1988: Palo Alto Software Launch

I was asked how I started Palo Alto Software.

How? Slowly, carefully, bolstered by good product and reviews that validated, doing a lot of coding and documentation myself, and not spending money we didn’t have.

Spreadsheet templates

It started as spreadsheet templates. The first of those was published in 1984 to accompany a book “How to Develop Your Business Plan,” published by Oasis Press. In 1988 I separated from that book, and redid the templates to accompany my own book when I published “Business Plan Toolkit,” released in MacWorld January 1988. All of these early products were 100% my work, my spreadsheet macros and my documentation. It helped to have a diverse background, including 10 years as a professional journalist, foreign correspondent in Mexico City, plus a Stanford MBA. I could write about business so (people told me) others could understand.

I released ‘Business Plan Toolkit’ in January of 1988 at the San Francisco MacWorld exhibit. Laura and Sabrina shared the booth duty with me.

Funded mostly by consulting

Throughout the early years I kept up a healthy consulting practice doing business plans for some startups, and that plus market research and strategy consulting for some larger high tech companies, plus workshops on business planning for dealers of high tech companies. Apple was by far my best client, with repeat business in consulting on business planning from the beginning until 1994 (Hector Saldaña was a steady client for years, and a supporter of the business idea, and informal advisor). The consulting supported marketing expenses. There was no Internet to speak of until 1995, so the early marketing was a combination of small ads in the back of magazines and product reviews in major computer magazines. I did about $1.4 million worth of consulting for Apple Computer between 1982 and 1994.

During the consulting years I never lost site of the main goal of building my own business. I was sacrificing consulting revenues to prop up products. My mantra was “I want to sell boxes, not hours.”

When we moved it from Palo Alto to Eugene OR in 1992, I had three early equity shareholders (1% each) who agreed to surrender their shares because there was no value in them. One of them was my brother, Chip.

There is another chapter here on the darkness before dawn in 1994, when all seemed lost; and how I created Business Plan Pro to snatch victory from the jaws of defeat. in 1995 PAS gained critical mass with Business Plan Pro so I was able to stop consulting and dedicate myself to the business. We grew quickly to more than $5 million annual revenues by 2000.

1983: Why Did I Start My Business

I was speaking to a group of students in 2007 when one of them asked me to comment on what makes an entrepreneur. The student who asked the question wrapped it in the mythology of the entrepreneur driven by the idea, stubbornly, tirelessly proving its value to the world. She wanted me to tell about me wanting to build something big.

Escaping Boredom

But I had to admit that my case was different.

I was running away from boredom, not building castles.

Me

When I left a good job at Creative Strategies and started on my own, in truth it was not because of something I wanted to build, not because of a creative vision, but rather because I thought I could make enough money to keep my family whole and do what I wanted. I wanted interesting work, and I wanted to choose my work. I wanted to actually do the writing and research, not supervise others. It was important to me that what I spend hours doing was something fun — I always found writing and planning and working numbers fun — even though I didn’t have the idea that would create the empire.

I wanted to actually do the writing and research, not supervise others.

Me

For the record, I thought at the time that I could make a living writing computer books. I was good at writing and liked it, and I was one of the early adopters of personal computers. I’d built my own and done some serious programming. Computer books were getting good money, or so it seemed after Stewart Brand had supposedly landed a $100,000 advance for a computer compilation related to his Whole Earth Catalog.

And I was wrong about that. I had to pivot to consulting, which happened almost immediately. I have more details in 1983: First Day of a New Business.

Or maybe you like this shorter version:

I was married, had kids, so we needed the money; and nobody else would pay me what I needed to make.

me

And the idea of a software product, that creative vision? Yes, that happened, but that came slowly, over years.

This theme continues in 1983: First Day of a New Business and then moves to 1988: Palo Alto Software Launch.

1988-89 Macworld & The Fishbowl Story

The first time I took our company to exhibit in a trade show we brought along a big plastic fish bowl with a sign that said: “Free Drawing! Drop your business card in the bowl for a free copy of Business Plan Pro®.”

Three days later we had four fishbowls full of business cards. Business cards, business cards, and not a lead among them. Fortunately we typed in only a few hundred names and sampled the marketing results before we spent the resources to input thousands. The list was useless. None of the people sampled wanted our product.

The following year we took the same product to the same trade show and the same fish bowl too. That second year, however, we put a sign by the bowl that said: “For more information about Business Plan Pro, drop your business card here.”

After that trade show we ended up with a few hundred good leads. We input the data and followed up and made some sales.

I’ve used this story often in teaching and seminars and managing my own company because to me it illustrates the importance of target marketing and focus. In this example, quality of leads is much more important than quantity. Thousands of bad leads are worth nothing, while a few hundred good leads have real value.

This is about selling business plan software. Not everybody wants business planning, and those who don’t aren’t good prospects. It’s hard, or expensive, or both to sift through a lot of leads to find those who have real interest.

A few years later the fishbowl story helped our marketing team recognize that we didn’t want mysterious banner ads or free prize offers that generated lots of clicks and few prospects. We wanted to attract the few interested people, not huge numbers of people who couldn’t care less.

What distinguishes the good leads from the bad leads is their interest. People walking the aisles at a trade show drop their business cards in any fish bowl offering something free, whether they are interested or not in what that exhibitor is selling. We didn’t want a lot of cards. We wanted cards from people interested in our specific product, business planning software, and not cards from anybody (via lucica at dress head).  The marketing follow-up was expensive , whether it was inputting data from business cards or mailing information, and the marketing yield was good with well-targeted prospects and bad with generalized prospects.

Some businesses depend more on targeting than others. Think about that for your business. Do you sell to everybody? Or do you sell to a specialized group? What kind of fishbowl do you want?

For the record, since I like the idea of true stories, this actually happened in 1988 and 1989 at the MacWorld expos in San Francisco, and the product was Business Plan Toolkit®, ancestor of Business Plan Pro®.


Reprinted from timberry.bplans.com A Fish Bowl, a Free Prize, a Lesson.