How Two Pioneers Brought Publishing To The Desktop

Information Processing

Since 1985, their software has helped to create a $1 billion industry

Katherine M. Hafner in San Francisco
Business Week

October 5, 1987

A lanky businessman hurries across a San Francisco hotel lob by after addressing a group of graphic artists. ''Mr. Brainerd! Mr. Brainerd!'' a young man calls after him. Catching up and pumping the older man's hand, he says: ''I just wanted to thank you for making my job easier.'' Two days later, 10,000 desktop-publishing fans pack a Santa Clara (Calif.) convention hall. Many attendees seek out a professorial-looking programmer named John E. Warnock, who wrote Postscript, a program that runs laser printers. For three days, ''Postscript was the major point of discussion,'' says Jonathan W. Seybold of Seybold Seminars, which held the conference.

STOCK HOP

Paul Brainerd and John Warnock are heroes to desktop publishers--people who use personal computers to produce reports and newsletters that look as though they have been typeset. Brainerd's Aldus Corp. developed PageMaker, software to specify type and lay out a page on a computer screen. Warnock's Adobe Systems Inc. wrote the Postscript ''page description language,'' which tells a printer how to reproduce that page on paper. Together with Apple Computer Inc.'s Macintosh and LaserWriter printer, these software packages made desktop publishing a reality in 1985.

Two years later, as they spread into the broader International Business Machines Corp. PC market, desktop publishing systems are a $1 billion business. Postscript is the industry-standard package for running laser printers. And despite a swarm of new competitors, Aldus' PageMaker remains the most popular layout program for desktop publishing. It's also the fifth best-selling package in the microcomputer software business, according to market researcher IMS America Ltd. Brainerd and Warnock have both become multimillionaires. Warnock took Adobe public in August, 1986, in the midst of an industry slump that kept other high-tech initial public offerings off the market. After coming out at 11, Adobe's stock rose to 60 in March, then split. It now trades in the mid-30s, making Warnock's 5% stake worth about $18 million. Profits in Adobe stock had helped make desktop publishing a hot item on Wall Street by the time Aldus announced its IPO last spring. When the issue came out in June, demand was so intense that minutes after opening at 20, it hit 32. Brainerd, 39, who put his $100,000 in savings in Aldus four years ago, is now worth some $100 million.

The companies are growing in lockstep. For the quarter ended July 3, Aldus' sales were $9.3 million, a 280% increase over the previous year. Net income rose 180%, to $1.9 million. Adobe's revenues for its quarter, ended Aug. 31, were $10 million, up 100% from a year earlier. Earnings rose 96%, to $2.3 million.

GOD'S GIFT

Despite their millions, the two entrepreneurs seem more motivated by the challenges of their industry than by the financial rewards. Warnock, 46, is a down-to-earth family man. Frustrated in his job at Xerox Corp., he started Adobe. ''John's motivation is to revolutionize the whole printing industry,'' maintains Apple's former chairman, Steven P. Jobs. Brainerd, a soft-spoken workaholic, still lives in a one-bedroom apartment near Aldus' Seattle headquarters. Through their work with Apple, the desktop publishing pioneers formed a strong business friendship. But they come from vastly different backgrounds. A native of Utah, the 46-year-old Warnock has a PhD in computer science and is a computer graphics whiz, married to a graphic artist. Brainerd, raised in Oregon, has a masters in journalism and is married to his work.

Warnock got the entrepreneurial urge in 1982 after Xerox' Palo Alto Research Center decided not to commercialize his research in interactive graphics. He and colleague Charles M. Geschke started Adobe to make a graphics workstation for the printing industry. But Adobe's destiny shifted when Steve Jobs heard about Warnock's work. When the Apple chairman called in mid-1983, ''it was like a gift from God,'' recalls Warnock. Jobs needed software to make Apple's $6,000 LaserWriter crank out the kind of fancy reports that big companies were already producing on faster Xerox laser printers costing $20,000. Apple invested $1.5 million to fund development of Postscript and later exercised a warrant to buy 20% of Adobe, an investment whose book value is now estimated at $60 million.

DESIGN MAVENS

Just as Warnock and Geschke started writing Postscript in 1984, Brainerd was getting his feet wet, too. He had been production manager for the Minneapolis Star & Tribune in the late 1970s and was responsible for computerizing the paper's editorial operations. Before long, he was offered a job by the computer supplier, Atex Inc. ''He knew more than our support engineers,'' says co-founder Charles Ying. ''He was asking such embarrassing questions, I figured I'd better have him on my side.'' When Eastman Kodak Co. bought Atex in 1983 and shut the Redmond (Wash.) plant that Brainerd was managing, he persuaded four Atex engineers to start Aldus with him.

At first, Brainerd had an idea for a program to prepare newspaper ads on microcomputers. But when he got a Macintosh, the idea emerged for a software package that would enable Mac owners to prepare high-quality documents for printing on a laser printer.

Brainerd speculates that desktop publishing might not have come about if the two entrepreneurs had not met in 1984 at Jobs's suggestion. ''Warnock is more of a technologist, and I'm a business person,'' says Brainerd. ''But we shared an appreciation for good design.'' With Jobs as one of their few allies, they both agreed that their most important joint effort was persuading a reluctant Apple to promote desktop publishing. ''Apple was scared to death of the LaserWriter and the publishing business,'' says Brainerd.

Now it looks as if the two friends could become rivals. To assuage concern that Adobe might be vulnerable because it was a one-product company, in early 1987 Warnock came up with Adobe Illustrator, a software package for graphic artists. Facing the same concerns, Brainerd is now looking for acquisitions to broaden Aldus, and industry analysts expect him to wind up with a program that competes with Illustrator. How will it do? ''I hope not very well,'' says Warnock. He quickly corrects himself: ''Well, I hope we do a little better.''

PAUL BRAINERD Aldus' PageMaker software specs type and does page composition

JOHN E. WARNOCK Adobe Systems' Postscript tells a laser printer how to reproduce a layout