Category Archives: True Stories

Adam Osborne’s Trade Show Theory of Productivity

Business Stories, True Stories

I was reminded of Adam Osborne (1939-2003) yesterday. If you’re old enough to have been hooked on computers in 1981, you’ll remember the Osborne 1 — Adam’s flagship product — as the first true portable, squat and ugly, but priced way below the competition ($1,795).

I remember him well for several reasons.

First, I was finishing up at business school and had fallen in love with computers and wanted one for myself. The Osborne was sensationally cheap.

He brought a prototype with him to class that day. Several of us fondled it. It was hard to imagine a real computer — even though it had that tiny 5" screen you see in the illustration here — for under $2,000.

Back then, real business computers, even the new personal computers, went for about 2-3 times that price. Even the Apple II, more a hobbyist machine than a serious computer, was priced at about $4,000.

Second, Adam was a guest speaker at a computer industry class I took that year, my second and final year at Stanford. He was brilliant. You couldn’t spend an hour with him without wanting him to succeed.

He was also a maverick. He got into the personal computer world very early, late 1970s, wrote well, and established himself as a writer of computer books and engaging columns in computer magazines. I was a frequent reader. When he came out with his own computer line, well, things were different then because the industry was so young, but it was something like what would happen today if David Pogue (NY Times) or John Dvorak (PC Magazine) announced a computer line.

It was easy for me to identify with him. I got into business school having spent the preceding eight years as a foreign correspondent in Mexico City. Then I discovered computers. 

Adam himself, born in Thailand, was raised in India near the hermitage of Sri Ramana Maharishi, now considered a saint. His parents were devotees. He got his university degree in Manchester (UK) and his PhD (Chemistry) in the U.S. He was a true character.

He sparkled on a podium. I attended several of his conferences in the early days of the industry, at venues like the early Comdex and industry conferences in Silicon Valley. Which brings me to why I remembered him yesterday. It was the following quote that came to mind…

"90% of the gross national product is produced the night before the trade show opens."

That was a typical Adam Osborne comment. Not what you’d expect from the founder of a computer company, particularly not in the old days when companies were smaller and things were often a bit dashed together.

I think it was in the same talk about productivity that he complained about product developers not letting go, holding the product hostage for all the bells and whistles, after which he shared the following words of wisdom for high-tech product success:

"Adequate is good enough."

In context, what he meant was sometimes you have to ship the product or go broke. Still, the implications are typically Adam Osborne contrarian.

So there’s a piece of history on the last Friday of August, 27 years (or so) later. The good old days.

We Don’t Want Your Revenue

Business Stories, True Stories

We sat in a beautiful conference room, about the fifth floor, in the San Francisco financial district. Our host, a dot-com company that will remain nameless, had the entire floor of a large office building. The conference room had a great view, and beautiful paintings on the inside wall. The offices were plush. The people we met with had impressive titles and impressive backgrounds.

The meeting was going well. They were talking about buying our company. We had a lot of Web traffic, what we used to call eyeballs.

But at one point one of us added the following into the conversation:

"And we have revenues. Several million a year."

"Oh," came the response, "we wouldn’t want your revenues."

Say, what? We — two of us from my company — looked at each other. We were puzzled. They had no revenues, just hopes for the future, and a lot of eyeballs. They were talking about buying us for stock. Perhaps I should add — but you’ve probably already figured this out — that this happened at the height of the dot-com boom, at tag end of the last century.

Somebody from their side caught our surprise, and felt the need to explain.

"Right now we’re valued based on traffic alone," he said. "And we’d want to incorporate your traffic. But if we also incorporated your revenue, then they’d start valuing us on revenue instead of traffic."

"Which would be a lot less," somebody else added.

We didn’t do the deal. We kept our company ourselves. Theirs was worth 10 or 20 times ours in stock value back then, but within a year it had tanked.

This is a true story.

Maybe the Customer’s Always Right. The Client Isn’t

Business Mistakes, Business Stories, True Stories

I picked up an interesting comment the other day:

The customer might always be right, but the client isn’t.

Intriguing thought. It came from a bright young woman who’s done a lot of PR work. She has a very good point.

The client relationship implies a professional relationship, like doctor and patient, attorney and client, or consultant and client. 

Customers buy stuff. Clients buy expertise.

Do you want your doctor to humor you when you’re wrong, and your health is at stake? I assume not.

