Fire in the Valley (2014)
Chapter 3
The Miracle Makers
Make a miracle.
Bill Millard, IMSAI founder
At MITS, many of the themes that would define the personal-computer industry were already present. But it wasn’t much of an industry, and MITS management showed its roots in hobby electronics. Ed Roberts needed to sell computers, but even more, he wanted the fun of designing and building them. At IMSAI, for the first time a company would enter the nascent industry driven by a laserlike focus on business success rather than a passion for technology. It would achieve that success, and would also run afoul of some of the errors that personal-computer companies still struggle with today.
After Altair
Everybody wanted to be second.
-Ted Nelson, computer visionary, philosopher, and critic
During the two and a half years between the January 1975 Popular Electronics cover story announcing the Altair 8800 and the May 1977 sale of MITS to Pertec, a new industry was on the rise. The Altair announcement triggered both technological and social change. The hobbyists who read the Popular Electronics article may not have envisioned the subsequent proliferation of microcomputers, but they did realize they were witness to the start of a radical change in the way people accessed computers. They had been longing for it.
Programmers, technicians, and engineers who worked with large computers all had the feeling of being locked out of the machine room. They resented the tyranny of the priesthood and dreamed of owning their own machines.
Hobbyist Entrepreneurs
The Altair from MITS breached the machine-room door, and rivals emerged almost all at once from garages all over the country. Ed Roberts’s price was hard to undercut, and if it had not been for the long delays in delivering the Altair, MITS’s early advantage would have been huge. But none of these hobbyist entrepreneurs was in it primarily for the money. When they failed, and they often did, they failed openly, with their schematics laid on the table for all to see. Mistakes proved instructive, and failures did little to discourage increased innovation. The revolution was running on its own internal drive, and not according to the external pull of profits. As a result, the industry did not take shape according to traditional economic laws.
The MITS competitors were hobbyist enterprises, partly because none of the big corporations wanted to build microcomputers. Only those fanatics who were totally and blindly enthralled by computers and electronics could have endured the tedious detail work required to design and build a computer by hand.
The idea of assembling a computer by hand sounded crazy to most people. It had only recently become possible to attempt such a task at all, and the Altair had yet to prove itself as a computer in anything more than the technical sense. But the hobbyists of 1975 knew that the Altair eventually would make its mark.
Don Lancaster, of TV Typewriter fame, had been providing digital know-how to a generation of computer hobbyists through his freelance articles in electronics magazines. Lancaster became involved with a company called Southwest Technical Products in the mid-1970s. Southwest Tech made high-end audio components kits and in 1975 released an Altair-like microcomputer using a new microprocessor from Motorola, the 6800. Many engineers, including Ed Roberts, thought the 6800 was a better chip than the Altair 8080, and Roberts kept a watchful eye on Southwest Tech.
Don Lancaster exemplified the spirit of information sharing, unthinkable among most other business competitors, that ran throughout the computer-hobbyist field. Special-interest magazines had helped create a nationwide community of hobbyists who regularly wrote to one another, argued at length and with passion, and generously shared their knowledge. As a result, they were technically prepared and emotionally geared up to build their own computers. “They wanted it so bad they could taste it,” said semiconductor designer Chuck Peddle.
Some of the Players
At UC Berkeley, computer-science professor John Torode examined the Intel 4004 and 8008 chips and decided they were less than ideal for use as central processors. When he got one of the first 8080 chips from his old friend Gary Kildall, who was teaching computer science down the coast in Monterey and consulting at Intel, Torode began to think seriously about building his own microcomputer.
By mid-1974, Torode and Kildall had assembled a microcomputer and a disk operating system of sorts. But they were skeptical about the market for such a device and continued to refine the product strictly as a hobby; Kildall created the software and Torode fashioned the hardware. They sold only a handful of machines before the Altair burst on the scene, including the two devices they sold to a San Francisco Bay Area computer-terminal company called Omron. The two then pursued their interests independently; Torode built computers under the name Digital Systems and later Digital Microsystems, and Kildall wrote software under the name Intergalactic Digital Research (later just Digital Research).
Although the Bay Area was recognized as a development hub, the microcomputer phenomenon was spreading nationwide. In Denver, Robert “Dr. Bob” Suding turned his hobby into a business, Digital Group, which soon won the respect of many hobbyist customers. The company initially produced plug-in circuit boards for the Altair and other emerging computer brands. Suding also pioneered an idea that was taken seriously five years later: a machine that could use different types of microprocessors interchangeably. The Altair was an 8080 machine and the Southwest Tech computer a 6800, but either processor would work in a Digital Group computer.
This innovation reflected the thinking of the times. An interchangeable microprocessor was a boon to microcomputer designers (that is, hobbyists), but was of little use to ordinary consumers because of the lack of software for the new processors. The hobbyists were designing computers for themselves. Even the appearance of the machines reflected their hobbyist origins. The typical computer resembled a homemade piece of electronic test equipment—a metal box rigged with toggle switches, blinking lights, and wires running out of its back, front, top, or sides—a real “kludge.”
No one gave much thought to a machine’s visual appeal because designers were creating the computers they wanted, regardless of how the end product looked. When the Southern California-based company Vector Graphic rejected a designer’s pink circuit board with purple rheostats on the grounds that the components clashed with Vector’s green-and-orange computer, the designer was flabbergasted. Color coordination was seldom a consideration in mid-1970s computer design.
One of the first computer companies to consciously consider aesthetic appeal and economical use of desktop space was Sphere, founded by Mike Wise in Bountiful, Utah. This was the company that, like MITS, had promoted its computers with a traveling show run out of a motorhome. The Sphere computer was integrated; that is, the display monitor and keyboard were incorporated into the same case with the microprocessor. The machine was a closed unit, with no mass of wires dangling out of its sides.
The Sphere didn’t last. Although a commercial product on the outside, inside it was all hobby machine. The mechanism under the lid wasn’t pretty—not even to a hobbyist. It was too much of a handmade item, filled with scores of crisscrossing, hand-soldered wires. The Sphere was not engineered for production, nor was it particularly reliable. Plus, as one hobbyist of the time put it, it had “the world’s slowest BASIC.”
The names given to the corporate start-ups reflected the informality and tongue-in-cheek humor of the hobbyist movement. Lee Felsenstein started a company called Loving Grace Cybernetics and later another called Golemics Incorporated. Ted Nelson’s Itty-Bitty Machine Company, a sly play on IBM, appeared in Evanston, Illinois. Chicken Delight Computer Consultants cropped up in New Jersey. Kentucky Fried Computers began in Northern California.
