Review of Corwin Flambeau's "A Sampler of Failed Businesses"
Copyright Richard Schwartz, 2001

Corwin Flambeau - now here is a venture capitalist who marches to his own tune! Screwball, visionary, misanthrope, Flambeau has been called many things during his long and colorful life. The book under review is an apology of sorts, though it defies easy classification. Flambeau bills his work as a simple catalogue of flawed business ventures, though this self-assessment is far from accurate. While it contains a treasure chest of egregiously flawed business ideas, the work reads like a cross between a memoir and a diatribe. Above all, perhaps, Flambeau's work should be considered a textbook on how to squander an enormous fortune.

The facts of Flambeau's life are well known. We refer the interested reader to R. K. Hurley's ``The Rise of the Vegas Overlords'' or to J. R. Valentine's ``Thirty Years Uphill, Thirty Years Downhill'', two extensive accounts written from very different points of view. Here we sketch only the barest facts, in order to put Flambeau's own book in context.

Born out of wedlock to a destitute New Orleans woman during the Great Depression, Corwin Flambeau became a classic ``child hobo''. Ten years of fruitless wandering back and forth across the country brought the hardened child-man to the newly booming Las Vegas. Petty thief, hired muscle, busboy, blackjack dealer, floor manager, casino manager, Flambeau rose steadily through the ranks of the gambling industry under the corrupt but charitable influence of the Vegas power brokers. Still in his forties, Flambeau amassed one of the largest fortunes in America through a string of astoundingly lucky mergers and acquisitions.

Some say that his luck simply ran out on his fiftieth birthday. As Valentine puts it, ``Like all winning streaks, Flambeau's had to snap''. One associate of Flambeau's attributes his change of course to the result of a brain fever. Hospital records indeed show that Flambeau spent four days in the hospital several weeks short of his fiftieth birthday, but there is no indication of the nature of his malady, nor any indication that it had any lasting effects. Whatever the cause, Corwin Flambeau became a kind of patron saint of quixotic ventures. Former associates relate how this previously shrewd, calculating, circumspect, ruthless operator suddenly countenenced the most harebrained schemes, giggling like a child over the most extravagantly infeasible ideas.

Here is Flambeau's own account, taken from his book: ``Imagine that you ate nothing but spinach, brussel sprouts, tofu, carrot puree. You dutifully did sit-ups and push-ups every morning, jogged in the afternoons, swam in the evenings, brushed and flossed your teeth three times a day, built and maintained yourself with a grim efficiency. You stand in the middle of your life and look behind you at the endless string of sensible days trailing off into the past; you look ahead at the same string of days trailing off into the future, as if reflected in a mirror. What is it that comes to mind? Boredom!''

Flambeau tells us that he came to regard business ventures as a kind of candy; the wilder the idea, the sweeter the taste. In his book, Flambeau dwells lovingly on his ``candy''. For example, he takes almost a hundred pages to tell the tale of McSmash, a venture that came to a very public and spectacular end.

McSmash was the brainchild of Hideo Murakama and Branson Tap, two ex-convicts who had nothing to their names but ideas. McSmash was to be a business specializing in the breaking of glass. For a fee, a client would be given a baseball bat and ten minutes alone with a huge assortment of glass fixtures: plates, lawn statues, old lamps, and whatnot. Wearing protective gear, the client would be free to smash the glass fixtures to bits. Murakama and Tap envisioned this as a kind of modern therapy and planned to target ``frustrated professionals'', people such as doctors and lawyers and accountants, who worked at lucrative but ultimately stifling jobs.

The venture presented numerous practical problems. For instance, these ``smash outlets'', as Murakama and Tap called them, would require a steady stream of glass. To deal with this problem, Murakama and Tap proposed to set up the outlets near junk yards and glass processing facilities. In response to the issue of insurance, which was certainly the most pressing problem, Murakama and Tap designed an ironclad waiver that had to be signed in advance by the client. Nearly ten pages long, the waiver took into account every possible contingency, addressed a bewildering list of mishaps, in all cases directed liability back to the client.

Satisfied with these solutions, Corwin Flambeau lavished funding on the venture. The trio found certain laws in the United States insurmountable, but they tried their luck abroad. The first McSmash outlet opened in Tokyo in August, 1982, followed swiftly by several more. By 1983 McSmash had become a kind of national craze in Japan. There was talk of branching out to Korea, to Australia, to Mexico.