What about a business planning consultant? I did that for about 15 years. One of the hardest things I had to do was (thank goodness not that often) tell the client when I thought he or she was wrong. That’s what I was paid to do.

My best long-term consulting relationship lasted through 12 years of fairly steady repeat business. Part of what kept that going was me having the resolve to tell them when the clients were (always just in my opinion, because nobody owns the truth, but still…) wrong.

Biggest Startup Business Obstacle, Counterpoint: Biggest Boost

Bootstrapping, Business Stories, Starting a Business, True Stories

I posted my biggest obstacle here Saturday: When I started my business in 1983, needing the money was my biggest obstacle. I had a good job, which I left on purpose; and mine was the only income. And we had heavy debts left over from business school, and four kids, 10 years to one year old.

There was also a biggest boost to starting a business: My wife said "go for it; you can do it." And she meant it. At several key points along the way, she made it clear that we would take the risk together. There was never the threat of "I told you so, why did you leave a good job, you idiot!" What she said was "if you fail, we’ll fail together, and then we’ll figure it out. We’ll be okay."

If you’re starting a business and living a relationship, then think about that one. Call it a "make or break" factor.

My Biggest Obstacle in Starting a Business

Business Stories, Starting a Business, True Stories

I’ve been asked to write about the biggest business obstacle I faced when I started a business. I’ve thought about it. It took some time. I developed some lists. But, after consideration, here’s what it came down to:

My one biggest obstacle was needing the money.

My family depended on my income. We had several small children, I had the fancy MBA degree and the only income. We had business school debts, a mortgage to pay, and running expenses. All of that, against the background of quitting a good job to do my own thing instead, with all of the related risks, was pretty hard to overcome. I might cite confidence, but it could also have been a bad decision with a good outcome, due to plain good luck.

A lot of people who need the money keep the real job, and don’t set out to do their own thing, or build a new thing.

Furthermore, as I look back on it, I don’t want to be advising anybody else to do as I did. If you do, then at least make sure you plan really well. Reduce the uncertainty as much as possible.

I was driving with my youngest daughter over the weekend. She’s 21, soon to be starting her fourth year of college, and thinking about her future. That might be the ideal time of life to start a business, if it weren’t for the experience and know-how factor, because there are few ties and dependencies. Ironic: more age increases the chance of success, but also increases the weight of alternative options.

Delegate Well or Not at All

Business Mistakes, True Stories

One thing that often happens to founders trying to grow their companies is the need for delegation.

As a founder of a small company, you start by doing everything from unlocking the door in the morning to closing up at night. You grow it by bringing in other people to take on the tasks you originally did yourself, one by one.

I’ve been through that process myself. In the early days of Palo Alto Software I did the programming, the documentation, the marketing, the administration, and the technical support. And I answered the phone.

As we grew, I shed those tasks one by one. My first hire was someone to answer phones, and the second hire was someone to handle tech support. Then came a bookkeeper, which led, over time, to a controller. I hired somebody to handle the documentation, and somebody to manage the programming.

Something I learned along the way: if you delegate a task to somebody else, and then second guess the results, that person won’t accept the next task. Instead, you’ll be stuck with micro managing, whether you like it or not, because that person will ask you all the details so that you decide, rather than risking being second-guessed again.

So, for example, if you ask a marketing person to design and implement a brochure, and you don’t want to deal with the details during the process, then you’d better damn well shut up and like the brochure when it’s done.

If you don’t let it go, and instead of that you wish it had a different headline or a different size or a different color, then you’re not delegating; you’re micro managing. The person you’re second guessing won’t take initiative in the future. Instead, he’ll come back at you over and over asking you to decide every detail along the way.

I’m guessing that this seems obvious when you read it, but I know from experience that it’s very hard to do. I’ve learned the hard way. I had some smart people who helped. But it wasn’t always easy. So, If you’re trying to grow a company, then you probably need to delegate. If that’s the case, then I suggest you take a step back, and test yourself: watch yourself in action.

If people keep coming back to you asking you to decide the details all the time, that’s a good indication that you’re not really delegating or you are second guessing and making your would-be delegates miserable. Get a clue: if people don’t seem to want to make decisions, maybe that’s because you make them suffer when they do.

Goliath’s Revenge Part 2: Promises, Promises

Business Ethics, Business Mistakes, True Stories

In part 1 of this post, I shared a mistake I made mainly by myself, believing what was said by big-company managers instead of what was written in the contract. That, as it turned out, was a big mistake. But that was my last post, so let’s go on to part 2.

