About this episode

As a pioneer, there is not a single roadmap to work from. There’s no way to model your success off of another because there is no other--you’re it. You’re the front runner. There must be an internal competition established within your brain to be constantly improving. Richard Garriot has experienced all of this throughout his time in the gaming sector.

Richard is an investor and private astronaut as well as a pioneer and legend. What drew me to him was his role within privatizing space travel as well as his experience as a video game entrepreneur. However, I had no idea how rich his background in the gaming sector was. Tune into this episode to hear how iconic he truly is and how he reached this level of success.

In this episode, you'll hear.

  • How entering science fairs prepared Richard to be a great independent competitor.
  • How he published his first product.
  • His experience as a freelance game creator looking for publishers.
  • What caused him to start a company with his brother.
  • Why packaging was important to him even before building a brand.
  • His experience losing the faith of everyone he worked with and making up his own philosophy from scratch.
  • How he navigated his business with the emergence of the internet.
  • The period of time when he took a break from gaming and pursued space travel.
  • His vision for space and the future of space travel.
  • The power of being multidisciplinary.
  • The key things he learned from his failures.

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The Startup Story is now on YouTube: https://www.youtube.com/jamesmckinney
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Richard on Twitter: https://twitter.com/RichardGarriott
Richard’s website: http://www.richardgarriott.com

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Episode transcript

Richard Garriott: Hi, this is Richard Garriott. I am a private astronaut and video game creator, and this is MY startup story.

Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.


James McKinney: Welcome to episode 98 of The Startup Story. Our episode is a bit longer than usual because our guest today is an absolute pioneer and it was impossible to trim this Startup Story down to our usual 60 minute format. But before we jump into our episode, I just want to remind you to visit Grindology.com. We just launched Grindology last week and to celebrate our launch, our friends over at Design Pickle are collaborating with us for a nationwide search for a golden pickle, valued at nearly $12,000. One lucky Grindology member is going to win a full year of Design Pickle's pro service that will provide the winner with a full year of unlimited graphic design service.

Now, the attorneys require me to mention no purchase necessary to enter and you can visit Grindology.com/goldenpickle to learn more as well as enter without a purchase.

This is an unbelievable opportunity as our first box is an exclusive offering and will ship in January, so make sure to secure your box today by visiting Grindology.com. Now let's jump into this week's episode.

My guest this week is Richard Garriott, video game pioneer and legend, as well as investor and private astronaut. This man has quite the journey to share with us today. Now that said, I want to be upfront with you. What drew me to Richard's story was his role within privatizing space travel as well as his experience as a video game entrepreneur. But I had no idea, absolutely zero idea, just how rich his background was within the gaming sector. In fact, I reached out to a friend of mine who is very involved in the gaming industry and was a creative lead on some of the most iconic modern games out there. And when I hit him up to let him know I was going to be interviewing Richard his response was, "Lord British? Everyone knows. This guy's a legend." Well, I didn't but after this episode you're going to see just how iconic he truly is.

And for those that are not familiar with Richard's significance within the gaming industry this episode is going to blow your mind. Especially because as a pioneer in anything there is not a single roadmap to work from. There's no modeling your success off of another because there is no other. You're it, you're the front runner. In fact, all of the successful games he created were done so because he learned something during the creation of the previous game and wanted to improve upon that learning to create something great. But Richard's story is not just about video gaming. His involvement in space is fascinating as well. In fact, it is his ties to space that really begin his Startup Story.


Richard Garriott: I had a pretty unusual upbringing but most people would latch onto the wrong part from its saliency towards a startup story, which is that my father was an astronaut. But astronauts, by the way, are not entrepreneurs. They're almost the antithesis. They're mid-level government employees in a gigantic bureaucracy. My mother on the other hand, she was both an artist but also a naturalist and absolutely an entrepreneur. She was not only selling her own art but often what you might describe as a garage industrial scale, that it often involved the whole family. In fact my mother, specifically she was a, she did all kinds of art but her most prolific style was pottery and she was known in our region for making something called an earth rise pot. I have one just up on my shelf above me. It's basically a little cookie jar that the bottom basketball sized jar is a copy of the surface of the moon-


James McKinney: Interesting.


Richard Garriott: … and the lid looks like the blackness of space with the knob being painted as the earth. And so the theory of the pot is you're standing on the moon, looking through the blackness of space at the earth rising over it. And so if you're the wife of an astronaut hired to go on Apollo to go to the moon, it's a perfectly reasonable pot to envision. The whole family got involved in the assembly line of pouring liquid slip into the molds and scraping it off, and painting various parts. As you got older, you grew into the skillsets required to do various parts of this little family industry.


James McKinney: Growing up in this household where you have really while it may be midlevel government employee, being an astronaut was a big deal. So you had this idea, you had this vision of what could be from a career perspective. You also have an entrepreneurial mother where you got to see a lot of freedom and opportunity inside of that. You got to see kind of both sides of what could be. What were you thinking you wanted to do as a kid?


Richard Garriott: That was another struggle for me in that I had two older brothers who were extraordinarily good students. They were straight A students. They both were great athletes. They both were on the track team and setting records. And here I was the third of four coming through and I really had no interest in competing with them, either scholastically or in sports.


James McKinney: Okay.


Richard Garriott: Actually I was a B or C student at best.


James McKinney: Wow.


Richard Garriott: For me, the saving grace was that again going back to my mother, when I was in kindergarten the local schools had science fairs. They're not quite as popular these days but they were when I was young. And for kindergarten she helped me make a science fair project where we followed this little wasp that's down in Texas called a cicada killer that flies over and stings the buzzing cicadas you hear in the trees in the south. They carry the stunned but living cicada down to the underground burrow where they lay eggs on the living, paralyzed cicada. Seal the entrance to the hole. The grubs hatch, eat that cicada alive, and then emerge as full grown cicada killers. And when my mom showed me this, we dug one up with a shovel and we built this little terrarium to show off this little tunnel, first of all I was amazed that the reality has this sort of thing in it as a kindergartner.


James McKinney: For those who haven't seen these cicada killer wasps, they are nasty looking.


Richard Garriott: They are scary.


James McKinney: They are frightening if you've never seen them before.


Richard Garriott: They are really scary. We got the kill jars out to catch them and kill them, and it's a whole thing. But I won first place in my school and then first place in my district with that little project. That success set me on the path of being a terrible student, but a great independent competitor. And so I entered science fair every year and I won it most every year.


James McKinney: That's awesome.


Richard Garriott: All the way through graduation. And that worked to my advantage a little later because as I got older I did things like I was part of junior achievement, which I'm sure you recognizes as sort of an entrepreneurial club like Boy Scouts but for entrepreneurs. So I was sort of learning the entrepreneurial style. When I finally got to high school and computers finally came into existence, the school I attended had originally only one working machine of any kind. They had one teletype that was connected with an acoustic modem to a mini computer in some far off university, and no one in the school knew how to use it. It was sitting in the front of a math class but no one even turned it on. It was me with an innovative project that I said, "What is that thing? I want to figure it out," and the faculty knew that if I was interested in something I would tear into it individually.

So even though normally I was a terrible student they knew okay, Richard's interested in this, somebody ought to figure it out, let's let him do it. And so they let me have the classroom to myself for an entire period, no teacher, no assignments, nothing. All they did at the beginning of the semester is say, "Richard, what are you planning to do with that machine this semester?" And the first semester was I want to figure out how to turn it on and write programs on it, which I did. Second semester I want to make some games on that thing.


James McKinney: Wait, what grade is this again?


Richard Garriott: Starting in my freshman year in high school.


James McKinney: Unbelievable. I love it.


Richard Garriott: And so for all four years of high school I had a premium credit A, my only A, with this class, completely self-directed class on learning how to operate this computer, and eventually that turned into not just this teletype but an Apple II and then ultimately that led to the games I ultimately published.


James McKinney: So in high school, again can you give us a… you talk about you created games. From a context, because a lot of times we can create things that we see especially as a kid. Our idea of what could potentially be is somewhat limited. We have great imaginations but we're still kind of constrained to what we have personal experiences with. When you say you wrote games, from a context perspective what games were your benchmark at that time? What was the gaming scene?


Richard Garriott: Yeah, so let's break that down. And the best way to understand that is also to understand how I taught myself to program, because again I had no teacher. I had no curriculum. There were no manuals or curriculum about how to teach yourself to program, or learn program by following this instruction. What there was is a few magazines. Like there was a magazine called Byte that was really popular at that time, one of the first computer magazines, and others. Soft Talk Magazine once the Apple II came out. But what almost all these magazines included in them was a page or two of a program you could type in on your supposed computer, and whoever had a computer might have them. Sometimes those programs were in FORTRAN, sometimes they were in basic, sometimes they were in other languages. Once I figured out how to turn on this computer, the teletype ran Basic. And so a lot of programs would show up in Basic, but there's also lots of different kinds of Basic. And so if you would type in a program out of a magazine that was supposed to run on a computer that ran Basic even if you typed it in correctly it often did not run because the Basics weren't the same.

