1
00:00:29,696 --> 00:00:33,894
We never ever had any idea

2
00:00:34,201 --> 00:00:35,930
that this would be as explosively

3
00:00:36,236 --> 00:00:37,999
successful as it was.

4
00:00:44,545 --> 00:00:47,173
Fastest to Fortune 500

5
00:00:47,447 --> 00:00:50,348
and fastest to over a billion?

6
00:00:50,617 --> 00:00:54,075
I would've just said
you're blowing smoke.

7
00:01:00,561 --> 00:01:05,055
Compaq is the story of
how David takes on Goliath,

8
00:01:05,365 --> 00:01:07,196
and it's not easy,
but when you do it,

9
00:01:07,467 --> 00:01:10,368
it fundamentally changes society.

10
00:01:15,709 --> 00:01:18,405
We hope you, too,
come to believe that the Compaq

11
00:01:18,712 --> 00:01:20,543
is an important landmark
in the short history

12
00:01:20,814 --> 00:01:22,372
of the personal computer field.

13
00:01:22,649 --> 00:01:23,206
Thank you.

14
00:01:25,419 --> 00:01:26,977
Compaq was basically

15
00:01:27,287 --> 00:01:29,448
prying open a lock box.

16
00:01:29,756 --> 00:01:31,155
It's analogous to somebody

17
00:01:31,458 --> 00:01:34,586
saying we're going to put
Google out of business.

18
00:01:34,895 --> 00:01:37,056
Are you a Mac or a PC?

19
00:01:37,331 --> 00:01:40,926
The reason they don't say Mac
or an IBM is because of Compaq.

20
00:01:41,234 --> 00:01:43,566
You cannot get to the iPhone without

21
00:01:43,837 --> 00:01:44,633
the original Compaq portable.

22
00:01:58,652 --> 00:02:04,454
Man, if you're looking for action.

23
00:02:04,758 --> 00:02:07,352
Man, Houston's the town.

24
00:02:07,661 --> 00:02:09,526
Here's the action town.

25
00:02:09,830 --> 00:02:10,819
One of the first things

26
00:02:11,131 --> 00:02:13,122
I bought when I got a real job, which

27
00:02:13,433 --> 00:02:19,861
was a sacker at a grocery
store making $0.45 an hour,

28
00:02:20,173 --> 00:02:26,669
was a '53 Ford for $350.

29
00:02:26,980 --> 00:02:28,174
We'd take our cars way out to North

30
00:02:28,482 --> 00:02:29,642
Houston where it
was deserted roads

31
00:02:29,950 --> 00:02:32,851
and maybe run a few races.

32
00:02:33,153 --> 00:02:35,849
And I ain't jivin'.

33
00:02:36,156 --> 00:02:37,817
Street drag racing,
like you see in the movies

34
00:02:38,125 --> 00:02:40,286
where you're going
around Dead Man's Curve.

35
00:02:40,560 --> 00:02:43,051
Man, Houston's the town.

36
00:02:43,363 --> 00:02:45,695
There weren't any video games.

37
00:02:45,999 --> 00:02:48,832
That car was my computer.

38
00:02:49,136 --> 00:02:50,569
I loved working on it.

39
00:02:50,871 --> 00:02:53,863
I'd change spark plugs,
and set the points on the distributor,

40
00:02:54,174 --> 00:02:58,474
and adjust the timing,
and that natural inclination

41
00:02:58,745 --> 00:03:00,178
to try to understand how it worked

42
00:03:00,480 --> 00:03:05,179
and to not be afraid of taking
it apart and working on it.

43
00:03:05,485 --> 00:03:08,818
I got a lot of enjoyment out of it.

44
00:03:09,089 --> 00:03:11,580
Speak and Spell,
a revolutionary learning

45
00:03:11,892 --> 00:03:13,325
aid from Texas Instruments.

46
00:03:13,593 --> 00:03:14,582
It almost thinks.

47
00:03:14,895 --> 00:03:16,260
We were very lucky to have

48
00:03:16,563 --> 00:03:19,327
a high tech company,
like Texas Instruments, in Houston.

49
00:03:19,599 --> 00:03:21,191
The learning can go
on with the Texas

50
00:03:21,501 --> 00:03:22,866
Instruments TI-30.

51
00:03:23,170 --> 00:03:24,933
Specially designed for
high school students

52
00:03:25,238 --> 00:03:28,366
to help them find the wonder
of numbers never ends.

53
00:03:28,675 --> 00:03:29,869
That's where I wanted to go,

54
00:03:30,177 --> 00:03:32,543
and I got the job and
that really got me started

55
00:03:32,846 --> 00:03:33,676
in high tech electronics.

56
00:03:37,851 --> 00:03:41,287
The bosses asked me to
take a small team of people

57
00:03:41,588 --> 00:03:43,055
to develop an intelligent terminal.

58
00:03:43,356 --> 00:03:44,584
It was a predecessor to the PC.

59
00:03:47,461 --> 00:03:48,723
He called me up and said, Bill,

60
00:03:49,029 --> 00:03:51,054
would you come work for
me and be my business

61
00:03:51,364 --> 00:03:51,887
development manager?

62
00:03:56,903 --> 00:03:59,428
I came out of Texas A&M,

63
00:03:59,740 --> 00:04:00,798
electrical engineering degree.

64
00:04:05,412 --> 00:04:06,538
Bill was the marketing guy,

65
00:04:06,813 --> 00:04:08,280
and he was a good one.

66
00:04:08,582 --> 00:04:11,915
Jim was the engineering guy,
and even though I was an engineer

67
00:04:12,219 --> 00:04:13,311
by background, I was really sort of

68
00:04:13,620 --> 00:04:15,986
the business guy,
the general manager type.

69
00:04:16,289 --> 00:04:20,419
While TI was a great place,
as the fun became less

70
00:04:20,727 --> 00:04:25,061
and less over time, Rod and Bill
and I would quip to each other,

71
00:04:25,332 --> 00:04:27,061
like, let's go do something.

72
00:04:27,334 --> 00:04:31,236
We were seeing what was
going on in Silicon Valley.

73
00:04:37,110 --> 00:04:38,338
You wandered around,

74
00:04:38,645 --> 00:04:40,340
there was still a lot of fruit trees.

75
00:04:40,647 --> 00:04:41,909
It was a lot of empty space.

76
00:04:42,182 --> 00:04:44,650
There was no Silicon Valley
as we think of it today.

77
00:04:49,356 --> 00:04:50,789
It started out as purely

78
00:04:51,091 --> 00:04:53,685
hobbyist, not commercial.

79
00:04:53,994 --> 00:04:55,985
You had to solder
your own connections

80
00:04:56,296 --> 00:04:58,355
and build your kits.

81
00:04:58,665 --> 00:05:01,099
You had the microprocessor
become available

82
00:05:01,368 --> 00:05:02,926
in the very early 1970's, and you

83
00:05:03,203 --> 00:05:08,163
saw a lot of hobbyists coming
up with new ways to use it.

84
00:05:08,475 --> 00:05:09,601
When we were out there

85
00:05:09,876 --> 00:05:13,368
it was just exhilarating
to be around these guys

86
00:05:13,680 --> 00:05:17,172
and to see their enthusiasm.

87
00:05:17,484 --> 00:05:18,974
The VP of engineering
of a small company

88
00:05:19,286 --> 00:05:21,982
would pull up in his Ferrari,
which at TI you're

89
00:05:22,289 --> 00:05:23,278
never going to have a Ferrari.

90
00:05:23,557 --> 00:05:24,489
Maybe you can rent one once.

91
00:05:27,561 --> 00:05:29,791
What are we doing?

92
00:05:30,063 --> 00:05:32,156
It was like, oh my goodness, this

93
00:05:32,465 --> 00:05:33,864
is what I would like to do.

94
00:05:34,167 --> 00:05:38,126
Seeded this sense of we ought
to go do something together.

95
00:05:38,405 --> 00:05:39,997
Let's just go do something.

96
00:05:40,307 --> 00:05:41,501
Wasn't about getting rich.

97
00:05:41,808 --> 00:05:44,402
It wasn't about building a computer.

98
00:05:44,711 --> 00:05:47,976
It was really about
starting a company that

99
00:05:48,248 --> 00:05:49,215
would be a good place to work.

100
00:05:51,685 --> 00:05:52,982
Bill said, why don't we come over

101
00:05:53,253 --> 00:05:56,086
to my house Thursday at 7:30.

102
00:05:56,389 --> 00:05:59,222
And we said, let's do that.

103
00:05:59,526 --> 00:06:01,323
We can at least have a beer.

104
00:06:01,595 --> 00:06:04,257
We bought a thing called
Entrepreneur's Manual.