A few years back we’d been working off and on with a very big company, publicly traded, a couple of billion dollars of revenue, that had a target market a lot like ours and product line that was potentially complementary. A product manager there (let’s call him Ralph) wanted to bundle our software into their software. That seemed like a big win for us, so we were happy.

Anxious as we were to count our chickens that hadn’t hatched, we asked quickly about the deal. "Don’t worry," Ralph said, "you’ll get a good deal. That comes later."

What felt like proper next steps were taken. Mutual non-disclosure agreements were signed. We sent details about our software to our supposed new ally. Months passed. We had meetings. We had conference calls. The project proceeded. For about eight months, our would-be ally got a nearly complete view of the details of our software, our strategy, business plan software in general, and our specific view of business planning software, and, in particular, my view on business planning.

When we asked about deal terms, which we did several times along the way, Ralph assured us we’d like it. We trusted him.  Big mistake. Another one for the mistake bank, too (John, go ahead).

As we neared the end of the deal, when deal terms finally came, they were extremely disappointing; in fact, they were unacceptable. We said so. Negotiations continued.

Suddenly there was another player: a knockoff of one of our earlier versions. And they, Ralph informed us, were ready to have their software bundled for free. They were prepared to live off the upgrades that they hoped would result.

So we were screwed. Promises, promises. Actually, as the years passed, it didn’t really make much difference. Their implementation sucked. The knockoff software they bundled was as bad as they deserved.

Months later I traveled up to Portland, OR to talk with an attorney about the possibility of a lawsuit. I and my family and my company had never sued anybody, but this seemed like they’d done us wrong. We had a nice lunch with the expert, and he concluded, taking no more time than one good lunch, these points:

  1. They did wrong. Technically, this was called promissory estoppel, he said, gaining an advantage by promising something and then not delivering.
  2. Our likelihood of winning a lawsuit, he estimated was about 95%.
  3. It would cost us several hundred thousand dollars to sue.
  4. Our likelihood of being paid damages was about zero.

So, as you probably already guessed, we did nothing; chalked it up to experience, and went on with our business.

Goliath’s Revenge Part 1

Business Mistakes, True Stories

I had a nice time in Bend (Oregon) last weekend, including a conversation after dinner with some friends, a nice summer night, staying light late; the subject of large companies screwing small companies came up. I had something to add — from experience. More of the "mistakes I’ve made" categories. They’re easier to talk about at the end of a good day, looking at the river, feeling at peace with things.

Before I get into this, I should point out that I’ve also had some very good deals and long-term relationships with large companies. For example, I consulted with Apple Computer almost steadily from 1982 until 1994; it was a large company, but I had no complaints. My company, Palo Alto Software, has had good long-term relationships with Inc Magazine, Prentice Hall, Entrepreneur, and several others. It’s not like all big companies are bad. But here’s a story, and maybe a lesson.

The Contract That Meant What it Said

We (two of us) sat in a conference room with eight managers of a very large company, wrapping up weeks of negotiations on a deal bundling a version of our software with a version of theirs. It was a tough negotiation. When we were very close, all the major points agreed, we flew to their location to do this final session. We had to go through things we thought had already been settled.  Finally, at the end, with everything supposedly settled, we signed a contract with a couple clauses we didn’t like.

One of them seemed to give them far broader rights than what we’d agreed. The word "unlimited" was there on the page.

"Don’t worry," they said, "that paragraph on page two is just for the disk duplicators, we have to have those rights or they won’t manufacture the disks. And you’re covered with the paragraph on page three, that limits our rights to exactly what we’ve agreed."

So we signed. Dumb. This belongs in the mistake bank for sure. But we did.

Three years later, our software appeared in a completely different context, way outside of what was agreed upon. I called the guy we’d negotiated with: no longer with the company. I called his assistant: no longer with the company. I called two others who’d been there: not longer with the company

Finally we took it to their corporate counsel. Actually to a person who was one of their legion of corporate counsels. We told him they didn’t have the right to do that.

"What do you mean," he answered. "Can’t you see it right there on page two? It says unlimited rights."

"But that’s not what we agreed," I said.

Silence.

Poor Customer, Poor Customer Service

True Stories

As this story starts, I’ve already been on hold 11 minutes, and switched through three people. What I want to do is cancel a prepaid home theater installation. I’m not mentioning the store.