But what that did is it let you kind of go well, why doesn't it run? And you begin to learn about formatting and syntax, and these other variations of how these machines do or don't operate identically. Then what you do is when you type those in, they're usually one page. So one might be how to sort a list, like if you have a list of names in a database, the names of all the kids in class and you want to order them alphabetically. So there's a little program you can type in that does that. You're going like okay, it's interesting. I'm not sure what I'd do with it, but it's interesting. Another one you might type in would be how to create a one solution maze, meaning it would let you draw little paths through a farm field hypothetically and tell it made a maze. You typed that in and go okay, now I understand this principle but also is there any way I can do that with the other skill that I now know how to do which is to order things alphabetically?


James McKinney: Interesting.


Richard Garriott: Like those two things don't add up to much. But as you type in more and more of these little programs you begin to be inspired by both all the pieces you see as well as all the things you're doing that are not typing in programs to make them work, like for example I was reading the Lord of the Rings, and this is also in 1977 in my sophomore year is when the game Dungeons and Dragons was published.


James McKinney: Oh wow.


Richard Garriott: Yeah and so all these things sort of coalesced, so I was learning to program, Dungeons and Dragons was first becoming popular, and I was reading Lord of the Rings like lots of kids my age were doing, and those three interests collided.


James McKinney: Interesting. And so in that moment, I guess it wouldn't be that moment first or second semester, but obviously your interest in computers increased greatly. Did you start thinking from a longevity perspective that you thought, "I want to be in games," at that moment in time?


Richard Garriott: No, because there were no games. There was no industry about making games at this point. There literally was zero. In fact, at this time the closest there was, was you could buy a Pong machine for your console television at home where the two controller, the two knob controllers, would connect to a box and that box would literally clip onto the antennas of your television set, and then create a really fuzzy terrible picture of the ball going back and forth to hit the paddles. So Pong predates me, but that's about it.

About that same time that's when the original text adventure came out, and so that was probably the most sophisticated game like thing that was around back then was text adventure. Then one summer I had access to a computer actually at Lockheed because we had a summer camp kind of thing at Lockheed one summer, and they had a computer with a CRT and that monitor could play there was like a little Star Trek game on it. So I saw there was like the third real game that I saw.

So when I started writing my games… by the way, starting my second semester after I learned the game at all, I started writing games over and over and over again. I was very prolific. In those four years of high school I know exactly how many I wrote. I've got most of them right here behind me on the desk. I wrote 28.


James McKinney: Twenty-eight games?


Richard Garriott: And I know the number is 28 because I numbered them, and they were all sort of Dungeons & Dragons like inspired, and so they were called D and D One, D and D Two, D and D Three, and so literally in a box here right behind me I have the spool of paper tape-


James McKinney: Oh my goodness.


Richard Garriott: … which was the storage medium for D and D One. By the time I got to D and D 28, which I also have here behind me, and by the way you didn't write these on the computer, you wrote these in a notebook and after you hand coded, you mentally debug it in your head then you type it all in and see if it all works.


James McKinney: Oh my goodness.


Richard Garriott: So D and D One through D and D 28 I have in the notebooks that I originally wrote them in, and then D and D 28 was the last one I wrote on the teletype before the Apple II became popular. And so D and D 28 B, which was the first one I wrote on the Apple II became my first published program.


James McKinney: As far as a published product, are we saying that someone else could install it and play it as well?


Richard Garriott: Correct. Well, in fact that's an important differentiation because on that teletype if you looked around the world there were hundreds if not thousands of these PDP computers in existence, mostly at universities and scientific institutions, maybe some banks and stuff. But there was few if any games being played on them, and there was absolutely no way to distribute a game to someone else. I'd have to literally print out a spool of paper tape and mail it to somebody. Even then, it probably wouldn't work because these were terribly prone to tear and fold, and it was really manually very difficult. So it was only when the Apple II came out that it was even plausible to begin to share things, share a diskette. When I originally made it, it was actually on a cassette but pretty quickly it was on a diskette.

By this time I had a summer job working at the computer store near my home. It was a store chain at the time called Computer Land. It was the owner of that store, a guy named John Mayer, who saw me after hours working in the back at the Computer Land store on my Apple II game with the help of some of the other employees kind of helping me fine tune some of the algorithms. He would come back there and look at it, and you have to keep in mind that at this moment we were not only selling $3,000 machines to people but we were selling them with software that would come with it or could be bought separately. There were things like a checkbook balancing software, or a really terrible word processor, or a recipe card file manager.


James McKinney: I love it.


Richard Garriott: You know things that would be pretty hard to justify a $3,000 machine. And John came back and saw this program and said, "Richard, what you have here is much more interesting, much better than anything else we are selling in this store to try to justify selling $3,000 machines. You should sell that." It had literally never crossed my mind until he said it. And so he said, "Look, you make them, we'll hang them in the store here to sell." And in the same little strip center there was a print shop. So I went to the convenience store and bought some Ziploc bags. I went to the print shop and I had literally my mother help me with the calligraphy to write the name of my first game, it was going to be called Akalabeth, and she made the cover sheet for me. We xeroxed those or mimeographed them at the print shop. At home at the kitchen table my mom helped me staple little manuals together for it. And on that Apple II that I have just right here behind me-


James McKinney: In the background, yeah.


Richard Garriott: … that's the machine that I hand copied those first disks on, and we hung them on the peg board. And at the time I put little stickers on them. The first one had a 1 sticker on it, 2nd one had a 2 sticker, and I still have 11, 12, up until 19 or 20. So I only sold about a dozen, but in that first week where I sold a dozen, one of those, this was the day where the way most people got software was through piracy. There really was few places to buy it legitimately and plenty of places to get it illegally, swap meets and such. So within that first week a copy found its way to California where one of the very first distributors was getting started. So they called me on the phone and said, "Hey, Richard, we have a pirated copy of your game. It looks really good. We would like to distribute it nationally."


James McKinney: Wow.


Richard Garriott: And I said, "Well what does that look like?" I had mine in a little 5x7 Ziploc bag and was selling it for $20. They put it in an 8 ½ x 11 Ziploc bag, they put a color sheet in the front of it, and they raised the price from $20 to $35, so that was really the only change was the bag. But within about three months they sold 30,000 copies around the country-


James McKinney: Wow.


Richard Garriott: And my royalties was about $5 per unit, and so if you do that math that's $150,000 I earned in about three months of sales for a program that probably took me about seven weeks of after school time to create. And so when those checks came in obviously I was flabbergasted, but so was my whole family.


James McKinney: Yes, yes.


Richard Garriott: They're sitting there going, and by the way the speed of my mid-level government employee father, my father is an astronaut. His salary at that time was something on the order of $65,000 a year.


James McKinney: Oh my goodness.


Richard Garriott: So I nearly tripled his income with afterschool work. So pretty much everyone in the family is going like, "Wow, you should make another one of those." And I'm was like, "Yeah, I guess I should." And so that's really how I just sort of fell into it. There really was no… I was doing it for the passion of making something cool and I happened to be at the right age at the right time to have this at least opportunity. But I also was one of the first people that just decided to really push this machine to see if it could do these things. So Akalabeth was the first 3D role playing game of any kind on a machine, one of the first role playing games of any kind period.


James McKinney: How old were you?


Richard Garriott: I was 19.


James McKinney: 19 and you created the first role playing game of its kind? Wow.


Richard Garriott: Yeah.


James McKinney: Wow, that is unbelievable. So at 19 and to bring that $150,000 into 2020 that's the equivalent of about $470,000 so at 19 you had created a game, first of its kind, that had netted you for seven weeks of after school work close to half a million dollars.


Richard Garriott: Yeah.


James McKinney: And obviously I would assume that automatically just said okay, we are going to repeat, make another game like the family talked about. But did you see this, were you starting to have this thought that this might be a career path for you? Because you use the phrase you stumbled into gaming. At this point, your dad making $60,000 as an astronaut, again an incredibly cool job but you just netted $150,000 at the time. What were your career thoughts? Because you're coming to the end of high school, there's obviously things that have to start percolating in your mind about what the next chapter of life is and now you come across this opportunity.


Richard Garriott: No, honestly at this point there's not enough of an industry to even when you're at the kind of by definition the forefront you're not, at least I had no conception until a few more years after this which we'll get into in a minute that this was going to go on for a while. All I really thought of at that point was well first of all from a scholastic standpoint I was getting ready to go to college at the University of Texas. I was enrolled as a double E major and really just because my dad was a double E, and both my brothers, well one was a doctor the other is a double E, and so it was like you know I kind of have a family history in that and it's kind of related to this computer thing I like and so maybe I'll go do that. My heart really was not in it, but I started down that path.

But what I did think of at that moment is I said you know when I wrote this game called Akalabeth, which is really D and D 28B, I was not creating it for public consumption. It has no real story. It has no real end. It is not remotely balanced. It's not that good a game. And yet it emerged at this amazingly high level of sales compared to anything that had ever existed at that moment. And so all I could think about is wow, if I just write a game planning for people to see it, I know I could do way, way, way better. I mean this game was nothing compared to what I know that I am capable of building with a little more time and purposeful attention to the fact that people are going to play it. Instead of taking seven weeks I took about a year and I created Ultima I. and So Ultima I was the first attempt at… it was just Ultima, I didn't know there was going to be more than one. When I created Ultima again it wasn't for a career, it was because I knew I could do so much better than what had already been amazingly successful one step previous.