105
00:06:04,564 --> 00:06:06,156
Because surely that'll
tell us how to put

106
00:06:06,433 --> 00:06:07,866
together a successful company.

107
00:06:08,168 --> 00:06:09,897
We sit at a table,
we each have our piece of paper

108
00:06:10,203 --> 00:06:11,761
with us and a pen,
and we're going to start

109
00:06:12,072 --> 00:06:13,198
taking notes about what we say.

110
00:06:13,506 --> 00:06:17,374
It's like, OK, what do we do now?

111
00:06:17,677 --> 00:06:20,373
Let's talk about all the possibilities.

112
00:06:20,680 --> 00:06:22,045
One of the things we did, sort of,

113
00:06:22,349 --> 00:06:24,510
traditionally, was we would
go out and eat Mexican food.

114
00:06:24,784 --> 00:06:26,217
Pepe's Tacos restaurants.

115
00:06:26,519 --> 00:06:28,009
Treat yourself to the wonderful world

116
00:06:28,288 --> 00:06:31,086
of Mexican food and
authentic Mexican atmosphere.

117
00:06:31,391 --> 00:06:32,881
Bill and I always wanted

118
00:06:33,193 --> 00:06:36,629
to do a Mexican food restaurant,
so we brought that up.

119
00:06:36,930 --> 00:06:39,023
Maybe a Mexican food restaurant.

120
00:06:39,299 --> 00:06:40,698
We didn't really want to do

121
00:06:40,967 --> 00:06:42,195
a Mexican food restaurant.

122
00:06:42,469 --> 00:06:44,403
What a stupid idea
that would've been.

123
00:06:44,704 --> 00:06:45,728
Pepe's Tacos restaurants

124
00:06:46,039 --> 00:06:47,529
are the family fun place to be.

125
00:06:47,807 --> 00:06:51,709
We finally decided,
as you would hope, I guess,

126
00:06:51,978 --> 00:06:55,470
that we ought to stick
with what we knew.

127
00:06:55,782 --> 00:06:59,548
And we toasted the beginning
of starting a company.

128
00:06:59,819 --> 00:07:01,116
You're probably on your way

129
00:07:01,421 --> 00:07:03,286
up to the top of the ladder.

130
00:07:03,590 --> 00:07:05,558
Texas Instruments,
a terrific company.

131
00:07:05,825 --> 00:07:07,486
And you did a silly thing
like quit to try to start

132
00:07:07,794 --> 00:07:08,761
your own computer company.

133
00:07:09,062 --> 00:07:11,929
People must have
thought you were nuts.

134
00:07:12,232 --> 00:07:13,995
We went to the credit unions

135
00:07:14,301 --> 00:07:15,427
and took out loans.

136
00:07:15,735 --> 00:07:17,635
I knew that I could last 6 months

137
00:07:17,938 --> 00:07:19,667
after I sold my wife's car.

138
00:07:19,973 --> 00:07:23,101
I had three small
children, and a wife,

139
00:07:23,410 --> 00:07:25,002
and mortgage.

140
00:07:25,312 --> 00:07:28,076
I'd actually,
recently married Rhonda.

141
00:07:28,348 --> 00:07:30,942
I was meeting a lot of
her extended family,

142
00:07:31,251 --> 00:07:32,980
and it would be like,
what do you do?

143
00:07:33,286 --> 00:07:36,200
Well, I've actually left my job,
and I want to start a company.

144
00:07:36,323 --> 00:07:37,290
Oh, that's great.

145
00:07:37,590 --> 00:07:38,989
What is that going to be?

146
00:07:39,292 --> 00:07:41,590
Well, we hadn't decided yet.

147
00:07:41,861 --> 00:07:43,089
And you quit your job?

148
00:07:43,363 --> 00:07:44,625
Yes.

149
00:07:44,931 --> 00:07:46,922
And you could tell they
were thinking, poor Rhonda.

150
00:07:54,307 --> 00:07:55,638
The success of IBM had

151
00:07:55,942 --> 00:07:59,503
come about through
mainframe computers.

152
00:07:59,813 --> 00:08:02,338
IBM was making big computers

153
00:08:02,649 --> 00:08:05,982
to sell to big companies.

154
00:08:06,286 --> 00:08:09,016
Computers were
treated as a priesthood,

155
00:08:09,322 --> 00:08:11,153
and only the priests
could touch them,

156
00:08:11,458 --> 00:08:14,359
and everyone else looked
through a glass wall.

157
00:08:14,661 --> 00:08:16,458
Eventually, the users wanted to get

158
00:08:16,730 --> 00:08:20,222
hold of that computing power.

159
00:08:20,533 --> 00:08:21,864
IBM wanted to maintain control

160
00:08:22,168 --> 00:08:23,635
over the computing industry as they

161
00:08:23,903 --> 00:08:25,734
had during the 60's and 70's.

162
00:08:26,039 --> 00:08:27,301
Let's build something
for the masses

163
00:08:27,574 --> 00:08:29,041
that they can buy and
become a commodity.

164
00:08:29,342 --> 00:08:32,175
Everyone else was struggling

165
00:08:32,479 --> 00:08:36,176
to get a permanent foothold.

166
00:08:36,483 --> 00:08:41,853
First PCs, Apple II,
Commodore, RadioShack...

167
00:08:42,155 --> 00:08:44,885
It was still a tiny market.

168
00:08:45,191 --> 00:08:51,994
The game changer was when
IBM entered the market in '81.

169
00:08:52,265 --> 00:08:54,426
IBM, International
Business Machines,

170
00:08:54,734 --> 00:08:57,760
has entered the small computer
market for the first time.

171
00:08:58,071 --> 00:08:59,834
It's expected to have a major impact

172
00:09:00,106 --> 00:09:02,199
on what is now the
fastest growing sector

173
00:09:02,509 --> 00:09:03,498
of the computer business.

174
00:09:03,777 --> 00:09:04,835
IBM said, we're going

175
00:09:05,111 --> 00:09:08,171
to go from selling
million dollar computers

176
00:09:08,448 --> 00:09:10,712
to a few thousand people,
to $1,000 computers

177
00:09:11,017 --> 00:09:11,847
to a few million people.

178
00:09:12,118 --> 00:09:13,278
IBM's personal computer

179
00:09:13,586 --> 00:09:15,918
is designed for office,
school, or home use.

180
00:09:16,222 --> 00:09:19,385
It's aimed at exactly the same
market as its competitors.

181
00:09:19,692 --> 00:09:21,717
It's expected to be
sold very aggressively.

182
00:09:22,028 --> 00:09:23,120
And the race was on.

183
00:09:23,430 --> 00:09:26,399
This was going to cause
that market to explode.

184
00:09:26,699 --> 00:09:28,064
Sales of personal computers

185
00:09:28,368 --> 00:09:30,461
are so hot this Christmas,
Santa Claus may have to replace

186
00:09:30,770 --> 00:09:32,362
his reindeer with microchips.

187
00:09:32,639 --> 00:09:34,869
850,000 people
bought home computers

188
00:09:35,141 --> 00:09:36,870
in the United States last year.

189
00:09:37,143 --> 00:09:40,078
The industry expects, this year,
more than 3 million will.

190
00:09:40,380 --> 00:09:41,711
We're no longer on the verge

191
00:09:41,981 --> 00:09:43,539
of the personal computer revolution.

192
00:09:43,817 --> 00:09:45,910
We're right in the midst of it
with more and more people

193
00:09:46,219 --> 00:09:48,744
jumping aboard every day.

194
00:09:49,055 --> 00:09:51,285
Osborne was being very successful

195
00:09:51,591 --> 00:09:53,957
with an extraordinarily
ugly portable.

196
00:09:54,260 --> 00:09:56,592
And Rod had purchased the IBM PC,

197
00:09:56,896 --> 00:10:00,559
so he could write
business plans on it,

198
00:10:00,834 --> 00:10:03,962
and it became obvious
to him that that PC,

199
00:10:04,270 --> 00:10:06,431
if it was portable,
that would be a good product.

200
00:10:06,739 --> 00:10:08,297
What popped in my head was, well,

201
00:10:08,608 --> 00:10:12,510
if we could take this
idea for a portable,

202
00:10:12,812 --> 00:10:13,938
and we could make it
run the software that

203
00:10:14,247 --> 00:10:18,013
was written for the IBM PC,
ooh, that's when

204
00:10:18,318 --> 00:10:19,250
the chill went down my spine.

205
00:10:19,519 --> 00:10:22,579
It's like, oh, man, would that sell.

206
00:10:26,359 --> 00:10:27,519
Welcome to the
Computer Chronicles.

207
00:10:27,827 --> 00:10:30,022
I'm Stewart Cheifet
and this is Gary Kildall.