A thin line existed between buyers and manufacturers in those early days. Operating a microcomputer took so much expertise and dedication that to say a skilled user could have become a manufacturer was no exaggeration. The “industry” consisted of a conglomerate subculture of technofreaks, hobbyists, and hackers untrained in business practices, entrepreneurs who were more interested in exploring the potential of the microcomputer than in making a fortune.
One exception was IMSAI Manufacturing in San Leandro, California.
IMSAI
IMSAI became the number-two maker of microcomputers and soon thereafter seized the leading sales position from MITS. Started by Bill Millard just months after the January 1975 Altair debut, IMSAI was unique in its origin and philosophy. Practically all the other company presidents were hobbyists who knew each other through club meetings and newsletters. Millard, by comparison, was a former sales representative. He and his associates didn’t know the hobbyists and didn’t want to know them. They seldom attended the hobbyists’ club meetings at which members would swap stories of their experiences with various new (and unreliable) machines, exchange rumors, and share equipment, software, and insights. Millard and company didn’t consider themselves part of that crowd.
From the very first, Millard and his team of hard-driving executives saw themselves as serious businesspeople in a field populated by blue-jeaned dilettantes. The IMSAI computer would be the desktop tool of the small business, Millard decreed. It would, among other things, replace the typewriter. In the minds of IMSAI executives, the company was building commercial systems for business customers who wanted to do real work. They weren’t in the business of making toys for hobbyists. It was prescient on their part to see such potential in those crude early microcomputers. It may have seemed fanciful to build a company on that vision back in 1975, but Millard and his team were not afraid to be seen as overly ambitious. They were operating outside the envelope, and that was how they liked it.
In 1975, when IMSAI began making its 8080 microcomputer, most of the hobbyists thought that Millard was trying to corner the business market a little early. The hard-core hobbyists didn’t know just yet what those machines could do, so how could the business community be expected to embrace them? Microcomputers were still experimental and often didn’t work right. So what made Millard and his team think that small businesses would buy the machines?
“Guesswork,” according to cofounder Bruce Van Natta. “We guessed that these things were really small business machines, even if the damn things did weight 80 pounds and barely fit on a desk.”
Technologically, the IMSAI computer was no breakthrough. It was essentially a copy of the Altair with some enhancements—most notably, a better power supply. The Altair’s power-supply unit, which was supposed to distribute the appropriate DC current and voltages to the various parts of the computer, was regarded by hobbyists as dismal. IMSAI, on the other hand, delivered “a power supply you couldn’t lift,” as Van Natta put it. Although IMSAI eventually solved other stubborn technical problems, perhaps the company’s most significant achievements in hardware design were improving the Altair power supply and eliminating the hand-soldered wires that the Altair required. Those two innovations went a long way toward making the machines truly useful.
But IMSAI’s most important contribution to the nascent industry was not a technological one; it was the company’s pure chutzpah. Millard took a “me-too” design, sold it to a market whose mere existence was dubious, and built a company that became a power to be reckoned with.
Amateurs and Professionals
It was an unusual organization in that it really did believe in high-intensity, enthusiastic amateurs.
-Bruce Van Natta, IMSAI cofounder
Bill Millard was a magnetic role model to the IMSAI executives, and through them he set a singular tone for the company. Millard did not hire hobbyists, but he did hire enthusiastic amateurs. His personality and goals became the corporate personality and the company’s goals, so much so that Millard’s decision-making style steered IMSAI even when he wasn’t around, as happened during some rocky times in the company’s history when top-level decisions were critical.
Unlike Ed Roberts at MITS and many others, Millard was not particularly fascinated by hardware. Roberts was a true hobbyist, a computer junkie who really wanted to see what the thing could do. Like a number of microcomputer engineers after him, Roberts built the kind of machine that he wanted to use. If MITS managed to sell just a few hundred computers, enough to keep the company in its little shop next to the laundromat, Roberts wouldn’t feel that he had failed. He liked money, but for him a larger thrill was always in the possibilities the machine presented.
Bill Millard Assembles His Team
Bill Millard was different from the other company heads. He burned with a much more acquisitive fire, constantly seeking increased market share, increased capital, and more and more attention. “He was a typical entrepreneur,” according to one of his protégés, Bill Lohse, “except maybe a little more careless, a little more gutsy.” He was a gambler who liked to take chances.
And he knew how to sell. Millard had been a rep for IBM and had done well at it. By the late 1960s, he was manager of data processing for the city and county of San Francisco, where he dealt with mainframe and minicomputer companies into the early 1970s. That experience enabled him to identify the potential players who would join him in the biggest gamble of his life.
Millard was looking for a loyal and dedicated team to follow him onto the competitive industry playing field. He wanted enthusiastic young men and women who weren’t necessarily computer experts but who would take the risks he wanted to take. Other microcomputer companies could be run by engineers. Millard created a company run by salespeople.
Millard’s people all displayed an intense desire to succeed and an unswerving confidence in their sales abilities. They were an odd bunch for the industry at that time. They wore suits. They talked more about money than machines, and more about goals and “miracles” (Millard’s oft-used expression) than about money. And, almost without exception, they had “done the training.”
“Doing the training” for Millard and many other Californians at the time meant going through Erhard Seminars Training, or est, one of a spate of self-help movements that sprang up during the late 1960s. Millard had done the training and encouraged his family and friends to do it, too; it became a condition of employment for upper-level executives at IMSAI. One est tenet had particular relevance for IMSAI: failure or the admission of its possibility was viewed as evidence of lack of a desire to succeed. Therefore, many est graduates were reluctant to admit a task might be impossible or a goal unattainable. Millard liked that tendency in people and actively sought it in his coworkers.
Initially, Millard had no intention of building computers. He started IMS Associates, the IMSAI parent company, to configure computer systems for businesses, which was the sort of work he had once done for San Francisco’s city and county governments. IMS determined what hardware and programs companies needed to solve their data-processing problems and matched the hardware and software accordingly. His focus began to shift when he met Joe Killian, an est graduate and a good programmer who also knew hardware.
The Technical Guy
After dropping out of a graduate physics program, Killian was looking for a job in the Bay Area when a friend introduced him to Bill Millard. Killian had become fascinated with computers in graduate school, and formed an immediate bond with Millard. But Killian was not the model IMSAI executive Millard typically sought. Although he was young and enthusiastic, was open to new ideas, and attacked technical problems with a hobbyist’s zeal, he tended to deliberate before he spoke. He always hesitated a moment before expressing his opinions on a new idea, the moment it took him to reconcile the new idea with his existing knowledge and beliefs.
