No Way To Run A Company

How Not To

4 Dec. 2009

It's late fall of 1980 and I'm working every available minute to get the Osborne-1 design ready. The work is going on in multiple locations – my office in Berkeley, the offices of Sorcim (“micros” spelled backwards) in Santa Clara where the firmware (what would now be called the “ROM-BIOS”) is being developed by Richard Frank and his crew and where Tom Davidson, our general manager, maintains an office, and at times in the unfinished third of a tilt-up building on Corporate Way in Hayward where I do thermal testing of the “unit”, as we call it. I put in a lot of time driving from one site to another in my 1977 Honda Accord.

Sorcim has the wire-wrapped prototype with a printed-circuit DRAM section laid out by my electronic musician friend. It's just a circuit board with spacers for legs holding it off the tabletop, a tiny 5 inch CRT monitor (diagonal, meaning the picture is 3 inches high by 4 inches wide), a 5 inch full-height floppy disc drive and a keyboard obtained as a sample from a keyboard manufacturer. When there is some question about the hardware operation I have to pack up my oscilloscope and drive the hour-long drive down there and fix it. At least once I am so tired at the end I can't make it back and wisely check in at the Vagabond Inn motel next door.

A couple of times Adam Osborne himself comes down, ostensibly for a conference, accompanied by a young woman co-worker from his book company. After strutting back and forth a few times and chatting briefly with Richard, Adam would draw himself up and say “well, you guys obviously know much more than I about these things, so we'll just be going”, and the two of them would leave. Clearly the purpose of their trip was not to confer with us but, in a sense, to confer among themselves.

During this time we try to get a metal housing made at a reasonable price. Tom takes me to Galgon Industries in Hayward , where Manfred Galgon and his crew have turned out ten metal cases for our first run of prototypes. Manfred is an immigrant with a thick German accent, and proud of his heritage. “Did you ever see a Cherman miss?” he would challenge. I briefly consider replying “Yes – out in the front office” where one of Manfred's daughters holds down the front desk – but I hold my comments.

Tom is trying to negotiate a workable price for a metal case in production quantities – the quote stands at $150 each – far more than we can afford. Even though Tom had been trained as a machinist he takes his favored approach of “beating up suppliers” in trying to argue the price down. Manfred was having none of that and steadily grows angrier. Suddenly, he erupts, pointing at me while looking at Tom, “him I will talk to!” Swinging his arm to point at Tom, he continues rapid-fire, “him I will not talk to!” and everybody gets out of the room. I would have liked the chance to talk with Manfred about better ways to get the price down, but I have to go with Tom to a nearby restaurant and listen while he laments over a few beers. Galgon remains our supplier for several sheet metal parts, an indication of Tom's respect for Manfred.

Not too long after that episode I am taken to the offices of GVO, an “industrial design” firm, for a conference about designing a plastic housing. The executive we meet with wears a European double-breasted suit, an unusual sight in Silicon Valley, clearly meant to make us feel uncomfortable about our ordinary clothes. After a while, he calls in the actual industrial designer on the project, a tall, prematurely balding young guy named Mike Levitt. He lays out a plan for two plastic housings – the first done by the quick-and-dirty “vacuum form” process in which a sheet of heat-softened plastic is pulled down over a wood and metal mold and vacuum is used to pull it around the mold. The second case, which will take months longer to prepare, would be the usual “injection-molded” type where molten plastic is forced by pressure into a machined metal mold.

Tom goes with the GVO plan, and I begin coming down to GVO to help Mike work out questions and problems. Very quickly I realize that the executive in the fancy suit will be of no help in the process, and discover that I can get in to see Mike through the back door on weekends and after hours when the executive is away. From this I construct the aphorism “always find the back door into a supplier” - that is, develop a direct channel between the technical people on both sides of a problem to get it solved in the fastest and best way.

Industrious as ever, Tom finds a plastics fabrication company in San Francisco, Ajax Plastics, that is willing to throw themselves into the task of tooling up to manufacture our beige vacuum-formed housings. Their lead technical person, Paul Bunning, is a short, wiry fellow who calls himself a “plastics artist” and is willing to put in the long hours needed to prepare for production. They built three molds and arranged them on a turntable so one would be heating, the other “pulling” the plastic sheet and the third “trimming” and removing the cooled sheet. Tom commented at one point “I had to buy a plastics company to get it done.”