208
00:10:30,330 --> 00:10:33,458
And, Gary, our subject today
is IBM and the dominant role

209
00:10:33,766 --> 00:10:35,290
they play in the
computer world in general

210
00:10:35,602 --> 00:10:36,796
and the PC world in particular.

211
00:10:37,103 --> 00:10:38,502
Matter of fact, they've
taken over the phrase PC.

212
00:10:38,805 --> 00:10:39,931
It doesn't mean
personal computer anymore,

213
00:10:40,206 --> 00:10:42,003
it means an IBM personal computer.

214
00:10:42,308 --> 00:10:45,277
IBM has always had
this mentality that it

215
00:10:45,545 --> 00:10:46,876
is the king of the world.

216
00:10:47,180 --> 00:10:49,341
What do you think would be
the biggest threat to IBM's

217
00:10:49,649 --> 00:10:50,843
position in this situation?

218
00:10:51,151 --> 00:10:53,381
Well, I don't think
that anything is really

219
00:10:53,686 --> 00:10:55,483
a threat to the IBM position, and I

220
00:10:55,788 --> 00:10:59,053
don't anticipate that
they will begin to decline.

221
00:10:59,359 --> 00:11:00,223
IBM didn't care.

222
00:11:03,730 --> 00:11:06,392
If you weren't Xerox,
if you didn't have that massive,

223
00:11:06,699 --> 00:11:09,133
New York, type presence that
loomed over the entire country,

224
00:11:09,402 --> 00:11:09,891
you didn't matter.

225
00:11:14,007 --> 00:11:15,838
We weren't really good
at writing business plans,

226
00:11:16,142 --> 00:11:17,404
but we knew that the
way a product looked

227
00:11:17,710 --> 00:11:19,371
was important to people.

228
00:11:19,679 --> 00:11:21,544
Ted Papa John was
an industrial designer,

229
00:11:21,848 --> 00:11:24,749
and we got him, and we
drove over to the House of Pies

230
00:11:25,051 --> 00:11:25,915
for two things.

231
00:11:26,219 --> 00:11:27,743
One, a piece of pie, and the other

232
00:11:28,054 --> 00:11:31,512
was to convey to Ted
our ideals for what

233
00:11:31,824 --> 00:11:34,190
the unit may look like.

234
00:11:34,494 --> 00:11:36,894
We walked in,
looked around, picked a booth

235
00:11:37,197 --> 00:11:39,188
that was kind of by itself.

236
00:11:39,499 --> 00:11:41,729
Unfortunately, we hadn't
thought to bring anything with us,

237
00:11:42,035 --> 00:11:44,833
so we turned over the
placemat and borrowed a pencil

238
00:11:45,104 --> 00:11:49,666
from the waitress, and proceeded
to describe to Ted Papa John

239
00:11:49,943 --> 00:11:52,503
how we wanted it to look.

240
00:11:52,779 --> 00:11:54,940
What he drew was something that

241
00:11:55,248 --> 00:11:56,579
was very professional looking.

242
00:11:56,883 --> 00:11:59,044
We knew where the monitor
would go, what the size was,

243
00:11:59,352 --> 00:12:02,185
how the keyboard would go in.

244
00:12:02,455 --> 00:12:04,514
Laid out somewhat like an Osborne

245
00:12:04,791 --> 00:12:07,521
but with much smoother lines,
plastic molded case,

246
00:12:07,794 --> 00:12:11,457
keyboard just like an IBM PC.

247
00:12:11,764 --> 00:12:15,359
As I saw that sketch coming
together on the paper,

248
00:12:15,635 --> 00:12:18,263
there was an excitement.

249
00:12:18,571 --> 00:12:19,799
We're going to make this work.

250
00:12:20,106 --> 00:12:23,633
I didn't know how yet,
but it was headed that way.

251
00:12:23,943 --> 00:12:25,103
This is something
we can get funding for.

252
00:12:33,219 --> 00:12:35,779
Post Mark Zuckerberg
inventing Facebook

253
00:12:36,089 --> 00:12:38,057
in high school, there is
this different path which

254
00:12:38,324 --> 00:12:42,260
is oh, if I study this stuff
and I learn computers,

255
00:12:42,562 --> 00:12:44,587
I can move to Palo Alto
when I graduate college,

256
00:12:44,897 --> 00:12:47,457
and there's just money
raining from the sky.

257
00:12:47,767 --> 00:12:49,496
Uber growth at Uber.

258
00:12:49,802 --> 00:12:51,565
Reuters has learned that
the ride sharing service see

259
00:12:51,838 --> 00:12:54,398
its global bookings more
than tripling this year

260
00:12:54,674 --> 00:12:56,403
to nearly $11 billion dollars.

261
00:12:56,676 --> 00:12:58,644
A picture is worth a thousand words,

262
00:12:58,945 --> 00:13:01,641
and for Instagram, a billion dollars.

263
00:13:01,948 --> 00:13:03,939
SnapChat, the barely
three-year-old company,

264
00:13:04,250 --> 00:13:08,346
raised almost half a billion
dollars in investment funding.

265
00:13:08,655 --> 00:13:10,247
There's just so
much venture capital.

266
00:13:10,523 --> 00:13:12,855
Back then, there wasn't that much.

267
00:13:13,159 --> 00:13:14,626
If you wanted to start
a computer company,

268
00:13:14,927 --> 00:13:18,021
there was literally nobody.

269
00:13:18,331 --> 00:13:21,164
You had to go get a bank loan,
you had to have collateral.

270
00:13:21,467 --> 00:13:22,764
If you weren't walking in,

271
00:13:23,036 --> 00:13:25,368
in a suit... a nice suit, and a tie,

272
00:13:25,672 --> 00:13:28,766
and you had this education,
and you had this background,

273
00:13:29,042 --> 00:13:30,942
and this many
decades of experience,

274
00:13:31,210 --> 00:13:33,940
nobody wanted to
even listen to you.

275
00:13:34,213 --> 00:13:38,013
We received an introduction to meet

276
00:13:38,318 --> 00:13:39,683
Rod, Bill, and Jim in Houston.

277
00:13:42,789 --> 00:13:46,281
Their business plan had a
sketch of the portable computer

278
00:13:46,559 --> 00:13:48,959
on the back of a placemat
from the House of Pies.

279
00:13:49,228 --> 00:13:53,961
And they showed for first
year sales of $30 million.

280
00:13:54,233 --> 00:13:56,531
Now, that was absurd.

281
00:13:56,836 --> 00:13:59,999
You're taking a chance on
somebody from a big company

282
00:14:00,306 --> 00:14:03,673
starting a new company.

283
00:14:03,976 --> 00:14:06,877
It's whether it's a gut
feeling or something

284
00:14:07,180 --> 00:14:09,341
about the discussion
you have with them

285
00:14:09,649 --> 00:14:12,015
that you feel is going
to help differentiate

286
00:14:12,318 --> 00:14:15,913
them from other people.

287
00:14:16,222 --> 00:14:18,690
Rod obviously had some skills,

288
00:14:18,991 --> 00:14:19,821
but he had clear weaknesses.

289
00:14:20,093 --> 00:14:21,253
He wasn't a public speaker.

290
00:14:21,561 --> 00:14:25,224
He didn't have the brash,
over-the-top demeanor

291
00:14:25,531 --> 00:14:28,193
that we now associate
with tech entrepreneurs.

292
00:14:28,501 --> 00:14:32,028
He was modest,
he was extremely clean cut,

293
00:14:32,338 --> 00:14:36,365
he was thoughtful...
almost like a boy scout, right.

294
00:14:36,676 --> 00:14:39,907
Pretty much everybody who
met him was drawn to him.

295
00:14:55,094 --> 00:14:58,222
We were basically in
this class B office space,

296
00:14:58,531 --> 00:15:01,967
and it was right next
to a field full of cows.

297
00:15:02,268 --> 00:15:03,428
We had no furniture.

298
00:15:03,736 --> 00:15:05,465
There was one phone line.

299
00:15:05,772 --> 00:15:07,069
I brought my card table and chairs.

300
00:15:07,373 --> 00:15:09,864
So we put a very long cord on it.

301
00:15:10,143 --> 00:15:11,371
It didn't matter who did what.

302
00:15:11,644 --> 00:15:13,305
I don't even know
who reported to who.

303
00:15:13,613 --> 00:15:18,448
I ain't jivin' when I say Houston.

304
00:15:18,751 --> 00:15:19,979
Here's the action town.

305
00:15:20,286 --> 00:15:21,810
The people that I
wanted to work with

306
00:15:22,121 --> 00:15:23,748
were the people that were
coming to this company

307
00:15:24,056 --> 00:15:25,785
that was making a product,
and I didn't know what it was.

308
00:15:26,092 --> 00:15:28,322
I couldn't tell them
what the product was.

309
00:15:28,628 --> 00:15:29,925
It was secret.