The demise of McSmash is well known: The first serious accident coincided with the first televised account. Even though corneal injury was covered by the waiver, the public was treated to Peter Moore, a wealthy businessman visiting Japan, writhing on the floor in agony, clutching at his eyeballs. Lawyers descended upon the case like vultures and ripped the waiver apart into shreds. McSmash went bankrupt six months later. The negative publicity generated by the trial permanently forestalled any attempts at reopening the business.

Flambeau looks back with equal fondness on Carbird, a short-lived company he founded in the early '90s, in collaboration with Florence Popp, a retired English teacher and diehard hippie. After spending several hours one afternoon looking for her car in a mall parking lot, Popp had the idea that perhaps one could push a button and have a mechanical bird flutter into the air, tethered to the car by a long string. Seeing the bird from a distance, the hapless shopper could then easily locate her car.

Popp imagined that her company could produce many different kinds of birds. The multiplicity of birds, first of all, would suit differing aesthetics and, second of all, would prevent the obvious problem of duplication. If many people pushed their ``carbird buttons'' at the same time, there would have to be a method for sorting out which bird belonged to which car. Thus, for example, I would head off in the direction of the bright red cardinal while the person next to me would follow his bluebird.

Popp wanted to equip each bird with a small but cost-efficient computer, so as to create interesting behavior. She argued that the carbird product should be entertaining as well as useful. As she explained to Flambeau, one could envision a ``symphony of flight'', with many birds fluttering at once, each according to its own pre-programmed pattern. From a practical point of view, Popp argued that the small computers would make the birds ``intelligent enough'' to avoid obstacles such as trees or low overhangs. To cover the high cost of manufacture, Popp proposed to aim the product at the rich.

Flambeau built a small carbird factory on the outskirts of Fresno. He and Popp hired a slick advertising executive named Horace Wilson, as well as a team of graphic artists. They launched an aggressive marketing campaign which simultaneously played upon people's fears of losing their car in a public place and upon their sense of wonder at the natural world. As a final publicity stunt, they gave away 1000 carbirds to drivers in Phoenix, Arizona.

Disaster struck in an underground car lot. Popp had written the instruction manual in a way which made it clear that the carbird should not be operated underground. Unfortunately, she had not calculated on the possibility of an operator who was unable to read the instruction manual. In his book Flambeau recounts with a kind of philosophical mirth an event which, by all rights, must have been horrifying at the time. Suffice it to say that the court did not agree with Flambeau and Popp that the grabbing of the control panel by 4-year-old Joey Fickus was an ``unforseeable event''.

In 1985, Flambeau teamed up with a young genius by the name of Terence Caruthers. Fresh out of Caltech with a Ph.D. in Chemistry, Caruthers had perfected a method for producing giant sheets of glass, thin as razor blades but strong as concrete. Caruthers and Flambeau hatched the plan of building transparent, polyhedral houses. They envisioned their creations filling entire neighborhoods, enormous jewels glittering in the sun.

Flambeau purchased land in Southern California, at the base of the San Bernardino mountains. He began operations at once. The vast production was riddled with difficulties, but Flambeau and Caruthers plunged forward. It was not easy, for example, to manufacture giant polygonal sheets of glass. One required giant furnaces, clamps which stretched the length of a building, precision cutters wrought on an unprecedented scale. Special vehicles had to be assembled in order to carry and manipulate the polygonal sheets of glass, cranes with huge delicate robotic hands. Entire industries sprang up overnight, nurtured by a steady outpouring of enthusiasm and cash - industries that never saw a penny of profit. In the end the beautiful houses stood empty for five years before they were destroyed by an earthquake.

Corwin Flambeau financed mechanical insects, luminescent flowers, mirrored contact lenses, indoor fireworks, waterproof television sets, a school for training chimpanzees to play checkers, a working bicycle made from toothpicks and feathers - these and more are described with a mixture of pride and wistful nostalgia. Reading these reminiscences, one wonders how he felt, not about the things in themselves, but rather about their stubborn failure to thrive in the public arena.

Indeed, the last several chapters of Flambeau's work are a kind of post-mortem, an analysis of his own relentless failure. When he has said everything he has to say, his final analysis is simply this: For the most part, people are interested in the ordinary.