It took a New Mexico automobile dealer, who was one of Millard and Killian’s customers, to push them into building microcomputers. Early in 1975, a request from the auto dealer presented both a challenge and a maddening problem for Millard. The dealer had commissioned Millard to find a minicomputer to do his accounting, and Millard thought he knew of an inexpensive way to satisfy him. MITS had just announced the Altair, and Millard planned to buy the rudimentary machine and tack on whatever extras the dealer needed. If a microcomputer could do the job, he could cut the cost drastically.
Unfortunately, Millard did not fully grasp the MITS situation and what kind of struggles the company was having. Overwhelmed by orders, Roberts’s little company was not yet ready to deliver finished Altairs, and Roberts had given no thought to quantity discounts. The idea of selling Altairs at a discount to Millard, who would dress them up as business systems with the appropriate software and attachments, didn’t appeal to Roberts. When Millard realized that Roberts couldn’t or wouldn’t supply him with discount-priced machines, he looked elsewhere.
Had Millard been in tune with the hobbyist community, he might have done business with one of the new hobby firms just popping up. Instead, he drew on his contacts in the minicomputer and peripheral-equipment areas. At Omron, a computer-terminal company that had, coincidentally, just bought the first two of John Torode and Gary Kildall’s microcomputer systems, Millard chatted with a fellow named Ed Faber. Faber was, in some ways, a kindred spirit. Like Millard, the softspoken Faber was an ex-IBM salesman in his mid-40s who was intrigued by risks. Despite connecting with Faber, Millard’s immediate goal was to fill the auto dealer’s order, and again nothing acceptable emerged. He was growing frustrated.
Millard realized that a great opportunity had presented itself. It wasn’t just a matter of a single auto dealer in New Mexico. Once Millard’s people had put together a complete system with all the necessary programs and hardware, they could sell it to auto dealers throughout the country. Millard knew they wouldn’t fail. He wasn’t about to let this opportunity evaporate. He took the auto dealer’s money and with it started a company called IMSAI Manufacturing for the express purpose of building microcomputers.
Millard knew what he wanted. He was convinced that the Altair was the machine for the job, and if Roberts wouldn’t sell Altairs to him at a reasonable price, he would build his own. Or Joe Killian would. A friend of Killian’s had bought an Altair, and Killian had carefully studied it, but that wasn’t enough. External examination was fine, Killian said, but he really needed to get inside the thing and dismantle it. His friend liked his Altair as it was, intact. Millard phoned Paul Terrell, whose nearby Byte Shop was one of the few Altair dealerships in the country. Millard ordered some Altairs for dissection. Over the next few months, Killian would tear the computers apart, figure out how they were made, and replicate them.
Figure 26. Paul Terrell Terrell supplied Bill Millard with the Altairs that Joe Killian disassembled to learn how to replicate and improve the design. (Courtesy of Paul Terrell)
The Salesmen
Millard’s team was beginning to grow. Killian had worked many late nights on another project, and Millard gave him a much-needed vacation in February 1975. In Killian’s absence, Millard advertised for a programmer to take his place. The UC Berkeley computer-science grad school dropout who applied for the job was youthful, brash, and willing to take risks; moreover, he knew how to sell himself. Bruce Van Natta impressed Millard immediately. Van Natta in many ways had the typical appearance and manner of an IMSAI executive. He was tall, thin, bright-eyed, and sharply attired, quick with an opinion, succinct and decisive in his speech, and willing to take outrageous risks.
Van Natta fell naturally into the mold of the aggressive IMSAI exec. When Killian returned from his vacation, the three of them sat around a table at Jake’s Lion Restaurant in San Leandro talking late into the night about their plans for microcomputers, their new company (IMSAI), and making miracles happen. If Killian or Van Natta complained that Millard was asking the impossible, Millard would tell them, “Make a miracle.”
While Killian worked on the IMSAI computer, Bruce Van Natta was promoting something called the Hypercube, a product idea he had conceived and hashed out during the Blue Lion talks. The Hypercube device was designed to link together several microprocessors to produce results similar to those you’d get from a large computer. Van Natta was acclaimed for this concept. He was soon giving lectures around the San Francisco Bay Area, at one point speaking before several hundred electrical and electronics engineers. But he was proudest of his invitation to lecture to the UC Berkeley Computer Science Department, which he had just recently left.
The Hypercube caught the attention of the computer-news media, stealing the front page of Computerworld and the “Product Spotlight” in Datamation, two mainframe-computer publications. A great deal of attention was being paid to a product that never existed except in Bruce Van Natta’s head, but to the computer-press editors who were keeping abreast of all the rapid innovations, the linking scheme that Van Natta proposed may have seemed like the only way tiny microcomputers could be made really useful.
In December 1975, with IMSAI’s computer in its first production stages, Millard once again met with Omron’s Ed Faber. This time he asked Faber to come work for IMSAI. Faber was skeptical. Killian’s computer was a kit, like the Altair. Kits were ridiculous, Faber thought. He had never heard of building your own computer, let alone selling it through mail-order ads run in Popular Electronics. But the number of calls coming in when he visited IMSAI changed his mind. He soon got swept up in all the excitement and accepted a position as director of sales in January 1976.
Faber did not exactly fit the IMSAI mold. He was seasoned, experienced, and used to giving orders rather than taking them. Most of the other key people were more malleable. Millard, the gambler, had wanted his eager band of executives to follow him anywhere in his high-risk excursions. Would Faber do the same?
In fact, Faber was willing to take risks. He was a veteran IBM employee who had specialized in two fields: sales and start-up operations. Having started a number of new ventures for IBM, Faber found that he relished the exhilaration of the experience. Millard needed someone to organize a sales force, and Faber was willing to do it. Faber’s post was a critical one; the sales team was the heart of the company.
Bill Lohse, one of the first salesmen Faber hired, was a vitamin peddler with a degree in philosophy. He, too, seemed to have been poured out of the IMSAI mold. He was tall and thin, a recent and enthusiastic est graduate, brash, bright, and fond of wearing the kind of top-quality suits that Van Natta and Millard favored. He knew nothing about computers but was convinced he could sell them to anyone.
Many more employees were hired by IMSAI, including a crew to actually produce the machines. And some of the new hires, such as ex-rock band roadie Todd Fischer, were of a different mold than Lohse, Van Natta, and Millard. By the fall of 1976, the production team was turning out Killian’s IMSAI 8080 computer in quantity. MITS, which until then had seen competition only in its circuit-board market, suddenly had a serious rival.
Building One and Building Two
Building One was primarily the administrative building. Building Two was the production building. There was always this thing of Building Two versus Building One.
-Todd Fischer, IMSAI computer repairman and entrepreneur
Todd Fischer liked to fix things.