310
00:15:30,229 --> 00:15:31,560
I assumed it was in the electronics.

311
00:15:31,831 --> 00:15:33,321
I didn't know if it was a toy, I don't

312
00:15:33,633 --> 00:15:34,657
know if it was a computer.

313
00:15:34,967 --> 00:15:36,059
Was it a sewing machine?

314
00:15:36,335 --> 00:15:36,926
Or a PC?

315
00:15:37,236 --> 00:15:39,636
It really didn't matter.

316
00:15:39,939 --> 00:15:43,340
Once I signed a nondisclosure,
and I walked the halls,

317
00:15:43,643 --> 00:15:45,008
they showed me what
the product looked like.

318
00:15:45,311 --> 00:15:47,404
They showed us the picture

319
00:15:47,680 --> 00:15:50,672
of the Compaq computer
that we were gonna build

320
00:15:50,983 --> 00:15:51,972
and that did it.

321
00:15:52,285 --> 00:15:53,309
It was exciting.

322
00:15:53,619 --> 00:15:55,587
It was like, OK, we can do this.

323
00:15:55,855 --> 00:15:56,617
This is a cool thing.

324
00:15:56,923 --> 00:15:58,254
I would like to own that thing.

325
00:15:58,524 --> 00:16:00,856
I would love to have that,
that's better than anything

326
00:16:01,160 --> 00:16:02,491
I've seen on the market.

327
00:16:02,795 --> 00:16:05,161
Man, Houston's the town.

328
00:16:05,465 --> 00:16:06,432
Here's the action town.

329
00:16:10,670 --> 00:16:12,831
Get your iPhone,
you look at the half million

330
00:16:13,139 --> 00:16:14,436
apps that each of us has on there,

331
00:16:14,707 --> 00:16:17,642
and you look at all of the products

332
00:16:17,944 --> 00:16:21,675
designed for other platforms
that miraculously seem to work.

333
00:16:21,981 --> 00:16:25,883
And we now take that for granted.

334
00:16:26,185 --> 00:16:28,847
Before Compaq, nobody
took compatibility seriously.

335
00:16:32,124 --> 00:16:34,319
Gary, the subject
today is the IBM clones,

336
00:16:34,627 --> 00:16:36,288
and the question I get asked
more than anything else

337
00:16:36,562 --> 00:16:38,223
by people who are about
to buy computers is,

338
00:16:38,531 --> 00:16:41,398
should I buy an IBM, or should
I buy one of the IBM lookalikes?

339
00:16:41,701 --> 00:16:43,464
I think I'm told there's
about 50 IBM clones

340
00:16:43,736 --> 00:16:44,703
out there on the market now.

341
00:16:45,004 --> 00:16:46,301
What's the difference, do you think,

342
00:16:46,572 --> 00:16:48,301
between a clone that makes
it and a clone that fails?

343
00:16:48,574 --> 00:16:50,337
We didn't want to do

344
00:16:50,643 --> 00:16:53,476
a better machine than IBM,
we didn't want

345
00:16:53,746 --> 00:16:55,304
to technically be superior.

346
00:16:55,581 --> 00:16:58,812
We wanted the
software to run the same.

347
00:16:59,085 --> 00:17:00,848
The keystrokes were identical,

348
00:17:01,153 --> 00:17:03,144
you didn't have to look
at a different manual,

349
00:17:03,422 --> 00:17:04,980
there was no training required.

350
00:17:05,258 --> 00:17:07,920
You just sat in front of it,
and it worked the same.

351
00:17:08,227 --> 00:17:09,717
It wasn't some vague definition

352
00:17:10,029 --> 00:17:13,089
of what does compatibility
mean... it was very clear.

353
00:17:13,399 --> 00:17:14,991
We have to run all the
software, and use all

354
00:17:15,268 --> 00:17:16,326
the peripherals that IBM does.

355
00:17:22,008 --> 00:17:26,035
Do you have any idea how
expensive this thing was?

356
00:17:26,345 --> 00:17:27,539
Let's turn this thing inside out.

357
00:17:27,847 --> 00:17:28,871
Halt & Catch Fire

358
00:17:29,181 --> 00:17:30,705
is a show about the
reverse engineering

359
00:17:31,017 --> 00:17:33,417
process of the IBM PC.

360
00:17:33,719 --> 00:17:37,246
The thing that really drew us to
Texas was the story of Compaq.

361
00:17:37,557 --> 00:17:40,253
You've got characters that,
for all intents and purposes,

362
00:17:40,560 --> 00:17:44,860
feel like outlaws, and they're
coming in to take on IBM.

363
00:17:45,131 --> 00:17:47,531
And they basically do
it by robbing a bank.

364
00:17:47,800 --> 00:17:52,396
Nobody ever got fired
for buying an IBM, right?

365
00:17:52,705 --> 00:17:54,798
You can be more.

366
00:17:55,107 --> 00:17:56,870
This is your chance.

367
00:17:57,143 --> 00:17:59,907
What we knew was
that IBM had come

368
00:18:00,212 --> 00:18:04,444
out with a product that was made
with off the shelf components.

369
00:18:04,750 --> 00:18:06,809
A personal computer,
like any other computer,

370
00:18:07,119 --> 00:18:08,984
is just a nothing box full
of electronic switches

371
00:18:09,288 --> 00:18:10,380
and hardware.

372
00:18:10,656 --> 00:18:11,315
They hadn't designed a new disk

373
00:18:11,624 --> 00:18:13,057
drive or a new processor.

374
00:18:13,326 --> 00:18:15,260
Anyone can buy all this
stuff off the shelf right now.

375
00:18:15,561 --> 00:18:17,119
This was stuff that
everybody in the industry

376
00:18:17,430 --> 00:18:18,761
was using some form or another.

377
00:18:19,065 --> 00:18:20,464
Except the chip.

378
00:18:20,766 --> 00:18:21,960
Except what's on the chip.

379
00:18:22,268 --> 00:18:24,259
Without IBM code it wouldn't run.

380
00:18:24,570 --> 00:18:26,800
It is the program, it is the magic.

381
00:18:27,106 --> 00:18:32,339
We sent Gary Stimac to
Dallas to buy some manuals.

382
00:18:32,645 --> 00:18:34,806
I purchased an IBM
reference manual,

383
00:18:35,114 --> 00:18:38,447
and it had all the listings
of the IBM code in it.

384
00:18:38,751 --> 00:18:41,618
He says, whoa, this isn't hard at all.

385
00:18:41,921 --> 00:18:44,481
Bad news is they copyrighted it,
and they own how it works.

386
00:18:44,790 --> 00:18:46,348
I circled the word copyright,

387
00:18:46,659 --> 00:18:48,991
brought it to my lawyer,
and he said, hmm...

388
00:18:49,295 --> 00:18:50,990
What many of the
companies were doing was

389
00:18:51,297 --> 00:18:54,630
they were copying IBM's code.

390
00:18:54,934 --> 00:18:57,494
Guess what, IBM sued them,
out of business they were.

391
00:18:57,803 --> 00:19:01,204
Good news is there's
a way around that, sort of.

392
00:19:01,507 --> 00:19:02,872
We needed to make sure that we did

393
00:19:03,175 --> 00:19:05,439
not shoot ourselves in the
foot from a legal standpoint.

394
00:19:05,711 --> 00:19:09,807
I said, Gary, you can
no longer write the code

395
00:19:10,116 --> 00:19:11,378
because you've looked at it.

396
00:19:11,684 --> 00:19:14,812
In fact, you can't answer
questions about the code.

397
00:19:15,121 --> 00:19:17,385
You're going to have to find
a different job here at Compaq.

398
00:19:17,690 --> 00:19:19,954
You can never look,
you just can never look.

399
00:19:20,226 --> 00:19:23,059
If you look,
and it influences your work,

400
00:19:23,362 --> 00:19:26,729
then you can be open to
a lawsuit and you've copied it.

401
00:19:27,033 --> 00:19:29,331
No one in the entire office

402
00:19:29,635 --> 00:19:31,569
could ever buy a
tech reference manual

403
00:19:31,871 --> 00:19:36,035
without me removing the
pages and me destroying them.

404
00:19:36,342 --> 00:19:39,402
We had to basically create
a functional device that

405
00:19:39,712 --> 00:19:41,509
would do what the IBM PC
did without knowing

406
00:19:41,814 --> 00:19:44,078
how the IBM PC did it.

407
00:19:44,383 --> 00:19:47,375
Would be similar to
playing baseball blindfolded.

408
00:19:47,687 --> 00:19:50,554
Very difficult,
not impossible, but very difficult.

409
00:19:50,856 --> 00:19:52,721
So you might strike
out a couple times,

410
00:19:53,025 --> 00:19:55,391
and you might fall
down a couple times,

411
00:19:55,695 --> 00:19:57,754
but eventually you're going
to start to get a feel for it,

412
00:19:58,064 --> 00:19:59,395
and you start getting a hit.

