IT Management: Life Style
by Chris Bidmead

Tuesday 13 May 2003

The knowledge: Adam Osborne

In the late 1970s, when I was asked to write an industrial film for the then UK computing giant ICL, I stopped off at the technical bookshop in Praed Street and bought a couple of paperbacks on the subject.

These books were the first two volumes of An Introduction to Microcomputers. The second of these was labelled Volume 1: Basic Concepts. The first was Volume 0:  The Beginner?s Book. The titles themselves were my first lesson in computer science.

The author was a British technical writer living in California, Adam Osborne, president of Osborne & Associates, Inc, the company
that published the books.

But Osborne & Associates was evidently more than just a publishing house. On the back of each volume, as well as offering to ?deliver inhouse seminars on microcomputers, their future potential or their immediate use?, the blurb extended the invitation to ?design your microcomputer-based product for you, or? help you do the job for yourself?. 

If Osborne?s company indeed had this inhouse practical design expertise, it is puzzling that in March 1980, Osborne should
be at the West Coast Computer Faire seeking the help of computer designer Lee Felsenstein to develop a radically new idea.

Osborne was certain he could open up a new market for microcomputers by putting a handle on the standard desktop machine and selling it on as a ?portable?. Over the following two years, this simple idea made him a millionaire, and a year later returned him to bankruptcy.

Along with the first portable computer, Osborne had invented a phenomenon that was to become endemic in Silicon Valley ? hypergrowth.

Pure and simple
Osborne was born in Thailand, ?where my father was teaching history at Bangkok University?, he told me during an interview in early 1987. ?My father was heavily into religions in general, and Eastern religions in particular, which was what attracted him out there.? 

The same interest eventually took the family to Tamil Nadu in South India to study under Sri Ramana Maharishi. It was here that the young Adam Osborne lived until 1950, the year Sri Ramana Maharishi died.

His next 11 years were spent in England, until he graduated from Birmingham University with a degree in chemical engineering.

?I was 22 when I went to America chasing a girl,? Osborne told me in 1987, the voice laconic, an accent so English it verged on caricature as it emerged from beneath his Terry Thomas moustache. ?I married her. We got divorced. Now I?m remarried. Living in Berkeley, which is outside Silicon Valley, but close by.?

He found a niche for himself in California documenting the early eight-bit processors. By the mid-1970s, he had progressed to writing and publishing what he was proud to call ?the first books on microcomputers in the world?.

Osborne went on: ?Then I also became the first columnist in the industry, for Interface Age magazine.? The column was called From the Fountainhead, a title that betrays his characteristic immodesty and perhaps hints at admiration for the once fashionable radial right wing novelist Ayn Rand. 

The evolution of his technical writing into a publishing house which he eventually sold to MacGraw-Hill had been based on pragmatic business decisions.  ?I?m the ultimate cynic,? Osborne told me. ?I take what I see work.  I?m a strict believer in the scientific principle of believing nothing, only taking the best evidence available at the present time, interpreting it as best you can, and leaving your mind open to the fact that new evidence will appear tomorrow.?

This apparent reaction against his metaphysical upbringing suggests that the idea for the portable computer did not come to him as as mystical revelation.  ?It was pretty obvious to me,? he said, adding that the possibility of failure hadn?t even occurred to him.

A less confident entrepreneur might have wondered why nobody else had come up with the idea. But for Osborne, it was simple: ?I?m smarter than them.  I thought of it before they did.?

Amateur dramatics
Lee Felsenstein and Osborne set up in business together in 1980 and their first machine was introduced at the West Coast Faire in April the following year.  

Felsenstein had engineered a 24 lb ?luggable? that would just about fit under an airline seat. It had an eight-bit processor, 64Kb of RAM and ran CP/M, the standard operating system of the day.

Although it was mains driven, there was provision for the attachment of a battery pack.   Storage in the standard machine comprised a pair of 100Kb floppy disk drives arranged on either side of a 5in CRT screen.  The keyboard latched over the front to create the base of a watertight case that looked as if it might house a sewing machine.

Looking back on the machine after the company had failed, Osborne blamed Felsenstein for its design shortcomings: ?In retrospect, he was a bit of an amateur. He did very complicated designs that were not very manufacturable. I was no engineer at all; he wasn?t much of one either. Later on I realised that a lot of the basics you needed, like having a good solid ground-ing all around the edge of the board, and things like that, he knew nothing about. Which meant that the boards he designed were particularly unmanufacturable.?

