I am waiting for you, Vizzini. You told me to go back to the beginning. So I have. This is where we got the job. So it’s the beginning.
I’ve been in the computer, or the IT industry for over twenty-five years. I’ve travelled all over the world on business. I’ve written books. I’ve spoken to thousands of people. And yet, I live about 9 miles from where it all began.
This tiny nondescript building, tucked in between the power station and and the river, just outside the mouth of Provo Canyon is where it all began for me. While still a college student, I went to work for a young local company called WordPerfect. Many now have probably never heard of them. But, at one time they made the most popular wordprocessor in the world.
When I started in 1988 a copy of WordPerfect 4.2 sold for $495. If you account for inflation that’s $950 in today’s world. And that didn’t include a full Office suite. That was just the wordprocessor.
I started in the telephony office, installing phones. Eventually, I moved to support, because everyone worked in support. When I went to support, I also moved offices from the little shop by the river to Building G on what became known as WordPefect campus.
The trees were much smaller then. The land was originally an orchard and the trees on the campus now were spindly little things that looked like they might blow over in a the first stiff wind that came along. That pretty much describes some of the employees. It certainly describes me. I was a fresh faced 25 year old in my 3rd year of Computer Science, and they offered me the outrageous salary of $25,000 /year! And I got PAID HOLIDAYS! And they stocked the refrigerators with FREE SODA!
Very few people have heard of WordPerfect today. If you look close at the picture above, you can see Adobe‘s logo on Building G today.
The saga of WordPerfect has been told elsewhere by others who were more qualified than I to tell it. I want to focus a little on the lessons that we can learn from my brief 5 years there.
WordPerfect had a couple of things that contributed to it’s tremendous success. First, was it’s design. Before the days of Graphical User Interfaces (GUI.) You just had text on the screen. No pictures, no mouse. You typed. And used the Function Keys. (F7 anyone?)
WordPerfect hid nearly all of the formatting codes and commands. What you had was a soothing blue screen with white letters. I sometimes wonder if Microsoft didn’t pick their colors for the Blue Screen of Death because it was the default formatting colors for WordPerfect.
Second, WordPerfect offered the best support in the industry. Not, in my opinion, not in their opinion. They just were the best and everyone knew it. Microsoft couldn’t touch them in that department. And this support was important, because in the days before the Internet, (yes, we are going back to that time) you had two ways to learn a new program: Read the manual, which was often not very good, launching the careers of a slew of authors, or you asked your geeky computer friend.
WordPerfect changed all that. You could call an 800 number and ask anything you wanted, and you could talk as long as you wanted. (This was in the days when long distance phone calls were expensive.) I once saw a phone bill for WordPerfect that was $500,000 for a month. And ironically, the intern who was supposed to pay the bill forgot one month. So, next month’s bill showed up, just like yours does with a line that said, “Past due: $500,000, if you’ve already paid this, please disregard.”
I’m in this picture about three rows back in the middle. (No, not that guy, the one next to him.) My brother Richard Bliss is standing just outside the doors and you can see his reflection in the glass above the door.
So, what happened? Why,with a great design and a staff of friendly phone operators waiting to answer the phone, did WordPerfect fail to keep it’s dominant position?
First, they failed to innovate. Microsoft had a wordprocessor, but it really wasn’t very good. It was certainly not as good as WordPerfect’s. But, Microsoft also was working on this operating system upgraded called Windows. Version 1.0 was a joke and everyone laughed at them. As far as I know there never was a version 2.0. Version 3.0 started to look better, and Version 3.11 was killer.
WordPerfect, like all companies that made software had to make a new version for each operating system. WordPerfect and Microsoft didn’t like each other very much. The WordPerfect executives decided that Windows was not all that important. So, instead they worked on a new version of WordPerfect for an operating system from IBM called OS/2. Has anyone heard of OS/2? No, I didn’t think so. OS/2 pretty much flopped and Windows? Well, we all know how that turned out.
WordPerfect for many reasons missed the next big thing. By the time they brought out a version for Windows over a year late, they had missed their window of opportunity and Microsoft never looked back.
Let’s look at the second thing they had going for them. WordPerfect still had all those support operators and they (we) were really, really good. I’ve worked for both Microsoft and WordPerfect support and while Microsoft support is world-class, WordPerfect was far and away the better customer experience. So, what happened?
Microsoft Office happened. Remember when I said that a copy of WordPerfect cost $495, $950 in today’s dollars? Microsoft started bundling not only their wordprocessor, but a spreadsheet program called Excel, and a presentations program called PowerPoint. Later they added an email client called Outlook. And they started selling this bundle for the same price or less than WordPerfect sold their wordprocessor alone.
In business the difference between your costs and your sale price is called your margin. And the margins quickly shrank. WordPerfect had over a thousand support people working in Building G and later Building H. And customers didn’t have to pay for support. They didn’t even have to pay for the call. As the ad above brags, support like that isn’t cheap.
WordPerfect’s business model was build around a particular price point. Can you imagine going to your boss and telling him you need $1000 per person JUST for their wordprocessor? At my last company I think our entire desktop image, including applications, operating system, virus protection, etc. cost less than that. When they could no longer sell at that level, they had to change.
So, what’s this mean for you and me? What lessons can we learn from WordPerfect?
First, you have to be a little bit of a fortune teller and try to predict the future. Right now the big “buzz” is around Cloud Computing. If you don’t at least know what it is, you should probably learn a little. If you are in the communications team, you should understand what BYOD means and more importantly what it means for your business. The people who get noticed and viewed as the thought leaders in an organization are those who bring the new ideas to management with a plan.
A few years ago when the big push was for virtualization, I was managing an email team. We researched virtualization and realized that it was not at a point where we wanted to move our email system to it. . .yet. I prepared a brief and took it to my manager with an explanation of why I was NOT recommending we virtualize our email system. It led to some crucial conversations, but my manager appreciated the fact that I was bringing him a plan. Even if it was a plan to NOT follow the herd.
The second thing to take from the WordPerfect story is the idea that you need to constantly be looking at reorganizing your organization. Today’s margins may change tomorrow. If they do, how are you going to adapt?
When I was working as a manager in a startup company, I went to my lead developer and said, “Give me a schedule and feature list if we had to cut our budget by 50% next month.” A few months later we lost a big client and had to cut back. We already had that plan on the drawing board.
It’s a cliche because it’s true: The only constant in business is change.