A guided tour of personal computing. Paul Terrell.
Computer power was meant for the people. In the early 70's computer cults were being formed across the country. Sol Libes on the East Coast and Gordon French in the West were organizing computer enthusiasts into clubs. My own fraternity was the Homebrew Computer Club, which met in Palo Alto, CA, once a month and numbered among its members such notables as Jobs and Woz of the yet to be named Apple Computer Company, Garland and Melen of Cromemco, Ed Faber of Imsai (now of ComputerLand), and many, many more.
My passion was retail, and the prospect of providing a storefront for the host of products that would spew forth from that membership was overwhelming--as was the idea of being the first electronic candy store in Silicon Valley.
The first Byte Shop opened its doors on December 8, 1975 (my birthday), and within its walls Apple Computer was birthed with a purchase order for 50 Apple I computers that Steve Jobs leveraged into the seed capital to start his company.
We also taught Ziff-Davis Publishing Company a thing or two about publishing as we negotiated to buy every back issue of Popular Electronics because old issues were selling as collectors' items.
While all this way going on, the voice of IBM was asserting that computers could not be sold in retail stores. Today their stores are called Product Centers and Byte Shops are no longer hobby shops but business computing centers.
The kids that grew up in our stores became entrepreneurs rather than hobbyists. Steve Leininger left the Byte shop of Santa Clara to design the TRS-80 for Radio Shack in Fort Worth where he still leads their design team. I am also certain that somewhere in the infamous past of Chuck Peddle, creator of the Pet, a Byte Shop touched his soul. But with 74 Byte Shops nationwide, it was time to move on and create the computer of my retail dreams. The Magic of Sorcerer
In April of 1978 my Sorcerer Computer was introduced at the Long Beach Computer Show. My goal was to bring computer magic to the people. Computers were the most misunderstood creatures in the world, and if everyday people were to appreciate and use them, the mystique and magic had to be dispelled.
Graphics would play a major role in getting the computer into the home, but graphics must be as easy to put on the screen as text. The graphic resolution of the Sorcerer was better than that of Apple, Commodore, and Radio Shack combined. The Sorcerer had the first programmable keyboard on the market; any key could be programmed to evoke any special character or function. It was also the first personal computer to offer software on ROM cartridges.
How could anything with standard software like Microsoft Basic and CP/M, the most advanced microprocessor chip, 64 x 30 line display, and 64K memory sell for $895. Ten thousand computers later I learned that people who walk around with arrows in their backs are called pioneers. Today almost every home computer has cartridge software capability, and computer graphics in the form of video games has made computers at home in our homes. Most of the other features of my dream machine are, today, standard equipment with one exception--price. Let's toast the pioneers who left the market clipping coupons at $895 before the price war of 1983. Software to the People
If you have doubts, take the word of this visionary: software will be in the 80's what hardware was to the 70's. It was with that in mind in 1981 that I concevied the Software Emporium chain to be to the personal computer industry what the record store is to the music business.
Believing that the software business is like the record business, which is to say hit or miss, I soon discovered its pitfalls. After all, pioneers are also explorers. My initial stocking inventory of 650 stock keeping units (SKUs) showed up COD from Softsel. You can always tell what stage of development an industry is in by the payment terms offered by its businesses, and software was obviously in its infancy because the retailer was forced to play bank.
To add insult to injury, by the time the product got to my shelf, everyone in the chain of distribution had added on his profit. There the product sat--on my shelf being financed by me and my bank--waiting for a buyer to come along. Having 20/20 hindsight developed in my previous ventures, I quickly realized that this was not a healthy situation and that if Software Emporiums were to flourish I would have to come up with a new approach. I did--consignment inventory.
But that turned out not to be the answer either; consignment only transferred the inventory carrying costs up the channel of distribution. The Home Stretch
I continued to ask myself how software products could be put into retail stores without anyone in the distribution channel having to bear the inventory carryng costs. The answer is electronically, and I am off on my fourth and final venture in personal computing, Romox, Inc.
The goal of Romox is to remove the burden of inventory carrying costs of software along with the risk associated with buying product that may not sell through to the consumer.
It is important if you are going to be successful in an endeavor not to be too revolutionary in an evolutionary world. People resist change, and if the mission is to move mountains, they must be convinced that those mountains are only mole hills. Romox is not designed to change existing channels of software distribution. Romox is intended to make software a more profitable business by offering the benefits of electronic distribution to everyone involved in the sale of software--consumer, retailer, distributor, publisher, and author.
The consumer can buy software at a reasonable price. The retailer can carry every title in every format since there is no inventory carrying cost associated with programs in electronic form (When the program is copied onto cartridge or disk from the programming terminal it is then, when the product is created and paid for, that money becomes due). The distributor experiences an increase in blank media sales with no risk of obsolescence since many different titles can be programmed onto the medium by the customer. The publisher gets his product to the retail shelf immediately without any inventory exposure, and finally, the author receives a larger royalty check because distribution is efficient and volume is high because price is reasonable.
I see electronic distribution as a perfect solution for a not so perfect industry that saw two billion dollars in losses among major manufacturers in 1983 alone. Personal computing is an equal opportunity industry--big companies fail right along with the little guys. Home Delivery
Romox, with its programmable cartridge media and point of sale manufacturing machines, has provided to the industry the next logical step in software distribution. What about the future? Is home delivery of software the follow-on to Romox?
Certainly at some point in our future we wil experience the true meaning of computers in our homes. They will have a value way beyond video games and will be connected to vast networks that will offer access to databases that we have not yet begun to create.
The future of home delivery of software is as vague as that statement. With Playcable a failure in Los Angeles and Warner Communications pulling the plug on Qube in Columbus after eight years of less than successful operation, how can companies like Coleco/AT&T and Atari/Activision justify throwing good money after bad. The message to be learned from these failures is, "The customer doesn't care for or want home delivery of anything." Or, put another, people eat out and people eat at home. When they discover how to use the stove, they will eat at home more often. Until then, let's dine out with Romox and retailers.
Personal computing has come a long way in ten years, and we have barely scratched the surface. Computers are as significant and as exciting as the automobile and the telephone. The opportunities are yours and the time is now.
"There is a tide in the affairs of men which, taken at the flood, leads on to fortune."