Note from Kalen: This article is
a little wayyy longer than normal, but it’s a great story. I highly suggest finding the time to read the whole thing. Take it away, Steve!
“Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in that grey twilight that knows neither victory nor defeat.” – Theodore Roosevelt
It’s so easy for us to fall into the pattern of working really hard on goals that we picked up through social conditioning but never really consciously chose. However, when we work on such goals, we often hit nothing but roadblocks until we figure out what it is we truly want.
A major shift in my personal growth occurred when I reached the point of letting go of socially conditioned ideas regarding what I should want and finally got clear about what I really did want.
A Personal Failure Story
During my mid-20s I decided I wanted to build a business and get rich. That seemed like something very important to accomplish. I was inspired by Think and Grow Rich and other books of a similar nature. I’d visualize myself having lots of money. I thought about how great my life would be if I had lots of money and a successful business.
For a while I seemed to be making progress. When I was 25 years old, I landed a publishing deal for one of my computer game prototypes. I was pretty excited to receive the first advance payment of $50,000. The total advance was to be $675,000, paid out over several months. That was a reasonable advance for the type of game my small studio was developing, especially since I had to hire other team members and acquire certain software licenses. Compared to other retail game budgets at the time, this project was fairly inexpensive title, definitely not something that was striving to be a major retail hit. Today that level of funding would be ridiculously cheap for a serious retail PC game.
Almost from day one, things were problematic with this publisher. They were unresponsive to communication requests, they tried changing the terms of the deal after we started working together, and they failed to send my team what we needed in a timely manner. After a couple of months trying to work with them, they missed making the next advance payment. Then they unilaterally pulled out of the deal, breaching our signed agreement. To top it all off, they filed a lawsuit against me to get the first advance payment back, filling it with false accusations that had absolutely no basis in reality. It was a ridiculous bullying strategy.
Their actions made little business sense to me unless they were simply trying to tie up our project to get it off the market and prevent a timely release. Unfortunately some publishers have been known to employ this tactic when they have a competing title in the works. I don’t know if that was the motivation — I don’t recall this publisher developing any games in the same genre at the time. I suspect we were simply victims of crazed corporate-level decision making. I have no other good explanation for why they handled this relationship the way they did. I’m certainly not the only developer to have a bad experience working with this publisher. One involved a very messy, very public battle that went on for years.
Since I couldn’t think of a better solution, I called their CEO directly and basically said, “I really don’t understand what you’re doing here. We spent the first advance payment working on this game for you, you block us nearly every step of the way, you breach our contract, and then you turn around and sue us with a list of phony charges? I don’t get it. This makes no sense to me. But I can’t fight you, so I give up. The money was spent on development, so there’s nothing to return [this was true]. If you proceed with this lawsuit, you’re just going to put us out of business. Is that your goal?” At first he seemed a bit stunned by my directness, but after a few minutes he agreed to drop the lawsuit. We agreed to peacefully go our separate ways. I simply wanted nothing more to do with this publisher, and I (gladly) never worked with them again.
Legally I was in the right and probably could have won a sizeable judgment against them for breach of contract if I could have managed the legal fees ($20,000 retainer just to get started), but I wanted to spend my time making games, not giving depositions to attorneys and having this thing linger on for years. Suing people just isn’t my way. To date I’ve never sued anyone, despite having some occasions like this when it might have seemed justified.
Years later I learned that this same publisher and many of its officers (including that same CEO) were publicly exposed for a massive accounting scandal, defrauding their investors by artificially inflating their stock price. They were sued by the Securities and Exchange Commission and had to pay millions of dollars in damages. I can’t say I was surprised. Even though I didn’t understand polarity at the time, looking back it’s pretty clear to me that this CEO and I were of opposite polarities. Incidentally, their games continue to emphasize violence and killing more than ever, and those games have been accused of spawning real-world acts of violence too.
Bit of irrelevant trivia: While having a meeting with my attorney regarding this issue on a patio in Century City (Los Angeles) one morning, he notices a guy walking down the street, waves to him, and shouts, “Bill!” The guy turns and walks up to us. Turns out it was William Shatner. My attorney was working on a book deal for him. Since I was a big Trekkie at the time, I doubt I could have been any dorkier during that conversation. Of all the attorneys I’ve had to deal with in the course of business, that was the only one I’ve ever truly enjoyed working with. Too bad he retired from law shortly after that.
The following year I landed a game development deal with a different publisher. This publisher seemed fairly honest, and I liked the CEO. Unfortunately they weren’t doing well financially and had to unilaterally pull out of our deal after nearly a year of working together. But up until that point, they were pretty good about making payments on time and providing reasonable support. We did have some rough spots working with them, but most of those problems seemed to stem from their declining financial situation. They had to cut our project due to lack of funds, and that was a big disappointment to all of us. At least nobody threatened to sue anybody, so we parted ways as amicably as possible.
