by W. E. Pete Peterson
Copyright 1993, 1998 W. E. Peterson
Innocent at Birth
While driving back to the drapery shop one afternoon in the summer of 1980, I had a strong feeling that one day I would be rich. I laughed to myself at this premonition. I did not care about being rich, I just wanted to pay the bills. My wife, Marieta, and I had four little children, a mortgage, an empty savings account, and a failing business. We were worried enough to wonder if it was time to disconnect the telephone and cancel the life insurance.
Our financial troubles resulted from the recession of 1980, when new home building in Utah County had stopped. I worked at Julie's Draperies, which I owned and ran with my brother, André, and my sister's husband, Lynn. During the week my job was to visit crazy housewives who called for appointments, giving them estimates for custom draperies and attempting to play the part of the talented interior designer. I called the housewives "crazy," because most of them went temporarily insane when they learned the cost of their window treatments. On Saturdays I kept the books and wrote up the work orders from my sales. Sales for the year were down to one third of normal levels, and my partners and I were going weeks at a time without pay to keep the company afloat. Instead of the normal five appointments per day, I had only five or six per week.
With time on my hands and bills to pay, I took a job weekday mornings at a local supermarket stocking the dairy case and bagging groceries. This helped keep me away from the drapery shop, where I often received sad and sympathetic looks from the women who sewed for us. The grocery store paid four dollars an hour, which almost covered our house payment, but I hated the job. I was supposed to stock the dairy case and bag groceries, but it seemed I spent most of my time running back and forth between the two duties.
If I did not have a drapery appointment in the afternoon, I worked in our large garden with three of my little children at my feet. Sam was almost five, Wendy was three, and Ellen was almost two. Joe was only a few months old, not quite old enough to know the fun he was missing. The garden was beautiful and weed free and provided us with lots of food that summer.
Perhaps all the dirt in our clothes was the reason our washing machine died. When it broke down and the repairman told us a new machine would be cheaper than fixing the dead one, my wife broke down too. When her father learned we did not have the money to buy a new machine, he offered to pay for a new washer, and we gratefully accepted his gift. Six months earlier we would have been too proud to take his help.
I spent a lot of my time that summer wondering what I would do if the drapery business failed. I had grown up expecting to earn a doctorate and do something important with my life, but after getting a bachelor's degree in psychology at BYU in 1972, I never made it back to school. After a year working as a bookkeeper for an employment agency back East, I returned to Utah and took a job in my mom's custom drapery business, thinking I would save a little money and then go back to school. When I met Marieta in 1974, getting married was more important to me than going to school. Once the children started coming, I gave up some of my dreams and decided to concentrate on making a living.
After my mom passed away in 1979, a lot of the fun went out of the business. She had a talent for creating new designs and running the shop. In her will, she left one third of the business to me, one third to my brother, and one third to my sister. I do not think any of us enjoyed owning or running a drapery business, but we were resigned to our fate. If not for the recession, we would probably all still be there, wishing we could find a way out.
As I considered my premonition on that afternoon in 1980, I tried to figure out how it might come true. It occurred to me that some of our relatives had money, and if they all died at once, we might inherit as much as one hundred thousand dollars. Considering our circumstances, that was an enormous amount of money, but my feeling did not seem to be about one hundred thousand dollars. The money involved would be more than I could count. Although I had no idea how such a thing could happen, I was impressed enough to tell my wife about the premonition later that evening.
I would not have imagined that one of our poorest relatives, my wife's brother Bruce Bastian, would be the person to help set the fulfillment of the premonition in motion. I met Bruce in 1974, just a few weeks before marrying his sister. When we met, he was the director of the Brigham Young University Marching Band, and he was counting on his sister performing in his band. Once Marieta and I were engaged, she decided to hang up her tambourine for good, so it took some time for Bruce and me to become friends.
Bruce earned his bachelor's degree from BYU in music education and planned on spending his life directing a high school or college band. After graduation he stayed at BYU to work on a master's degree in music and to work part-time as a teaching assistant to the director of the Incomparable Cougar Marching Band. When the director left to work at a college in the Northwest, Bruce became acting director of the band. The position was not permanent and his pay remained at the level of a teaching assistant. He did not mind the low wages or lack of benefits, however--the band was his life.