Paul's artistic credentials are displayed by a wall hanging consisting of a large sheet of plastic with three ghostly impressions of the Osborne housing bulging part way out. It produces an eerie effect, as if they were invaders from another dimension who had almost made it through to our reality. Some years later, on another project, Paul takes great pride in designing a housing that would be far cheaper to build than the sort favored by industrial designers, and in charging one third of what they would charge. Unfortunately, I can now no longer locate him, and I suspect his tobacco habit combined with the fumes expected in plastics manufacturing brought him to an untimely end.

At the 6^th West Coast Computer Faire in March 1981, where we are the hit of the show with our new product, Adam and I find ourselves walking down an empty corridor behind the scenes. In an expansive mood, he claps me on the shoulder and said “the product is the company – we're going to build it up really big and sell it off really fast!” I hope he knows what he was doing, because in those areas, I certainly know nothing.

At the show no spectator could get close enough to the product to see that the display was wavering from magnetic interference between the power transformer and the CRT monitor, that random characters would appear on the screen, that the insides contained a large amount of double-sticky foam tape, our universal mechanical fix, or that the unit weighed 30 pounds due to the large iron and copper power transformer. Carrying two of them from my car four blocks to the show had nearly pulled my arms out of their sockets.

At the show a man I'd never met introduces himself and pulls out a small electronic assembly – a “switching power supply” from Astec that would replace our huge, heavy power transformer, eliminate the waver I called “the Hawaiian effect” and greatly reduce the amount of heat within the device. It was a godsend, and I immediately design it in.

Around this time Tom confides to me that he is not using purchase orders – his parts orders to suppliers are made verbally. This is unheard of, but it is part of his strategy of negotiations. If the suppliers want to, they could shut us down in a day without legal consequences. It is only their perception of mutual self-interest that sustains the whole house of cards that is the parts supply structure. If we ever falter, Tom makes clear to me, we would face disaster - the parts would keep coming only as long as everything looked good.

Upon starting production Adam demonstrates how little he knows about running a company of any significant size. He attempts to get everyone in a room around a table so he can hear reports and issue orders. You simply can't do this with a company that's larger than about 15 people – management is a full-time job and most of what's discussed is of no relevance to most of the others there. It will radically reduce the company's productivity.

By that time, with the title of Vice President for Engineering, I had set up the engineering department with a totally inadequate two engineers (Pat McGuire and myself). There was a documentation clerk who asked for much less in salary than we thought she ought to have, and a part-time draftsman. I had made a fairly common error of confusing the role of “vice president for engineering” with “chief engineer”. I tried to solve all the problems this brought about by working very long hours, often into the early morning hours. Pat puts together our floppy disc duplication system – an Osborne board with four floppy drives and enough modifications of hardware and software to make it work. Pat often works alongside me when I ran late.

One day Adam and Tom are out of town and we are having our company meeting. I am told by our 23-year-old marketing VP that there is an unacceptable level of errors on the machines we were shipping, and that production has to be stopped until this is fixed. Remembering Tom's warning about never slowing down, I dig in and resist. With the others away, I am the one with authority over production, so I hunch up my shoulders and declare “I won't do it!”

Marketing then demands that we ship all production to them before shipping to the customers. They will test the machines and let them out only when they see fit. I agree, since it would not slow down shipments of parts and endanger our supply lines. Marketing then rents a vacant third of our building and hires a raft of temporary workers to walk up and down along rows of computers, aimlessly poking discs in and out and running programs.

When Tom returns he backs me up. The meetings continue until Pat looks up and asks “has anyone ever cleaned the heads on the duplicators?” Everyone looks at each other. The fellow responsible for this sort of thing had previously been a hard disc drive technician, where the first question asked is always “did you clean the heads”? The same day we place an order with a professional disc duplicating company and our homemade duplicator setup is returned to a shelf in the engineering shop. The errors, which have been due to weak recording of the floppies, end.

The company expands into the space used for marketing's “testing” program, and almost all of the temporary workers stay and become permanent. This is no way to run a company, a lesson I am learning too late to apply.

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