After these two deals crashed and burned, I was left with about $150,000 of debt that built up over several years. That money was spent trying to keep projects going without sufficient publisher support. With virtually no income coming in and my credit exhausted, I didn’t see any reasonable choice but to declare bankruptcy. With a new publishing deal and a steady stream of advances, I might have been able to gradually work off that debt (almost all of which was on unsecured credit cards), but it was clear I wouldn’t be able to secure a new deal within a timeline that would appease the creditors.
Our debts were soon sold to collection agencies, and their primary collection tactic seemed to be to flood us with letters and phone calls. I was naive at the time and honestly tried to explain the situation to those who called, sharing what I thought were my best options for eventually paying off the debt. But soon I understood that they didn’t care what I said. They just assumed I was lying and tried to use whatever I said against me. They’d keep calling every day asking the same questions, acting as if I was somehow withholding a wad of cash. It was like they were just using a script of tactics. I caught no glimpse of real-time intelligence in their communication at all, so eventually I just stopped taking their calls, and we changed our phone number. That at least gave us some breathing room.
Due to the downward spiral this caused, Erin and I had to abandon our office lease prematurely and sell off most of our equipment and furniture. A few months later we were kicked out of our apartment because we were behind in our rent. This was all happening in late 1998 to early 1999. We had to scramble to find a new place to live, borrowing money from a relative for the security deposit.
All the while we were continuing to work full-time and beyond to keep our primary project going, figuring we couldn’t afford to let it fail because of all that we’d invested in it. Erin and I got married in 1998, and relatives gave us money so we could at least afford to have a small wedding. We took a very short honeymoon to Las Vegas since we felt we needed to get back to work as soon as possible.
During this time I remember sitting on the beach one day, looking out at the ocean and saying, “Well… at least you’re free.” I remember thinking that no matter how bad my financial situation was, I could at least enjoy the ocean. Just because my finances were screwed up didn’t mean my whole life had to be a mess. That was an important lesson to me.
Since Erin and I were married, all our debt was shared, so we both went bankrupt together. My business was only a sole proprietorship, so all of the business debt was personal debt. (Today I run StevePavlina.com as an LLC). Erin and I were very much in love, but getting kicked out of our apartment 9 months after our wedding wasn’t such a great turn of events.
I remember we had multiple garage sales to sell off most of what we owned. We even returned many of our wedding gifts to raise extra cash to pay our bills.
After working very hard on my business (sometimes even sleeping at the office) for five years, I had nothing to show for it but a bankruptcy. I started with $20,000 cash (money I’d been saving since childhood) and turned it into $150,000 debt. I had no money to finish the game projects I started, and the opportunities that spawned them were long past. Fortunately most of the debt was eliminated by the bankruptcy (except for several thousand dollars we owed to relatives), but of course our credit rating was trashed. It seemed like we were basically starting over from scratch.
I was so frustrated because all I wanted to do was make computer games, and aside from a few small shareware games I released along the way, all my big projects had been killed off. Imagine devoting years of your life to projects that only got canceled in the end and never saw the light of day.
Despite these challenges, Erin and I grew closer than ever. I think going through these rough times is one of the reasons we’re so close today. We know we’ll be there to support each other if the going gets tough. We’re also very grateful for the abundance we now enjoy.
Even as I went through these experiences, I was reading personal development books and applying what I learned. I was vigilant about visualizing my game projects succeeding. I’d imagine seeing my games on the store shelves. I even made a self-hypnosis tape to help condition the belief that my projects would succeed. I took tons of action and put in a lot of long hours. I really stretched myself to do the best I could.
It wasn’t until everything collapsed that I realized I’d been working on the wrong goals all along. Somehow I got caught up following someone else’s idea of what I should be doing. I thought I needed to build a games studio, get an office, and land a publishing deal. So that’s exactly what I did.
It wasn’t until after the crash that I realized that none of those goals were truly my own. My true desire was simply to make a game. When I realized that, I reached a new level of clarity.
A New Vision
Even though my financial life was in ruins, I decided that before I gave up for good, I was going to do one last thing. I was going to design, develop, and release an original game, a game I could be proud of. I decided I’d simply shut out my financial problems and make that happen no matter what.
Due to all the problems I ran into with money, I also decided I was going to get this game done for free. I wasn’t going to spend any money to develop it. I didn’t care that it seemed impossible to make something decent with no budget. I just resolved to make it happen.
In order to make ends meet, I did some computer consulting and tutoring on the side, while Erin helped small businesses make web sites (and I occasionally helped her with that too). We made just enough money to scrape by, often ending the month with less than $100 to our names.
It took about six months and a lot of creativity, but the game was completed. I did the design and programming myself. The artist agreed to work for no pay in exchange for royalties from sales (which paid off nicely for him in the long run). Erin found a young local musician who was willing to license a few tunes in exchange for professional credit. I made the sound effects myself or grabbed them from a royalty-free effects CD left over from a previous project. Friends and relatives helped test the game. The project was completed in about six months with no budget.