413
00:19:59,699 --> 00:20:02,532
How many of these addresses
do we need to transcribe?

414
00:20:02,835 --> 00:20:04,598
65,536.

415
00:20:04,904 --> 00:20:05,836
We went out and got all

416
00:20:06,105 --> 00:20:07,402
the IBM software we could find.

417
00:20:07,707 --> 00:20:10,005
Everything we could find...
games, or Lotus 1-2-3,

418
00:20:10,276 --> 00:20:12,403
or unimportant,
really important, all of it.

419
00:20:12,712 --> 00:20:14,043
We got every bit we could find.

420
00:20:14,346 --> 00:20:16,211
We would go through and run them

421
00:20:16,515 --> 00:20:18,506
until something broke,
and then we'd figure out well,

422
00:20:18,784 --> 00:20:21,048
what broke, and why did it break.

423
00:20:21,353 --> 00:20:22,684
We liked the idea

424
00:20:22,955 --> 00:20:25,549
of what Compaq was
trying to do a lot because

425
00:20:25,858 --> 00:20:27,257
of the PC compatibility.

426
00:20:27,560 --> 00:20:29,027
We thought it was the right idea.

427
00:20:29,295 --> 00:20:32,287
We were rooting for it,
but nobody really knew

428
00:20:32,598 --> 00:20:34,065
how it was going to come out.

429
00:20:34,366 --> 00:20:37,062
We're IBM, and we've seen
some very skeptical people

430
00:20:37,369 --> 00:20:39,200
become very enthusiastic.

431
00:20:39,472 --> 00:20:41,440
And that makes us
proud because we

432
00:20:41,741 --> 00:20:45,768
have more computers helping more
small businesses than anybody.

433
00:20:46,078 --> 00:20:47,602
So at IBM there was always

434
00:20:47,913 --> 00:20:50,882
this arrogance,
this confidence, that no one

435
00:20:51,150 --> 00:20:52,583
could recreate what we did.

436
00:20:52,885 --> 00:20:54,318
And if they did, we could just,

437
00:20:54,620 --> 00:20:56,144
we could just tweak
something because

438
00:20:56,455 --> 00:20:57,979
we controlled the marketplace.

439
00:20:58,290 --> 00:21:00,121
IBM entered the
personal computer market

440
00:21:00,426 --> 00:21:02,724
two years ago and
went all out unleashing

441
00:21:02,995 --> 00:21:05,555
its power as the sixth
largest industrial corporation

442
00:21:05,831 --> 00:21:06,798
in the US.

443
00:21:07,099 --> 00:21:08,430
Already, the computer giant has won

444
00:21:08,734 --> 00:21:10,964
25% of the personal
computer market,

445
00:21:11,270 --> 00:21:12,567
and its share is growing.

446
00:21:22,481 --> 00:21:27,817
Compaq was basically... they
were prying open a lock box,

447
00:21:28,120 --> 00:21:30,588
and they were letting the
genie out of the bottle.

448
00:21:34,527 --> 00:21:37,928
I was extremely excited
and scared to death

449
00:21:38,197 --> 00:21:39,494
because I was the
one that had to stand up

450
00:21:39,799 --> 00:21:44,259
and make this speech,
which I had never done before.

451
00:21:44,537 --> 00:21:47,938
Rod was not experienced in dealing

452
00:21:48,207 --> 00:21:49,504
with the public and the press.

453
00:21:49,809 --> 00:21:50,833
Ben had made sure

454
00:21:51,143 --> 00:21:52,940
everybody that mattered was there.

455
00:21:53,212 --> 00:21:54,474
TV cameras were there.

456
00:21:54,780 --> 00:21:56,179
We're in this beautiful
old room called The Library

457
00:21:56,482 --> 00:21:57,949
at the Helmsley Palace.

458
00:21:58,217 --> 00:22:00,014
Good morning and welcome.

459
00:22:00,319 --> 00:22:02,014
My name is Rod Canion,
and I am the president

460
00:22:02,321 --> 00:22:05,119
of Compaq Computer
Corporation of Houston.

461
00:22:05,391 --> 00:22:06,949
The mysterious company
you've been invited

462
00:22:07,226 --> 00:22:09,057
to come and hear about today.

463
00:22:09,361 --> 00:22:11,352
I spent most of the night practicing,

464
00:22:11,664 --> 00:22:13,461
changing, practicing, changing.

465
00:22:13,732 --> 00:22:15,461
This is an important day for us.

466
00:22:15,734 --> 00:22:18,965
The public introduction of a new
personal computer that has been

467
00:22:19,238 --> 00:22:20,330
in development for nine months.

468
00:22:20,639 --> 00:22:21,799
It was the big city

469
00:22:22,074 --> 00:22:26,340
and we were the kids
from the plains of Texas.

470
00:22:26,645 --> 00:22:28,806
There's a three piece suit,
and my thick glasses,

471
00:22:29,081 --> 00:22:30,514
and we looked out of place.

472
00:22:30,816 --> 00:22:33,910
This is the Compaq
Portable Computer.

473
00:22:34,220 --> 00:22:37,815
The unit is laid over smoothly
using its carrying handle,

474
00:22:38,090 --> 00:22:40,320
and the keyboard is removed
by sliding two latches

475
00:22:40,593 --> 00:22:43,061
and lifting it out.

476
00:22:43,362 --> 00:22:46,354
That's how easy it is to
get it ready for operation.

477
00:22:46,665 --> 00:22:49,600
It was a portable and
that was something

478
00:22:49,902 --> 00:22:54,896
IBM had no entrant in at all,
and it was 27 pounds.

479
00:22:55,207 --> 00:22:59,940
Portability... people need to
be able to take it anyway.

480
00:23:00,246 --> 00:23:01,406
It's going to have a handle.

481
00:23:01,714 --> 00:23:02,840
It was simultaneously

482
00:23:03,115 --> 00:23:05,845
an incredibly revolutionary
idea but sounds so

483
00:23:06,118 --> 00:23:08,245
mundane to today's audiences.

484
00:23:08,554 --> 00:23:09,680
A handle, wow.

485
00:23:09,955 --> 00:23:12,048
It is the only personal computer,

486
00:23:12,358 --> 00:23:16,089
portable or otherwise,
that is truly compatible with

487
00:23:16,395 --> 00:23:17,885
the IBM personal computer.

488
00:23:18,197 --> 00:23:20,097
I begin to really realize, this is it.

489
00:23:20,399 --> 00:23:22,526
The flag was going down,
and the race was going to begin.

490
00:23:22,801 --> 00:23:26,293
I repeat, Compaq is the only
personal computer that is truly

491
00:23:26,605 --> 00:23:28,800
compatible with the IBM PC.

492
00:23:33,812 --> 00:23:34,972
This was just a blip on the screen.

493
00:23:35,281 --> 00:23:37,715
Who cares about a luggable?

494
00:23:37,983 --> 00:23:40,110
It just doesn't matter, it's a toy.

495
00:23:40,419 --> 00:23:42,979
It's a curiosity... it's nothing more.

496
00:23:43,289 --> 00:23:45,052
While some software
computer firms are battling

497
00:23:45,324 --> 00:23:46,791
to succeed, one personal computer

498
00:23:47,092 --> 00:23:48,616
company is more
concerned with taking

499
00:23:48,928 --> 00:23:51,089
its hardware success forward.

500
00:23:51,397 --> 00:23:53,729
Our company is real all of a sudden.

501
00:23:53,999 --> 00:23:57,400
We have a name, we're on the radio.

502
00:23:57,670 --> 00:23:58,898
We're getting calls

503
00:23:59,171 --> 00:24:00,968
from presidents, and CEOs,
and engineers saying,

504
00:24:01,273 --> 00:24:02,638
this is a cool machine.

505
00:24:02,942 --> 00:24:05,433
What I brought today is
a Compaq portable computer.

506
00:24:05,744 --> 00:24:09,578
It's a full functioning computer
in a portable enclosure.

507
00:24:09,848 --> 00:24:12,817
People were walking
with portable computers

508
00:24:13,118 --> 00:24:15,985
down the aisles of airplanes,
and the computer

509
00:24:16,288 --> 00:24:17,653
was hitting people in the head.

510
00:24:17,957 --> 00:24:18,981
We didn't hardly have
a chance to breathe...

511
00:24:19,291 --> 00:24:20,258
People loved the product.

512
00:24:20,526 --> 00:24:21,857
We couldn't build them fast enough.

513
00:24:22,161 --> 00:24:25,096
Trying to use portable
computers, which

514
00:24:25,364 --> 00:24:26,763
were not laptops at that point.