When high school ended and many of his classmates went to college or engineering school, Fischer headed to the Air Force recruitment center to enlist. The Air Force, in turn, taught him to repair electronic equipment. Fischer valued the training, but didn’t want to make the Air Force his career. So, when his hitch was up, Fischer went to work for IBM repairing typewriters and keypunch machines. He quit in 1967 after working there only briefly. It wasn’t that Fischer didn’t like the job. But it was the late 1960s, and to this Bay Area boy IBM symbolized faceless bureaucracies and soulless corporate power.
After leaving IBM, Fischer discovered that he could make money from music—not by playing it, but by fixing band equipment. In the late 1960s, he drifted into the San Francisco rock-music scene. This was Fischer’s milieu and he loved it. From 1968 to 1971, Fischer worked with dozens of local rock groups. He worked as a roadie for legendary drummer Buddy Miles and for the rock band Uriah Heep. He traveled around the world with stage acts repairing electronic equipment. He was in heaven.
Eventually, Fischer returned to Earth. Back in the Bay Area he tried running an electronics-repair shop, but couldn’t make a go of it. He was doing repair work in a stereo store when a friend invited him to come to work in the service division of a year-old computer company called IMSAI Manufacturing. “Repair computers? Well, why not?" he thought. After touring with the likes of Buddy Miles the work was a bit of a letdown, but at least Fischer got to fix things.
Fischer would turn out to be a key hire at IMSAI, but his laid-back style was very far from the goal-driven “make a miracle” spirit Millard promoted.
It’s the Goal or Nothing
Meanwhile, IMSAI had grown quickly and showed no signs of decelerating. The company already occupied two buildings on Wicks Boulevard in San Leandro; administration, sales, marketing, and engineering were located in one building, and production and support in the other. Millard had assembled a driven organization, a fact nowhere more apparent than among the sales team in Building One. Telephone salespeople like Bill Lohse came in promptly at 8 A.M. and, after a brief meeting, got on the phones and stayed there, logging every call until lunchtime. Lohse would take an hour off, during which time he compared notes with other sales representatives on how many thousands of dollars of equipment they had sold that morning. Then he’d jump back on the phones again, making calls until the end-of-the-day sales meeting. Lohse learned not to talk in terms of “problems,” but instead to use the buzzwords “challenges” and “opportunities.” Exhortations to “make a miracle” were frequently heard.
Under Millard’s encouragement—some say insistence—the IMSAI executives and sales staff “did the training,” made the miracles happen, and met their goals. IMSAI employees learned to focus on what they wanted to do and then go out and do it. They learned that lesson well, and it intensified their performance in meeting goals and in their relations with coworkers and customers. “Focus on what you want to do and do it” was a powerful message to send to a recent graduate in his or her first serious job. As if things weren’t intense enough, the new hires worked for a rapidly expanding company that could apparently either go bankrupt the next week or grow as big as IBM. This message was delivered under the leadership of a charismatic entrepreneur, a high roller who informed each new employee that he or she could perform miracles—and would perform miracles.
Millard’s exhortations were part of a calculated effort to create an atmosphere that spurred his staff to superhuman achievement. Only those who were driven could thrive in that atmosphere. The intensity created an attitude among IMSAI management of almost manic optimism. They regularly worked well into the night, living and breathing IMSAI and almost losing sight of the sublunary world. Yet from where Bill Lohse stood, eyebrow-deep in work, it was often difficult to focus on anything but what he was already doing. He saw nothing on the horizon but that week’s sales goal.
Meeting sales goals became IMSAI’s raison d’etre and the sales department the company’s heart and soul. No one drove this point home more clearly than Bruce Van Natta. He had held a number of jobs at IMSAI, working in purchasing, programming, engineering, and product planning. One day, to everyone’s surprise, Van Natta walked into the sales director’s office and announced that he himself wanted to be a sales representative. It seemed an odd thing for a cofounder of the company to request, but before long Van Natta was the company’s top agent.
Around that time, Bill Millard set a sales goal of $1 million for the month. Two days before the end of that month, Van Natta checked the sales figures. They totaled $680,000, and no potential customers were left to call on. Van Natta would never say that it was impossible to make the goal; one didn’t talk that way at IMSAI. But he thought as much when he headed home that night.
Van Natta’s wife, Mary, was IMSAI’s sales coordinator, and she, too, knew what the sales figures were. Her birthday was approaching, and she wasn’t sure she could enjoy it in the wake of the failure to reach their goal. When Van Natta asked his wife what she wanted for her birthday, she could think of only one thing. “I want the goal,” she told him. Van Natta reminded her that with just two sales days left in the month, and their having called on everybody they could possibly contact, they would be lucky to ring up another dime that month. And $680,000 was a long way from a million bucks.
Mary Van Natta insisted that she still wanted to make the sales goal her birthday present. Bruce Van Natta said okay and did some mental calculations. He was one of a dozen or so people on the sales team, and he accounted for about 30 to 40 percent of sales. If only he could convince the firm’s biggest customer to place a 90-day order instead of a 30-day order, or if only he could renegotiate a few other sales orders. It all just seemed impossible.
For the next two days, Van Natta and the rest of the sales team labored feverishly to close the $320,000 gap. At ten minutes before 5 P.M. on the last day of the month, Van Natta dragged himself over to Mary’s desk and added his latest sales to the current total. It came to $990,000. It was amazing—virtually a million dollars, and surely a miracle by any reasonable standard. But it was almost five o’clock and time to quit for the day.
What, and fail? No way, Mary said. It’s the goal or nothing. There would be no falling short by even $10,000. Bruce Van Natta went back to the phone and called a dealer he knew. He asked the dealer to take $10,000 worth of equipment that Van Natta knew he didn’t really want as a personal favor. The dealer reluctantly agreed. They made their goal with literally minutes to spare.
A Company with Two Cultures
Building Two was where reality came in. Selling a million dollars’ worth of computers and building a million dollars’ worth of computers are two different things, and the production people had trouble keeping up with the orders. After one spring month when the company actually shipped a million dollars’ worth of machines, the production crew threw a party in Building Two to celebrate. Operations manager Joe Parsialli brought in beer, and pizza was ordered for everyone. Nancy Freitas, a production technician, and Todd Fischer, who by then was supervisor of production testing, both got tipsy on just a beer or two.
Freitas noticed that they weren’t the only ones feeling the effects of the alcohol. After working long hours for weeks on end, getting drunk on just a couple of beers wasn’t surprising. A lot of overtime was expected of everyone. The production team usually arrived to work around 6 A.M. and stayed until at least 8 P.M. They were tired and feeling frazzled, and it wasn’t just the hours that were fatiguing them. It was also the constant push and emotional strain. Fischer recalled that after working 12 to 14 hours straight they would sometimes sit in a bar and drink just to stop their hands from shaking.