The irony was that I enjoyed this project immensely, much more than the more ambitious projects that were funded by publisher advances. I finally got to sit down and be creative without distractions such as deadlines and budget concerns. I didn’t know if the game would sell, but I just put myself in a place of absolutely not caring about the money. I just wanted the opportunity to finally create something and put it out into the world. I often pretended I was living in a dream world where money was irrelevant. I wanted to add my game to that world simply because it seemed like an interesting challenge.
I released the game as shareware in June 1999, initially pricing it very low at $9.95. I knew the game was worth more than that, but I wanted everyone to be able to afford it. Within a few months it was earning enough money to cover all our expenses. It even won a couple awards, including Shareware Game of the Year. My small company finally became profitable and remained so every year thereafter. I stopped updating the game around 2003 and discontinued it in 2006. The site where I sold it has long since been shut down. But I continue to get at least one or two emails about it each month. What’s much more important to me than the game was the lessons I learned by developing it.
One key to this turnaround was understanding what I really, truly wanted. I didn’t really want to build a game studio. I didn’t really care about earning lots of money. I didn’t want to be working with dishonest or financially troubled publishers. I just wanted to create something new for the sheer joy of creation. I wanted to add something to the world that didn’t previously exist. That was the part that gave me joy. All the rest was distraction.
Another key was realizing that I can still do what I love even when I’m dead broke, deep in debt, or bankrupt. A lack of money is no excuse. I would sooner lose all my stuff, write articles from a park bench, and post them on bathroom walls than take on work that didn’t allow me to express my creativity.
An even more important lesson was that by centering my life on creative self-expression, I also center my life on service to others because my own creativity is the most valuable thing I have to share. And by sharing my greatest value, I’m also doing the very thing that people are willing to exchange their value for… which makes it easy to generate abundant income. “Do what you love, and the money will follow” is a bit oversimplified, but it’s essentially correct. The challenge is being able to get yourself to the place where you can commit to doing what you love and saying “piss off” to everything else.
By ignoring the various problems in my life and focusing on creative self-expression, the major problems solved themselves. For example, within about a year of releasing my game, I landed a licensing deal for it that earned several thousand dollars in the first month, just enough to pay off the rest of my family debt, allowing me and Erin to be debt-free for the first time in about six years.
If all the scaffolding of your career and finances were to come crashing down around you, what would you be left with? What really matters to you? Have you figured out what you truly love to do? Or are you stuck doing what you think you’re supposed to do?
It took many years for me to figure out what excites me most. This includes learning and growing, creatively expressing myself, connecting with people, helping people, being courageous, having new experiences, building a positive community, sharing ideas, making people laugh, acting on my intuition, etc.
The hard part was giving myself permission to pursue what I really wanted, regardless of what anyone else thought about it. Before that I was constantly obsessing over goals that didn’t make me happy.
Applying the Lessons
These difficult lessons really paid off when I launched my personal development business in October 2004. Instead of pouring my life savings into it and going into debt trying to build a business (the way my naive 23-year old self thought it had to be done), I just decided to spend the bulk of my time doing what I loved without spending money. I loved writing personal growth articles, so that’s what I did.
My total investment to launch this business was $9 to buy the domain name for the first year. I didn’t even have to pay for web hosting at first because I piggybacked the site on the same server I was using for my games business. So $9 was my only real out-of-pocket cost. In the past four years, that’s as deep as I ever had to dig into my pockets to fund this business. All the other expenses that came up were easily paid from the income generated.
The site didn’t make a lot of money at first, but it also didn’t cost anything to run except for my time, so I didn’t really care. I had already learned the tough lesson that I just need to focus on creative self-expression, and the rest will largely take care of itself.
When I wrote my book, I put myself into that same frame of mind. I didn’t worry about whether it would sell well or how many people would buy it. I just stayed in that place of creative self-expression without getting attached to outcomes. Last week the book hit the Amazon top 100 bestseller list for a short time, and its current sales rank is still pretty good for a book that’s three months from release.
It’s funny that when I tried to make money and build a successful business, I went bankrupt. But when I just tried to creatively express myself and share the results with others, I was able to earn plenty of income and build a successful business.
Perhaps the most important lesson is that money and business/career success are side effects of expressing your creativity. Be careful not to mistake them for goals unto themselves. Isn’t it beautiful that you can actually have all of the above though? You don’t have to choose one or the other. But you do have to focus on those core acts of creativity, not on the side effects.
If you were broke, bankrupt, and homeless and couldn’t spend any money, what activities would give you the most joy? Are you centering your life around those activities today? If not, then you must ask yourself, “Why not?” If you aren’t doing those things, then you’re already as broke as a human being can possibly be. If you want to stop being broke, then be creative instead. It’s a lot easier in the long run. Believe me — I learned this the hard way.