Written by David Tebbutt, Personal Computer World 10/83 - scanned
MASTER PROFILES - WHO WANTS TO BE A MILLIONAIRE?
Two men whose lives are dedicated to making dreams come true are Clive Sinclair and Nolan Bushnell. Sinclair made a major impact by introducing the world's first true pocket calculator and Bushnell by inventing the videogame. Both men went on to further successes and they have recently both started what can best be described as idea incubators. David Tebbutt takes up the story ...
America has its Silicon Valley and Britain has Cambridge. Both are breeding grounds for high technology companies and are densely populated with very clever electronic engineers, many of them with good product ideas. But what these people often lack is sufficient business know-how to get their products to market. Now two engineer/entrepreneurs, Nolan Bushnell and Clive Sinclair, have come up with answers to this particular problem. In Bushnell's case. he has created a company called Catalyst Technologies which creates brand-new high technology companies around original ideas. Sinclair. on the other hand, has created a division of Sinclair Research called Metalab to develop new products around which new operating divisions of Sinclair Research will be constructed. Their ideas appear so similar that I decided to learn more about these pied pipers of the electronic age.
I'll describe each man's history separately up to the point of starting his `incubator'. After that I'll thread the two tales together. First, Clive Sinclair . .
Clive Sinclair's schooling was a pretty haphazard affair. He somehow managed to attend 13 schools before leaving at the age of 17 to become a technical author. While he was at school he taught himself about electronics and when the time came to go on to university, he discovered that no-one taught the sort of electronics courses he felt in need of. The subject at that time was very much a subset of the physics courses.
So, a writer he became and he churned out more books in four years than many people manage in a lifetime. Seventeen to be precise, plus a large number of articles in Practical Wireless. At the age of 22, he was inspired to borrow £50 in order to start his first company, Sinclair Radionics, which sold electronic components by mail order. In the early days of his company, he managed to pick up 1,000 computer transistors which had failed Plessey's quality control checks. He had realised that they would be perfectly adequate for less demanding work so he wrote a couple of books and an article explaining their uses and promptly sold them at seven times the price originally paid. I first noticed his advertisement when he was flogging a kit for `the smallest radio in the world'. I seem to remember it was the size of a matchbox and I agonised for months over whether to buy one. In the end I didn't and I think it was because I thought the man pictured in the ad looked a bit shifty. It was Clive Sinclair sporting what appeared to be tinted glasses.
His business expanded into hi-fi kits and all seemed to be going well. Within five years the company turnover reached £100,000 and it moved to Cambridge. Five years later it moved to St Ives and it was from this base that Sinclair took the calculator world by storm with the launch of the Executive. Before long Sinclair's turnover was running into millions of pounds and he started to invest heavily in research and development of new products. By 1975 the first results of this investment were announced, the cleverly named Black Watch and his first digital multimeter. A pocket TV was still under development when the Black Watches were found to be unreliable. Nylon carpets were causing all sorts of production problems and then, once the things were on sale, cold weather got at them and they conked out. There was an awful fuss and ITT, the chip maker, ended up paying Sinclair £50,000.
The Black Watch fiasco (there was more to it than I've told you) caused such financial strain that Sinclair approached the NEB for funding for the pocket television. Lord Ryder, who was in charge of the NEB at the time, gave very strong personal backing to the project and the investment was approved. This partnership continued for almost three years and produced two versions of the Microvision along with five calculators and three new digital multimeters. Behind the scenes, Sinclair was working on a computer project which was destined to spawn the NewBrain but, before that saga had run its course, things started to get a bit tense between Sinclair and the NEB. Lord Ryder left and the new people saw a future in instruments whereas Clive saw a rosy future in consumer electronics. The split was inevitable and soon afterwards the NEB, claiming the television had cost them £7,800,000, sold it off to Binatone who then found it couldn't make it at a profit.