515
00:24:27,032 --> 00:24:30,024
They were sewing machines
on the meal tray of airplanes.

516
00:24:30,336 --> 00:24:33,931
The company's first product
was a 28 pound portable computer.

517
00:24:34,206 --> 00:24:36,868
The salesman used to
demonstrate how rugged it is

518
00:24:37,176 --> 00:24:38,473
by taking it and dropping it.

519
00:24:40,546 --> 00:24:41,638
What Compaq did,

520
00:24:41,947 --> 00:24:45,178
because they built
things so damn well,

521
00:24:45,484 --> 00:24:50,979
is they quickly went up to be
an acceptable alternative to IBM.

522
00:24:51,290 --> 00:24:52,655
Its founders decided early on

523
00:24:52,958 --> 00:24:54,789
to build machines
compatible with those built

524
00:24:55,060 --> 00:24:56,994
by IBM but with new features.

525
00:24:57,296 --> 00:24:59,059
Market research showed
customers want it.

526
00:24:59,365 --> 00:25:00,229
Sometimes people

527
00:25:00,532 --> 00:25:01,624
wanted to go home
over the weekend

528
00:25:01,900 --> 00:25:03,697
and finish their work before Monday.

529
00:25:04,003 --> 00:25:04,992
They grabbed a portable.

530
00:25:05,304 --> 00:25:07,636
That really turned
out to be important.

531
00:25:07,906 --> 00:25:10,204
Product was just
flying off the shelves,

532
00:25:10,509 --> 00:25:11,703
and the dealers loved it.

533
00:25:12,011 --> 00:25:13,501
Salespeople already
familiar with IBM

534
00:25:13,812 --> 00:25:15,336
products didn't need much training

535
00:25:15,647 --> 00:25:17,410
to sell Compaq computers.

536
00:25:17,716 --> 00:25:20,879
We meet a Computer Land
dealer in a little motel,

537
00:25:21,186 --> 00:25:24,246
and there's no wall receptacle.

538
00:25:24,556 --> 00:25:27,047
How am I gonna plug this in?
Well, the bathroom has one.

539
00:25:27,359 --> 00:25:30,726
OK, so we put the
computer on the toilet seat,

540
00:25:31,030 --> 00:25:34,932
and we plug it in, and it ran.

541
00:25:35,234 --> 00:25:36,360
And they went, wow!

542
00:25:36,668 --> 00:25:39,501
The challenge was
building computers

543
00:25:39,772 --> 00:25:41,239
fast enough to meet the demand.

544
00:25:41,540 --> 00:25:45,203
We had no idea that it was
going to be as big as it was.

545
00:25:45,511 --> 00:25:47,376
We're cutting back on
advertising... we can't cut back

546
00:25:47,679 --> 00:25:51,376
on advertising, and Rod said,
well, let me make this

547
00:25:51,683 --> 00:25:53,776
really clear... we're sold out.

548
00:25:54,086 --> 00:25:55,383
Compaq Computer Corporation

549
00:25:55,687 --> 00:25:58,212
delivered its first
portable personal computer

550
00:25:58,524 --> 00:26:00,389
in January of 1983.

551
00:26:00,692 --> 00:26:03,923
By the end of the year,
the firm had sold $111 million

552
00:26:04,229 --> 00:26:05,423
worth of the machines.

553
00:26:05,731 --> 00:26:07,699
A figure that company
executives say

554
00:26:07,966 --> 00:26:10,434
exceeded the first
year sales of any firm

555
00:26:10,736 --> 00:26:12,795
in American business history.

556
00:26:13,105 --> 00:26:14,197
That was the first time where

557
00:26:14,473 --> 00:26:16,464
there was a ripple at IBM.

558
00:26:16,775 --> 00:26:19,107
That being said, we had seen
other people come in... Amdahl,

559
00:26:19,411 --> 00:26:21,709
Hitachi... and they
come and they rise,

560
00:26:21,980 --> 00:26:23,948
and then they go back down.

561
00:26:24,249 --> 00:26:27,309
And we will defeat them in the end.

562
00:26:38,764 --> 00:26:44,225
There was kind of a feeling
that something was going on

563
00:26:44,503 --> 00:26:47,939
out there with
respect to the PC world

564
00:26:48,240 --> 00:26:50,504
and somehow or other
IBM wasn't getting

565
00:26:50,809 --> 00:26:52,299
the share that it wanted.

566
00:26:52,611 --> 00:26:53,976
Now, I know IBM was
getting a big share,

567
00:26:54,279 --> 00:26:55,644
but they wanted more.

568
00:26:55,948 --> 00:26:58,849
And so people started
paying a little bit of attention.

569
00:26:59,151 --> 00:27:02,814
With a clone that is actually
offering more portability,

570
00:27:03,122 --> 00:27:07,081
for example, becomes
a successful notion like that,

571
00:27:07,359 --> 00:27:10,851
then isn't it the case that IBM
would or even has gone in there

572
00:27:11,163 --> 00:27:13,825
and taken that
market to some extent?

573
00:27:14,133 --> 00:27:16,931
That's the danger of playing
the IBM compatible game.

574
00:27:17,202 --> 00:27:20,433
There was complete
conviction among the Wall Street

575
00:27:20,706 --> 00:27:22,606
public and the press public.

576
00:27:22,875 --> 00:27:25,105
Well, enjoy it while
you can because IBM

577
00:27:25,377 --> 00:27:28,642
is going to have a portable
and then it's sayonara.

578
00:27:28,947 --> 00:27:30,710
Wall Street hit a
record high again today.

579
00:27:31,016 --> 00:27:34,179
One of the better performers
was IBM, up more than five points

580
00:27:34,486 --> 00:27:35,510
this week alone.

581
00:27:35,821 --> 00:27:37,948
One of the reasons
is IBM's huge success

582
00:27:38,223 --> 00:27:40,691
in the tough home computer
market, and the rumor

583
00:27:40,993 --> 00:27:41,857
that there is more to come.

584
00:27:42,161 --> 00:27:43,719
What was IBM going to do, and when

585
00:27:44,029 --> 00:27:47,965
was it going to actually happen,
and how successful would it be?

586
00:27:48,233 --> 00:27:50,565
We were always
concerned about IBM.

587
00:27:50,869 --> 00:27:52,894
I think anyone else in
the computer business

588
00:27:53,205 --> 00:27:56,663
ought to be very frightened,
and I think everyone else is.

589
00:27:56,975 --> 00:27:58,374
IBM was arrogant.

590
00:27:58,677 --> 00:28:04,411
Some manager got PO'd at us
and said, kind of like a hitman,

591
00:28:04,716 --> 00:28:08,345
go design a portable and take
those guys out... tired of them.

592
00:28:08,654 --> 00:28:10,087
The Compaq personal computer's

593
00:28:10,389 --> 00:28:14,348
main selling point is its high
compatibility with the IBM PC.

594
00:28:14,660 --> 00:28:18,255
Yet IBM is now bringing its own
portable PC to the marketplace.

595
00:28:21,366 --> 00:28:22,697
It's called the Fud Factor.

596
00:28:23,001 --> 00:28:25,731
F-U-D for the fear,
uncertainty, and doubt created

597
00:28:26,038 --> 00:28:28,233
among its rivals by IBM.

598
00:28:28,540 --> 00:28:30,371
Will there be life for
other home computers

599
00:28:30,676 --> 00:28:33,406
after giant IBM's product appeared?

600
00:28:33,712 --> 00:28:35,390
What nobody outside
the company knew

601
00:28:35,581 --> 00:28:37,515
is that we had no orders coming in,

602
00:28:37,783 --> 00:28:41,048
so this wasn't really a
future hypothetical problem,

603
00:28:41,353 --> 00:28:42,513
this was an immediate problem

604
00:28:42,788 --> 00:28:43,618
that was threatening to kill us.

605
00:28:46,625 --> 00:28:48,354
Compaq's stock went down

606
00:28:48,627 --> 00:28:50,595
because they were
concerned that IBM would

607
00:28:50,896 --> 00:28:51,726
put Compaq out of business.

608
00:28:55,100 --> 00:28:57,534
Compaq was the first
one in with the luggable.

609
00:28:57,803 --> 00:29:00,738
IBM put two products,
essentially, in there,

610
00:29:01,039 --> 00:29:02,404
and it doesn't do nearly as well.

611
00:29:09,915 --> 00:29:13,544
They didn't really
try to make it better

612
00:29:13,819 --> 00:29:16,982
and try to meet Compaq's advances

613
00:29:17,289 --> 00:29:18,483
in technology and performance.

614
00:29:18,790 --> 00:29:22,749
Their product would not
run all the software...

615
00:29:23,061 --> 00:29:26,394
Their IBM software,
even their IBM software

616
00:29:26,665 --> 00:29:31,466
people did to run in their computers

617
00:29:31,770 --> 00:29:34,933
would not necessarily
run in their portable.