But what's interesting about that is both Akalabeth and Ultima I were written in Basic. Basic for anyone who knows what Basic is, is extremely easy to write but extremely limited and slow. But to even make Ultima I work I had to cheat, you know Steve Wozniak is now a friend. I had to dig into his mind and unravel the dark mysteries of that machine in a way that made me curse him for the way he designed it, but I got as much as you could get out of basic on that machine. And so as soon as I was finished with Ultima I, and Ultima I by the way sold over 50,000 copies at $45 a shot, and then I said wow, I've really come to the limit of what I can do with Basic. But I've just begun. There was actually one assembly language sub routine in Ultima I that I had a friend help me write because I didn't know assembly language. But once I had started across that bridge I said wow if I write the entire game in assembly language, it'll be much faster, it'll be much more compact. I can therefore cram it with much more features, and I can write a much better game. And so I began what became Ultima II really still not having any conception of a career, really only looking at what I had just done and said, "I know I can do so much better." And just by a couple of fundamental changes. And so that's what began Ultima II.


James McKinney: But are you doing this, Ultima I are you creating this… again you created Akalabeth after school, in the back of Computer Land, a little retail store.


Richard Garriott: And my closet at home.


James McKinney: And your closet at home. Ultima I did you create that while you were at UT?


Richard Garriott: Yes, in my dorm room while I was skipping all my classes.


James McKinney: Okay, so you created at UT. So at this point you're still just doing it, I'm using air quotes, "freelance" if you will like on your own. Was Ultima II the same way?


Richard Garriott: Yeah.


James McKinney: So at this point no one has picked you up, no one has tried to gain rights to the game? Because at this point we're talking '83 for Ultima II maybe?


Richard Garriott: Yeah, exactly. So Akalabeth and Ultima I I published through a company called California Pacific was the name of the company. And in these days of the computer industry in California where the few publishers that existed were pretty much all based on the west coast, there was a lot of money rolling in. the people running these businesses were usually new to business, and had a lot of money. No surprise a lot of that money was wasted. And by the way, what I'm about to tell you now I did not repeat for the first 20 years of my career because it seemed so dangerous to talk about frankly, which you'll understand why. Which is I would go to magazine interviews in California, much less business meetings in California. I would go to a magazine. We would go to their conference room in the middle of their offices. The conference room would be glass all the way around and as soon as we sit down to start the interview, people are pulling out bags of cocaine and scratching out lines of cocaine on the table during the interview.


James McKinney: That's the eighties.


Richard Garriott: And this was also happening when I went to sign my first contract at the age of 19. The owner of that company on the way home, when he picked me up at the airport to take me to the hotel we of course stopped at his dealer's house first to pick up cocaine. I mean it was shocking. So no surprise, a lot of the first companies went out of business.


James McKinney: Yes.


Richard Garriott: Usually with a large amount of drug debt. So when California Pacific quit paying me I then had to look for another publisher. Interestingly with Ultima II that I was just working on in assembly language. As soon as I kind of said, "Okay, I'm a free agent now," all six or eight of the existing companies that existed all said, "Hey, we'd love to publish Ultima II, because Ultima and Akalabeth, you have a good track record so it's kind of a guaranteed success." And so I said, "Well, okay I'd be happy to work with one of you but I have some demands. And my demands are I'm tired of my game being in a Ziploc bag. When the rest of you and almost all of my competitors are writing things instead of like Asteroids it might be Apple-oids where there's apples floating around a screen and you shoot them out, but otherwise it's Asteroids. Or it might be some play on Centipede, or it might be some play on pick your coin op video game of the era." And I was writing games that took me a year or two to write, and mine were big fictional fantasies. I wanted screenshots on the box. I wanted a cloth map inside the box. I wanted the manuals to be big and written fictionally as part of the world. I mean the experience of being in my world I wanted to start from the box. As soon as I said I wanted a box, every publisher said, "We're not interested," except one.


James McKinney: Wow.


Richard Garriott: Except one, and that was a company called, they were Online Systems at the time, became Sierra Online, and then Sierra. So Sierra agreed to my outrageous demand of a box. Ultima II became the first game in the industry in a box, and pretty much immediately all games came in boxes after that.


James McKinney: That's incredible.


Richard Garriott: But a Ziploc bag, think of it. A Ziploc bag the most expensive thing in it is the disk may be 50 cents. I mean the bag is a nickel, the cover sheet is a nickel or a dime, and so everything is under $1. But as soon as I put it in a box, the box was like $2 and the cloth map was exactly $2 because their price has actually been unchanged in 40 years. It's always been $2. Today, the cloth map in my most recent game cost us $2. But in Ultima II, the first cloth map, $2. And so you add all the parts together, it adds up to about $5 or $6 and it really was quintupling the cost of goods so that's why most publishers were like there's no way, we're not interested.

But again when Ultima II ships it rated up to 100,000 units in sales, and when I finished it I was like wow, this really is a better game than Ultima I, which is a better game than Akalabeth. But it's also the first ever assembly language program I've written. I learned assembly language while writing it, and so I'm going I now know how to write assembly language. And so I need to throw out this code and start over.


James McKinney: Oh my goodness.


Richard Garriott: So Ultima III is still the "Richard teaching himself how to make a game." But it's the last of that process, and so a few pieces came together here. Which is one, Sierra quite paying me for similar reasons. So here I am a free agent again, with a top selling game that I'm just not getting paid for. And I called my next older brother, who during the same period of time he's the engineer, he's the electrical engineer, he worked at Texas Instruments designing the first 64K dynamic ram chip so he knows the computers well. He also has a business degree, an MBA. He had worked in his summers for venture capital firms studying investments in some of the first gaming companies that were pitching me to now become part of their companies.

So he turned to me and said, "Richard, none of these jokers know how to run a business. The fact that they can't even pay the goose that lays the golden egg…" or any of the others. It wasn't just me they didn't pay, it was all their authors. He said, "Look Richard why don't you and I go into business together, because at the very least I can promise you that if I take in money for the sale of one of your games I will pay you your fraction first before we pay anybody else. You'll get paid." And I'm going like, "Wow, that's a better deal than I've ever had so sure let's do it."

That's really what then caused my brother to go off and actually start a company. It's also the Ultima II, which again now it's sold 150,000 or 200,000 units. We started the company with a game that already had a track record, and so when we went to call up Target and Walmart and all the computer stores, "Would you like to carry our game?" of course they said yes. Again, it was a pretty magical moment to be able to start that way. I'll pause there, because going onto Ultima IV is a big step.


James McKinney: Well, there's a lot of things that took place in that period. And again, each game you made you did an attempt to make the other one better because you learned something, and so you wanted to be better because you knew it could be better and how you did it. But one of the things that I found really interesting is the packaging was important to you, but yet each game you made was so that the game was better than before.

But now you start thinking of what is the user experience look like from owning the game? And I'm sure you probably thought user experience while making the game as well, but maybe from a different angle. But now you're looking at it from a consumer side of buying the game itself. I can see things starting to take shape but do you remember why packaging was a big deal to you? If the industry was doing what it was doing, and you were just trying to make a better game than you did before, not because you were trying to build a brand, why was packaging important to you?


Richard Garriott: Reflecting on it, I think what it was, was trying to tell people that the disk in my box or bag was inherently more valuable than the one in this other baggie. Because again almost every other baggie that were all over the store walls were knockoffs. They were all things, they were still like my first game. They were things that people wrote in a few weeks. They were things that people would publish 10 of things and a couple would stick, and they'd be happy, and the eight that didn't stick they'd who care they'd put up some more. And I was going that's not what I'm making. I was already thinking of myself as Tolkien, thinking of myself as Gary Gygax even though making things are pretty darn trivial in comparison, so far. I still had that in mind.

In fact I can tell you I wasn't much of a reader until The Hobbit, that one of my sister-in-law's gave to me. There's a map in the front of it that shows the map of the Lonely Mountain and there's dwarvish runes written around on the map, you just kind of glance at it as art, and then only later interesting he book do you realize those runes actually have meaning. And very quickly you realize you can go back to those runes and since they're really runes that were the basis of the Latin alphabet they're almost English letters once you kind of recognize them pretty quickly, and then you can actually read the words on the map.

For me that was this amazing a-ha moment of he had transcended it being fiction, and he had created it as a reality.

And similarly at the same time, in fact something inspired specifically the cloth map in Ultima II was the release of the movie Time Bandits. I don't know if you remember that movie, but in that movie people were jumping back and forth through time, but they did so, they could do that because they had this cloth map they could unfurl that would tell them in certain time periods where a portal would open up that they would use to jump back and forth in time. And having just come off my hobbit experience I loved the movie, but I wondered if the map had a reality to it. Meaning was the map, for example, a real map of earth that had time zones on it. So and this is before VCR's because this is way back, and so I went to see that movie over and over and over again. I even took friends with me often and we'd sit there with drawing pads and every time that map came up on screen we would draw it. By the way, I now have a copy of the map, a real copy, here beside me.

But after I spent weeks transcribing the map out of the movie I realized I was actually sorely disappointed because the map actually has no meaning. It actually, it doesn't. But I sort of put these two things together and went, "Ugh. When I do something like this the map is going to have meaning." And so Ultima II actually is a time travel game. It actually has a map of the Earth which has markers on it, and each marker on it, it's kind of a pair of markers and each marker has to do with an epic of history, and those two symbols together tell you what the portal that appears there. The first marker is what time period it'll appear in, and the second mark is what time period it will take you to. And so you actually can use this map that I created to actually navigate not only the surface of the world but back and forth through time and history by going to the right points on the map in the right epics. So I fixed it for Terry Gilliam.