Clive received a modest golden handshake and went to his 'lifebelt' company in the background called Science of Cambridge. I've just looked in the very first issue of PCW and there on page 8 is an advertisement for the MK14 which you could buy for just under £40 (plus VAT and P & P). It was from the S of C premises that he formed Sinclair Research in July 1979. Seven months later he launched the ZX80 and just over a year after that he introduced the ZX81. Thirteen months later, the Spectrum appeared. Sinclair has also gone into partnership with Cambridge bookshop owner Patrick Browne and formed Sinclair-Browne, a book publishing company. It's no secret that he has an electric car under development which will theoretically see the light of day in 1984. In July 1983 Sinclair announced his incubator, Metalab, which is effectively the R & D arm of Sinclair Research.
Bushnell managed a more conventional schooling than Sinclair, although his father's death when he was 15 must have caused problems at a difficult age. He went on from school through college and university studying engineering, economics, philosophy, mathematics and business. He first got interested in computers in the mid-sixties when he was still at university. Like Sinclair, he worked for someone else for the first four years after completing his formal education. In 1971 he raised $500 and started his own spare-time company, Syzygy, which developed a video game called Computer Space. He was employed as an engineer by an arcade game manufacturer and somehow persuaded him to take on the game. It flopped mainly because it was too complicated to learn and too boring once you'd taken the trouble. Bushnell then took on his own engineer to develop a tennis game. His employer refused to touch it and threw Bushnell out. Bushnell then tried punting it around but no-one wanted to know. In the end, he christened the product Pong, renamed his company Atari and the rest, as they say, is history.
Pong became a mighty hit in arcades all round the world. Money poured into the Atari coffers at an amazing rate and was squandered almost as quickly on new and unprofitable ventures. Inevitably, Pong lost its appeal and the cash started to dry up. Just in time, another product called Gran Trak came to Atari's rescue and it turned out to be just the first in a sequence of arcade successes. Then the market for domestic video games opened and that was the key to unbelievable growth for the company. Bushnell and his colleagues had created the market for video games yet at this time they controlled only about 10% of it. They desperately needed cash to expand their production capability. Bushnell went to Disney and MCA, both of whom turned him down, but Warner Communications decided to take the plunge.
In 1976, Warner paid $28,000,000 for Atari, almost half of which went straight into Bushnell's pocket. He stayed on as chairman but suddenly his motivation for 26-hour days had gone. The partnership, like Sinclair's with the NEB, was not a particularly happy one. Bushnell thought Warner was `stuffy' and it thought he was irresponsible. Two years later he bought back the rights to one of his ideas, Pizza Time Theatres, from Warner. Warner didn't really think much of the idea anyway and cheerfully dropped the project. There are now over 200 Pizza Time Theatres around the world, each one around nine times more profitable than the average pizza parlour.
The key to this success was Bushnell's recognition that the 20 minutes you have to wait for a pizza to cook could be turned to profit. He installed arcade games, amusement park rides and performing animal robots with names like Chuck E Cheese. The robots entertain while the rides and arcade games absorb the punters' money. Bushnell reckons that there will be 1,000 Pizza Time Theatres around the world by 1986.
Since launching Pizza Time in 1978, he has formed a few more companies. The first, started in 1980, is called Axlon and produces hand-held terminals, memory expansion boards and other bits of microprocessor wizardry. Magnum Microwave Corporation manufactures microwave components for satellite communications companies and Compower Corporation makes switching-power supplies for computers.
In December 1981 he formed his incubator, Catalyst Technologies, which is a holding company for several high-risk, high technology start-up companies. On the side he has also managed to create one of the valley's more pleasant restaurants, the Lion and Compass in Sunnyvale. If you ever find yourself out that way, drop by. It's not bad but, typical of most of Bushnell's activities, you will need to throw quite a few dollars his way.
There's very little difference between the concepts of Metalab and Catalyst Technologies. They both exist to develop new, high-technology, high-risk ideas for later exploitation. In Bushnell's case the participants are set up as separate companies, whereas Sinclair treats Metalab as a division of Sinclair Research. As Bushnell's products hit their stride the company is `graduated' to stand on its own feet somewhere in the Santa Clara valley, while Sinclair's plan is to make maturing products the foundation of new independent operating divisions of Sinclair Research. The differences are technical ones, really. In each case, the man at the top is the driving force and quite often comes up with the original product ideas, too.