When things weren’t so crazed, the group definitely knew how to have fun together, Fischer discovered. There were other musicians on the team, and sometimes they jammed together. Sometimes, when the pressure eased up a bit, a bunch of them would head out back to throw a Frisbee around. They went out for lunch together, sometimes as many as 20 or 30 of them at a time.
Fischer valued the camaraderie, and he noted some other differences between the people in IMSAI’s two buildings. Those in Building One were definitely cliquish, whereas those in Building Two were relatively laid back. Building Two employed a few musicians and some dope-smokers, but not many est graduates. IMSAI was definitely split into two factions, and it seemed that neither could relate to the other. The people in the production department worked together to get the job done, whereas those in Building One competed aggressively against each other.
Millard believed that competitiveness never handicapped a salesperson. In fact, he did all he could to encourage competition. And probably no one at IMSAI, in Building One or Building Two, was more aggressively competitive than the company’s director of marketing, Seymour Rubinstein.
Miracles and Mistakes
I personally consummated the CP/M contract. [Gary Kildall] got a good deal, considering that the Navy was supporting him and he didn’t have any other expenses.
-Seymour Rubinstein, software entrepreneur
When he first met Bill Millard, Seymour Rubinstein was a programmer for Sanders Associates, a military-defense-electronics firm in New York. Rubinstein’s ambition and self-confidence were obvious to Millard, as was something else that Millard admired—a willingness, born perhaps of supreme self-confidence, to take on tasks that others regarded as impossible.
Taking Software Seriously
Rubinstein was the quintessential self-made man. Born and raised in New York City, he put himself through Brooklyn College taking night classes, including the school’s sole computer course. Using his nerve and innate smarts, Rubinstein turned that one course into a job as a technical writer, then a job in programming, and finally a position as chief programmer at Sanders. By the time he left Sanders, he would tell people later with a chuckle, he had a staff of programmers working for him.
In 1971, Millard formed System Dynamics to sell an IBM-compatible telecommunications terminal. He recruited Rubinstein to come work for him in California on the short-lived venture. Rubinstein settled in San Rafael, north of San Francisco. When System Dynamics folded the next spring, driven out of business by IBM, Rubinstein and Millard went their separate ways.
Rubinstein remained enthusiastic about the technology. Ed Faber may have been initially skeptical about selling computer kits, but Seymour Rubinstein was not. After System Dynamics took down its tent, he became a consultant. When Rubinstein returned from a consulting trip in Europe in late 1976, he was unaware that an actual microcomputer industry was in its infancy. So, he was surprised to find that a new store called Byte Shop had opened on a main street of sleepy, suburban San Rafael, selling computer kits. Rubinstein bought a kit, put the device together in a few weeks, and began programming. To his amazement, it was a real computer! Only later did he learn that his computer was manufactured by the same man who had brought him to California, Bill Millard.
Figure 27. Seymour Rubinstein At IMSAI, Rubinstein negotiated sweet deals for software from Gary Kildall, Gordon Eubanks, and Bill Gates. Later he launched his own software company, which brought what-you-see-is-what-you-get functionality to word processing with WordStar. (Courtesy of Seymour L. Rubinstein)
In February 1977, Rubinstein joined IMSAI Manufacturing as a software product marketing manager. After Millard persuaded Rubinstein to “do the training,” Millard was even more convinced he had done a smart thing by hiring him. Within a few months, Rubinstein moved up to the position that he would have for the rest of his tenure at IMSAI—director of marketing.
As software product marketing manager, Rubinstein got to know programmer Rob Barnaby, at least as much as one could get to know the angular, taciturn young man who liked to work alone into the early hours of the morning. Both Barnaby and Rubinstein realized that the IMSAI machine needed a greater quantity of software and more robust software given that what was originally supplied with the machine was scanty and fairly weak.
Barnaby had proposed to write a version of BASIC for the IMSAI, but Millard vetoed the project when he found out how long the task would take. Until that time, Barnaby had been doing miscellaneous programming and helping to hire other programmers, such as Diane Hajicek and Glen Ewing, plus negotiating software deals from outside sources. Millard wanted fast results, and buying software was quicker than writing it. When Rubinstein arrived at IMSAI, Barnaby was negotiating two software contracts with individuals from the Naval Postgraduate School in Monterey, where Glen Ewing had studied. Rubinstein soon took over those negotiations from Barnaby.
The Negotiator
IMSAI desperately needed a disk operating system. From the start, Millard saw the IMSAI machine as a disk-drive machine; that is, one that would use magnetic disks for permanent information storage, unlike the Altair, which had initially used slower and less-reliable cassette tapes. Disks were essential for the business applications Millard intended for the machine. But a disk drive was useless without a program that would act as a sort of software “reference librarian” to handle storage of the information on the disks.
IMSAI bought a disk operating system called CP/M from Gary Kildall, the professor at the Naval Postgraduate School who had written software for Intel’s 4004 chip and had teamed with John Torode to sell computers to Omron. In 1977, CP/M was brand-new as a product, although it had grown out of his work consulting at Intel. Kildall had given Barnaby the third copy in existence. Rubinstein negotiated with Kildall and his partner and lawyer, Gerry Davis, and closed the deal for a flat $25,000. It was highway robbery, Rubinstein later boasted; if Kildall had had any sense, he would have sold CP/M on a royalty basis, and not for a flat fee. After closing the deal, Rubinstein then chided Kildall that his marketing approach was naive. “If you continue this practice, you are not going to make nearly as much money as you are entitled to,” he told him. Kildall shrugged off the warning. This first deal felt good to him.
One of Kildall’s students had written a version of the programming language BASIC, and IMSAI picked that up, too. The student, Gordon Eubanks, settled for even less than what Kildall got. Eubanks gave IMSAI his BASIC for the promise of a computer and some technical support. IMSAI, in turn, supplied him with a computer, disk drives, and a printer, and encouraged him to develop the language further, with the understanding that IMSAI would have unlimited distribution rights. Eubanks’s CBASIC would work with the newly purchased CP/M. It was just what IMSAI wanted. IMSAI got such a good deal on CBASIC that it didn’t even consider also buying MBASIC, the BASIC programming language that Bill Gates and Paul Allen were selling under the company name Microsoft.
Later, when IMSAI did begin buying software from Microsoft, Seymour Rubinstein handled the negotiations from start to finish. Rubinstein was a remorseless negotiator and brought all his skills to bear in dealing with Microsoft’s young president, Bill Gates. Gates left their meeting thinking that he had done well for Microsoft, but a few days later began to have doubts. Rubinstein, on the other hand, knew at once what kind of deal he had made. “Everything but the kitchen sink,” he chuckled, “including the stopper and the faucets.” Seymour Rubinstein was making miracles in his own way.
