Dan Bricklin and Bob Fanskton cracked the micro-software market wide open with a program called VisiCalc.
It's Friday afternoon," says Julian Lange, checking his watch. "Last time I looked, it was Sunday night." Lange is the chief operating officer of Software Arts Inc. and manages the day-to-day operations of the Cambridge, Mass., company that developed VisiCalc, the hottest-selling business application software for personal computers. As at many of the fledgling companies in the personal software industry, events move so fast at Software Arts that today is often gone before Lange has a chance to deal with it.
As a result, Lange spends most of his time worrying about the future, six months or a year down the road. If he doesn't think about what kind of management the company is going to need, or how much office space, or what marketing strategies are right, the future will pass by too fast and the company will spin out of control. And things keep speeding up at Software Arts.
The company was founded just three years ago by Daniel Bricklin, now 30 and chairman of the board, and Robert Frankston, now 32 and president. In 1980, it had revenues of $1 million. When 1981 started, the three top managers thought they might have revenues of $2 million for the year. In June, they revised that estimate to $2.5 million. In October, they realized they would have over $3 million.
The reason for the exponential growth at Software Arts is that VisiCalc was the first program that proved personal computers could be useful for businesspeople. And that has sparked an explosion of growth for both hardware and software producers. Forecasts say the industry will grow 50% a year in the next decade, from about $500 million in 1981 to as much as $20 billion in 1990.
For all the speed of events these days, Software Arts had very quiet beginnings. In the spring of 1978, Dan Bricklin, an intense fellow who says things like "that's neat," was working on an M.B.A. at Harvard Business School. With pencil, paper, and calculator, he was hacking his way through the mind-numbing spreadsheet projections for the cases the school is famous for. He had an idea for a better way to crunch numbers: Program a computer to do all the grunt work. "I visualized an electronic blackboard and electronic chalk in a classroom," says Bricklin. (See "How VisiCalc Works," INC., November 1981, page 104.)
That summer, he doodled around on paper with images of the programming problem and decided that it would work. He thought he might be able to sell the program door-to-door to hightech executives around Boston's Route 128. But the first working version was limited to 5 columns and 20 rows (compared to the current version's 63 columns and 254 rows) and was difficult to use without some knowledge of programming. Bricklin realized he needed someone who knew better how to commit his idea to machine code.
He turned to Bob Frankston, with whom he had become friends at the Massachusetts Institute of Technology's Computer Sciences Laboratory in 1970. Frankston, who speaks casually of such programming concepts as orthogonality, took to the idea immediately and started writing the code for their program. Working with Bricklin and Steve Lawrence, their first employees, Frankston was eventually able to design VisiCalc's mass of code into a mere 20,000 bytes of memory, quite a technical feat. "We weren't writing a program as much as we were making a product," says Frankston. "It was a matter of being very sensitive to how the program would be used and what level of quality was necessary."
At the suggestion of another MIT and Harvard Business School graduate, Daniel Fylstra, Frankston coded VisiCalc for an Apple computer.Fylstra was looking for a home-budgeting program to continue building a catalog of programs for his nascent publishing company, Personal Software Inc. From what Bricklin told him, he thought VisiCalc might do. He already knew there were a lot of Apple owners because he was selling computer-chess programs for the Apple with some success.
Bricklin and Frankston had been talking about starting a company for most of the last 10 years. When Fylstra expressed an interest in selling the still-unnamed VisiCalc for them, they decided the time was right and incorporated Software Arts in January 1979.
As Bricklin started his last semester at the B-school in the winter of 1979, he and Frankston settled into a regular routine. During the day, Bricklin went to school and Frankston slept. In the evening, the two of them would talk about the development of their program. Occasionally, they would stop in at Fylstra's "office" -- his third-floor apartment -- and speculate about the future. At night, because the rates were cheapter, Frankston worked on the code for VisiCalc on a time-sharing terminal in his attic while Bricklin slept.
In April, Fylstra came up with the name, which stands for Visible Calculator and for which Personal Software still owns the rights. He and Frankston were having breakfast in a greasy spoon in North Cambridge when he thought of the name. "It wasn't a great name," says Frankston, "but everything else we came up with was worse."
As Frankston made progress on the code, each successive version of VisiCalc created a little more excitement in the small group of entrepreneurs. Unfortunately, few people shared their enthusiasm. In May, Bricklin and Frankston showed a prototype of VisiCalc to computer dealers, who weren't impressed. In June, after Bricklin graduated with his M.B.A., Frankston gave a presentation at the National Computer Conference in New York City. About 20 people showed up for his talk. All but two were family or friends, and those two walked out before he was finished.
In July, they scraped up $20,000 in cash, pledged a loan for $65,000, and bought a Prime 550 minicomputer for the development work on VisiCalc. That month, they got their first encouraging sign: Benjamin Rosen, a respected computer industry analyst, gave VisiCalc a rave review in his newsletter. He called it "the software tail that might wag the personal computer dog."
They finally introduced the program to the public in October, but even then not much happened. "We knew it was a good product and were using it ourselves," says Bricklin, "but we were caught between thinking it was great and getting a lukewarm reception. You know, we said, if each computer store sells one copy every other week, then we can do it. But we couldn't believe the numbers that added up to. Bob and I are very insecure about these things."