618
00:29:35,240 --> 00:29:36,400
But you could take that same thing,

619
00:29:36,675 --> 00:29:39,439
and put it in our portable,
and it would run.

620
00:29:39,745 --> 00:29:41,076
How could that be?

621
00:29:41,346 --> 00:29:43,906
Of course IBM at the time
did the only obvious thing,

622
00:29:44,182 --> 00:29:45,444
and they blamed the user.

623
00:29:45,751 --> 00:29:47,742
You're not doing it correctly,
and the user said,

624
00:29:48,020 --> 00:29:49,988
I may be dumb, but I'm not stupid.

625
00:29:50,289 --> 00:29:52,519
Why don't you come back to
me when you've got it figured.

626
00:29:52,824 --> 00:29:57,761
I had heard from friends
of friends inside IBM

627
00:29:58,030 --> 00:30:01,830
that there was a lot of
discussion and turmoil

628
00:30:02,134 --> 00:30:03,362
within their PC ranks.

629
00:30:03,669 --> 00:30:05,500
Why is this happening?

630
00:30:05,804 --> 00:30:08,034
Why is this little
company out-marketing us?

631
00:30:17,182 --> 00:30:18,547
They've done a little
growing since they

632
00:30:18,850 --> 00:30:20,818
began in February of '82.

633
00:30:21,119 --> 00:30:23,110
They had 6 employees then.

634
00:30:23,388 --> 00:30:25,618
They have 950 now.

635
00:30:25,891 --> 00:30:27,381
Two years ago,
they occupied the space

636
00:30:27,693 --> 00:30:29,320
on one floor of this building.

637
00:30:29,628 --> 00:30:33,189
By spring, it'll look like this
in one of their locations.

638
00:30:33,498 --> 00:30:35,898
Well, production is up 1600%.

639
00:30:36,201 --> 00:30:38,135
The worry now is they
won't get enough workers

640
00:30:38,403 --> 00:30:39,631
to keep up the pace.

641
00:30:39,905 --> 00:30:41,202
If you'd like to apply to Compaq,

642
00:30:41,506 --> 00:30:42,905
you can call this number.

643
00:30:43,208 --> 00:30:47,804
Compaq is looking to add 500
people by the end of the year.

644
00:30:48,080 --> 00:30:51,345
The culture that Rod
created within Compaq

645
00:30:51,650 --> 00:30:53,914
was 20 years ahead of its time.

646
00:30:58,323 --> 00:31:02,350
Tech companies today are
very progressive and cool,

647
00:31:02,661 --> 00:31:04,526
and they create a fun environment.

648
00:31:04,830 --> 00:31:06,195
Where people aren't working, they're

649
00:31:06,498 --> 00:31:09,160
come play in our sandbox.

650
00:31:09,434 --> 00:31:12,767
If I work at Facebook,
they'll do my laundry,

651
00:31:13,071 --> 00:31:15,665
they'll pick me up and drop
me off, there's a misuse,

652
00:31:15,941 --> 00:31:19,240
and there's a full time chef
who is trained on cordon bleu.

653
00:31:19,544 --> 00:31:21,409
They basically have built
a place that is so great

654
00:31:21,713 --> 00:31:23,078
that you never want to leave.

655
00:31:23,382 --> 00:31:25,009
At a time when other computer
makers are being squeezed,

656
00:31:25,283 --> 00:31:27,080
why is Compaq still growing?

657
00:31:27,386 --> 00:31:29,946
The answer may lie beyond
technology and marketing,

658
00:31:30,255 --> 00:31:32,917
in a corporate culture that
gives employees free Cokes

659
00:31:33,225 --> 00:31:34,920
and puts trees in the plants.

660
00:31:35,227 --> 00:31:37,752
We started out providing
coffee and soft drinks

661
00:31:38,063 --> 00:31:40,429
for everybody when there
were 10 people in the company.

662
00:31:40,732 --> 00:31:42,290
Jim Harris and I would
stop by the grocery store

663
00:31:42,601 --> 00:31:45,399
and pick up some more
soft drinks for the day

664
00:31:45,704 --> 00:31:46,932
if we needed it.

665
00:31:47,239 --> 00:31:51,369
It was a very
egalitarian kind of culture,

666
00:31:51,643 --> 00:31:54,271
and it really owes it to Rod.

667
00:31:54,579 --> 00:31:55,807
You sense that the
employees appreciate

668
00:31:56,114 --> 00:31:58,309
the fact that you don't have
a marked parking place?

669
00:31:58,617 --> 00:32:00,312
How often do you get to work early

670
00:32:00,619 --> 00:32:01,551
to get your job done and you walk

671
00:32:01,820 --> 00:32:03,378
by an empty
reserved parking place?

672
00:32:03,655 --> 00:32:06,419
Just seemed to make sense that
the people who got there first

673
00:32:06,725 --> 00:32:08,158
deserved to park closest to the door.

674
00:32:08,460 --> 00:32:10,052
You'd see Rod Canion
walking down the hall,

675
00:32:10,328 --> 00:32:13,820
and it was certainly more than
permissible... it was hoped...

676
00:32:14,132 --> 00:32:15,292
that you would stop
and talk with him if you

677
00:32:15,600 --> 00:32:16,794
had something to talk about.

678
00:32:17,102 --> 00:32:18,660
The corporate culture
at Compaq computer

679
00:32:18,970 --> 00:32:20,562
means involving
employees in decision

680
00:32:20,839 --> 00:32:22,602
making at almost every level.

681
00:32:22,908 --> 00:32:27,402
What I think, or what I say,
can change things where you

682
00:32:27,679 --> 00:32:29,010
work... that makes a difference.

683
00:32:29,314 --> 00:32:31,077
We were all very
proud of what we did.

684
00:32:31,349 --> 00:32:33,146
The camaraderie
and the teamwork,

685
00:32:33,452 --> 00:32:36,478
and the ability to get things
done without the red tape

686
00:32:36,788 --> 00:32:39,018
and without all the
hassel that comes

687
00:32:39,324 --> 00:32:40,256
with big company bureaucracies.

688
00:32:45,130 --> 00:32:46,791
IBM was the very definition

689
00:32:47,098 --> 00:32:50,158
of what a large
American corporation was.

690
00:32:50,469 --> 00:32:52,801
They don't call it
Big Blue for nothing.

691
00:32:53,104 --> 00:32:56,699
It's a company with more
than 387,000 employees,

692
00:32:57,008 --> 00:33:04,540
834,000 shareholders, and 590
million shares of common stock.

693
00:33:04,850 --> 00:33:06,875
When you looked at the
organization chart of IBM,

694
00:33:07,185 --> 00:33:09,016
it was a very
hierarchical organization.

695
00:33:09,321 --> 00:33:11,881
Here's the person up here
and you're down here.

696
00:33:12,190 --> 00:33:15,557
What came down from on top is,
you better not lose and that

697
00:33:15,861 --> 00:33:17,385
was just in IBM's blood.

698
00:33:17,696 --> 00:33:20,961
So it was a very,
very competitive environment

699
00:33:21,233 --> 00:33:22,791
that you had to go through.

700
00:33:23,068 --> 00:33:24,899
The greatest asset
the IBM Corporation

701
00:33:25,203 --> 00:33:26,727
has happen to be its people.

702
00:33:27,038 --> 00:33:30,303
If you can give an individual
a given set of objectives,

703
00:33:30,575 --> 00:33:32,065
measure them,
and then reward them,

704
00:33:32,377 --> 00:33:34,675
then almost any
target can be achieved.

705
00:33:34,980 --> 00:33:37,380
IBM was a financially
driven company.

706
00:33:37,682 --> 00:33:40,014
Make your numbers, make your
numbers, make your numbers.

707
00:33:44,856 --> 00:33:47,324
If you run a small
business profits can get

708
00:33:47,592 --> 00:33:50,527
squeezed when inventory
doesn't match up with production.

709
00:33:55,233 --> 00:33:59,533
What can help is a visit to
an IBM personal computer dealer.

710
00:33:59,838 --> 00:34:01,271
We thought a breakthrough,

711
00:34:01,573 --> 00:34:04,007
kind of out-of-the-box
thinking for marketing

712
00:34:04,276 --> 00:34:07,006
was having Charlie
Chaplin sell our products.

713
00:34:07,279 --> 00:34:09,372
The IBM personal computer...

714
00:34:09,681 --> 00:34:12,673
not only can it help you plan
ahead, it'll balance your books

715
00:34:12,951 --> 00:34:15,044
and give you more
time to make dough.

716
00:34:15,353 --> 00:34:17,116
Charlie Chaplin being
innovative marketing?