As far as the buying public is concerned, both companies are generating things which people will want to buy. They are creating demand for new products which didn't exist before. They are creating jobs for some people and making fortunes in the process. Sinclair and Bushnell are both risk-takers and both currently have the money to be able to take those risks. Could you imagine the public outcry if the British government decided to sink tens of millions of pounds into something as off the wall - as Pizza Time Theatres? Yet commercially, it has been a resounding success.
It seems to me that Bushnell and Sinclair's motivations differ. Bushnell lives in America, which is extremely success-oriented. Success over there tends to relate to the number of noughts on your salary cheque or your personal fortune. I even know some people who are hailed as heroes because their company turnover is so many millions. The fact it makes a loss on those millions doesn't seem to occur to anyone as perhaps being a teeny weeny bit of a failure. One can't blame Bushnell then for saying his aim in life is to create a billion pound company that will last forever. Sinclair, on the other hand, would seem to be motivated more by seeing his ideas turn into reality. Money is almost a by-product of this activity. It is also the fuel which enables his future ideas to follow the same route. It looks to me as if Bushnell pursues ideas because they'll make money and Sinclair because he feels things need to be done.
Bushnell gets things going by rummaging around Silicon Valley for people with bright ideas or those who are capable of implementing such things. He gives them the key to an office on the desk of which are 35 contracts to sign. Once this ceremony is over, a company exists, its staff are insured, they have premises, equipment, telephones, credit - all the things to enable them to get on with the job of creating their product. Catalyst Technologies provides everything else.
At Syzygy, Bushnell worked nights being creative because the day was completely filled with simply running a company. He doesn't want other creative people to have to exist like that. His approach, which provides management, secretarial and administrative staff, is reckoned to cut six to nine months off the development time of a project which must be good both for cash flow and for hitting the competition.
Clive Sinclair is getting his staff by advertising. Already he has received several hundred replies from his recent campaign. He is looking for top-notch scientists and engineers who can work under the peculiar pressures induced by high-risk projects. They will be classically trained, unlike Sinclair himself who cheerfully admits that he might not qualify for a job in Metalab. They will be employees of Sinclair Research and, as such, are freed from the worries of having to run a business just as Bushnell's are.
Metalab and Catalyst both rely on peer pressure to motivate their teams to produce results and at the same time they use the community approach to encourage the free exchanges of information and ideas between the participants in the various projects. In each case, up to a dozen or so projects can run concurrently in the incubator. Bushnell described it somewhere as `a warm, cuddly environment for success'.
I think Bushnell's activities are entirely self-funded whereas Sinclair is not averse to taking the odd 30% government grant when it's offered. Both men place enormous trust in the people they take on. They expect them to respond with a responsible attitude towards work, results and requests for equipment. Both will give their people everything they need to achieve success. This is one area in which publicly funded and large-company funded projects go haywire, certainly in the UK. Sinclair thinks it odd that people are employed in this country at salaries of, say, £25,000 yet the employer will often balk at spending a couple of hundred pounds on equipment.
Although Sinclair welcomes ideas from outside, his word was 'exogamous', he will not undertake contract research at Metalab. (Incidentally, I had to look that word up, too. It means 'outside marriage' from the Greek words `Exot end `Gamos'.) At the moment the Sinclair projects are the next computer, the flat-screen television, battery technology and a number of other things which he prefers not to discuss just now. Sooner or later he expects the electric car to move in there too.
Bushnell has among his projects at the moment a robot maker, a computer camp for kids, a video home shopping outfit, a high-resolution television (have you ever seen American TV?) and a games company he bought a couple of years ago. He dreams of holographic games which are played in the space between machine and its operator. Since his agreement not to compete with Atari expired on 1st October 1983 you can look forward to a lot of excitement soon. The company to watch will be called Sente Technologies. The name was chosen because Atari is the Japanese word for check whereas, in Go, Sente is the nearest equivalent to checkmate.
