We had invited two of the best to present: Slate Corporation, a collection of PC software industry luminaries headed by Vern Raburn, a veteran executive of both Microsoft and Lotus; and Pensoft, a group of relatively junior but talented engineers headed by a young entrepreneur named Michael Baum. About six months earlier, I had made a deal with Raburn: GO would stop development on our own electronic forms application and turn the project over to Slate if it would agree to finish the application and bring it to market under Penpoint. Now Raburn was ready to show off Slate’s product, called PenApps, for the first time. Carol and I had repeatedly asked for an advance copy of his demo script, but because of unexplained delays, it somehow never showed up. Pensoft had been working on a flexible, pen-based “personal information manager,” similar in some respects to Lotus Agenda, which would track handwritten appointments, notes, and phone lists.
Raburn got up to practice his presentation. To my surprise, he had directed his engineers to build a calendar and appointment scheduler with PenApps, along with two other unrelated sample uses, which he planned to demonstrate. When he climbed down from the stage, he avoided my eyes.
“Vern, let’s talk,” I said. “You know what Pensoft is doing. We’re here to build a market at this point, not snipe at each other. If you want to shoot at him later, that’s your business, but this is GO’s announcement, and I want you to stick to the electronic forms.”
“These aren’t applications for sale, just examples. Anyway, I have to pursue my business the way I see fit,” he said.
I felt like inviting him outside for a fistfight, but there were more important matters to deal with. “How about if you stick to the calendar and skip the appointments,” I told him. “And I want you to lead with a heavy emphasis on the forms.”
He reluctantly agreed.
Completing the roster, along with IBM, were senior executives from NCR and Grid Corporation, who had decided, after an extensive courtship, to follow IBM’s lead and license Penpoint for their future pen computer projects. In the afternoon sessions, forty other ISV and development partners would be demonstrating or discussing their applications.
Near the end of the rehearsal, Carol walked up to me and said, “We’ve got a problem.” She seemed clinically devoid of emotion, a defensive technique she had developed to deal with the unimaginable stress of pulling this all together on schedule. “The cables that run the images out of the live demo units from the podium to the display screens aren’t working. Can you please talk to Kevin?”
I found Kevin in a corner of the room, sweating over a pile of electronics with a soldering iron, attended by a circle of his engineers. “My guess is that the signal degrades over the long run of the cables,” he said. “This worked fine with the shorter lines in our tests.”
“So now what?” I asked.
“If I’m right, there’s no easy fix. We need to find a way to boost the signal.”
“Maybe we can rig a camera overhead, aimed down at the podium.”
“Might work, might not,” Kevin said without looking up. Carol got the video crews to work through the night to set this up.
The next morning, I drove back to the hotel. I knew that within a few hours, either we would be the laughingstock of the computer industry—having blown $25 million in a foolhardy attempt to convince people that pen computers were something new and different—or we would be hailed as visionaries. I still did not know which way this $500,000 show was going to go.
Carol gave the signal to open the doors, and seven hundred invited guests flowed into the ballroom. The transformation from the previous evening was dramatic—everything was orderly, polished, and clean. With broad banners adorning the walls, the room had the feel of a royal pageant. At precisely ten o’clock, the lights dimmed and a fast-paced video rolled on the center screen above the stage, accompanied by loud rock music. An announcer’s voice said, “And now, Jerry Kaplan, CEO of GO Corporation.” I walked to the spotlighted podium to begin my speech.
“It’s my pleasure to welcome you here on the birthday of the man who made penmanship famous—John Hancock.” The crowd burst into laughter. “We’ve asked you here today to witness a demonstration of one compelling truth, that computers operated by a pen will be simpler and more convenient than any other computing tool for people on the go. Adding a pen to a system designed for a keyboard makes it more complex, not simpler. The pen is not an option, the pen is the point.” The audience applauded enthusiastically. “It’s my great honor to introduce to you the first operating system designed specifically for the coming wave of pen-based computers.” After a brief summary of Penpoint’s key features, I introduced Robert.
He walked to center stage with his demo unit unobtrusively tucked under his arm. Unsnapping the leather cover, he pulled out the inch-thick, four-pound tablet computer, with only a screen and a single on-off button, and held it aloft. “Here it is, the future of computing.” The audience cheered again and began stomping their feet. The GO engineers among them started to chant “Pen-point, Pen-point, Pen-point . . .” Soon the whole crowd was into it—it sounded like a wartime rally. Robert plugged his computer into the display cable and looked over to the side of the stage at Kevin, who had been up much of the night trying to get it working. Kevin pressed a button and all three screens flashed to life with sharp images of an electronic table of contents. He shot Robert a thumbs-up. Carol, also in the wings, gave Kevin a big hug. The director’s face broke into a broad smile. Then Robert launched into his demo.
He began with a quick tour of the notebook metaphor. Each document occupied a page, identified by a page number in the upper right-hand corner. Labeled tabs ran down the right side of the screen as in a loose-leaf binder. After turning to a memo, he demonstrated Penpoint’s “gestures,” scratching out some words and watching as the surrounding text closed up. He drew an insert caret, and a combed box called a writing pad popped up. After writing a few words, one letter to a comb, he tapped a button labeled “OK.” The new handwritten words were instantly transformed into typed text and inserted into the memo. Our handwriting team had made great progress, and it showed—though there was still a long way to go before the software was good enough for general use.
