely, only because Sears gave them an 80% advance. One less generous partner, and the company would have been gone.
The lesson isn't "don't take big orders." It's that Bushnell walked into that meeting without knowing what was actually feasible. He didn't have a baseline. He didn't have contingencies. He got lucky, and this outcome is rare. We like to tell the success stories, where founders beat the odds, but failure is the most common outcome.
Before you promise anything to a customer, to an investor, to yourself, know what you can actually deliver. Not what sounds exciting. Not what might be possible if everything goes perfectly. What you can do with the team, skills, and resources you have right now.
The shiny opportunity isn't worth much if you wreck the company trying to chase it. The fix isn't complicated, but it does require honesty: know your numbers, know your capacity, know what your market actually wants versus what sounds impressive in a pitch. That's the baseline work I do with founders before they make commitments they can't walk back.