Bushnell believes he is motivated by boredom. He feels he always has to have something interesting to work on. I read somewhere that he even regards sleep as a personal insult! Sinclair is driven by the excitement of seeing his ideas become reality. Sinclair's achievement orientation seems more healthy and personally satisfying than Bushnell's pathological compulsion to be doing something interesting.
Both men feel that governments should resist the urge to interfere in business activities. It only has the effect of slowing things down and this applies equally to development of new, or to the demise of existing, activities. They both feel that education needs a bit of a shake-up. Bushnell reckons that kids are being trained to become functionally useless in the twenty-first century while Sinclair feels that more emphasis should be placed on the art of living and a broader-based education for all covering both the arts and the sciences. Sinclair is particularly peeved that universities don't fulfil their potential. He describes university departments as being suspended in aspic. Each one pursues its own discipline and there is nowhere near enough intermingling between them. He has a dream of some future time when he can create a `Paralab' containing multi-disciplinary people, people with deep and varied experiences, people who are keen to explore and develop ideas and pet theories for a few years with others of a similar outlook.
As well as these active people, Sinclair would like to have a group of wise people, savants, who would be there to listen, reflect and generally act as guides and sounding-boards. A well-stocked library would contain a wide and interesting selection of books, including some which would probably be regarded as somewhat eccentric by less open-minded people. His dreams for a Paralab reflect some of his frustrations with our `system'. His preference for classically-educated employees in his Metalab suggests that they currently offer the best chances of success. The Paralab sounds just about the most exciting environment in which to work. I've no doubt that there will be few places available and that applicants will be vigorously screened. Imagine it: three years free of normal financial pressures, and the ability to pursue your own dreams and studies. If Sinclair is prepared to take that risk, and I'm sure he will, I think it could pay off handsomely.
Neither man seems to be terribly interested in money for its own sake, which is a refreshingly healthy attitude. They both regard it as a tool which must be put to work. Bushnell does admit, however, that it is a convenient way of keeping the score in his favourite game, business. They are each prepared to risk millions on their judgements of what products people will want in the future.
Bushnell talks about the day when you'll be able to jump into a machine in one of his Pizza Time Theatres and actually experience being anywhere in the world. Anywhere, that is, where he has installed remote control robots. A 'player' in San Francisco could, through a satellite communication link, order a London-based robot out of its garage and control its progress around our capital. The player could actually experience walking round St Pauls's Cathedral, getting lost in the Barbican or watching the changing of the guard. With a bit of holography it might even be possible for the booth to 'become' whatever part of London the robot happens to be in. Can you imagine that? Bushnell can and he's already admitted it.
Sinclair sees Britain becoming very strong in mind-based products. Expert systems can encode the knowledge of our best people on video-disks, say, and export them to any country which needs the expertise. Such systems would be great as personal doctors to take care of all the fairly simple jobs, freeing real doctors to do their jobs properly. Education could be packaged in the same way and we already know what can be done with computer programs. Video tapes, video disks, communications and computers are going to be central in our development and to our prosperity in the coming years. Like Bushnell, Sinclair sees robots as being important in the future, although his visions are not quite as bizarre as Bushnell's, who says things like: 'Robots will provide companionship and therapy for kids who can't make friends!' It may be true but it's an awful thought.
Oddly enough, their strongest dislikes are both to do with people whose ego gives them problems. Bushnell gets really mad when someone makes a mistake, knows it's a mistake but doesn't do anything about it because of loss of face, pride or whatever you want to call it. If this behaviour gets in the way of the bottom line then he completely freaks out. Sinclair, on the other hand, has a hearty dislike for people who present a facade of what they would like the world to think they are. He rather wickedly suggested that a lot of people in the City fell into this category. He loves openness and finds that he can relate to the children well because most of them haven't yet learned to construct a facade. He is sad that his fame has meant a considerable loss of privacy.
So there we have it. Each man deserves a full biography and I've no doubt that one day two people will become extremely wealthy simply by recording the lives of these two children of the twentieth century. In their different ways each making a profound impact on our lives. Which is the most beneficial, only time will reveal. For the moment I'm proud that one of these visionaries is British.