I get to "please enter your ZIP code." I did: five digits, not hard.

"We’re sorry, we’ve received an invalid entry ZIP code. Please enter a five-digit number."

So I entered it again: the same five digits. I swear, it was really my ZIP code. I could confirm with the LCD on my telephone.

"We’re sorry, we’ve received an invalid entry ZIP code. Please enter a five-digit number."

Really, I promise, I did type my Zip code. But I’d already invested more than 11 minutes, so I did it again. The result? You’re thinking "We’re sorry, we’ve received an invalid entry ZIP code. Please enter a five-digit number." So was I. Instead, it was "We’re sorry, we are unable to complete this call. Please dial the tollfree number again."

Sigh.

I called back. After another 10 minutes the nice operator managed to cancel my scheduled home theater installation, but she was unable to credit the card I’d used to prepaid for the installation because — although she found the job number, me, my address, and my phone number, and the appointment (prepaid appointment), the system didn’t know that I’d paid, or when, or how. Apparently I have to go back through my credit card records. Wow, that’s great service.

But wait! It gets better.

I had to cancel the appointment because the following had happened the previous week. I received an email from the store asking me to call about a bad credit card. The card in question had been used to order the stuff related to the home theater assembly, and the store was right, it was a bad card. That call went something like this:

"We’ve put that order on hold because the card was declined."

"Yes, I know, and I know why. The card was compromised. Chase is sending me a replacement card. I’ll have it in two days."

"The system’s going to attempt payment two more times, then cancel the order."

"But no, please don’t! The card in question was compromised, I can’t give you a good number today because I’m waiting to receive the new card number on Monday. Can you please just hold that order until I call with the new card Monday?

"No, I’m sorry, we have no way to do that. It’s all automatic."

"Oh no, I’ve been waiting two weeks on backorder, and I have assembly at home set up for next weekend. Please, there must be an override. Just put it on pending until I call back on Monday." (Not to brag, but our company, with only 40 employees, could do that easily.)

"I’m sorry, there’s no way to do that."

"No offense, I know this isn’t your fault" (I really wasn’t angry at her, and I didn’t sound angry), "but  could I talk to a supervisor or somebody who can override the system?"

"I could put you on hold for 10 or 15 minutes to get a supervisor, but I can save you the time. The system is automatic."

"What if I call back Monday, between 9 and 5 pm?"

"The system works the same regardless."

I wanted to spend about two thousand dollars with that store, between the wall furniture and the installation services. I wasn’t able to. Part of my hardware order was canceled because of the bad card, part had to be returned, and I canceled the installation services. So I ended up buying the stuff I needed and getting the home theater installation through zipexpress, a national vendor, with great customer service from a guy named John. The installers came on time, did a good job, and were friendly and professional. The big store still has the money I paid though, and now I have to go back into the customer service nightmare world to get it back.

What’s the name of the store? I’m sorry, irrelevant, could have been any of the big ones. Naming the store turns a blog post about customer service into a diatribe from an angry customer; that’s not my point.

Great Moments in Office-Mind Sanitation

Personal Productivity, True Stories

Once upon a time I worked for Larry Wells at Creative Strategies. He was president and founder. He was good to work for, a smart person, a fair and honest boss. I’ve fallen out of contact.

In the last two weeks I’ve aggressively cleared the clutter from my two main workspaces, my office at Palo Alto Software and my office at home. It was hard for me to do, but I was really longing for the great relief of cleared clutter. I took big boxes and emptied everything but the computers and their cables and speakers and monitors into them. All the drawers, shelves, and open desk spaces were cleared into boxes. Then, slowly, I replaced what I really needed, and threw out the rest.

Which reminded me of Larry’s strategy to solve the same problem. Every six months or so he would have somebody clear out all the surfaces in his office and pack them into cardboard boxes, which were sealed, dated, and stored with large labels indicating the date. In between those anti-clutter orgies he would just leave everything piling up.

When he needed something that had been boxed and stored, he would guess the timeframe and have the boxes brought back temporarily, and he’d search them.

I think that worked for him.

And one final note: I’m tempted to become a clutter bigot, a reformed pack rat, but for two worries: first, I’ll look like a real idiot when I get project oriented again and clutter up (far too likely, although I’m dead set against it); and second, I don’t want to get into the pattern behavior of the reformed smoker.