Today, Felsenstein recognises the Osborne touch in those comments from 1987. ?Adam?s attempt to tar me with the brush of amateurism seems to rest upon a common practice of his ? taking a bit of gossip and erecting it as a main truth without further investigation,? he told me in a recent e-mail.

?He talks of my designing a board that was unmanufacturable because it lacked a magic ring of copper around the periphery which was supposed to ward off RF emanations. In fact, this was a bit of folklore of the time ? such a ring would be as likely to resonate with a tremendous howl (at radio frequencies) as to quiet anything down. 1982 was when the FCC regulations governing radio frequency noise generations were brand new, and no one quite knew what to do to meet them.?

Apportioning blame
These niggles aside, the Osborne 1 was a radical departure from convention in three main ways. As well as being the first portable, it also set a new price point: a complete computing system at a price that could be accommodated by most credit cards.

And it was also the first machine to come with a set of bundled software: the WordStar word processor, the SuperCalc spreadsheet and two versions of BASIC, with some additional utilities thrown in. On each of these points, the Osborne 1, its design reminiscent of some World War II communications device, set the industry off in new directions.

Poetry in motion it wasn?t, but it created a market for a new kind of freedom. If in exploiting that market Osborne had been as sure-footed as he was loud-mouthed, the Osborne brand might have dominated computing for the following decade. The failure of his company, which filed for bankruptcy in September 1983, is widely attributed to cash flow problems caused by his pre-announcement of a new product, the Osborne Executive, while he still had large stocks of the original Osborne 1 to clear.

But the root cause can be sensed in the hubris of Osborne?s own self-absolving version of events. ?Actually, what I tell people who want a retrospective right now,? he said in 1987, ?is that in fact I have a 15-year record of unbroken success. I started Osborne Associates, which I successfully sold to MacGraw-Hill. I started Osborne Computer Corporation, which I left in January 1983 in the midst of its best quarter ever. I started Paperback Software in October 1983 and it?s doing very nicely, thank you very much, and making a profit now.?

He added: ?Anyone who chooses to judge me only by the nine months of that period when I wasn?t an officer of no corporation [sic] and running no company, has got to be a victim of their own delusions.?

Although Osborne remained chairman, he had turned over control to company president Robert Jaunich, enabling him to later pass the buck firmly in Jaunich?s direction. ?The Executive was overpriced,? Osborne told me, blaming the president. ?It had a larger screen, more memory, but was basically still a CP/M machine.?

Osborne announced it to the press on 14 April 1983, prematurely as it turned out: ?We were going to ship it in April, but Jaunich in his wisdom didn?t want to because there were minor flaws still showing up, no more than was the industry standard, but he didn?t understand cash flow. So we had a month of no income at all, because the Osborne 1 sales had essentially gone away with the announcement of the Executive.

?We had no cash reserves and we couldn?t stand a single month with no cash. And from that point on it was downhill all the way. [Jaunich] found himself just painted into a corner going to hell in a handbasket.?

The comeback
Osborne made a valiant effort to bounce back into the business world, but not before he had taken time out to write a book, Hypergrowth: The Rise and Fall of the Osborne Computer Corporation.

His new venture was Paperback Software, an attempt to bring economy prices to the applications market. One of the key products was VP-Planner, a Lotus 1-2-3 lookalike that shipped in October 1985.

Osborne?s business model was very different from the centralism Lotus had evolved. He had discovered that corporate MIS departments were the first line of support for things like spreadsheets, so his support focus was purely aimed at individual customers. 

?We charge them for support,? he said, ?and that threat cuts out all the frivolous calls. So at a time when we have, probably, 150,000 packages out there being used in people?s hands, we have one and a half people on the phone lines because so few calls come in. The threat of the charge is all it takes, plus the fact that it is their nickle and not ours.?

On the development side, he revealed: ?We pay royalties and develop no software inhouse.  The developers use the royalties to keep enhancing the product.  So we have these dedicated groups of people working for themselves, busting ass to get product developed and improved, for 20 per cent of net revenue, period. No overruns, no schlocky software that we can never use, no ideas that we pour money down a rat hole for and never get a nickle back on ? none of that.?