Then Robert turned to a clean page, where he drew a circle freehand. When he raised his pen, the circle immediately snapped to a perfectly round shape. He drew an X over the circle, and it disappeared. He sketched several boxes, which melted into perfect rectangles, and dragged them with the pen into the form of an organization chart. He then connected the boxes with lines, which adjusted themselves to be straight and level, and wrote the word “simple” over one of the boxes. The translated word appeared as text inside the box. He turned to a page containing a faxed document and showed how it could be marked up with the pen and faxed back. Finally, he demonstrated “math paper,” which looked like regular lined paper, but when he wrote the mathematical expression “2 × (3 + 4)” on a line, it added the answer “= 14.”
After the other speakers were done, I returned to the podium to wrap things up. “I’d like to introduce you to the latest addition to our management team. As of today, we have a new president and CEO. Please welcome Bill Campbell!” The audience cheered as this renowned executive took the stage. He gave a brief but inspirational speech about GO’s vision and commitment to building a new market.
When we broke for lunch, forty GO staffers roamed the crowd with pen computers to give people a hands-on feel for the new technology. And to our surprise, nearly everybody stayed for the afternoon sessions.
In the evening, we held a company party at the hotel. The mood was electric. Bill Campbell announced that we were granting every employee a bonus of 286 shares of stock—a reference to the Intel processor powering the demo units. For a while I played the piano, and someone put up a jar for tips, which quickly filled up. Then several of us were off to the airport for the redeye to Boston.
Although we were exhausted, we spent much of the flight showing
off Penpoint to interested passengers. The next day, at the Berklee Performance Center in Boston, we repeated the San Francisco performance to an even larger crowd, eight hundred members of the Boston Computer Society.
When the dust settled, the press had delivered our message loud and clear. We were the cover story for Byte magazine and PC World. Stewart Alsop wrote us up in his next newsletter: “GO has developed what is, in my opinion, the most state-of-the-art personal computer operating system in the industry.” We were inundated with calls requesting application development kits and asking where our stock could be purchased.
I took Robert, Kevin, and Bill out for a celebratory drink. “Well, gentlemen,” I said. “I think we made our point.”
“No question,” Robert said. “We’re riding the top of the wave.”
“A fuckin’ tidal wave, judging from the press,” Bill added.
Kevin raised his glass and said, “Now we just have to keep from drowning in our own storm.”
I link arms with Bill Gates (left) and Mitchell Kapor (right) shortly before GO was founded. Gates and I would later become fierce competitors in pen computing.(© Ann E. Yow)
Kapor consults his “to do” list on a Compaq 286 portable while traveling cross-country on his private jet. On a similar trip, earlier in 1987, Kapor mentioned to me how awkward it was to make notes this way, which led us to the idea for a pen computer.(Courtesy of John Doerr)
Kevin Doren, cofounder and vice president of engineering at GO, proudly displays a circuit board from the first portable pen computer. Beside him is the deskbound prototype that the portable model replaced. The race was now on to assemble and test the new working units before making a presentation to State Farm Insurance in June 1989.
Robert Carr gives the first public demonstration of GO’s Penpoint operating system at the PC Forum in March 1991. Afterward, Microsoft unveiled Pen Windows, a competitive product whose similarities to Penpoint seemed to us to be more than coincidental.(© Ann E. Yow)
GO investor and board member John Doerr (right) shows me why he is a “full-service venture capitalist” as we return to San Francisco from a triumphant product announcement in Boston in January 1991.(Courtesy of John Doerr)
Stewart Alsop (right), the influential publisher of PC Letter, looks somewhat bemused as David Liddle, a member of GO’s board of directors, presses his point.(Courtesy of John Doerr)
An early pen computer user checks his electronic calendar using Pensoft’s Perspective, which resembles Penpoint’s “notebook” look. Touching the pen to a name that appears in bold (in this case “Esther Dyson”) calls up information about that person.(© Ann E. Yow)
After tracking down Norm Vincent of State Farm (far right) at an industry conference, I persuaded him and two associates to step into a bar in the hotel lobby for a quick demonstration of GO’s latest ha ndwriting-recognition software.(Courtesy of John Doerr)
Mike Quinlan (right) and Kathy Vieth of IBM pose for press pictures with nie following the July 1990 announcement that IBM would license GO’s operating system.
I turn over the reins of GO Corporation to Bill Campbell (left) at the January 1991 announcement of Penpoint. I was CEO of GO during its developmental stage; Campbell had the experience, connections, and stature to help the company meet future challenges.(© Doug Menuez/Reportáge)
The GO executive staff takes a rare break together. Bill Campbell, a master at team building, would arrange lunches and other outings whenever he sensed that the staff was becoming stressed out. Clockwise from left: Kevin Dorett. Mike Homer, Robert Carr, Randy Komisar, Campbell, Debbie Biondolillo, Stratton Sclavos.