Bruce was an interesting figure on the football field at 6' 2", 140 pounds, in his dark suit atop a ladder at the fifty yard line. Rarely one to smile, and with enough nervous energy to power the lights in the stadium, he was serious about his band and his music. He spent his summers writing the pre-game and halftime shows his band performed, and he spent his spare time during school counseling and helping band members. He had a great ensemble, which sounded more like a very large rock and roll group than a university marching band.
For his master's thesis, Bruce was writing a computer program to display the band's step-by-step formations during a half-time show. The 3-D graphics program displayed the band from anywhere in the stadium--from high up in the press box, from the end zones, even from underground. His thesis work was amazing for the time, especially since he needed to tie three computers together to get enough processing power to run his program. Given the demands of arranging the band's music, directing the band, and helping his students, his thesis progressed slowly.
At the end of the 1976-77 school year, the dean of the music department met with Bruce to tell him the school was hiring a new band leader, someone with a PhD. Bruce was extremely disappointed and was unimpressed by the dean's assurance that he was doing Bruce a favor. Fittingly, after Bruce left, the BYU band dropped the word incomparable from its name.
Bruce's thesis project caught the attention of a BYU computer science professor, Alan Ashton. With Alan's help, Bruce was able to get out of the music department and finish his master's degree in the computer science department. After making the switch, he was ready to graduate in the spring of 1978.
That spring Bruce had interviews with many computer companies, including IBM, EDS (then owned by Ross Perot), and Hewlett-Packard. He leaned towards taking a job with HP until Alan talked to him about a new company he was forming to write word processing software. Bruce liked the idea of working in a small company, so he took a chance, deciding to work for Alan.
Alan had begun work on a word processor in the summer of 1977. Normally Dr. Ashton spent his summers consulting or teaching, but for some reason nothing had turned up in 1977. Rather than do nothing, he decided to spend his vacation designing a word processor. His effort was more of a mental exercise than a conscious effort to start a software company. In the back of his mind, he hoped to one day find a way to bring his word processor to life and make, perhaps, an extra two or three hundred dollars per month from the effort.
At 35 Alan looked the part of a college professor, with greying hair that was usually a little too long, because he had trouble finding time to get a haircut. He and his wife Karen lived in a modest three bedroom house with seven or eight children. They would eventually have twelve children, including a foster daughter.
Alan's word processing design drew on his earlier PhD work at the University of Utah. The U of U computer science doctoral program was one of the first established in the country and attracted a number of now famous computer pioneers such as David Evans of Evans and Sutherland; Alan Kay, who would work at Xerox PARC and later become an Apple Fellow; and John Warnock, founder of Adobe. For his doctoral thesis, Alan used a computer to create music on a Hammond organ. Although taken for granted today, computers were not making a lot of music in the early 1970s. For music to sound right, the notes have to be played at the right time, and computers back then were too slow and had too many delays to be very good at playing them promptly. Like music, word processing works best when things happen at the right time. When you type a letter on the keyboard, you want to see it immediately, and you do not want to wait around for the computer to fit your letter into a processing schedule. The techniques Alan used to make good music also helped him to make a great word processor.
In 1977 word processing was still fairly new, so Alan didn't have to spend much time on research. After seeing a demonstration of a Wang word processor and reading an early word processing study, he was ready to start. He already had some experience, because most of his consulting work and a lot of the research he did with his students was in the text processing area. Text processing, or text editing, was a primitive form of word processing used mostly for writing computer programs.
Alan set out to design a product which was not a run-off word processor. In the early run-off word processors, the screen did not look like the printed page. If you changed your margins, for example, you did not see the margins change on the screen, but you would see the change when the document was printed. Worse still, a run-off system used ugly codes, like .LM12 or @HD@B, in the middle of the text for changing how the document looked on the page. Alan wanted the screen to look like the printed page, with the correct line endings and page breaks and without any ugly codes. This design eliminated the repagination step used by the run-off systems. Because Alan's document was always formatted correctly on the screen, there was no need to reformat it for printing.
Alan's design included a number of innovative ideas. Instead of forcing the user to look at only one page of a document at a time, Alan wanted the user to be able to scroll through the document, as if it were on rollers at the top and bottom of the screen. He used function keys for the different features, so he could give the screen an uncluttered look without a lot of menus. He designed in an automatic insert, so if the user typed text in the middle of a line, the new text would push the old text out of the way, instead of erasing it as was the standard for the time.