Missing Parts
Meanwhile, Building One’s glorification of achieving the impossible dream was creating problems for the production and service people in Building Two. According to Todd Fischer, it was easy to think of the buildings as two conflicting individuals because the departments each had such different personalities. The way that the salespeople dictated the production department’s output levels with no concern as to what production could realistically get done was much too disruptive.
For instance, Fischer said, the sales department would set a production quota of 27 units for an item. Production would then set aside the parts for 27 units and build 27 units. Then, someone from Building One would come running across the parking lot yelling, “I’ve just sold 30 more of those things! We’ve got to have 30 more by Friday.” Sales seemingly didn’t care that production lacked the necessary parts and the available people to build the units. At least that’s how it looked from Fischer’s point of view in Building Two. Sales had to have the items out by Friday, so production would shift gears and get it done. It was “make a miracle” time.
Fischer didn’t like the way the unpredictable work schedules jerked people around. Jarring changes in the work hours threw everybody off, taking a psychological toll on the production crew. They never knew when they would have to work overtime hours or hastily salvage an item in order to obtain some needed parts. This constant uncertainty diminished production’s pride in their work because machines often had to be rushed out of the shop without proper testing. One time, Fischer got a call from a customer wondering why his computer had a screwdriver inside of it. Apparently, the computer was sealed up and shipped out before the technician had a chance to retrieve the missing tool.
But even the beleaguered production department was better off than customer support. Nancy Freitas’s brother Ed, who worked in inventory, could see that the customer-support department got short shrift. When customer support needed a part to repair a customer’s machine, supplying that part was low priority. Production got the needed parts first, a practice that failed to charm customers who were waiting for their machines to come back from the repair shop. As a way to fight back, Building Two put an informal (and unauthorized) procedure into effect. If Fischer or Freitas spotted a problem, Freitas would mention it to her brother, who would work his inventory magic. The part that customer support needed would then materialize. Freitas and Fischer often found themselves resorting to this solution. Together they started an underground parts-supply network.
Freitas had worked in both inventory and production, so she was able to diagram an operational flowchart that connected all the departments and detailed the route that parts took through the manufacturing and repair phases. She knew exactly what could be done and how long it would take. All that talk of “making miracles” irritated her. Using her chart as proof, she would explain that a certain goal was physically and materially impossible. Management didn’t want to hear the word “impossible.” Their reply was always the same: make a miracle.
Management’s reluctance to acknowledge production limitations also caused friction within Building One, where the engineering department resided. After the release of the IMSAI 8080, engineering’s big new project was a computer called the VDP 80. The VDP 80 had a novel design featuring a screen built right into the box, and Killian wanted to see the machine thoroughly tested. The order came down that the machine had to be shipped, and it didn’t matter that the whole department, including Joe Killian, said it wasn’t ready to go because it needed to be tested first. The prototype seemed to work, the orders were coming in, and the company needed cash.
Engineering threw up its hands. If you want the computer, Killian’s group told Millard, it’s your baby. Engineering didn’t want responsibility for a machine that would soon be clattering with problems, and Millard didn’t want to hear about potential problems. Sales was getting more and more orders for the VDP 80 every day. The company needed the money to cover current expenses so it could start shipping product. And that was that.
It seemed to many people in the engineering, production, and customer-support departments that the sales group was blindly selling the ground right out from under them. IMSAI cared about success, all right. But management measured success by sales figures first, rather than by the quality of production or level of customer service. IMSAI was a selling machine, and when viewed that way, the company was doing very well.
Selling Computers Like Hamburgers
For Bill Lohse in sales, things were endlessly exciting and challenging. Lohse saw the company as constantly evolving, unafraid to take risks, and scoring some big successes along the way. Millard thrived on change and risky ventures. The sales team was expanding and improving. Salespeople with experience and plenty of IMSAI drive and initiative, like Fred “Chip” Poode, were being recruited. Then there was the franchise idea.
The computer store was emerging as a serious channel of distribution for microcomputers. Ed Roberts limited MITS’s market reach by demanding that the company’s retail outlets sell only Altairs. Bill Millard was not going to make the same mistake, but how could he also ensure loyalty to his product?
Millard liked the notion of an independent but friendly franchise, and the idea also interested Ed Faber. Perhaps Faber was chafing in Millard’s organization and was seeking more autonomy, or perhaps the initial excitement had worn off since the IMSAI start-up. At any rate, in the summer of 1976 Faber told Millard that he wanted to start a franchise operation, like McDonald’s had with hamburgers. Lohse watched this development with special interest, and when Faber left to start the franchise, Lohse replaced Faber as director of sales.
Lohse immediately had two major challenges to overcome. Chip Poode saw Lohse as a kid fresh out of college and resented being passed over for the director’s job, and Seymour Rubinstein, in Lohse’s view, thought that the marketing and sales departments should both report to one person, Seymour Rubinstein. Not surprisingly, Lohse and Rubinstein frequently locked horns.
Nevertheless, Lohse thought IMSAI was a great place to be. He enjoyed working in the sales department for Bill Millard and being around his mentor. IMSAI’s people sold when nobody else thought they could, and hit sales goals that seemed impossible. It was unreal in a way. They did seem to perform miracles.
est and Entrepreneur’s Disease
It was a bunch of people heavily into est.
-Jim Warren, computer publishing pioneer and founder of the West Coast Computer Faire
Millard was busy throughout 1978 creating new companies. IMS Associates, the IMSAI parent company, spawned ComputerLand, Faber’s franchise operation. Millard also went to Luxembourg for several months to set up IMSAI Europe, a separate corporation that would buy computers from the California operation for resale in Europe. As a result of his frequent absences, Millard failed to notice the dramatic tailspin that IMSAI was in.
Overreaching
IMSAI’s high-handed stance regarding customer support was finally starting to hurt the operation, and the company had targeted the wrong market. The prevailing notion was that IMSAI was selling computers to serious business users. However, the quality of the IMSAI machine, like that of every other early microcomputer, was erratic. Someone who bought it for strictly business purposes was likely to be disappointed. The IMSAI 8080 had a distressingly high failure rate, and the instructions that came with the machine, having been written by engineers, were opaque to anyone who tried to use them. Bruce Van Natta’s tongue-in-cheek summation of IMSAI’s attitude toward documentation was, “You got the schematic? Then what’s the problem?”