James McKinney: That's incredible. And it's just, it's so… this is what I love about The Startup Story is the diversity of entrepreneurship. And again prior to you and your brother starting your own company together, you really were just pursing everything to just your own internal competition, to make something better than you made before because you learned something in the process. And now as we're talking looking back it's so apparent what your future was going to hold because of just how your brain works, and even just the map concept and the detail, and the world building that you were creating within your discipline. But let's talk about your first venture with your brother, which you launch Ultima II under. Was it different for you being that now you were a business owner, an entrepreneur? Was it different for you being a game builder?


Richard Garriott: So first of all for me there was a transition that was happening sort of through Ultima II and Ultima II where I began to have this realization that this was going to be an industry, and the Ultima series might continue. If this one does well I might make another. I still didn't have much forward looking but at least I had expanded my "now" a little bit. And when we started it was really my brother doing the business. So that part remained his and I still was largely by myself. I was now out of the closet and into my mom's art studio that we kicked her out of to run my office.

But I was still there, largely by myself making the games. But now I had a few friends who were also over from the neighborhood who were also making their own little games in my mom's art studio above the garage. But the first really big change came after the release of Ultima III where one of the things I had put in that game, as I had for I can't tell you why in my previous games, but in all of my games from the beginning when you finish it, it tells you, "Report your feat to Lord British." And in the case of Ultima III it gave my home address in Houston, TX. And so I also immediately began to receive what you might call fan mail.


James McKinney: Wow.


Richard Garriott: And if anybody had sent things in to the previous companies it was never forwarded to me, and so likely people were writing in or possibly people writing in then too, I just was not aware of it. When I began to get mail about Ultima II, I was actually very surprised to see the nature of the mail because even though you might call it fan mail, pretty much universally from then and now my supposed fan mail is one sentence, or at most a paragraph, of, "Hey I really liked your game and I felt inspired to write you." Thank you, that's part the good part. And then it is paragraphs to pages of, "Let me tell you what you did wrong."


James McKinney: Wow.


Richard Garriott: Or, "Let me tell you how to redesign your game," or, "Let me tell you how to do it better." It's basically criticism from then on out. And so first of all that was really interesting to process, that on the one hand people are enjoying it enough to feel like they really need to tell you that, but on the other hand have really been thinking about it and want to tell you they're on the same journey of creative understanding and expression. In addition to just kind of figuring out should I be complimented or hurt, there was one other thing I noticed which was that people weren't interpreting the story, not that there was much story, in the same way as I sort of wrote it.

And here's a good way to describe that. So in most games even today, if you play a fantasy game today just like my earliest games it's usually you are the hero who is here to save the world and the bad guy has been doing all kinds of nefarious things, and you're just the person to go defeat them. You are set off into the world to gain strength, and power, and resources and then finally when you're strong enough you meet up with a bad guy (who has done nothing during the game except wait for you) and dispatch them. That's the story of most roleplaying games.


James McKinney: Yep, yep.


Richard Garriott: But what's interesting is how people play roleplaying games is they don't act like the hero. They are min maxing the process to become as powerful as needed to kill the bad guy. All they want to do is kill the bad guy, and for that they need money. And so if the shortest path to making money is stealing from shops or killing non player characters, they will do that because that is the behavior the game is rewarding.


James McKinney: Yeah, yeah.


Richard Garriott: People would tell me that in their descriptions of how they would play. They go like, "Oh, I love the game. What I really love doing is stealing from all the shops and killing all the characters, especially your character Lord British." And I was like, "Hey, wait a minute, these guys are supposed to be the hero and they're not really being the hero." In fact, the bad guys really aren't being very much bad guys either now that I think about it. You're told that they're the bad guys, but they're not doing anything to make sure… they're not acting bad as far as you can tell as a player.

And so I really sat back after Ultima III and at this point I finally am comfortable enough in my own skills as a programmer that I know I can make whatever it is I think of. I don't need to change languages. Assembly language is already incredibly efficient at the lowest level of the hardware. I now have enough money I can hire help to bring on to solve a technical problem if I needed it, that sort of thing. So I'm going okay that's the challenge is not how to make it work. The challenge is now what should I be doing? I sit down and I decide that I'm going to make a game that if you act like the bad guy that people have been acting like in my games you cannot win, and I'm going to make it to where the bad guys need to have action in the world to where they're worthy of your hatred and the non-player characters hatred.

And so I'm basically going to set up a game that forces you to actually walk the walk of being-


James McKinney: A hero.


Richard Garriott: … virtuous. And when I began to express this to my friends and family, they thought I was literally crazy. They were going, "Richard, your career is just starting and you are now going to end it, and the reason why you're ending it, or evidence that this is going to be rejected by the players, is because you're getting fan mail where people are telling you exactly what they enjoy about your game and you're about to tell every single fan who has written you that you're going to punish them for playing the way they've told you they like to play your games." And I was like, "Yep, that's what I'm going to do."


James McKinney: Which goes so contrary to anything we know today about the feedback loop.


Richard Garriott: Yeah.


James McKinney: Like the fact that you-


Richard Garriott: Yeah, by the way I can't stand focus groups. I can't stand getting people to weigh in. I will listen to people. I mean people close to me that I kind of understand their bias and I understand that the games they like or don't like, I do want to hear what they say. I then process that to what does that mean to me, am I pleased about that result or not. But here's how hard this problem became. Not only did I immediately lost the faith of literally everyone I worked with, but I then also said well if I'm going to write a game that's going to talk about being good what does that mean? What does it mean to be good? Am I going to make a game about the Ten Commandments? No, that's not me, I'm not going to make it about the Ten Commandments. Am I going to make a game about the seven deadly sins? And I'm going like well no, that's like good for scary movies, that's not really good for keeping you on the straight and narrow.

And I said okay well I need to go read. I need to read up on philosophy. And so literally the bookcase right behind me, the top three shelves are philosophy books that I've had since this moment, because again this is before anything was online. And so you had to go literally to the bookstore and this is before Amazon, so you had to physically go get it. And I started just tearing, even though I hated history and philosophy in school, I now had a reason for it and so now I was a passionate absorber because I needed it. And so what was interesting about that journey is I not only read all kinds of different comparative religious texts, I went through Greek and Roman utopian ideals and systems for the future.

And frankly as I went through all of that I said none of them, not one, is what I think I should base my game on. I'm going to have to make up my own philosophy from scratch and that philosophy has to be good enough to make a good game, good enough that people will kind of embrace it as hey that's a good thing to do. So it has to have, to use a Steven Colbert phrase, it has to have "truthiness" to it that makes it appropriate. And so it has to be something that I almost kind of believe really. It needs to be something I can defend. And I'm going like oh I don't even know… I really don't know if I can do that, but here's how I'll start.

And what I did is I went to the books behind me and I started pulling out basically quotes about concepts about virtue. And so it might be honesty. Honesty is a good thing and so I took literally a yellow post-it note, put the word "honesty" on it, and I put a line. I had a wall of my house and I put a line across the center of the wall and I put things that were good above it. Honesty, good. Hatred, bad. Compassion, good. And I began to put words all around here, and then I also began to group the words together like love and compassion, hey they're kind of related I'll put them near each other. And then I would come to words like justice, and I'd go justice is sort of a complex one because justice sort of, it includes this aspect of truth meaning you want the right side to win, but proper justice also has to have in my mind some love or compassion in it, in the sense of the eye for an eye, tooth for a tooth where you cut off the beggars hand if they steal a loaf of bread. If a child steals a loaf of bread because they're hungry, it is not just to cut off their hand. Maybe you ought to feed the kid and put them in school.

And so I began to sort of work all this out and then finally I realized after much effort that I was seeing this pattern emerge, and that was that almost all the words on the top half I could derive out of the presence or absence of three basic concepts: truth, and love, and courage. With those three positives, I could build all the things above the line and with falsehood, hatred, and cowardice I could build most all the words on the bottom of the line, or below the line.


James McKinney: Interesting.


Richard Garriott: And so I thought I've found it, and so I then began to tear into this discovery. But another thing happened, which was if you remember role playing games at this time your character was called your character, and that character didn't have to be you. You could be playing an evil wizard Halfling on today's role playing game adventure because that's what I want to play today. But if you were playing an evil wizard you should be expected to act in an evil way. But I was writing a game where I didn't want you to be an evil wizard. I wanted you personally, the human playing the game, I wanted you to feel a personal responsibility for the deeds and actions of your character. And so I needed a way for that character to actually be you, not an alter ego.

And I had in my research came across this Sanskrit word used in the Hindu religion called Avatar. And the word Avatar is used in Hindu faith to be the human manifestation of a God on earth. So Vishnu the elephant God comes to earth in human form to not be noticed as a human, that is Vishnu's Avatar. And so I said that's the word I need. I need this to be your avatar. And I need to create a beginning of the game that helps you understand how you, the skinny geek from earth, find your way through a portal into my fictional land of Britannia. And even though you might manifest like looking like Conan the Barbarian it's really you inside that body.

And so all of the introduction to the game, all the fictional wrapper to the game, all describe how one day you're out at the park and there' a gypsy wagon that the local renaissances fair. And the gypsy uses these tarot cards to ask you about truth, love, and courage. And then a portal opens up and whisks you away and now you're this buff dude in my world. But it's you, it's your avatar. And so that's where the word avatar comes from in all of gamin.