He also eliminated the different typing modes which plagued the early word processors. With other products, if you were typing new text at the end of a document, you had to be in a Create mode. If you typed in the middle, you had to be in an Edit mode. In an Edit mode, your typing would erase existing text, so to insert text, you had to change to an Insert mode. Alan allowed the user to type anywhere in the document without a mode change.
By the end of the summer of 1977 Alan had a design specification of about fifty pages in length. His clean screen, automatic on-screen formatting, absence of modes, and auto-insert were great improvements over previous word processors. This design was, however, barely more than an outline. If he had been writing a symphony instead of a program, you would have said he had a collection of melodies, short phrases, and ideas. Most of the work, including the arranging and orchestration, remained to be done. His design was more a list of objectives than a comprehensive set of specifications. He gave his hoped-for product the unassuming name of WP and stored it away when school started in the fall.
The next spring, at the same time Bruce was about to graduate, Alan received a call from Don Owens. Don, who at that time worked for Itel, a leasing company in Northern California, had dreams of starting his own software company. His background was in marketing, and he was a prototypical entrepreneur, with lots of ideas and plans, but not a lot of money. Don had a forceful personality--the type of guy who would always have his sales quota booked well in advance of any deadline, so his employer would not dare to bother him if he took Friday off without permission.
Don heard of Alan because of some text processing consulting work Alan had done for Hill Air Force base. He asked Alan to write a word processor for Data General computers on behalf of a company to be founded, funded, and owned by Don and a friend of his named Bob Johnson. Alan was not sure of his position in the company, although he was under the impression he would own a part of it. In spite of the fuzzy ownership details, he was excited about the chance to bring his design to life.
Don named the new company Satellite Systems, Inc. because he liked the acronym SSI, which he had seen on the side of a railroad car. "Systems" was part of the name because he intended to sell computer systems as well as software. "Satellite" fit the acronym, but was a poor choice, because not everyone could spell it, and the word gave the impression the company sold television antennas.
It was based on Don's promise to finance the company that Alan offered Bruce a job as a programmer. Together they signed a lease for office space and ordered a computer. Bruce at the time was married, and his wife, Melanie, was expecting their second child. (Melanie worked part-time in the drapery business quilting bedspreads for us.) As soon as Bruce accepted the new job, he and his wife signed a mortgage on a home. The day after the mortgage papers were signed, Don broke the news over lunch that the funding had fallen through. Don could come up with his share of the money, but his partner could not. Don felt sorry for Bruce and gave him a $100 bill to ease his pain.
Alan felt terrible for Bruce and called a few of his business acquaintances in hopes of helping Bruce find work. He learned that Eyring Research of Provo, Utah was looking for a programmer, and soon Bruce was offered a job. Once there, Bruce learned that Eyring was under contract to provide a Data General computer to Orem City, then a small city of about 50,000 people just north of Provo, where Bruce and Alan lived. As part of the computer system, Eyring had agreed to provide a word processor.
Eyring's wor d processing commitment was for exactly the type of software Bruce and Alan had been planning to write for SSI. Knowing that Eyring would be hard pressed to provide a good word processor in time to fulfill its contract, Bruce talked to Alan, and together they went to Eyring with a proposal. If Eyring would be willing to pay Bruce's salary during the project, and if Alan and Bruce could retain ownership of the finished product, Alan would bring his design and his time to the project without charge. Eyring agreed to the arrangement, which gave it a much better chance of fulfilling the contract with Orem City. Eyring retained rights to sell the word processor if it sold similar computer systems to other cities, but Bruce and Alan owned the resulting product outright.
Eyring's contribution amounted to only a few thousand dollars in salary paid to Bruce, but it was enough for Bruce and Alan to get started. Alan worked practically every moment he was not teaching, including nights, holidays, and Saturdays. Bruce worked almost every hour he was awake, even though most of his friends and relatives told him he was crazy. Alan worked primarily on the part of the program which did the printing, and Bruce wrote the screen portion. Together they improved and expanded upon Alan's original design. Bruce made many contributions not only to the code of the finished product, but also to much of the design.
By the spring of 1979, Eyring felt the program was ready to deliver to Orem City. When Bruce and Alan let Orem City know they intended to improve the program, Orem City agreed to let them continue to use the Orem machine without charge in return for the right to use any of the new versions without an additional fee. Bruce borrowed a little money from his father so he could continue full-time work on the project, and Alan continued to contribute his nights, Saturdays, and holidays without pay. Together they worked in the basement of the city offices for another year to make a version of WP they could sell commercially.
