Miracles and Mistakes
I personally consummated the CP/M contract. [Gary Kildall] got a good deal, considering that the Navy was supporting him and he didn’t have any other expenses.
–Seymour Rubinstein, software entrepreneur
When he first met Bill Millard, Seymour Rubinstein was a programmer for Sanders Associates, a military-defense-electronics firm in New York. Rubinstein’s ambition and self-confidence were obvious to Millard, as was something else that Millard admired—a willingness, born perhaps of supreme self-confidence, to take on tasks that others regarded as impossible.
Taking Software Seriously
Rubinstein was the quintessential self-made man. Born and raised in New York City, he put himself through Brooklyn College taking night classes, including the school’s sole computer course. Using his nerve and innate smarts, Rubinstein turned that one course into a job as a technical writer, then a job in programming, and finally a position as chief programmer at Sanders. By the time he left Sanders, he would tell people later with a chuckle, he had a staff of programmers working for him.
In 1971, Millard formed System Dynamics to sell an IBM-compatible telecommunications terminal. He recruited Rubinstein to come work for him in California on the short-lived venture. Rubinstein settled in San Rafael, north of San Francisco. When System Dynamics folded the next spring, driven out of business by IBM, Rubinstein and Millard went their separate ways.
Rubinstein remained enthusiastic about the technology. Ed Faber may have been initially skeptical about selling computer kits, but Seymour Rubinstein was not. After System Dynamics took down its tent, he became a consultant. When Rubinstein returned from a consulting trip in Europe in late 1976, he was unaware that an actual microcomputer industry was in its infancy. So, he was surprised to find that a new store called Byte Shop had opened on a main street of sleepy, suburban San Rafael, selling computer kits. Rubinstein bought a kit, put the device together in a few weeks, and began programming. To his amazement, it was a real computer! Only later did he learn that his computer was manufactured by the same man who had brought him to California, Bill Millard.
Figure 27. Seymour Rubinstein At IMSAI, Rubinstein negotiated sweet deals for software from Gary Kildall, Gordon Eubanks, and Bill Gates. Later he launched his own software company, which brought what-you-see-is-what-you-get functionality to word processing with WordStar. (Courtesy of Seymour L. Rubinstein)
In February 1977, Rubinstein joined IMSAI Manufacturing as a software product marketing manager. After Millard persuaded Rubinstein to “do the training,” Millard was even more convinced he had done a smart thing by hiring him. Within a few months, Rubinstein moved up to the position that he would have for the rest of his tenure at IMSAI—director of marketing.
As software product marketing manager, Rubinstein got to know programmer Rob Barnaby, at least as much as one could get to know the angular, taciturn young man who liked to work alone into the early hours of the morning. Both Barnaby and Rubinstein realized that the IMSAI machine needed a greater quantity of software and more robust software given that what was originally supplied with the machine was scanty and fairly weak.
Barnaby had proposed to write a version of BASIC for the IMSAI, but Millard vetoed the project when he found out how long the task would take. Until that time, Barnaby had been doing miscellaneous programming and helping to hire other programmers, such as Diane Hajicek and Glen Ewing, plus negotiating software deals from outside sources. Millard wanted fast results, and buying software was quicker than writing it. When Rubinstein arrived at IMSAI, Barnaby was negotiating two software contracts with individuals from the Naval Postgraduate School in Monterey, where Glen Ewing had studied. Rubinstein soon took over those negotiations from Barnaby.
The Negotiator
IMSAI desperately needed a disk operating system. From the start, Millard saw the IMSAI machine as a disk-drive machine; that is, one that would use magnetic disks for permanent information storage, unlike the Altair, which had initially used slower and less-reliable cassette tapes. Disks were essential for the business applications Millard intended for the machine. But a disk drive was useless without a program that would act as a sort of software “reference librarian” to handle storage of the information on the disks.
IMSAI bought a disk operating system called CP/M from Gary Kildall, the professor at the Naval Postgraduate School who had written software for Intel’s 4004 chip and had teamed with John Torode to sell computers to Omron. In 1977, CP/M was brand-new as a product, although it had grown out of his work consulting at Intel. Kildall had given Barnaby the third copy in existence. Rubinstein negotiated with Kildall and his partner and lawyer, Gerry Davis, and closed the deal for a flat $25,000. It was highway robbery, Rubinstein later boasted; if Kildall had had any sense, he would have sold CP/M on a royalty basis, and not for a flat fee. After closing the deal, Rubinstein then chided Kildall that his marketing approach was naive. “If you continue this practice, you are not going to make nearly as much money as you are entitled to,” he told him. Kildall shrugged off the warning. This first deal felt good to him.
One of Kildall’s students had written a version of the programming language BASIC, and IMSAI picked that up, too. The student, Gordon Eubanks, settled for even less than what Kildall got. Eubanks gave IMSAI his BASIC for the promise of a computer and some technical support. IMSAI, in turn, supplied him with a computer, disk drives, and a printer, and encouraged him to develop the language further, with the understanding that IMSAI would have unlimited distribution rights. Eubanks’s CBASIC would work with the newly purchased CP/M. It was just what IMSAI wanted. IMSAI got such a good deal on CBASIC that it didn’t even consider also buying MBASIC, the BASIC programming language that Bill Gates and Paul Allen were selling under the company name Microsoft.