James McKinney: Wow.


Richard Garriott: Comes from this moment in Ultima history.


James McKinney: That is unbelievable. To accelerate your story a bit because I feel like I could just sit with you for hours to unpack the story and the element behind every single game. Now we find ourselves where you're bringing again another industry fist, this use of an avatar, getting people to have to own the decisions that they make within the context of the game. But one of the other things that is so interesting about your journey inside of gaming is at some point the internet becomes a thing.


Richard Garriott: Oh, absolutely.


James McKinney: And we haven't talked about it yet, but can you from Ultima II to Ultima Online can you fast track us through that journey?


Richard Garriott: Absolutely. So Ultima IV by the way when it was released, over the objections of friends and family, it became my first number one best seller.


James McKinney: Oh wow.


Richard Garriott: And by the way you will see this pattern kick up, which is every time everybody disagrees with what I'm doing it means I'm on the right track, and you'll see that here continue.


James McKinney: I love that.


Richard Garriott: After Ultima IV, then Ultima V became a much better told story shall we say since Ultima IV was the first time we really try to dig into that. Ultima VI was called The False Prophet. It's one of my favorites from a cover standpoint. I actually set… each of the Ultima's starting with IV are sort of social commentary about what's going on in the world and how to hold a mirror up to people to say look we can all be racist, we are all prone to human failings based upon the information and environments that we show up in. and I try to get more and more clever about that over time.

One of my absolute favorite Ultima's was one called Ultima VII, and to me it's the most complete Ultima in the sense that I had a particularly good team, particularly lack of outside pressures to ship it too soon or other reasons to cut short, so it's one of the most perfectly finished Ultima's. In contrast the next one, Ultima VII which is one of the roughest launches that we ever had because we definitely, we had huge amounts of pressure to ship it a year before it was finished.


James McKinney: And at this point up to Ultima VII is it still your and your brother's company? You're publishing, you're distributing all that?


Richard Garriott: No, there's a change here in Ultima VII which was that at this point in time, and now we're rolling into the nineties, we're now hitting the nineties. The industry has grown big enough and there are now enough publishers in existence, lots of people doing this.


James McKinney: There's consoles as well now.


Richard Garriott: Yes, that's correct. So yeah, every year to pick which platforms are going to be the winners is very hard to pick. You pick the wrong one, you're in trouble. In fact I did that once. I thought the Apple II was going to be big when the PC took over, and during Ultima V it nearly put us out of business by being on the wrong platform.

But by the time we get around to Ultima VII there's a new challenge which is that if you're a store like Kmart or Walmart, you have a section of the store for computer games and you don't want to talk to 100 different publishers to put the boxes on the shelf. In fact, if a publisher only puts out one or two games a year you don't want to talk to them at all because if the first game that you put on the shelf doesn't sell, you can't trade it in with them for a different box the next month. And so only the biggest publishers with the deepest bench of product releases could actually get at all shelf space. And so Origin, which was always in the top ten of companies but usually number ten, was not big enough to ensure that we would even get shelf space for our top selling games. So we really had to become part of a bigger company.

Ultimately, we became a part of Electronic Arts. So during Ultima VII's development we folded ourselves into Electronic arts. Now what's interesting about that is before that I was well known as thinking pretty bad things about Electronic Arts, and in fact Ultima VII the story is sort of an EA sucks story. I mean literally. The three main evil artifacts of the game are the sphere, the cube, and the tetrahedron which are the Electronic Arts logo. Elizabeth and Abraham, E and A, are the main bad guys.


James McKinney: Oh my goodness.


Richard Garriott: And Pert Snickwa, which is Trip Hawkins who was the former CEO of Electronic Arts, he's the main bad guy. So when we're here talking with EA about potentially being acquired by them I sit back and go, "Well hey, before we go much further I have to confess to you that this game is sort of an homage to what an evil company you are. Are you okay with, do we need to change that or are you okay with it?" And they actually were like, "No, we think it's great, that's hilarious so go for it."


James McKinney: I love it.


Richard Garriott: And so it stayed that way. So despite that, we became a part of Electronic Arts and Ultima VII did very well. I mean it was one of the bestselling Ultima's. Ultima VII sadly didn't fare as well and I have to take the blame for it because I was the decision maker. I made bad decisions because of pressure that I was receiving from Electronic Arts to say we do these sports games that come out every year at the beginning of every sports season. Timing is more important than giving it the luxury of finishing it the way you want. That's wrong, by the way, but they had a lot of data to back up their supposed perspective and I fell for it hook line and sinker and shot myself in the foot by releasing Ultima VII at least a year before it really should of. But there was another interesting thing happening around this time which was the emergence of the World Wide Web. So the internet proper technically has existed for some time, but it was really the emergence of the World Wide Web layer on top of it that was going to allow web browser, like Netscape and others, to exist. That it became obvious that the world was about to change.

Now, what's important to note is what was before that. So for most of the existence of computers people have networked computers together forever and even when I was just starting there were systems like one called Plato where some universities even had some terminals were tied together and some interesting games were made, some quite advanced games even compared to mine were made on some of these gains. But they again weren't commercial because these weren't thinks you could buy and sell. But the most popular games you could play on things like the dial-up service called AOL or Genie dial up service where you paid by the minute for your time were things like Genie Air Warriors which was a combat dog fighting game where they had 5,000 people who would be playing this at peak times, all paying $5 an hour or $10 an hour maybe per minute, I don't know exactly what the charging rates were. A lot to play it.

And eve year we looked at making a multiplayer Ultima. My games were kind of inspired by multiplayer table top role playing games, so I was always eager to go make a multiplayer game. But we would do the financial analysis and go okay, if we captured 100% of all the people who play games through dial up bulletin board services would we pay for any of the Ultima's we've made? And the answer was no. and so there was never enough revenue to cover the expense of making the game. But as the World Wide Web came into existence, me and another gentleman at Origin, a guy named Star Long, we said now is the time. We could see the hockey stick happening. It was going to take us two or three years to make a game. By the time that game was done, everybody we knew was going to be on the internet. Literally everybody was going to be on it, it was going to be basically free.

So we went and pitched this game Ultima Online to the company. And the way you do that at EA is you put this pitch document together, you put a design document together, you do a technical design document. You take all that to the marketing department. They do a sales analysis based on comparables they see out there in the world, and then based upon how much you cost, how much they believe you can do it, and how much the revenue would be they decide whether you're green lit or not. Well, sales has no comparables. Their closest comparables are things like Air Warriors and they're going, "The bestselling games in history have a few thousand players and you want to make a game that requires 100,000 minimum to be able to make money, so forget it. We're already selling millions of our other games, we don't believe you can sell 100." In fact, their projection was 30,000 copies lifetime.


James McKinney: Wow.


Richard Garriott: And so they said no. and so me and Star went back and said, "Boy, they are wrong." And we waited six months and the World Wide Web started getting bigger and bigger. We came back to the next pitch meeting, pitched the same game. We're told no, we're told 30,000 units again. Went back with our tails between our legs. Came back a year now later for a third pitch meeting. We were told no a third time, but on this time me and Star stood up there and said, "Look, we are not relinquishing the podium and tell you let us go make the prototype for this. The prototype would only cost a couple hundred grand, it's a knit compare to the corporate revenue or the corporate budgets. Literally insignificant. You are wrong on this. We're going to be late to the table instead of first to the table if we don't get started now." And basically did the stomp our feet and hold our breath until they told us we could go do it. And by the way that moment, that argument that was really literally an argument, was sort of the end of my career with Electronic Arts.

So they eventually said yes, but at that same time they decided we don't really want to work with Richard Garriott anymore, he's a total pain in the ass. So we went and we built the demo for Ultima Online. We put up the first website for Electronic Arts. The Ultima Online website was the first EA website and the website said, "Hey, we're the Ultima guys. We're building this new Ultima Online. We've already spent our money to get here, to make the demo so we'd like you to come play the demo for us but we have to have you send us $5 for the privilege of us sending you a disk that you can play the beta test with us." And within a few days, 50,000 people sent in money for the beta test.


James McKinney: Wow.


Richard Garriott: Immediately EA went, "Oh, I guess we were wrong on the sales potential." And this little game Ultima Online went from being the bastard stepchild nobody really wanted to suddenly the most important thing happening in EA worldwide, and when the game finally did launch a couple years later it was the fastest selling PC game in Origin and Electronic Arts history. And it still operates to this day, and at peak had many millions of players.


James McKinney: And again another industry first, you created the term the MMORPG.


Richard Garriott: Yeah. I honestly can't tell you who on the team created it. I don't remember, but yes Ultima Online is responsible for coining the term MMO, Massively Multiplayer Online game.


James McKinney: Unbelievable. This is blowing my mind how many firsts you are a part of. So we're talking to you today because you are I want to say still, but there was a period where you took a break from gaming, but you're back in the gaming industry with Portalarium correct?


Richard Garriott: Mm-hmm.


James McKinney: Can you walk us through kind of your life's journey? Because again there's also a segment where you were an astronaut for a period of time.


Richard Garriott: Yeah.


James McKinney: It's an amazing journey you've had. Can you walk us through Ultima to today?


Richard Garriott: Yeah. So if you think of the Ultima series ran for 20 years.


James McKinney: Amazing.