No software existed for even the simplest business applications when the IMSAI 8080 was first released. The computer was large, unwieldy, and suggestive of nothing so much as a pile of electronic test equipment. It took a huge leap of faith to believe that businesses would rush to install this assemblage in their offices or would entrust their business records to this unproven, unreliable artifact. Therefore, most “business” users were actually hobbyists who only hoped to use the machine in business and tolerated its deficiencies because they were learning how it worked and having fun doing so.
Eventually, IMSAI’s inadequate customer support proved too aggravating even for the most tolerant hobbyists. Word spread fast throughout the hobbyist community, whose opinion IMSAI disdained. Sales soon started falling behind projections, and the gambit of funding current expenses with orders for future products began to wear thin.
When Millard was away, Wes Dean was in charge. Dean was IMSAI’s president, yet he was beginning to feel despair for the company’s future. Looking beyond the day-to-day crises, Dean saw that IMSAI was failing to address critical problems with its support, image, and cash flow that would affect the company in the long term. Dean finally gave up and left and was succeeded by John Carter Scott, who presided over the layoffs that came in early October 1978.
IMSAI’s financial problems reached crisis state in the fall of 1978, and it became clear to Scott that drastic steps were necessary. The company had enough orders for machines and repairs to keep everyone busy, but meeting payroll was impossible. In October, Scott initiated the first in a series of layoffs. Building Two suffered the most. When Todd Fischer, who had moved to a key position in the service department, learned that Nancy Freitas would be cut in the layoffs, he resigned, leaving an unanticipated gap in that already struggling department.
The VDP 80 Mess
For IMSAI, Fischer’s chivalry could not have been more badly timed. The company had started shipping the new and untested VDP 80, and the VDP 80 machines were coming back almost as fast as production could push them out the door. The downsized service department struggled with a variety of defects in the machines, while the sales team sold more and more of the defective products. Because the repairs were done under warranty and were often extensive, the company was making very little, if any, profits on the VDP 80. IMSAI had two options: send the design back to the drawing board and stop selling the computers until the design problems were solved, or continue selling them and repair them all when they came back.
IMSAI chose the latter option.
Releasing the VDP 80 prematurely was a bad decision, but not inexplicable. Except for Killian and the engineering department, the folks in Building One did not believe that the VDP 80 had really serious problems. Expressing such a belief would have been tantamount to an admission of failure. IMSAI’s culture wouldn’t allow that. This attitude and the single-minded focus on “The Goal” eventually caused the company to lose track of who its customers were and the very nature of the market. And the relentless positive thinking that had blinded management contributed to the decision to release the VDP 80 too quickly.
Meanwhile, the numbers were heading in the wrong direction. In April 1979, the company took in $20,000 more than it paid out; the following month it took in $12,000 less than it paid out. By June 1979, Millard was looking for investors, but by then it was too late. No one was willing to sink money into his struggling company.
Earlier, when IMSAI was more financially healthy, Millard had turned down several investment offers. He was not alone in his reluctance to take on investment capital. Many early microcomputer executives feared that selling even a part of their companies would cause them to lose control of their organizations. They abhorred the prospect. That thinking came to be called “entrepreneur’s disease,” a company founder’s determination to never release any corporate control to anyone for any price. As he neared the end of his reign at IMSAI, Millard began to have regrets and wished he had accepted a little investment money. The $2 million offered by one would-be investor who hoped to turn a profit would have come in handy in 1978.
Charles Tandy, among others, had made a foray into investing in IMSAI. Tandy was head of the nationwide chain of Radio Shack electronic-equipment stores. He didn’t want his company, essentially an electronics-distribution firm, to venture into building microcomputers, but he was interested in carrying them in his stores. Tandy could either buy computers from another company or buy an entire computer company outright. IMSAI was the biggest seller in the field and seemed the logical choice. The day that Bill Lohse observed Tandy walking into Millard’s office he knew immediately that the discussion going on inside would be crucial to IMSAI’s financial state. It distressed him to learn that Tandy had wasted his time in talking to Millard and that the companies would not do business together.
Millard now thought IMSAI’s cash-flow problem was serious enough that it required his presence in San Leandro. Soon, Bill Lohse was packing for Luxembourg to oversee IMSAI Europe.
Death and Rebirth
Rod Smith says that he does want one of my VDP80s and sent a 4.6K check and that’s nice. But it feels a little like everything we do is correct and right but nothing produces the result.
-Bill Lohse, in a telex from IMSAI Europe to IMSAI San Leandro
When Millard arrived in San Leandro, he found IMSAI in terrible financial shape while stuck with a computer on the market that was blackening the company’s reputation. To turn things around, he first authorized the redesign of the VDP 80. Millard and the engineering people agreed that it was basically sound and would sell well if it worked—that is, if its reputation had not already been irreversibly damaged.
Looking for a Miracle
Another project that held some promise for success was Diane Hajicek’s IMNET, a software package that could link several IMSAI machines together. The machines could then share resources, such as disk drives and printers. Together, IMNET and the revised VDP 80 would, Millard hoped, give IMSAI a viable office product to sell. Every step was a gamble now, and time was the opponent. If IMSAI could get the VDP 80 and IMNET earning dollars soon enough, the company could make the miracle it needed. If not, well, Millard didn’t engage in negative thinking.
When Millard thought he could safely return to Europe, he left Kathy Matthews in charge. Matthews was Millard’s sister and had been an executive in the corporation for some time. But the money situation didn’t improve. Finally, in the spring of 1979, the company filed Chapter 11—a provision of federal bankruptcy law that keeps a company’s creditors at bay while the company cuts expenses back in an attempt to dig itself out of its financial hole. Despite filing for bankruptcy, Kathy Matthews still believed IMSAI could recover and prosper.
Now more than ever, IMSAI needed a miracle. Matthews was doing all she could to generate orders. When Diane Hajicek said IMNET was ready, Matthews went on the road for three days straight to show off the product. With the exception of the presentation at one of Ed Faber’s ComputerLand stores that went especially well, many of the demonstrations were embarrassing—IMNET wasn’t really ready to go public. Matthews sent IMNET back to Hajicek for more work while expressing her wish to the Luxembourg group at IMSAI Europe that they could see “how wonderful and exciting IMNET is.”
Layoffs continued, and IMSAI was consolidated into a single building. Company executives who had been living like the big-business officers they dreamed of being now faced seriously reduced circumstances. The interior walls of Building One were rearranged, and the resulting narrow hallways made employees claustrophobic. The functions of the various offices became more generalized, as did those of the company officers. One day, IMSAI vice president Steve Bishop found company president John Carter Scott lying on his back on the floor of the former marketing office assembling machines while chief engineer Joe Killian soldered wires.
