Personal Computer Boom Opens Niche for Software Creators

The Wall Street Journal

February 25, 1980

"THE AGE OF EDISON IS COMING BACK," SAYS CHRISTOPHER MORGAN, EDITOR-IN-CHIEF OF BYTE, THE NATION'S LARGEST-CIRCULATION COMPUTER MAGAZINE. "BRIGHT PEOPLE ARE SITTING WITH COMPUTERS IN THEIR BASEMENTS AND TURNING OUT SOFTWARE THAT IS GETTING VERY, VERY GOOD. THEY ARE OFTEN ONE-MAN COMPANIES WITH CRAZY-SOUNDING NAMES. BUT THE COTTAGE INDUSTRY IS REAL AND GROWING."

A CASE IN POINT IN LESS THAN TWO YEARS, DANIEL H. FYLSTRA HAS TURNED WHAT BEGAN AS A GRADUATE SCHOOL PROJECT INTO A SOFTWARE PUBLISHING COMPANY THAT WILL DO ABOUT $4 MILLION IN BUSINESS IN 1980. HIS ORIGINAL INVESTMENT, $500, ALREADY IS VALUED AT ABOUT $2 MILLION.

FYLSTRA'S PROGRAMS ARE USED ON SMALL "PERSONAL" COMPUTERS, THE KIND THAT TYPICALLY SELL FOR $1,000 OR LESS AND THAT PLUG INTO STANDARD ELECTRICAL OUTLETS IN HOMES AND OFFICERS. HENCE, THE COMPANY NAME: PERSONAL SOFTWARE INC. ONE OF ITS PROGRAMS, CALLED VISICALC, HAS SOLD THOUSANDS OF COPIES--AN UNPRECEDENTED NUMBER FOR A PROGRAM THAT ISN'T WRITTEN OR SPONSORED BY A COMPUTER MANUFACTURER. THE PROGRAM PROVED SO POPULAR THAT THE SUNNYVALE, CALIF., COMPANY RAISED ITS PRICE TO $150 FROM $100 TWO MONTHS AFTER IT WAS INTRODUCED. HEWLETT-PACKARD CO. IS UNDERSTOOD TO BE PLANNING TO OFFER VISICALC SOON FOR ITS NEW HP-85 PERSONAL COMPUTER.

PERSONAL SOFTWARE AND OTHER COMPANIES LIKE IT ARE PROFITING FROM THE BOOM IN PERSONAL COMPUTERS SALES OF THESE MACHINES PRACTICALLY DOUBLE EVERY YEAR AS HEWLETT-PACKARD, TANDY CORP., APPLE COMPUTER INC., TEXAS INSTRUMENTS INC., WARNER COMMUNICATIONS INC., MATTEL INC. AND OTHER MANUFACTURERS KEEP EXPANDING THE MARKET. TANDY'S RADIO SHACK DIVISION ALONE HAS SOLD ABOUT 150,000 MACHINES.

UNTIL RECENTLY, USERS OF PERSONAL COMPUTERS HAD TO KNOW SOMETHING ABOUT PROGRAMMING IN ORDER TO DO MORE THAN PLAY GAMES, BALANCE CHECKBOOK AN HANDLE TASKS EASILY DONE WITH PENCIL, PAPER, POCKET CALCULATOR AND FILING CARDS. BUT THAT DRAWBACK IS DIMINISHING LARGELY BECAUSE OF SUCH COMPANIES AS PERSONAL SOFTWARE.

AARDVARK SOFTWARE INC. WAS FORMED BY A GROUP OF MILWAUKEE ACCOUNTANTS FOUR MONTHS AGO AND ALREADY SHOWS A PROFIT. THE COMPANY SELLS SEVERAL PROGRAMS FOR $25 TO $150 THAT AUTOMATICALLY DO VARIOUS FEDERAL INCOME-TAX CALCULATIONS--SUCH AS INCOME AVERAGING AND FIGURING THE MAXIMUM TAX ON EARNED INCOME--AND THEN FILL OUT THE APPROPRIATE TAX FORMS.

AND SUBLOGIC, OF SAVOY, ILL ., WHICH WAS FORMED BY A COMPUTER PROGRAMMER AND A FLIGHT INSTRUCTOR, SELLS A FLIGHT-SIMULATION PROGRAM FOR $25.

BECAUSE SUCH COMPANIES AREN'T BIG, THEY OFTEN RELY ON DISTRIBUTORS OR RETAILERS, SUCH AS LIFEBOAT ASSOCIATES IN NEW YORK, WHICH SELLS BUSINESS AND TEXT-EDITING PROGRAMS WRITTEN BY OTHERS. HAYDEN BOOK CO. IN ROCHELLE PARK, N.J., DISTRIBUTES A LINE OF ABOUT 30 COMPUTER-GAME, EDUCATIONAL AND MUSIC PROGRAMS WHILE ALSO PUBLISHING BOOKS.

HAYDEN AND PERSONAL SOFTWARE OPERATE MUCH LIKE TRADITIONAL PUBLISHERS. THEY REVIEW, EDIT AND SOMETIMES SOLICIT MANUSCRIPTS , OR PROGRAMS IN THE SEARCH FOR BEST-SELLERS. WHEN A PROMISING PROGRAM COMES ALONG, THE COMPANIES DISTRIBUTE IT, USUALLY ON MAGNETIC TAPES OR MEMORY DISKS, AND PAY ROYALTIES TO THE AUTHOR.