Richard Garriott: And from literally the foundations of the industry up until now, about now. For the first 20 years with my first company Origin, even though Ultima Online still runs to this day. Once I left Origin, once I retired from EA I then said first of all I need a break. So I took about a year off and did basically nothing, although the day I left we secured the URL for Destination Games which was going to be the next company. But it wasn't until literally a year later that we reemerged with basically the same people. The Origin group got back together again as Destination Games, and within a week of announcing our existence we were acquired. We didn't even have a product. We were acquired within a week of announcement for twice the money we were acquired as origin.


James McKinney: Oh my goodness. That's incredible.


Richard Garriott: So I got to sell basically the same company twice. We then ran Destination Games, which became a part of NC Soft, a Korean firm. Ran that for about 10 years. Retired out of NC Soft. Decided okay I'm going to take a break. This break was time to be involved in space travel. But by the way as much of an anomaly as space travel might seem, it's worth noting that I have used all of the money that I've ever made through my entire career to invest opening up commercial space flight. So today people look at SpaceX and think that's the foregone conclusion of the future of space travel are these reusable commercial rockets, but they did not exist prior to a few things that I helped start.

For example I helped start the X Prize back in the nineties. We put up together a $10 million prize for the first private vehicle to fly into space and that was one, and immediately on the heel Virgin Galactic came in existence, and SpaceX, and Blue Origin, and all these others. And at the same time I invested, I helped found and invested in companies like Zero G Corp that does parabolic flights, and Space Adventures which arranged my trip to space, and numerous others. Our largest holding is actually SpaceX. So space, I've been a big part of this opening of the space frontier long before you saw me take my own trip. But that was the time that I could make that trip and so that was why that was the right timing for me.


James McKinney: Why the interest in space? Especially at the time you were interested in space. Because if we date back far enough the shuttle program was significant through the I'm going to say, what it retired 2010 or 2011 I think it was. Again for a common person we were not talking about commercialized space travel until, gosh, I'm going to say aside from, even before SpaceX I mean I think Virgin Galactic was the first commercial mention or mass media mention of potentially commercializing space travel., so what happened or what occurred along your journey where that became of interest to you?


Richard Garriott: Excellent question, and that actually goes way back to the beginning of our story. When I was about 13 years old, so really almost the exact same time as I'm digging into Lord of the Rings and finding a teletype, same period of time, I think it was actually a little bit earlier it was in junior high versus the beginning of high school, our whole family for our family medical checkups would go to NASA. So the NASA doctors that were my dad's doctors were also the family doctor. They wanted to study the whole family just because it also gave them insight into what was going on with the astronaut. I was going in for my usual checkup and the doctor gave me an eye test, and I failed the eye test, and he said, "Hey Richard, I hate to break it to you but you're going to need glasses and that means you are no longer eligible to be a NASA astronaut." And I was like, "What?"

Because even though before that moment I'd never thought I wanted to grow up to be an astronaut, I mean I was not even on that path remotely, but you have to understand where I grew up. Not only was my dad an astronaut, my right hand neighbor Joe Engle was an astronaut. My left hand neighbor Hood Gibson, an astronaut. Over the back fence, another astronaut, and within two blocks was Neil Armstrong, Buzz Aldrin, any of the other astronauts you know all lived and I was part of their families growing up. I mean as far as I knew every adult I knew either was literally going to go to space or was involved in putting people into space.


James McKinney: Wow.


Richard Garriott: And so I grew up just sort of believing you didn't have to decide to go to space, you didn't have to plan to be an astronaut, everybody goes to space right? And so here I was before even being old enough to really think about it properly and this doctor was kicking me out of the club that every adult that I knew was a member of. I kind of went through the five stages or seven, however many there are supposed to be, seven stages of grief. First I was angry and then I was sad. All these things. But when I came out at the end, I'm going like screw you doctor, who are you to be the gatekeeper of space? If I can't go by your rules, I'm going to have to build my own space agency.

And of course at the age of 13 you don't do much about that, but as soon as you start having two things happening simultaneously which is one, a windfall of money, and two, this passion that I'm going to find my way into space. And I should say actually there's a third item which is all the people around me are involved in the space program, and so a lot of these folks that are retiring out of NASA including when my dad retired out of NASA often they're retiring because they're frustrated they couldn't get NASA to do something differently.

For example, in my dad's case it was he was working on something called an extended duration orbiter. They were going to put either solar panels or a fuel tank pallet in the back of a shuttle, which would let the shuttle stay in orbit for many months instead of only 30 days. From his perspective as a scientist this would give him a long duration laboratory, it was obviously the way to go. From a politics standpoint, the longer the shuttle can stay in space the less demand there is for a space station and so it was a non-starter at NASA. And so my dad split off, as many astronauts, to try to do something commercially to do it better. And so my first investments with my first windfall of money was behind all these super smart people I knew to help open up space to commercial activity. Well, what it turns out is those people might be great astronauts but they are not great entrepreneurs. They really don't know how to run a business and frankly they also don't understand that if they can't convince NASA to do something while they're in NASA, they're definitely not going to convince NASA to do it when they're outside of NASA.

So invested with lots of astronauts to do lots of stuff commercially, and almost universally it fell on its face. And it was only at the end of that period that I finally began to meet up with instead of those astronauts, people like myself who grew up in the Apollo era who were inspired by that era but also disappointed that 2001 never happened. We just said well we're going to go make it happen. So we literally built a succession of activities. Like for example the X Prize was to bring the vehicle into existence and that is what is becoming Virgin Galactic. We started Space Adventures to book people on suborbital flights to prove that if you built one of these vehicles there would be a market after you flew it once. We built the Zero G company to give people a taste of microgravity so that they would understand the value of this experience, and want more. It's kind of the expensive, but not compare to flying in space, starter experience.


James McKinney: That is unbelievable. So in your space journey, let's stay in your space chapter for a few moment here. In the space journey with X Prize and all the things that you were testing, SpaceX is the brand that most people know of. Even with Bezos and his company, Blue Origin I think is what it's called, most people don't know of what he's working on and that initiative, but everyone knows SpaceX. Again, Elon is an incredible showman as well as a remarkable entrepreneur as well. You're part of SpaceX as you had mentioned from an investment standpoint. When you think of your vision for space, do you see these different brands, again Virgin Galactic, SpaceX, being independent operators? Or do you see them having to come together at some point in time for some larger consortium to actually make something happen?


Richard Garriott: They're all part of this now undeniable shift of moving almost anything involved in space to a commercial orientation. And parts of them will work together. You know like we're talking about lunar landers, Blue Origin is running a consortium with a lot of the old former NASA primes, the old government contractors are now working for, with, through Blue Origin to make lunar landing equipment. It's odd that they sort of emerged as the new prime. But the real shift, what's interesting and this is something we recognized early in this process is even though it sounds like it's a big deal to shift from how the Saturn V was built or how the shuttle was built, and move instead to how SpaceX is doing it, it's easy to go like, "Wow, SpaceX is this really advanced vertical landing technology, reusable stuff," which is a big deal. But it's actually a really small change that allowed it to happen.

The case is like this. The shuttle wasn't built by NASA, it was built by Boeing, which is a publicly traded company, a commercial company that builds airplanes. It's a commercial contractor. But it was built as a cost plus activity with NASA managing it very closely and NASA owned the shuttle once it was constructed, and Boeing had a contract to maintain it and launch it for NASA. What that means is that NASA once you have invested in and built a space shuttle, you're not going to switch vehicles because you own three and paid for five ultimately of these orbiters at many billions each, you're going to use that. You're going to design missions that use that. Whereas on the other hand, and by the way we've done that for all of our human launch systems.

On the other hand, if you look at the way we put every satellite in space including every rover onto other planets unless you use Mars as a good example, Spirit, Curiosity, Opportunity and others, they were all launched on commercial boosters but not by NASA owning the booster. NASA just said, "I have built this rover I want on Mars. Who can launch me? Who can take me there?" And five people bid on it for that launch. They bought the best price performance need from it and off they went on a commercial booster. The only difference is procurement method. Buy the ride, not the vehicle. That's it. That is all that really had to change. All we had to do is say we're willing to do it with people as much as we're willing to do it with satellites. And as soon as you make that really small actuarial decision, immediately it means that you can say, "Okay, SpaceX is now certified to fly people. We'll buy five launches from you. We'd like to actually have a redundant capability, so Boeing if you ever get your CST100 going we'll buy five from you too. And if we decided to go to the moon and one of you is a better answer than the other, then I'll probably buy more of those from that company."

And so people like SpaceX are saying well I'm going to make mine to where I can go to Mars, so wherever you're going I've got you covered. But now those commercial vendors are taking the risk of deciding where their capabilities ought to go, and NASA's just saying, "I need a ride to that destination. Provide it, somebody."


James McKinney: That's actually remarkable. I'm excited to see where this goes. In fact, it's amazing how small this, again how big the universe is and how big space is yet how small it is at the same time. Just last week we had our episode with Steve Jurvetson who his firm, Future Ventures, invests in really complicated startups and ventures. He loves space tech and it's amazing to me how much of an industry space tech has become. But you being an investor in this space, why have you chosen to start a gaming startup as opposed to staying within space tech?


Richard Garriott: Well, I do both and by the way I do more than just those. I have many passions. Well, you know, think about Elon. Elon's doing cars and tunnels and spaceships so he's-


James McKinney: And neuro links.