IMSAI’s European operation wasn’t flourishing either. The money just wasn’t coming in fast enough. Lohse pronounced the situation grim. Back in San Leandro, at the end of July 1979 Kathy Matthews declared, “We need a great August.” Steve Bishop examined the records and found that the company had lost less money than he had feared. IMSAI could at least meet its payroll for another month.
Reading Your Own Obituary
The July issue of Interface Age carried a column by industry watchdog Adam Osborne, the former Intel employee who had written the documentation for Intel’s first microprocessors, in which Osborne called IMSAI a “financial victim.” Matthews felt as if she were reading her own obituary. But they weren’t dead yet, she insisted, and wanted “so very much to produce a miracle and create a butterfly from a caterpillar.”
Bill Millard decided the San Leandro operation was in need of his personal attention. He booked a flight back and sent telexes on July 31 to Ed Faber, Steve Bishop, and his daughter, Barbara Millard, that said,
I WOULD LIKE TO MEET WITH YOU WED. 8/2
He named the time and place. Within a week of Millard’s return, IMSAI Manufacturing suspended all sales and manufacturing operations. Steve Bishop told Lohse to advise their European dealers of the situation. Meanwhile, Millard was desperately looking for someone with money to keep IMSAI afloat.
On August 7, Steve Bishop telexed Lohse:
YOU NEED TO CONSIDER YOUR PAY. YOU WERE BEING PAID OUT OF SNLO [IMSAI San Leandro] AND ONLY ONE PERSON IS LEFT ON THE PAYROLL HERE. THE WAY WHM [Bill Millard] IS SAYING IT IS THAT WE CAN STICK AROUND AND MAY GET PAID BUT NO ASSURANCE. ALSO YOU NEED TO CONSIDER YOUR RETURN EXPENSE TO THE US NOT BEING NEGATIVE JUST WANTED YOU TO BE THINKING.
Things weren’t working out for Lohse. He had seized the European job in part to escape the problems looming at IMSAI, but there was no avoiding the company’s imminent collapse. Lohse had two choices: abandon ship or ride out the storm. Somehow, after all he had experienced, quitting didn’t make sense now. But if he stayed, Lohse had to wait for further developments in San Leandro. IMSAI’s future was up to Bill Millard. If Millard could find an investor, the sparkle would return to all their lives. Most of the items on Lohse’s to-do list said, “Wait for further info.” But Lohse wasn’t very good at waiting around.
A week later, on August 14, Kathy Matthews and Bill Lohse exchanged terse telex messages.
Lohse:
ANY NEWS?
Matthews:
NOT A THING.
Lohse:
RATS.
Lohse assessed IMSAI Europe’s financial position. It was dismal. No matter how he figured it, the European office could not guarantee payment of its September bills. Lohse would have to sell off essential equipment just to keep a legal minimum balance in the company’s bank account. Lohse informed his staff that there was no money left to pay them. He had worked closely with these people for six months, and it pained him to give them the news.
Lohse then sent a telex to Matthews:
Lohse:
WE ARE WAITING.
She replied:
WELL, WE HAVE ANOTHER DAY.
Lohse waited a bit, then answered,
WELL, OURS IS ABOUT OVER.
Perhaps he was referring to the time difference, or perhaps to something else.
On August 21, Lohse put in a request to return home. Bill Millard telexed back his permission, and asked Lohse to bring along the Norelco shaver Millard had left behind on a previous trip.
On September 4, 1979, Millard called a meeting in San Leandro. The building where they met, at one time the base for more than 50 people and several divisions of the company, was now vacant except for that small group of people sitting around a table. There wasn’t much to say. The VDP 80 redesign was complete and it was solid, but the machine on which the company pinned its hopes came too late. IMSAI had been dying for a long time, and the final miracle hadn’t come through. When the meeting ended, everyone got up and walked out in silence. A short while later, a police officer arrived and padlocked the front door.
But strangely enough, IMSAI wasn’t dead yet.
A Surprising Rebirth
Before the lockout, Todd Fischer had arrived to pick up some equipment. He had formed an independent repair company with Nancy Freitas after leaving IMSAI, and they were doing most of the IMSAI repairs when the company filed for Chapter 11 reorganization. Recovery from Chapter 11 almost requires a miracle, and IMSAI hadn’t been able to make one.
It was largely due to Fischer and Freitas that a new company was born out of the ashes of IMSAI. While IMSAI was foundering, Fischer-Freitas was showing a profit. John Carter Scott didn’t want his customers’ equipment tied up in judicial wrangling, so he asked Fischer to take all of it, along with whatever tools Fischer needed to keep his operation going. Plenty of IMSAI computers remained in the field, and they would all need service someday. Scott couldn’t think of a better person to repair them than Todd Fischer.
After a month, Fischer bought most of the remaining IMSAI inventory at a low-key auction. Later, after he found out the company name was also available, Fischer bought that, too. He and Nancy Freitas, now husband and wife, brought in an old music-industry buddy of Fischer’s and incorporated as IMSAI Manufacturing. Operating out of a few hundred square feet in the warehouse district of Oakland, California, they began to build IMSAI computers once more.
The IMSAI that Fischer and Freitas founded was a small company with little resemblance to the frenetic original. The new IMSAI focused more on customer support than on sales and made an effort to get to know its actual customers. Its one brush with fame came when one of its machines was featured in the early computer-cracker movie War Games in 1983.
The old IMSAI had been remarkably successful with the IMSAI 8080, selling thousands of units over its three-year existence. Although the success was short-lived, it was a triumph, and a significant accomplishment in an age when corporate executives were still communicating by telex. IMSAI’s brief triumph, and no doubt its ultimate failure, stemmed in large part from the managerial philosophy of Bill Millard. His tenure as IMSAI chief was marked by outsize goals, a complete intolerance of failure, an exceptionally aggressive sales force, a stubborn refusal to acknowledge nagging problems, an unwillingness to relinquish any control, and a perhaps-fatal scorn for the entire hobbyist community. Many wags in the industry used a term to describe such a business style—est, after the movement that Millard so thoroughly embraced. Adam Osborne put it simply: “est killed IMSAI.” But it might be better just to say that IMSAI’s management failed to take seriously the limitations of the technology of the day and tried to push microcomputers into business markets they were not ready for.
But although the IMSAI decision makers failed to understand the hobbyist culture of their market, they nevertheless fanned the fires of the revolution by giving hobbyists a better Altair. At the same time, IMSAI’s attempt to make the industry into something it wasn’t helped to define what that newborn industry actually was—a grassroots movement of hobbyists fully conscious that they were ushering in not just a technological revolution, but a social one as well.
That revolutionary spirit was nowhere more evident than at the Homebrew Computer Club.
Copyright © 2014, The Pragmatic Bookshelf.