To raise enough money to keep Bruce up to date on his bills, Alan and Bruce decided to release a simplified version of WP. The abbreviated version, which was designed for program editing, was called P-Edit. Because neither had any experience selling software, they decided to go back to Don Owens for help. They traveled to California to show Don the product, and he quickly sold a few copies of P-Edit to his employer, Itel. Soon the three agreed to start a business to sell P-Edit and WP. They decided that each would own one third of the new company.
Satellite Software International was incorporated in the State of Utah in September of 1979. The new name was very similar to the old one, since SSI was still the acronym of choice. (Back then acronyms were even more popular in the computer industry than they are today, and some people thought it was more important to find a good acronym than a good name. Everyone wanted to be the next IBM, NCR, DEC, CDC, or HP.) "Software" replaced the word "systems" in the company name, because the new company intended to concentrate on selling software instead of computer systems. International was added probably because it gave the company a more impressive sounding name, and perhaps, because the founders eventually hoped to sell software all over the world.
In March of 1980, the finished software, renamed SSI*WP, was offered for sale. SSI*WP did not have nearly as many features back then, but the original product was very much like the DOS versions of WordPerfect. A lot of the features were missing, but, with a little thought and creativity, the features that were there could do almost anything. The software came with a manual written by Alan and Bruce using their new word processor. The retail price of the software was $5,500, while the company's cost to manufacture a complete package, which included a computer tape, a manual, and a paper template, was about $25.
By today's standards, SSI's first word processor occupied a very small niche in the software market. The software worked only on a Data General computer, only on DG's AOS operating system, and only with Data General terminals. To print a nice looking document, the printer had to be a Diablo 1650 or work just like a Diablo 1650. While the niche was small, SSI had little competition and its product was very good. Bruce and Alan had paid close attention to the comments from secretaries and others who tested the product at Orem City before it was released. SSI*WP was fast and easy to use.
By the summer of 1980, SSI was selling two or three copies of SSI*WP each month. Although the first sales were encouraging, Bruce was still not making much money. Two or three times that summer he brought his wife and children over to our house for dinner. Each time they came, we sent them home with a trash can size garbage bag full of vegetables from our garden.
During those dinners, Bruce tried his best to explain to me what it was he was doing. I knew almost nothing about computers, and his word processing software seemed like a strange product to me. My only experience with computers had been during a summer job in 1965, when computer time was very expensive and programs were written on punch cards. I had no idea how much computers had changed in the 15 years since I had touched one.
Late in the summer, Bruce talked about the long hours he was working. During the day he was answering phones, putting together information packets, and mailing them out. At night he was writing software. I suggested he hire a part-time office manager to handle the phones and the mailings. When he asked how much it would cost to hire someone, I told him I thought he could fill the position for about $5 an hour.
Bruce called a couple of days after our conversation to ask me if I wanted to apply for the newly created job of office manager. When he told me the pay was $5 an hour, a dollar more than I was earning at the supermarket, I quickly agreed to come to an interview, as long as he understood I could only work part-time. I still had hopes the economy would improve and the drapery business would recover.
I met Don Owens in early September, when he interviewed me for the SSI office manager job. He spent more than an hour talking to me, showing me the help wanted section in ComputerWorld and explaining the great opportunities available in the computer industry. He encouraged me to keep looking into computers if I did not get a job at SSI. He sent me home with a few computer magazines and the promise that if I would read them, the stories would eventually start to make sense. About three weeks later Don called, offering me the job. I agreed to start on October 1, on the condition I could quit as soon as the drapery business improved.
Although I did not know it at the time, that $5 an hour part-time job would turn into a great opportunity. Somehow I had arrived at exactly the right place at exactly the right time. If Alan had found work in the summer of 1977 or if Bruce had kept his job as band leader or if Don had decided not to start a business or if Orem City had purchased an IBM computer instead of a Data General computer or if there had not been a recession in 1980, then I would probably still be driving up and down State Street every weekday with drapery samples in my trunk. Like some rare astrological phenomenon when all the planets are perfectly aligned, all the necessary events came together at just the right time, and a new and soon to be successful company was born.