[business school]
“I CORNERED THE MARKET on losing money,? says David Pomije, the founder of video-game retailer Funco Inc., about the time before Funco began to work.
?I had three to four failures.? In fact, he was hired by the bank that liquidated one of his business failures to dispose of some assets, Commodore computers sold via mail.
?I also happened to have, in 1988, some Nintendo video games.? After filing for bankruptcy and losing a chunk of his father?s life savings, he began renting those games and eventually built a successful enterprise that is now part of GameStop, the world?s largest video-game retailer.
Pomije told his tale at a University of St. Thomas panel discussion this spring, in Schulze Hall, named after the spectacularly successful Dick Schulze, founder of Best Buy, and flanked by one of the founders of YouTube and the founder of The Geek Squad.
Those two, YouTube?s Jawed Karim and Geek Squad?s Robert Stephens, talked humorously and self-deprecatingly of success. Pomije talked matter-of-factly about failure.
The way Pomije tells it, there?s no shame in failure if you learn from it. Lessons he learned:
Check the ego. ?All the businesses I had prior to this, my ego couldn?t get through the front door,? Pomije says.
Guard against too-fast growth. ?I used working capital for growth capital? in his ventures before Funco. With Funco, he says he decided to put the brakes on growth at a time when business was booming.
He decided, ?I?m only going to grow the business with the $8,000 my Dad lent me? to buy the video-game inventory from the bank. ?That was my governor for growth.
?You have to earmark time that you need to pause. We didn?t have cash registers. Our reporting systems were not adequate. We paused for about nine months at a time when most people would keep on going.?
Hire people experienced in executing the plan. ?As a visionary, you really have to know your limitations, and in the earlier two failures I didn?t do this,? Pomije says. He decided if the company was going to grow nationally, ?I would have to fire myself and then we?d have to fire our three key people.?
Pomije had a valuation done on the business in the early 1990s, and the number came back at $3 million. ?We did an executive search, hired four people. Then the market value increased sevenfold, and we hadn?t done anything differently.?
Here?s the best lesson of all: he wouldn?t have learned these things from a book. ?Had I not had the other failures first, Funco would not be here.?
? Beth Ewen
editor and co-founder
Upsize Minnesota
bewen@upsizemag.com