Later, when IMSAI did begin buying software from Microsoft, Seymour Rubinstein handled the negotiations from start to finish. Rubinstein was a remorseless negotiator and brought all his skills to bear in dealing with Microsoft’s young president, Bill Gates. Gates left their meeting thinking that he had done well for Microsoft, but a few days later began to have doubts. Rubinstein, on the other hand, knew at once what kind of deal he had made. “Everything but the kitchen sink,” he chuckled, “including the stopper and the faucets.” Seymour Rubinstein was making miracles in his own way.
Missing Parts
Meanwhile, Building One’s glorification of achieving the impossible dream was creating problems for the production and service people in Building Two. According to Todd Fischer, it was easy to think of the buildings as two conflicting individuals because the departments each had such different personalities. The way that the salespeople dictated the production department’s output levels with no concern as to what production could realistically get done was much too disruptive.
For instance, Fischer said, the sales department would set a production quota of 27 units for an item. Production would then set aside the parts for 27 units and build 27 units. Then, someone from Building One would come running across the parking lot yelling, “I’ve just sold 30 more of those things! We’ve got to have 30 more by Friday.” Sales seemingly didn’t care that production lacked the necessary parts and the available people to build the units. At least that’s how it looked from Fischer’s point of view in Building Two. Sales had to have the items out by Friday, so production would shift gears and get it done. It was “make a miracle” time.
Fischer didn’t like the way the unpredictable work schedules jerked people around. Jarring changes in the work hours threw everybody off, taking a psychological toll on the production crew. They never knew when they would have to work overtime hours or hastily salvage an item in order to obtain some needed parts. This constant uncertainty diminished production’s pride in their work because machines often had to be rushed out of the shop without proper testing. One time, Fischer got a call from a customer wondering why his computer had a screwdriver inside of it. Apparently, the computer was sealed up and shipped out before the technician had a chance to retrieve the missing tool.
But even the beleaguered production department was better off than customer support. Nancy Freitas’s brother Ed, who worked in inventory, could see that the customer-support department got short shrift. When customer support needed a part to repair a customer’s machine, supplying that part was low priority. Production got the needed parts first, a practice that failed to charm customers who were waiting for their machines to come back from the repair shop. As a way to fight back, Building Two put an informal (and unauthorized) procedure into effect. If Fischer or Freitas spotted a problem, Freitas would mention it to her brother, who would work his inventory magic. The part that customer support needed would then materialize. Freitas and Fischer often found themselves resorting to this solution. Together they started an underground parts-supply network.
Freitas had worked in both inventory and production, so she was able to diagram an operational flowchart that connected all the departments and detailed the route that parts took through the manufacturing and repair phases. She knew exactly what could be done and how long it would take. All that talk of “making miracles” irritated her. Using her chart as proof, she would explain that a certain goal was physically and materially impossible. Management didn’t want to hear the word “impossible.” Their reply was always the same: make a miracle.
Management’s reluctance to acknowledge production limitations also caused friction within Building One, where the engineering department resided. After the release of the IMSAI 8080, engineering’s big new project was a computer called the VDP 80. The VDP 80 had a novel design featuring a screen built right into the box, and Killian wanted to see the machine thoroughly tested. The order came down that the machine had to be shipped, and it didn’t matter that the whole department, including Joe Killian, said it wasn’t ready to go because it needed to be tested first. The prototype seemed to work, the orders were coming in, and the company needed cash.
Engineering threw up its hands. If you want the computer, Killian’s group told Millard, it’s your baby. Engineering didn’t want responsibility for a machine that would soon be clattering with problems, and Millard didn’t want to hear about potential problems. Sales was getting more and more orders for the VDP 80 every day. The company needed the money to cover current expenses so it could start shipping product. And that was that.
It seemed to many people in the engineering, production, and customer-support departments that the sales group was blindly selling the ground right out from under them. IMSAI cared about success, all right. But management measured success by sales figures first, rather than by the quality of production or level of customer service. IMSAI was a selling machine, and when viewed that way, the company was doing very well.
Selling Computers Like Hamburgers
For Bill Lohse in sales, things were endlessly exciting and challenging. Lohse saw the company as constantly evolving, unafraid to take risks, and scoring some big successes along the way. Millard thrived on change and risky ventures. The sales team was expanding and improving. Salespeople with experience and plenty of IMSAI drive and initiative, like Fred “Chip” Poode, were being recruited. Then there was the franchise idea.
The computer store was emerging as a serious channel of distribution for microcomputers. Ed Roberts limited MITS’s market reach by demanding that the company’s retail outlets sell only Altairs. Bill Millard was not going to make the same mistake, but how could he also ensure loyalty to his product?
Millard liked the notion of an independent but friendly franchise, and the idea also interested Ed Faber. Perhaps Faber was chafing in Millard’s organization and was seeking more autonomy, or perhaps the initial excitement had worn off since the IMSAI start-up. At any rate, in the summer of 1976 Faber told Millard that he wanted to start a franchise operation, like McDonald’s had with hamburgers. Lohse watched this development with special interest, and when Faber left to start the franchise, Lohse replaced Faber as director of sales.
Lohse immediately had two major challenges to overcome. Chip Poode saw Lohse as a kid fresh out of college and resented being passed over for the director’s job, and Seymour Rubinstein, in Lohse’s view, thought that the marketing and sales departments should both report to one person, Seymour Rubinstein. Not surprisingly, Lohse and Rubinstein frequently locked horns.
Nevertheless, Lohse thought IMSAI was a great place to be. He enjoyed working in the sales department for Bill Millard and being around his mentor. IMSAI’s people sold when nobody else thought they could, and hit sales goals that seemed impossible. It was unreal in a way. They did seem to perform miracles.