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.


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.


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.


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.

1979: Forecasting a New Market

(Reposted from timberry.bplans.com. In the summer of 1979, after we had moved from Mexico to Escondido Village on campus at Stanford, while waiting to start the MBA program, I worked with Creative Strategies International as a contract consultant. My last Mexico employer, Business International, owned Creative Strategies and helped me get the contract work.)

In 1979 Creative Strategies International, a high-tech market research company, assigned me the job of forecasting the market for automated teller machines in the U.S.

There were a very few of them already in place at the time. Maybe a few hundred.

I got the numbers as best I could. I found out how many banks there were, and how many branches. I got data for growth in banking customers and growth in branches. I got data for employees in banks.

I talked to dozens of experts. Product managers in companies making ATMs, or companies that could possibly be making them. Lots of bankers, lots of consultants to bankers, several journalists involved in bank-specific trade magazines.

Not all of them wanted to talk to me, but an older and more experienced vice president in the same firm (Tom Arnett was his name) had some good advice (and I’m paraphrasing here, it’s been 30 years):

They have to be interested in what they do, the market they’re in, or they couldn’t get up in the morning.

So hook them in fast. Tell them you’re forecasting the market for Creative Strategies. Tell them you’re thinking the market is going to grow at some percent — it doesn’t matter — but most experts disagree. Make it clear as quickly as possible that you’re going to offer opinions and information as part of the conversation, if they have time to talk to you.

Most of them will. They want to feel like experts. They want to be asked. And they want to know what you’re thinking too.

I used Tom’s advice a lot, and talked to a few dozen experts.

In the end, though, there was not technical or mathematical way to forecast ATMs. At least I was able to relate the projection to numbers of branches to give me some sense of error check, but it wasn’t clear that ATMs would all be in bank branches.

What made the biggest difference to that forecast was the placement of two ATMs at Stanford Shopping Center on the side of the Bank of America branch there. We lived in grad student family housing at the time, and we would ride our bikes over to the shopping center. The ATM was very convenient. It gave me cash fast. It gave me cash after banking hours. I used it a lot.

Most of the bankers told me people would never accept doing business with a machine. They’ll never warm up to that.

Happily, I believed what I saw instead of what the bankers told me. I projected a very fast growth rate for ATMs. As the years ticked off, it turned out I was very close. The forecast I made in 1979 gave a relatively accurate view of the future, given how much uncertainty was there in the system.

Take note, however: it was a human educated guess. The math helped me to compare my projection to the numbers of bank branches, but that was just a reality check. I was guessing.

1983: I Don’t Create Competition

In 1983: The First Day of a New Business I told the story of leaving Creative Strategies and going out on my own to write books and, as it turned out, build my business planning and market consulting business. I was recently reminded of an offshoot of that story, valuable to me as a lesson in running a business right.

The lesson came from Larry Wells, who was the founder of Creative Strategies, president of Creative Strategies when this took place, and was later a venture capitalist in his own firm and then Citibank Venture Capital. I don’t know where he is these days. It’s been a long time, and I moved from Palo Alto to Eugene, but if you’re out there Larry, send me an email. I just Googled you and it didn’t work, there are many Larry Wellses out there, none seem to be the one who started Creative Strategies.

Larry and I remained friends during and after my exit from Creative Strategies. He kept me on retainer for more than a year, passed some business over to me, and made sure I got all of my accumulated vacation pay. I stayed on an extra nine months longer than I wanted, because my original exit date was awkward. Larry was trying to buy back the company from Business International and wanted me to remain until after the deal was done.

There was, however, one thing he wouldn’t do: help me build a business to compete against him. That’s exactly what he said when I asked him to cosponsor a newsletter that became Infotext: the Strategy Letter (and died many years ago).

“Sorry Tim, that would be helping you to build a name to compete against us. I never do that. That’s always bad business.” Larry looked me straight in the eye and answered as simply and clearly as possible. I got it.

It’s a good lesson. Don’t build the competition. Even if you’re friends, or allies, you have to be able to look into the future and see where that leads.