Richard Garriott: And neuro links and hyper loops and a few other things too. So I also have multiple interests. In addition to both games and space, which are the two best known of my passions just because they're exposed externally so well, I've also helped build a company that does deep sea expeditions. If you saw the movie Titanic, the Mir submersibles that are used for that were chartered through a company that I helped called Deep Ocean Expeditions, so I've been down to the Titanic and hyper thermal vents and such myself.


James McKinney: Oh wow.


Richard Garriott: Also helped a company called Adventure Networks International that remains the only operator on the interior of Antarctica, so if you're an expedition that wants to be the first person to kite sail across Antarctica or whatever it is you want to do in Antarctica there's really only one company that can set up food and fuel caches and things all across Antarctica for you, that's A and N. I've been to Antarctica twice. I've been to the South Pole twice. I get involved in pushing… in fact, those companies were really part of the stepping stones of reaching space to be honest. Once I got together with this likeminded group of entrepreneurs we were going like, "We want to go to the extremes, ultimately space." But there's nothing to buy to do it ourselves, so we have to build the capability. But part of building the capability means it has to be a business that we're not the only customers for.

So starting with a little bit smaller, and going down to the Titanic is still a really hard thing to do, and especially there's very few machines on earth that can do it and none of them were commercial, not in the public sense. None of them can take passengers and so figuring that out, and figuring if there's enough people to pay for it and how you do it safely, those are all things that are stepping stones on ultimately getting ourselves and the industry started in space. I'm still involved in tons of stuff like that. I'm on my third… So by the way, if you think about how many times I've failed to get myself into space it's at least a dozen. We could have a whole other show talking about the failed attempts to build a company that could take me to space before it worked.

So I have another thing that I've been pushing on that I've now brought to my third failure. I only start them again once I figure out how to get past the reason it didn't work the most recent time, and that is I'm a big fan of something called Personal Rapid Transit. I actually think that while automated self-driving cars ultimately will make us be able to pass through intersections without hitting each other at high speed, and therefore you don't need stoplights, as long as there are gas guzzling self-driving cars on the road where the driver is driving the car, you can't do that. Roads will be congested as long as non-self-driving cars are a part of the mix. And so I think that's decades away and so I'm a big fan of something called Personal Rapid Transit which is an elevated guideway with little pod car trams either on top of it or underneath it. I think the economics work out well. I think the speed of moving around a city works out very well. There's test examples of it at Heathrow Airport in London, and two or three other test tracks built one up in the north states, one up in Canada, there's one in Japan, one in China, one that I think failed that is being built in the Middle East.

The point is I'm a fan of this. I've been trying to get it going frankly anywhere but I was working in my previous hometown Austin, Texas. But it's politically incredibly complicated because you have to cross private that's private property, state property, city property. You're going to be in the view of tons of people who may or may not care to have their view impinged and so it is not just an economic issue, it's also a gigantic politics thing like space. And so that's one I haven't cracked yet but I circle back on these pet issues, like Elon does. If you're going to try to do something that is big and important sometimes you have to take a few runs at it.


James McKinney: You know let me ask this question from an outsider looking in at all these various, high risk, unique ventures. Again, I can't even imagine the economics behind planting up an operation to go into the middle of Antarctica. I wouldn't even know what that P&L would look like. But when you're talking about a venture like that, or a venture like even X Prize we'll say, when you're thinking of these things are you looking at it as a normal startup entrepreneur would from your pitching other investors to be part of it, or are you self-funding this with just you and a few people?


Richard Garriott: For the most part I've been funding it with myself and a few people, and that's actually one thing that perhaps limits me and shows the strength of somebody like Elon for example. Elon goes into it not only to change the world but also because he has calculated correctly that he can also make a lot of money at it. I'm usually approaching it from the other perspective. I'm usually going I really personally want to go do this thing, I want to see this happen or be a part of it happening and so I will do whatever it necessary to get there. And that is a less business savvy way to do it, but it just works for me because my brother was always the business part of the business.

I was always the product guy. And so I'm in these things for the product, I'm in it for the art. I'm in it this to go, when I think about space, I'm going 80% of all people want to go into space like me. That means 80% of people who can afford to go to space want to go to space. There's a lot of them. So now what does it take to close that sale? And so what's interesting about that is for the most part people who have flown themselves to space have been billionaires, but interestingly there's a lot of billionaires and presumptively and in fact usually if you poll them 80% of them want to go to space too. But space also requires that you're going to take some time out to train meaning your eye is not on your company as strong as it was when you're not training. And it means you could die. And if you're the key man at some company like say Google that might hurt the stock price. And so it actually turns out that closing the sale to a billionaire is a bit tricky because you have to convince them that it's okay to disappear out of your incredibly valuable company that's responsible for your net worth.

So those are the things you learn by taking it a piece at a time. But again, I'm in it for the product. I'm in it because I'm like I know what the experience is. In any of the companies I've worked for I've usually been the person to help close the deal. When me and Robert would pitch together I'd just go, "Let me show you the game that you know you want," and get them very excited about it, and then Robert would come in there and say, "And by the way here's I know you're enthusiastic about it because Richard just made you so, here's how much it's going to cost and why it's fair for us to split money in this way."


James McKinney: So as you have multiple times started a new venture, funded it yourself, as you look to future ventures and now again the influence of proximity cannot be argued as you're surrounding yourself with more and more people like yourself but under various sectors do you start to look at things differently as you begin to ponder what your next venture and startup is?


Richard Garriott: Oh absolutely. By the way for full disclosure too, not only are we a direct investor in SpaceX but we are also investors in Future Ventures so Steve is a-


James McKinney: Oh, okay.


Richard Garriott: … Steve is a good friend. And by the way he's one of the smartest technology investors you would ever know, and very disciplined in especially the things he does not invest in. and so when me and my wife as independent investors, we first put money with Steve to say, "We trust you, go invest some money for us please." But also when we're doing things independently we often use Steve, and other people we know that we now rub elbows with regularly including Elon. We'll go like, "Hey, what do you think of this?" And we've grown a lot through that. And it's been interesting to see how our own investing discipline has improved and about how many charlatans frankly there are out there.


James McKinney: Hmm, yeah. How do you take these learnings of, again, we're transcending 30 years within your… well actually, so we're saying-


Richard Garriott: Forty.


James McKinney: … we're saying 40 years within your adult life if you will, and of course much of that in gaming and lots of other things since, and lots of other passions. But to get us up to one of your current ventures being Portalarium what have you learned within the gaming industry from your past 40 years that you're doing something differently now because of it?


Richard Garriott: I think the biggest lesson goes back to the research shelf behind me. What that taught me was that fortunately I learned through science fairs to be a self-educator. If I became interested in something I would go learn about it. What I hadn't realized is that how easy it would be to motivate myself to choose to go learn all these things once I realized I needed it and it would help me do something better. Once you cross that bridge, once you actually go you know what, anyone else could have read those books too. We can all go to school and learn anything. It's like people often ask me, "Was the training to go to space hard?" and the answer was actually no. if you can get a ham radio operators license, which you can on the internet, you can operate the radios on a space craft. If you can get a scuba diving license you can handle the life support.

But if you're going to do something new and unique and important in any field from podcasts to space travel you must not just study the state of the art of your current industry. You must actually cast a wider and wider net to pull inspiration from other industries, other genres, that you may or may not obviously see the connection to at first. And it's the people, at least in this day and age, it's the people who are multidisciplinary, who are willing to take that subject they didn't enjoy in high school and dominate it, and really decide I'm going to become a world class, at least for a period of a few years, I'm going to come up to the state of the art of knowledge on this particular subject and that will allow you to do something that's actually unique, because there's no one else in your little bubble is probably going to be doing that. And that's where you can bring true value. And I think that even goes to battery anodes, because I was reading up a lot on those the last few days. Again it's the people that think outside of the box and go like where, how can I fundamentally change this? What other industries? What far flung places? Elon's, I was listening to a tape of Elon, he talks to mining companies all the time about how much nickel is he going to be able to get for the next 10 years because he can't bet on a battery technology for which the raw resources literally won't exist.


James McKinney: Yeah, yeah. Oh my goodness, I love it. This time with you has been unbelievably rich. I want to honor the time that we've had with you by bringing it to a close. I want to honor the time that our listeners have given to hearing your Startup Story. So I want to come to a close with our final three questions that I ask every founder that we've had on.


Richard Garriott: All right.


James McKinney: And that first one being about the general idea of entrepreneurship. Now, not everyone wants to be an entrepreneur and that's okay. But do you believe anyone can be an entrepreneur if they want to be?


Richard Garriott: Unquestionably but I like the way you prefaced it. One of my business partners from all the way back in Origin is a guy named Jeff Hillhouse, still a dear personal friend. He joined me and Robert at every one of the companies we created. He was an exemplary partner. But he I don't think would want to strike out on his own. In fact, usually we'd start a new one and then he'd come join us once it was stabilized. And that seemed to be where he was the happiest. And so I can admire that also about people that are going like hey, I want to be able to reliably do a job and do it well and do it effectively, make a difference in the way that he makes a difference. The way he wasn't doing it is betting his life on the hypothetical future of something that he can't get his hands around yet.

