Electronic Arts (EA): Trip Hawkins
Digital gaming phenomenon Electronic Arts was an idea 11 years in the making, founder Trip Hawkins shares his start-up journey
Not many entrepreneurs spend 11 years planning their business’s start. But from his first foray into business at age 17, Trip Hawkins knew he wanted to start his own. He just didn’t know what it would do. Then, in 1971, he got a glimpse of an early prototype microcomputer at a friend’s house, and an idea began to take shape. In the future, he realised, home computers would be commonplace.
From that initial flash of insight, the biggest company in digital gaming would arise. Trip knew it would take time for home computers to catch on, but he began to chart a course that would position him to profit from the coming electronic age.
He chose a date for his business launch: 1982. Just as planned, Trip did start a home-based, one-man business that year. That company became Electronic Arts, which now employs around 7,000 people and has planned revenue figures of $4.075bn in 2013. How did it happen? Trip puts it down to a couple of personality traits: persistence and fearlessness.
“I was feeling completely sure of myself and totally confident about what my plans were, and pretty bulletproof”, Trip recalls.
The very first game
Trip’s interest in games began in childhood – and so did his interest in business. While still a teenage student at Harvard University, he borrowed $5,000 from his father to create a board game centred on his love of sport, AccuStat Football. The money allowed Trip to create several hundred copies of the tabletop game.
The game, although loved by those who played it, was a commercial failure, teaching Trip indelible business lessons that would shape his future plans.
“It was a thorough business experience for me, as I had to design, manufacture, have a marketing plan, and even assemble the product”, Trip recalls. “It helped me realise I was going to be an entrepreneur, but I was also disappointed that I failed. It made me a lot more careful and thoughtful before I started EA.”
At Harvard, Trip graduated with a self-designed degree in strategy and applied game theory, then added a Stanford MBA in 1978. Trip chose his first employer, Apple Computer, deliberately. He had seen the Apple II debut at a computer fair the year before, and wanted to work for a home computer company.
The Jobs years
In Steve Jobs, Trip found a mentor who would greatly shape his outlook.
It was early days at Apple: the company, based in California, had just 50 employees when Trip joined.
Trip’s responsibilities grew over his four years there, but he never lost sight of his primary goal: to develop his business acumen and wait for personal computers (PCs) to become more popular and powerful.
From Steve, he’d learned to think of himself as creative and unstoppable. The time was growing ripe for his start-up. One gaming company, Brøderbund, debuted in 1980. Trip heard from one investor who was interested in funding a game start-up. He worried he was getting behind the curve.
His dream of starting a company had crystallised into what Trip thought of as his ‘big idea’. Most software companies, he’d realised, treated developers like serfs instead of fostering their creativity. He wanted to start a game company that would operate like a music label.
“By this time, I had experience working with prima donna software development geniuses and realised these are really creative people”, he recalls. “I began to realise I could work with them as independent artists, and treat them as artists.”
Enter the crocodile
At just this time, Trip read about venture capitalist Don Valentine of Capital Management (which would soon become Sequoia Capital) in an airline magazine. The article said that Don was so intimidating that one young entrepreneur actually fainted in his office during a pitch. His management style was likened to that of a crocodile, lying in wait before rearing up to rip everyone’s ideas apart.
While this might have caused most would-be business owners to pitch to someone else, the article prompted Trip to call Don and ask for a meeting.
He admired Don’s attitude and thought he could get frank advice from him, which was exactly what Trip wanted. He wasn’t afraid of Don’s bite.
Knowing Trip’s track record at Apple, Don readily agreed to a meeting, and Trip arrived at the venue with some trepidation. He had no written business plan yet for the company he had christened Amazin’ Software, and Apple was gearing up to launch the Lisa computer. He thought Don would urge him to fulfil his commitments at Apple and finish his launch work. But that wasn’t Don’s opinion at all.
“He said I should quit Apple right away”, Trip says. “He offered me free office space, which is like saying, ‘If you pull this together, I’ll want to fund it.’ It was the encouragement I needed to take the final step.”
The beginnings of Amazin’ Software
Trip quickly wrapped up his work and left Apple in April 1982. Before taking Don up on his offer of free office space, Trip spent several months working from home, refining the business plan. He incorporated the company in May 1982 and funded it initially with $200,000 of his own Apple stock profits.
Amazin’ Software, eventually to become Electronic Arts, had finally begun…
This exclusive extract is taken from the Electronic Arts chapter, in How They Started Digital: How 25 Good Ideas Became Spectacular Digital Businesses, published by Crimson Publishing. To read the full chapter and find out more about their start-up story, as well as the inspirational inside stories of 24 other top digital businesses (including Groupon, Etsy, Match.com, Twitter, TripAdvisor and Wonga), pick up your copy of How They Started Digital, available on Amazon now.