1982: Metrics, Swag, and 3 Types of Lies

(Reposted from timberry.bplans.com)

This is a true story. Back in my market research days, 20-some years ago now, I watched one of my friends and colleagues (call him Fred) present a market forecast to a committee of IBM executives. They objected to his numbers, which seemed way off of what they expected, which was also what they’d received from competing market research companies.

The pause that followed seemed to me to take forever. I watched with excruciating pain as the IBM executives in the room exchanged glances. I was sure they thought we were idiots; and expensive idiots too.

It was probably only a second, maybe two. Fred, thank goodness, was a seasoned veteran of this kind of moment, an alumnus of Stanford Research Institute with a lot of degrees and a lot of experience. He responded immediately. “Oh, that’s because we define the market differently,” he said, quickly and confidently. Then he started asking questions. “How do you define PCs? Does the processor make a difference?” Our clients seemed bewildered first, then apologetic. Fred resumed his presentation. We were home free.

What I knew, but kept to myself, was that Fred had changed definitions as quickly as a carnival con man changes peas underneath walnut shells. There’s sleight of the hand and sleight of the definitions. Definitions are a market research consultant’s best friend.

Which brings me to the subject of metrics. By that I mean numbers, measurement, a scorecard. People want to see how they’re doing and we’re used to scores in numbers. I’ve posted on this blog before about the importance of metrics, which drive accountability into planning and management. Metrics are to management what mortar is to a brick wall. How can you have accountability if you can’t measure performance?

In three ways to make your employees miserable I quoted author Patrick Lencioni saying that employees need, deserve, and want metrics. Earlier I had posted the magic of metrics, about how much I like metrics in my own work life.

My story here is about another side of metrics, the pliability of metrics.  There’s an old quote, attributed to Mark Twain, Alfred Marshall, or Benjamin Disraeli:

“There are three types of lies: lies, damn lies, and statistics.”

Mark Twain

Sometimes we manufacture truth to fit our purposes. It’s not necessarily bad. When our Palo Alto Software soccer team went 8-1 in the city league last year we called a local trophy shop and ordered our own trophy, which most of the players assumed was given by the league for finishing in first place (and if this is you reading this, sorry, we thought you deserved it).  This gets particularly interesting when we do this with the metrics that are built into our management.

That comes to mind today for the juxtaposition of a story in the New York Times and a post by Seth Godin. In How Many Site Hits? Depends Who’s Counting, Louise Story reports on widely varying ranges of traffic statistics on different websites, depending on the source.

…big media companies — including Time Warner, The Financial Times and The New York Times — are equally frustrated that their counts of Web visitors keep coming in vastly higher than those of the tracking companies. There are many reasons for the differences (such as how people who use the Web at home and at the office are counted), but the upshot is the same: the growth of online advertising is being stunted, industry executives say, because nobody can get the basic visitor counts straight.

I do remember that in the old days of the dot-com boom we could manipulate definitions to change Web traffic numbers. For example, there were visits, visitors, unique visitors, unique visits, page views, hits, lots of different but related numbers. Of course the true measure was sales, but even with sales, did we count returns? Did the month end at midnight of the last day of the month, when orders were made, or when the orders were tallied and posted? There’s always some wiggle room.

In his post “The New York Times Bestseller List”, Seth Godin points out that the New York Times is manipulating the list to serve various purposes. But, he adds,

The best part… it doesn’t matter. Cumulative advantage is so powerful that even though the accurate reports of book sales often completely contradict the Times list, authors and others still obsess over it. We’re always looking for clues, especially in crowded markets.

The easy answer to this puzzle is consistency. Measure performance by one consistently applied measure, without making it matter much which measure you use, but stick to the same measure so you can see change over time. In the real world, however, even those consistent measures over time are subject to change.

Fred, the market researcher in my opening story, was in his early fifties when I was working at Creative Strategies, myself in my early thirties, and he taught me a thing or two. One of them was his use of the term SWAG as a data source. SWAG stands for “scientific wild-ass guess.”