But yes, fundamentally I do believe anybody that has that passion I think the skills can be learned by all means. I think I've learned a ton during my time. We've talked mostly about the ups this call but there have been a lot of downs. I've had a lot of software products that failed. I've had companies that have failed. I've made bountiful investments that have failed. I've been nearly broke, literally zero dollar broke, after being a millionaire twice already in the past so it is a lifestyle that is not for everyone. But I've at least grown to have the faith that I know I can pick myself back up and rebuild since I've done it now a couple times, and so I'm willing to take those kinds of risks although I also now leave a little on the side to where I don't bet it all quite so dangerously, especially now that I'm a father and have a family.


James McKinney: Those dynamics will change everything.


Richard Garriott: Exactly. But yes, it can be learned, I agree. Everyone can be.


James McKinney: So let me ask that question though just out of curiosity. When you look back on those failure moments, because we have talked a lot about the successes, but just real quickly when you look back on the failure moments what are some of those key learnings? You don't even have to talk about what the failures were, but what are those key learnings coming out of those failures so that you don't repeat it?


Richard Garriott: The first really big one I did mention was betting on the Apple when the PC took over. That was sort of the first clue I should have had was the Sony versus… the beta versus VHS where just because you have concluded that this is clearly the best machine and best price performance, there's way more variables than you are the master of. So the first lessons were basically humility to not believe your own… just because you're out selling something doesn't mean that's what people are going to buy.

One of the other big lessons came out of when we basically lost the race for shelf space. We were very pleased and proud with the evolution we had undertaken with Origin where we grew what we thought of as very quickly. All of our successes fed a multiplication of future success. But we never took venture capital and so our expansion rate was much slower than many of our competitors who were willing to take on venture capital, and were willing to go on acquisition binges to bulk up which just didn't seem to fit my artistry, so that was another real question about how basically it effectively put us out of business almost a second time.

Each one of those fails has its own lessons. I mention the first one, but the failures with a lot of the space stuff investing in astronauts. Really smart people but not great entrepreneurs. So each has had one of these lessons but it's been tragic that many of them have come with, like I rode the real estate stock market crash to the bottom for the fantasy reason that it seemed un- American to sell out of the market in some weird way. Similarly with the dotcom crash, followed by September 11th. There are times you were going like no, it's actually okay to take the money off the table. When you're at a gambling table, it's okay to take your money off the table. It really is okay, no one is going to be offended.


James McKinney: Incredible. So our second question that I ask about gratitude. A lot of the entrepreneurial narrative out there is that you've just got to put your head down and just plow through yourself. It's all about you and your effort. I believe that's not the case. I don't believe there is sustainability in that approach and therefore I believe that we are where we are today because of the shoulders on which we're standing upon from those that came before us. So when you look back on your entrepreneurial journey who are the people that you look back to with such immense gratitude for their contribution in your life?


Richard Garriott: You know it's fascinating but let me talk about the set up to your question though where you describe a lot of times it's because you've got it down to your own work, and that you didn't believe it. I would actually say in the earliest parts of my career putting my head down and doing my own work was the lion's share of my original success. But that's because there was no market and it was a solo job. There was really nobody helping me in the creation of my first five or six projects. There were really very few. I mean there were people that helped but they were not the shoulders upon which I was standing much.

The notable exception even in those early days was I mention this little piece of assembly language code that somebody helped me write before I learned it myself, a guy named Ken Arnold. He also did the music for all of my early games and I still think it's some of the best computer music that's ever been written for any games ever. And a guy named Yolo is his penname, mine is Lord British, whom also did some music in those early days.

But about the time of Ultima VII which is one of my other, one of the great games that I've ever done, and for sure Ultima Online, that is when it became super obvious that I am now frankly a minor player in the totality. The team that built Ultima VII which included actually Ken Arnold was a part of that and a whole cadre of a cast of characters, I suddenly became sort of a vision holder. I became the person that said I know what Ultima is because I've done a lot of them. I understand these virtues at a depth that I want us to talk about because I wrote them, but I'm now sort of the resource. I'm the sounding board to where now the team which started really at that point being dozens and pretty quickly moved to hundreds, became the people that really architected these worlds.

And these worlds were now so big that no one on the team, including myself, knew all the parts and pieces. There were whole, if you've heard of The Hitchhiker's Guide to the Galaxy, Slartibartfast that designed all the coastlines of Scandinavia, those coastlines of my game were crafted by individuals whose work often I would never see because the world was so large no one person ever traversed it all. It was a very interesting moment in time to relinquish. To go from a thing where it's all about you, you felt, to where you're going like, "Yeah, not much of it is really about me anymore. It's now really about all these amazing people that are around me making the difference."

And that's also when I began to respect much better people like my brother who at first he was just the non-shill that wasn't ripping me off, that at least had some good business sense. But after a while I realized it's actually his conservative hand, his being careful not to overspend our bank accounts, to make sure we got new games out. Because we were always late delivering our games, he knew it, and so he always kept some money in reserve to make sure we could survive until one of us actually managed to ship something. And over time I began to learn no, he's actually pretty darn brilliant to be that physically conservative and recognize not only had the foresight to allow us to finish our games because otherwise we're not selling anything people would buy, but also keep a tight enough rein to make sure we made it to the end. So even though he was an unsung hero for a big part of the experience from my perspective, in the end as I got older and matured I realized yeah, my big brother is a pretty cool dude.


James McKinney: That's awesome. I love it. You know we've been talking to, we've been sharing your story with an audience of 65,000 plus and we've been walking through your incredible, incredible entrepreneurial journey for the last 90 minutes or so. And so what I'd like to do is I would like to take the conversation from a macro level down to a micro level, really what I call a mentoring minute. A conversation with you and one of my listeners. And maybe it's the listener who's a frustrated entrepreneur who isn't even quite sure that they can recover from COVID and what it did to their business, maybe the way they were managing it. Maybe it's an entrepreneur who has had a business for seven or nine years, but their cash flow is always an issue and they're just frustrated by it and they're having a hard time understanding how to respond to the market.

Or maybe it's the wantrepreneur that I call them, the one who has a 9 to 5 and a book full of dreams and ideas, and maybe even a game idea, I have no idea. Or maybe the person that they're 60 and they think they're too old to start something. Whatever it is, they have this vision for what could be but there's some narrative they're hanging onto that they can't move forward on. Whatever persona it is, I would like to just afford this time for you to speak directly into that person's life. What would you have to say?


Richard Garriott: When I think of being an entrepreneur, when I think of starting something hard, and by the way if something's not hard it's probably not worthwhile. Because if something was easy everybody would be doing it. When you set off to start your own entrepreneurial activity I think you first have to decide where is this intersection between preparedness and opportunity, which is in my mind what makes good fortune is the intersection of preparedness and opportunity. The first things I always tell people, and I would tell you too, is to do your research. If I'm going to go start an ice cream shop that is not a blue ocean. That is a competitive landscape so why do you believe that you will be able to rise to the top of ice cream shops? And to me that means you've not only studied ice cream shops but you've studied 50 other industries that might hypothetically intersect with ice cream shops in the future.

But once you've decided that I now believe it, once you have convinced yourself and you literally believe that your idea will rise to the top then don't take no for an answer to making it happen. And that doesn't mean it's going to work, I just mean don't take no for an answer. And I can tell you that when I was told no on more than three of the occasions of my biggest successes those were times when I was told no the most. When I had the least faith of those around me. And to me that's because they are not the same level of visionary or didn't have, they hadn't done the same research that I had done to conclude that I knew that I was right. Because even though I listened to them, I saw them in the old way of thinking in some sense. And even if I tried to convince them and I couldn't because I couldn't communicate well enough or they weren't visionary enough to join me, if you believe it like I believed it, carry on.


James McKinney: Once you've had a few moments to process all the value Richard Garriott brought us in this week's episode please hit me up on LinkedIn, Facebook, or Instagram and share with me your thoughts on this episode. And if you've been around The Startup Story for any length of time then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. So with that in mind connect with Richard online at richardgarriott.com as well as on Twitter @RichardGarriott. We'll have a link to both of those in our show notes for easy access. I say it in every episode because I believe it with my very being, entrepreneurs support other entrepreneurs and Richard wants to connect with other entrepreneurs, so make sure to connect with him and let him know how much you enjoyed his episode of The Startup Story. And now for my personal ask.

The Startup Story community has been so incredible about sharing our podcast with others, but we have more stories to tell and more people to reach. We too are a startup and word of mouth is everything, so please follow us on Facebook and Instagram @TheStartupStory or on Twitter @StartupStory_. If you're on LinkedIn, please search for The Startup Story and follow our company page. LinkedIn is a really powerful way to raise awareness of the show. But the most impactful way you can help us grow our audience is to leave a review on Apple Podcast. Or if you listen to the show via Spotify, then please simply share the podcast directly from your Spotify app or wherever you listen to the show.

These simple actions can make a huge impact in getting these amazing founder stories out to the masses. And please make sure to tag or mention The Startup Story when you do share so that we can connect with you and say thank you directly. I'm so incredibly appreciative of the fact that you listen to the show each and every week, and I look forward to sharing these amazing stories with you every Tuesday with hopes of encouraging and inspiring you to start your story.

If you like this podcast and are thinking of creating your own, consider talking to my producer Danny Ozment. He helps thought leaders, influencers, executives, and authors create, launch, and produce podcasts that grow their business and make a real impact in this world. You can contact him today at emeraldcitypro.com/startupstory.

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November 10 2020
Richard Garriott, Video Game Creator and Astronaut

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