Paperback write-off
But there was a cloud in this sunny sky. The day before Osborne told me this, Lotus had called a press conference to announce it would be suing Paperback. ?It?s totally beyond my comprehension,? was Osborne?s response. ?They must have flipped their wigs. They see a real threat coming from us, and the good old American habit is if you can?t win normally you bury them with legal costs.?

But he claimed to be ?ecstatic? at the thought of a prolonged law suit: ?I don?t have a problem with it dragging on for years.  They can only spend so much on litigation, and everybody?s going to be reading about it and finding out that VP-Planner is really a far better product than Lotus.?

Osborne was convinced that the sales of his superior product would easily keep his war chest topped up during the coming battle, but it was another of his misjudgements. Although rewritten from scratch in Forth, VP-Planner was advertised as ?designed to work like Lotus 1-2-3, keystroke for keystroke?. 

Three years later, the courts concluded that Lotus? interface was protected under copyright law. It signalled the end of Paperback Software. Osborne left the company and quit the US, setting up home with his sister Katya in Southern India, the country of his childhood.

Out of the spotlight
He ran a small software company there during the last decade, but little more was heard of him. During this time he was diagnosed as suffering from organic brain syndrome, a generic term for a physical deterioration of mental function often associated with depression.

Earlier this year, after a series of strokes, Osborne died on 18 March in the hill station of Kodaikanal. News of his death took a week to reach the outside world.

Osborne and MicroScope

When MicroScope launched in 1982, Adam Osborne was already established and quickly became a regular in our news pages. Over the years he provided a fair few examples to illustrate how he worked and what he contributed to the computer industry.

One of the first mentions of Osborne Computers was in connection with a row the vendor was having with dealers over support issues. Complaints surfaced over a lack of software support. Dealers moaned that sales of the Osborne 1 were being undermined by a lack of advertising, point-of-sale marketing and a prohibitive price.

In response, Osborne Computers managing director Mike Healy told ber 1982 after his speech at Comdex. He delivered an attack on IBM and PC clones, making the point that good products were not a guarantee of success in the computer market: ?We can learn from IBM?s successful history that you don?t have to have the best product to become number one. You don?t even have to have a good product.?

In an excerpt from his speech, he provided a good indication of the problems faced by the original personal computer pioneers in the early 1980s as the market for cheap home and office machines emerged and exploded: ?In less than a year since the first Osborne 1 portable computers appeared in stores, we have seen 25 to 30 new companies launch imitations. Some of them are better than the Osborne 1 ? but you can?t expect them to sell more machines.?

Making reference to Apple, he outlined his belief that service from dealers and the vendor, not necessarily product quality, were the key to success: ?The Apple II wasn?t the best computer available in 1976 and today it is inferior to most, but Apple offers the right support and service.?

One of the key planks of Osborne?s pledge to improve customer service was the introduction of a 12-month warranty, not something as common in 1982 as it later became. It quickly emerged that it was easier to talk up the need to offer support than actually deliver it, and the warranty scheme was qualified to remain as only offering 90-day cover for products older than the fresh blue-cased Osborne 1.

The reaction was mixed, with some vendors claiming they had plans to offer two-year warranties. John Chew of Computer Applied Technology was quoted as saying that the rival company was considering a five-year labour and parts guarantee.

Trouble ahead
The next major announcement from Osborne was of the planned release of the Osborne II, and at the start of 1983 Adam Osborne stepped down as president to focus his efforts on publicising the company?s new products.

The first sign of financial trouble at the vendor came after it failed to meet the promised delivery date of its Executive Machine. A series of component delays had pushed back the launch of the machine and stretched the financial resources of the company to the limit. In the 2 June issue of MicroScope under the headline ?Osborne cash crisis?, the response from Osborne was to dismiss the scale of the problem.

The first anniversary of MicroScope carried the story that Osborne UK was trying to put together a rescue bid after its US parent slumped into bankruptcy. Mike Healy, UK managing director, stressed that if it could get its hands on products then it would be able to trade, but accepted the challenge would be convincing dealers it was safe to continue doing business with the vendor.

?I agree, credibility is the problem. We have to take steps to protect our customers,? Healy told the magazine on 22 September 1983. Adam Osborne made it known that he had ceased to draw a salary. Most of the staff in the US were dismissed and the banks were called in.

Osborne was told not to talk to the press, but popped up in the magazine in July 1984 when his side of the story was published in book form, where he set out his theory of corporate sabotage.