Macworld Magazine, December 1993

Wise Guy by Guy Kawasaki

Defying Gravity

How to succeed by really trying

One thing that makes my blood boil about the Macintosh software market today is that big companies like Claris, Symantec, and Central Point Software are telling the proverbial two guys in a garage that it's too late to start a company. This drives me crazy because it stifles the creative, can-do spirit of Macintosh. I know from recent experience that two people in a garage can still make history.

Getting into the Market

On October 30, 1989, Terry Morse and a few fellow employees from Mansfield Systems went out to lunch to celebrate his birthday. Unfortunately, he had to pay for his own lunch because that morning the company announced that it would be closing down. Its venture capitalists had grown tired of pouring money into the company. (Lesson 1: Never eat out on the day your company goes broke.)

Lloyd Chambers, a fellow employee, and Morse found themselves unemployed and out of money. Between the two of them, they had $12,000 from Morse's 401K plan, $5000 from Morse's parents, and a short stack of Chambers's credit cards. So it made perfect (Macintosh) sense to start a company.

Morse and Chambers's first product was Partner, a precursor to the publish-and-subscribe technology that you still never see anyone using. Morse and Chambers shipped version 1.0 of Partner six weeks after Mansfield went under. (Lesson 2: Ship something quickly and get into the marketplace.)

In the past, Chambers had created a freeware product called MacCompress that compressed and expanded Macintosh files on Unix computers. While completing Partner, he worked on another file-compression utility that would become DiskDoubler. Chambers intended to distribute this as a shareware product or to use it as a gift with the purchase of Partner. (Lesson 3: Let programmers work on whatever they want to.)

Morse and Chambers started showing off Partner and beta versions of DiskDoubler at Computerware, an all-Macintosh software and peripherals store in Palo Alto, California. They noticed that DiskDoubler—not Partner—was getting the oohs and aahs. Luck, or Macworld Expo impresario Mitch Hall's mistake, stepped in: the San Francisco Macworld Expo was in April that year, not January. Morse and Chambers had three extra months to finish DiskDoubler.

In four days at the show, Computerware sold 500 copies of DiskDoubler. By the summer of 1990, Morse and Chambers were selling 1000 copies a month. They knew they needed outside, experienced advice, so they contacted Marty Mazner, the former publisher of MacUser and former executive vice president of Computerware.

Seeking Outside Help

Mazner understood the potential of DiskDoubler, but he also knew that if an established company entered the market, Morse and Chambers might be snuffed out. So he arranged to show DiskDoubler to Symantec, and asked me to come along. The suit (he's subsequently "left" Symantec) who ran the meeting had worked at Ashton-Tate, he had Symantec's clout, and he was going to walk all over Morse and Chambers and bestow upon them the honor of adding DiskDoubler to Symantec Utilities for Macintosh (SUM) for a pittance in royalties. I wanted to puke.

In Symantec's parking lot, Morse told me he needed $25,000 to get a company going, and yours truly promised it to him. Salient Software incorporated in June 1990 with $50,000 of capital from myself, Marty, and Salient's law firm. (Lesson 4: Ask and you shall receive—if you have a great product.)

With Mazner's help, Morse and Chambers bootstrapped DiskDoubler by trading copies of it for ad space in leading mail-order catalogs. Morse and Chambers didn't take any salary for four months, until Salient's monthly sales were about $50,000. (Lesson 5: You don't need millions to start a software company.)

Cashing Out

Salient's sales kept increasing by 10 to 15 percent a month until June 1991, when System 7 shipped, and sales exploded. DiskDoubler had become a successful product in a seemingly infinite number of small upgrades. (Lesson 6: Constantly enhance your product—don't believe the quantum-leap upgrade theories.)

By the end of 1991, Salient was selling $2 million of product a year. In June 1992, Salient had amassed year-to- date sales of $3.5 million, and Mazner worked out a deal to sell Salient to Fifth Generation Systems for a price I cannot disclose. Suffice it to say that Morse and Chambers consider never working another day in their lives to be a viable option. (Lesson 7 : You can still make a lot of money with Macintosh software.)

Getting out of the Garage

Two guys in a garage can still succeed. It took Morse and Chambers only three years. They weren't intimidated by bozos who work for large companies, and who have never started a company but are willing to tell you why you can't. They created a product that was simple, easy to explain, and did a few things well. If you believe in yourself and work your ass off, you can defy gravity, too. And you can take this to the bank.