Friday, October 7, 2011

A thousand little companies reduced to a few survivors

This fascinating archive piece turned up in an Atlantic tweet the other day, probably because they thought it was relevant to discussion of Steve Job's legacy. James Fallows writes in July 1982 about how he bought a computer to do word-processing, after spending near 24 hours straight retyping a 100,000 word draft to hit a deadline.

On one level it is just a colorful historical artifact, as he explains to his readers what a computer is and what word processing means.

When I sit down to write a letter or start the first draft of an article, I simply type on the keyboard and the words appear on the screen.

But what is also interesting is the astonishing machine he uses to write on, a Processor Technology Sol-20, with a hefty 48K of memory.

Never heard of it? Nor me. The company that made it apparently went bust about six months later.

And there were dozens of such companies. Says Fallows:

The microcomputer industry these days is like the auto business in 1910, with a thousand little hustlers trying to claim a piece of the action. The next time you feel depressed about the vigor of the American economy, pick up a copy of Byte—or Personal Computing, or Popular Computing, or Interface Age, or InfoWorld —and look at the columns upon columns of ads from small-time companies with new products to sell.

There is Tandy and North Star, both of whom make odd things called 'Disk Operating Systems' or DOS. There is IBM with its new PC. Radio Shack and DEC and Commodore and Osborne make computers.

Over the past few months, in the interests of thorough research, I have tried computers by Apple and Zenith, Victor and Vector, Digital and Wang, Superbrain and Radio Shack, Atari and North Star, to name just a few.

Towards the end he mentions a company called Apple, which he says is one of the best known- but he doesn't like the Apple II's keyboard.

He never mentions Microsoft.

It can be very hard indeed to tell which out of a cluster of small new companies is going to make it. I looked up "Processor Technologies" on Wikipedia.

Processor Technology Corporation was a microcomputer company founded by Bob Marsh and Gary Ingram in April 1975.

It could have been - on one morning in a garage in 1978 or 1980 - Bob Marsh and Gary Ingram who were destined to grow the largest company in the world and be lauded and remembered in every newspaper on the globe.

All new innovations tend to produce waves of dozens or hundreds of new companies like this, and then consolidate down to two or three survivors. The auto industry was the same in the 1910s and 1920s, as Fallows says. Search technology was the same in the late 1990s. Remember Excite, Nothern Light, and of course Altavista?

It is the evolutionary nature of capitalism that I discussed way back in July, here. It generates variation, and then the market selects the fittest.

It can be quite brutal. While we remember Steve Jobs, maybe we ought to remember all the thousands of other computer entrepreneurs in the 1970s who did not end up as billionaires.

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