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It Was 20 Years Ago Today

A look at the cultural, economic, and political climate during 1979, the year that Inc. was founded, and the entrepreneurs and trends that shaped business over the past two decades.
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Inc. At 20 Years!
Look back at the people and trends that shaped our world, 1979-1999

It was 20 years ago today...

They were the last days of disco. There was sound--much of it crass--and plenty of fury. Out on the dance floor, gleeful Microsoft hires grooved to the Bee Gees' "Too Much Heaven" while a cluster of autoworkers intoned--unconvincingly--Gloria Gaynor's "I Will Survive." A bartender thumbed through the best-selling How to Prosper During the Coming Bad Years, trying hard to focus on only the first part of the title.

In 1979, the climactic year of what Tom Wolfe dubbed "The Me Decade," an uncertain and increasingly dangerous outside world made the preoccupation with self almost impossible. At home the things we'd built to make our lives better seemed suddenly to turn on us. In March news photos transformed the pale turrets of Three Mile Island into an archetype of environmental debacle. In May the media flashed the image of a crumpled DC-10, a crash--the worst in U.S. history--that took the lives of 273 people. Events abroad deepened our sense of helplessness. In November radical students in Iran seized the U.S. embassy. A month later Soviet troops swarmed into Afghanistan, ratcheting America's angry rhetoric up and the Cold War's temperature down.

Meanwhile, as the recession ground on and inflation hit its highest level in 33 years, we awoke to the fragility of institutions long considered invulnerable. In order to keep breathing, Chrysler was forced to rely on the kindness of a federal bailout. U.S. Steel shuttered 15 plants. John Wayne died.

But while old stalwarts proved no longer so, new ones appeared, decked out in full conservative regalia. Presidential candidate Ronald Reagan promised to "get government off our backs." "Ditto," chimed in newly elected Prime Minister Margaret Thatcher. And if the industrial age looked like cold grounds, the information age was just beginning to perk. The spreadsheet program VisiCalc convinced people that computers, of all things, could be useful. Apple was one year away from a spectacular initial public offering. And an entrepreneur named Bill Gates was so confident in the new-penny-bright future of his fledgling company that he bought a $166,000 house in Seattle. His optimism had roots in a trend: in 1979 there were more than 100 start-ups in Silicon Valley alone, and a flurry of studies demonstrated that small businesses produced 4 times as many jobs as large companies did, and 24 times as many innovations per research dollar.

Looking back to 1979 from these flush and feverish times, it seems impossible that we were ever that economically tortured or technologically naïve. A business boom--several business booms--removed from the hardships and pessimism of that era, we have grown accustomed to prosperity and confident in our mastery of the world around us. Proud of our accomplishments, we smile, pat ourselves on the back, and put off for another day checking to see if our computers are Y2K-compliant.

In the following pages, Inc. recalls the bumpy road that carried our readers from there to here....

But while old stalwarts proved no longer so, new ones appeared, decked out in full conservative regalia. Presidential candidate Ronald Reagan promised to "get government off our backs." "Ditto," chimed in newly elected prime minister Margaret Thatcher. And if the industrial age looked like cold grounds, the information age was just beginning to perk. The spreadsheet program VisiCalc convinced people that computers, of all things, could be useful. Apple was one year away from a spectacular initial public offering. And an entrepreneur named Bill Gates was so confident in the new-penny-bright future of his fledgling company that he bought a $166,000 house in Seattle. His optimism had roots in a trend: in 1979 there were more than 100 start-ups in Silicon Valley alone, and a flurry of studies demonstrated that small businesses produced 4 times as many jobs as large companies did and 24 times as many innovations per research dollar.

Looking back to 1979 from these flush and feverish times, it seems impossible that we were ever that economically tortured or technologically naïve. A business boom--several business booms--removed from the hardships and pessimism of that era, we have grown accustomed to prosperity and confident in our mastery of the world around us. Proud of our accomplishments, we smile, pat ourselves on the back, and put off for another day checking to see if our computers are Y2K-compliant. In the following pages, Inc. recalls the bumpy road that carried our readers from there to here....


Shorts

Do the right thing
"I had sort of assumed, as many people do, that there was this dichotomy between what's right and making a profit. What I've come to realize is that what entrepreneurs do is right. It creates jobs. It creates economic growth. It is the thing to do."

--BOB METCALFE
Founder, 3Com

Die, category, die!
Once upon a time, if you wanted to buy a hammer, you went to the hardware store around the corner. That era saw the beginning of its end in 1978, when three men in Atlanta started the hardware store to end all hardware stores. Literally. Those partners--Bernard Marcus, Arthur Blank, and Ronald Brill--were not content just to sell a few wrenches. Their mission was to make the Home Depot Inc. the preeminent hardware brand. In 20 years Home Depot, which went public in 1981, has opened some 770 stores across the United States and Canada.

Not surprisingly, the spread of Home Depots has been the last roofing nail in the coffins of many mom-and-pops: a slew of small independents filed for Chapter 7 after that familiar orange facade moved in down the block. And while Home Depot was hammering away at hardware stores, Barnes & Noble and Staples were doing the same to other retail sectors, proof positive that consumers aren't eager to try out-of-the-box thinking.

No room at the inn
In 1981, IBM entered the PC market, creating a de facto standard and prompting industry watchers to say that no new PC manufacturers need apply.

Last updated: May 15, 1999




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