Written by David Tebbutt, MicroScope 09/84 item 01 - scanned

ADAM'S TREE OF KNOWLEDGE

Adam Osborne's new book Hypergrowth is interesting but probably not a lot of use if you are seeking a balanced account of what happened at Osborne Computer Corporation. Guy Kewney did an excellent job of summarising the key arguments in his recent MicroScope article. But don't think that this is all there is to Adam's book. Adam reveals a lot about himself, his attitudes and his views of others. I see the book as an exorcism of some of Adam's personal demons and, more importantly for his future, the first step in his own re-marketing. Here's what he appears to think of the various participants in the microcomputer game:

Users: Adam's view of users is that they've got more computing power than they know what to do with. They buy computers like they choose lovers: without logic. They are tremendously accommodating to inconvenience as long as the price is low enough. Adam reckons on satisfying 90 per cent of a user's needs and sacrificing 10 per cent of the potential market because of that. Hence the Osborne 01's weird screen and low capacity disks.

Dealers: Adam knows that Osbornes couldn't have been sold without dealers. He started off by wooing them with generous discounts and contributions towards advertising costs. Somewhere along the way it dawned on him that dealers operate only in response to customer demand. Since creating that demand is the manufacturer's responsibility, Adam decided that dealers should receive the absolute minimum deal which would keep them stocking his product. Anything else is simply throwing money away.

Distributors: Adam thinks distributors are unnecessary, they simply insert an extra margin into the cost of a product and therefore increase resistance to purchase. He knocks the view that the distributor holds stock for the dealer and offers him a choice. The truth according to Adam is that dealers have to pay for this stockholding exercise anyway and if they can't afford to stock stuff themselves then they won't remain in business for long in any case. As far as distributors offering a wide range of products, he reckons this is the last thing the dealer wants because he doesn't have the competence in-house to handle more than a few products.

Manufacturers: Adam considers the stimulation of demand to be one of the manufacturer's major responsibilities. This means plenty of advertising and, Adam's favourite, free editorial coverage. To illustrate the effect on dealers of demand stimulated by the manufacturer, Adam quotes the month that dealers across the country were cancelling orders because of reliability problems. A week or two later they were having to re-order to satisfy demand stimulated, of course, by Osborne's advertising and PR efforts. Customers were buying because, whatever was wrong, they were convinced it would be fixed.

The Press: Adam believes in creating a symbiotic relationship with the press. He always tried to feed them interesting stories which would enhance their journalistic careers while at the same time giving Osborne more favourable exposure. Adam has a theory that press coverage occurs in waves. First, you get as many mentions as you can all at once. This makes other writers take notice. These new writers then do research and come up with the second wave of articles. Finally the grockles, who never write original stories, pick over the bones of what has already been written and create a third wave of supporting articles. He wryly observes that this can work with bad news too.

Software writers: Adam is about to enter the software publishing business. He makes himself sound like a vanity publisher. He believes that there are thousands of wonderful programmers around who produce their oevres as labours of love and do not necessarily expect to gain much financial reward from the exercise. Adam suggests that publishers who include product development amortisation in their cost of goods will be uncompetitive. He sees software prices dropping until they reach 'the bedrock of product manufacturing costs'. In other words, Adam has decided that this is to be his new soapbox. He obviously hopes it will get attention, that it will give his new venture publicity and that it will put the wind up other publishers.