"1-2-3" Creator Mitch Kapor

The young founder of one of the world's leading software companies gives some provocative reasons for walking away from it all.

What Steve Jobs is to personal computers, Mitch Kapor is to the software that runs them. Youthful swagger, technical wizardry, and an unconventional marketing sense allowed both men to found companies that quickly came to dominate the personal-computer field. In those early days, no visitor to Apple Computer Inc. or Lotus Development Corp. failed to note the laid-back business culture or the charismatic quality of leadership that together yielded extraordinary dedication and cohesiveness. More recently, both companies have learned how difficult it is to come up with second acts as dramatic as the first -- Apple with its Apple III and Lisa computers, Lotus with its Symphony and Jazz programs.

Today, both Mitchell D. Kapor and Steven P. Jobs have left the companies they founded. The lesson of Jobs's angry and not wholly involuntary departure from Apple in 1985 was not lost on Kapor as he considered his own future, and Lotus's. His resignation less than a year later still left him with a seat on the board of directors and 1.6 million shares of Lotus stock -- just about one share for each copy of Lotus 1-2-3, Kapor's program of spreadsheet-cum-database-cum graphics, sold. Kapor now spends much of his time down the street from Lotus at the Massachusetts Institute of Technology, a student of cognitive science and possibly a born-again entrepreneur in the field of artificial intelligence.

Kapor is a former Yale University student of linguistics given to weighing his words, a onetime transcendental meditator given to candid introspection. He spoke with INC.'s Robert A. Mamis and Steven Pearlstein.

INC.: You founded a tremendously successful company in a growing industry and, after only five years, you decided to walk away from it. Why?

KAPOR: If you look at Lotus as it started and as it is today, I think you'll see more differences than similarities. In the beginning, it was classically entrepreneurial: a small group of people trying to break into a market with a new product around which they hoped to build a company and achieve market share for the company and financial success for themselves and their investors. Today, Lotus is a company of 1,350 people with diversified, worldwide operations, with the organizational structure and challenges of a $275-million company. And so the nature of the challenges facing the company, and facing the people in it -- and, to your question, facing me -- is radically different.

INC.: Different, yes. But in your case, different means less attractive.

KAPOR: To be very specific about it, I guess the kind of things that I enjoy most -- and that I'm best at -- have to do with the design of software, working with small groups of people in which the most leverage comes from the marriage of technical astuteness and the intuitive sense of the marketplace. That's what drove Lotus in the earliest days and what made it successful. Today at Lotus, innovation is certainly still important. But there are many other factors that are important, including taking care of those 2 million customers, many of them large corporations, for which having new features in their software represents about 5% of what they really care about.

INC.: And those other factors are not things that exactly turn you on.

KAPOR: If you're going to be responsible for running a business, you have to be responsive to the requirements of the business situation, not what you want to do as the founder or chief executive officer. The operative question is, "What do we have to do to continue to survive and to prosper?" Building long-term corporate relationships, diversifying products and services around the core offerings -- I support those priorities at Lotus 100%. But it is a separate question whether Mitch Kapor is the best person to lead that effort or whether he wants to do it. And for a long time, the answer to both questions was pretty obvious. I couldn't say, "Hey, see you later." But my ultimate departure was part of a conscious plan over a period of two years or more aimed at extricating myself from my own success.

INC.: That means you were thinking about leaving three years after you started.

KAPOR: Well, I would point to the rate of compression in which events transpired. If it had taken Lotus 10 or 12 years to go from zero to $250 million in sales, which would be a very respectable performance, and then I had left, I don't think anybody would blink. So I think you have to be sensitive to the time subjectively as well as objectively.

INC.: You seem to be focusing a great deal on company size as the determining variable in your own satisfaction level.

KAPOR: There is a fundamental conundrum, isn't there, which says that the larger the organization becomes, the more it requires a measure of control and coordination, because without them, you've got anarchy -- you've got nothing. But those measures of control tend to mitigate and reduce the innovation and the quality of the process and the quality of the product, and I have trouble accepting that, at least emotionally. I'm not comfortable on a day-to-day basis with the basic assumptions that you have to make to be a citizen in that society.

INC.: Is that a problem with larger organizations, or is it a problem with Mitch Kapor?

KAPOR: I'm an agnostic on that question.

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