A version of this article previously appeared in Forbes.
Earlier this year, a decade and a half after the Citizen Kane of bad movies was released, Tommy Wiseau’s The Room returned to 600-theaters. Although a cult favorite for over a decade, The Room broke into the mainstream with the 2017 release of James Franco’s The Disaster Artist, which tells the improbable true story of how Wiseau financed, wrote, directed, cast and starred in The Room.
The Room has the distinction of initially failing abysmally and subsequently succeeding on a global scale. Unlike typical ventures that either succeed or fail in a binary sense, The Room embodies lessons that are instructive to both entrepreneurial success and failure.
The Best Of The Worst
“I inspire myself.” – Tommy Wiseau
Like many things about Wiseau, the total revenue generated by The Room is a mystery. The film cost approximately $6 million to produce and initially generated $1,800. However, beginning with the first recurring midnight screening in 2004 and the film’s DVD release in 2005, ticket sales have continued to grow, resulting in the creation of a best-selling book (The Disaster Artist), video game, a stage adaptation, and countless merchandise.
If one only considers box office sales, using BoxOfficeMojo’s average ticket price of $7.57 from 2004 – 2017 (I agree, it seems low to me as well, but I live in California) and an average revenue split of 30% to the Producer, the film would have to sell 2.6 million tickets to break even. Given the approximately 670 weekends since the start of 2005, the film would only have to average 15 showings each weekend at 250-seat theaters to recoup its costs. When DVD sales and licensing revenues are included, it’s clear the movie has become a modest money maker for Wiseau.
Do’s – What Tommy Got Right
“I’m satisfied with the way ‘The Room’ turned out, and I don’t want to change anything.” – Tommy Wiseau
Play Long Ball – Wiseau’s sole marketing tactic was a Hollywood billboard, which he kept in place for five years, at a cost of $300,000. The billboard depicted a menacing photo of Wiseau, along with a phone number. It was this billboard that eventually led to the movie’s cult following, as curious film fans called the number and were surprised to learn that it was Wiseau’s cellphone.
Lesson: Seek direct feedback from your customers. They will tell you when it makes sense to throw in the towel. Give up only when you no longer have the energy to pursue your venture, not when others tell you to quit.
Guileless Optimism – Despite his movie being categorically panned, Tommy has long claimed that he intended the script and plot to be obtuse.
Lesson: Naivety is one of a startup’s superpowers, when it is coupled with a relentless work ethic and a pragmatic ability to course correct when naïve assumptions prove to be ill founded.
The Market Is Always Right – Once it became clear that movie fans were enjoying the movie’s unintentional comedic elements, Wiseau embraced their feedback and rebranded the movie a dark comedy.
Lesson: Don’t be dogmatic. Entrepreneur’s assumptions regarding how the market will react and utilize their creations are often wrong.
Authenticity – Tommy’s boundless passion to make a great movie, despite his abject lack of talent, is evident throughout the film and is one of the reasons it continues to garner new fans.
Lesson: True authenticity engenders trust and confidence from your stakeholders and results in clarity and consistency of your thoughts and actions.
Contrarian Outsider – Like many entrepreneurs, Wiseau’s unyielding personality forced him to pursue his vision from the vantage point of an industry outsider.
Lesson: Don’t allow the past to define your venture, its culture or its go-to-market strategy. Although the failure rate of contrarian founders is higher than those who pursue “me too” ventures, contrarians are more apt to change the world and create tremendous wealth. Revel in your non-conformity and ignore conventional wisdom.
Don’ts – What Tommy Got Very Wrong
“(My underwear) improves your sexuality by 40 percent.” – Tommy Wiseau
Over Capitalized / Under Capitalized – With no understanding of the filmmaking craft, Wiseau purchased, rather than rented, his studio equipment. Due to his exorbitant spending at the film’s outset, little money was left for mundane things like food and refreshments for the cast and crew, let alone post-production, marketing or distribution expenses.
Lesson: Startups who receive excessively large initial funding rounds often make a similar mistake, spending too aggressively on office space, furniture and recruiting excessively large teams, before they achieve product-market fit. Spend every dollar with a specific return on investment in mind, irrespective of how much money you have in the bank.
Inexperience & Insecurity – Tommy’s lack of experience and self-awareness made it impossible for him to benefit from the knowledge of industry veterans.
Lesson: The less knowledge you have, the more you need to embrace the input and advice of others. You can remain a contrarian industry outsider while still benefiting from the time-tested knowledge of mentors.
Leading By Intimidation – The employee turnover on the set of The Room was constant, primarily due to Tommy’s lack of leadership skills. This led to the cast and crew contributing lackluster performances.
Lesson: Entrepreneurial leaders must inspire a sense of shared ownership in their venture’s mission. High turnover at a startup is generally a sign that the company’s leadership has failed to create the necessary culture and comradery required to overcome their startup’s inevitable challenges.
You can follow John on Twitter: @johngreathouse