John Sculley, then the CEO of Apple, takes care of business during a conference in Palm Springs. Sculley nearly undermined GO twice: once by asking IBM to back Apple’s Newton project, and later by making a similar proposal to AT&T.(© Ann E. Yow)
Plain-spoken Jim Cannavino, whom I first met in a company trailer at COMDEX, in Las Vegas, made a tempting offer of a partnership with IBM. But his resolve to support GO fell victim to the harsh realities of IBM’s waning industry influence and its internal battles over operating-systems standards.(© Ann E. Yow)
Jeff Raikes, Bill Gates, and Lloyd Frink of Microsoft test-drive Pen Windows, Microsoft’s response to Penpoint. Frink, who visited GO in 1989, was instrumental in designing the rival pen interface.(© Robbie McClaran)
Esther Dyson interviews Bob Kavner at her PC Forum. Kavner, at that time a group executive at AT&T, arranged the financing of EO, the personal communicator company that grew out of GO.(© 1993, Fran Solomon)
Alain Rossmann, the chairman of EO, presents the marketing strategy for EO’s personal communicators. Rossmann’s company, which was swallowed up by AT&T, soon afterward swallowed up GO.(© 1993, Fran Solomon)
My wife, Layne, who is also a computer industry professional, often provided informal advice and moral support. At a surprise fortieth birthday party she threw for me, she hopped on the back of my motorcycle as I drove into my living room to liven things up.
9
The War
BY THE BEGINNING OF 1991, Microsoft had become the most powerful player in the PC industry. Founded in 1975, the company had spent its first decade getting less respect than it deserved, before quietly blossoming into an international force. Its image problem stemmed from the fact that no one on the outside could discern the company’s business strategy. Most successful companies select one market or a few related markets, develop expertise in those areas, then build a defensible position with quality products or services. Microsoft, however, sold a wide variety of seemingly unrelated software products in a number of different markets. This omnivorous behavior was the result of a unique approach to survival that might be described as selective opportunism.
Rather than focusing on any one thing, the company became adept at identifying promising market niches with weaker competitors. It would closely study their products and tactics, then launch an attack on their position with a strong product and aggressive pricing. Sometimes Microsoft would propose some form of cooperation or joint development, to learn about the market before staging its own entry. This was the corporate version of the cheetah’s hunting technique: keep a close eye on your prey, sneak up, then outrun it. Like the cheetah, Microsoft became well adapted to its game: lean and mean, fast on its feet, observant, shrewd. And the first warning of its presence was often an unexplained rustling in the tall grass.
“I’ve been thinking about Windows, and I’m having second thoughts about writing applications for Penpoint.” One of our independent software developers had called me to discuss the potential market for Penpoint applications. “Your system is compelling, but Windows is compatible with an installed base of millions of PCs. As a developer, it’s hard to ignore that.”
The afterglow of our announcement had begun to dim, and Microsoft evidently decided it was time to strike before we gained too much momentum. We had heard rumors for months that its engineers were working feverishly to add some pen extensions to the increasingly popular Windows interface, but it seemed that the runaway success of our event may have taken them by surprise. Microsoft arranged a private conference with key software developers to reveal its plans, taking particular care to target those who had publicly committed themselves to Penpoint. The race was on.
“Windows may be widespread, but none of those computers have pens attached,” I said. “Writing with a mouse would be like writing with a potato.” I didn’t know exactly what Gates’s people had done, but it seemed logical that they had simply rigged a pen as an alternative to a mouse.
The developer still had his doubts. “Sure, but it’s going to be a lot easier for people with Windows apps to modify their existing programs than to start fresh with Penpoint, no matter how much better it is.”
I could tell by his voice that, like many independent developers, he wanted to know that he was really appreciated. “You don’t want to do just another Windows spreadsheet, just another Windows wo
rd processor. Where’s the sport in that? You’re a creative guy, and you need a system that will let you build something truly different. Windows is a crowded market, Penpoint is a wide-open playing field.”
He liked my tack. “I’ll think about it and call you back.”
“My door’s always open if you want to bat around new ideas.”
When I hung up the phone, I realized that there was no way I could personally persuade every developer this way. If Microsoft could introduce doubts into one developer’s mind, it was surely undermining our efforts with others as well. We had to devise a strategy to keep our story fresh and attractive.
The first step was to find out as soon as possible just what Microsoft had cooked up. It didn’t take long.
I spent what little free time I could find during the month of February cooking up a special surprise for my girlfriend, Layne. It was nearly a year since I had struggled up the stairs to the party at her house, and I felt it was time to get serious about our relationship. So I engaged an artist and a programmer to build a special Penpoint application. Then I picked an ordinary weeknight and asked her to come to my house for dinner after work.
“Would you mind doing a reality check on these figures?” she said, handing me a spreadsheet she was working on. Then she noticed I was opening a bottle of chardonnay. It was unusual enough for me to offer her a drink during the week, but she became especially curious when she saw that it was a forty-dollar bottle of wine. “Hmm, Far Niente,” she said.
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