717
00:34:17,422 --> 00:34:20,220
It was for IBM, but it wasn't
for the rest of the world.

718
00:34:21,092 --> 00:34:23,617
Why buy just a video game
from Atari or on television.

719
00:34:23,929 --> 00:34:26,921
Invest in the wonder computer
of the 1980's for under $300.

720
00:34:27,232 --> 00:34:28,563
Everyone was pitching computers.

721
00:34:28,867 --> 00:34:31,199
You had William
Shatner for Commodore.

722
00:34:31,469 --> 00:34:33,937
With the Commodore
VIC-20, the whole family

723
00:34:34,239 --> 00:34:35,536
can learn computing at home.

724
00:34:35,807 --> 00:34:37,434
My personal favorite,
King Kong Bundy,

725
00:34:37,742 --> 00:34:38,936
was selling computers.

726
00:34:39,244 --> 00:34:41,610
Bundy has never used
a computer before.

727
00:34:41,913 --> 00:34:43,574
He's sitting down.

728
00:34:45,250 --> 00:34:46,774
Wait a minute,
the on screen instructions

729
00:34:47,085 --> 00:34:49,246
are so simple he doesn't
have to wrestle with a manual.

730
00:34:49,554 --> 00:34:51,044
Compaq had John Cleese.

731
00:34:51,323 --> 00:34:53,382
Hello, I'm going to tell
you about Compaq's

732
00:34:53,658 --> 00:34:55,091
new Portable II computer.

733
00:34:55,393 --> 00:34:57,452
It's such a marvelous
machine that it would be quite

734
00:34:57,762 --> 00:34:59,320
unfair to compare it
with another computer,

735
00:34:59,631 --> 00:35:02,828
so we've decided to
compare it with this fish.

736
00:35:03,134 --> 00:35:05,932
A surrealistic
comedian from England

737
00:35:06,237 --> 00:35:09,331
who was more identifiable
to the geeks in the audience

738
00:35:09,641 --> 00:35:10,767
than to the general population.

739
00:35:11,076 --> 00:35:12,270
The Compaq Portable II, however,

740
00:35:12,577 --> 00:35:15,910
can run all IBM's most
popular software 30%

741
00:35:16,181 --> 00:35:17,671
faster than IBM can.

742
00:35:19,651 --> 00:35:24,179
TV ads with John Cleese were
a runaway best selling hit.

743
00:35:24,489 --> 00:35:27,253
Inside Compaq is capacity
equal to 30 diskettes.

744
00:35:29,427 --> 00:35:30,359
I need a vacation.

745
00:35:30,662 --> 00:35:32,186
This decision was sound.

746
00:35:32,497 --> 00:35:33,987
Wrong, but sound.

747
00:35:34,299 --> 00:35:35,527
Kind of makes you want to cry, huh?

748
00:35:35,834 --> 00:35:37,096
I am crying.

749
00:35:37,369 --> 00:35:39,428
The same year that
we did the John Cleese

750
00:35:39,704 --> 00:35:42,434
commercials, Apple
announced the Macintosh

751
00:35:42,707 --> 00:35:43,674
with its 1984 commercial.

752
00:35:45,477 --> 00:35:47,536
And we will bury them
with their own confusion.

753
00:35:48,647 --> 00:35:51,275
We shall prevail.

754
00:35:53,885 --> 00:35:54,852
Apple Computer officially

755
00:35:55,153 --> 00:35:56,552
unveiled its new Macintosh.

756
00:35:56,855 --> 00:35:58,720
The new Apple that
costs less than $2,500

757
00:35:59,024 --> 00:36:01,822
is supposed to be one of the
easiest computers to use.

758
00:36:02,127 --> 00:36:04,288
What the Mac has really
brought us is really affordable,

759
00:36:04,562 --> 00:36:05,688
high resolution graphics and that

760
00:36:05,997 --> 00:36:08,693
leads us to a whole new
generation of software

761
00:36:09,000 --> 00:36:11,332
where pictures and
text are both important.

762
00:36:11,636 --> 00:36:13,729
What corporations had
to do, because so many

763
00:36:14,039 --> 00:36:16,132
of their creative
types wanted Apple,

764
00:36:16,408 --> 00:36:19,138
is they had to have a subheading.

765
00:36:19,411 --> 00:36:21,811
OK, the creative types
can have their Apple,

766
00:36:22,080 --> 00:36:25,811
but Apple was not really
compatible with the rest

767
00:36:26,084 --> 00:36:27,244
of the world.

768
00:36:27,552 --> 00:36:29,486
And Apple really
didn't want that world.

769
00:36:29,754 --> 00:36:34,714
Apple was not a concern to Compaq

770
00:36:35,026 --> 00:36:37,859
because they seemed perfectly
happy with their 4% or 5%

771
00:36:38,163 --> 00:36:41,655
market share,
and people that bought

772
00:36:41,933 --> 00:36:44,026
Apples weren't
usually people that were

773
00:36:44,335 --> 00:36:45,393
going to buy Compaqs anyway.

774
00:36:45,704 --> 00:36:47,899
Meet the lady.

775
00:36:48,206 --> 00:36:51,664
Her name is Lisa, and she
is the most exciting thing

776
00:36:51,943 --> 00:36:54,173
to happen in computers today.

777
00:36:54,446 --> 00:36:56,346
Steve Jobs created the Lisa,

778
00:36:56,614 --> 00:37:00,380
an attempt to do what Compaq
ultimately did successfully.

779
00:37:00,685 --> 00:37:03,745
It was an attempt to enter the
business market for computers

780
00:37:04,055 --> 00:37:05,215
and it failed miserably.

781
00:37:05,523 --> 00:37:09,015
Unlimited power, Lisa, from Apple.

782
00:37:09,294 --> 00:37:12,422
Despite Steve Jobs
welcoming Compaq

783
00:37:12,731 --> 00:37:14,961
to this industry, that they
had thought that they had

784
00:37:15,266 --> 00:37:17,894
pioneered, Steve Jobs was
gone from his company

785
00:37:18,203 --> 00:37:20,433
within the space of three years.

786
00:37:20,739 --> 00:37:25,438
Compaq basically shook Silicon
Valley to its very foundations.

787
00:37:25,744 --> 00:37:28,304
What Compaq did give to Apple

788
00:37:28,613 --> 00:37:30,240
was that it proved that you could

789
00:37:30,548 --> 00:37:34,712
compete against the
monster and succeed.

790
00:37:34,986 --> 00:37:36,248
Well, computer
stocks haven't exactly

791
00:37:36,554 --> 00:37:38,283
been the darlings of
Wall Street of late,

792
00:37:38,590 --> 00:37:40,217
but as Steve Young now reports, that

793
00:37:40,492 --> 00:37:42,790
didn't stop Compaq
from promoting its latest

794
00:37:43,094 --> 00:37:44,152
product in gala fashion.

795
00:37:45,797 --> 00:37:47,162
I wear my sunglasses at night.

796
00:37:47,465 --> 00:37:49,057
I wear my sunglasses at night.

797
00:37:49,334 --> 00:37:50,892
Ladies and gentlemen,
David Copperfield.

798
00:37:58,443 --> 00:37:59,967
Ken Price basically

799
00:38:00,278 --> 00:38:04,612
came up with the concept of
an event to introduce a product.

800
00:38:04,916 --> 00:38:07,077
There were no limits.

801
00:38:07,352 --> 00:38:10,253
Ladies and gentlemen,
Compaq Computer Corporation

802
00:38:10,522 --> 00:38:14,925
proudly presents, live,
The Pointer Sisters.

803
00:38:15,193 --> 00:38:19,425
I'm so excited,
and I just can't hide it.

804
00:38:19,697 --> 00:38:21,130
I went to some of
those early Compaq

805
00:38:21,432 --> 00:38:23,366
product introductions, and I'm going,

806
00:38:23,668 --> 00:38:27,160
wow, that's like show biz.

807
00:38:27,472 --> 00:38:29,337
I was doing things that
I had never done before.

808
00:38:29,641 --> 00:38:32,109
Ladies and gentlemen, Rod Canion.

809
00:38:32,377 --> 00:38:34,845
Rod Baby Canion as we
say in Hollywood, Rod Baby.

810
00:38:35,146 --> 00:38:39,207
All tech CEOs need
communications training.

811
00:38:39,517 --> 00:38:42,543
He went from Wal-mart
polyester suits and shirts

812
00:38:42,854 --> 00:38:46,654
to really nice woolen
designer jackets.

813
00:38:46,958 --> 00:38:49,552
All of us could use a
little improvement, right.

814
00:38:49,861 --> 00:38:51,852
He got some dental work done.

815
00:38:52,163 --> 00:38:53,528
He went to speech school.

816
00:38:53,832 --> 00:38:55,959
I never dreamed that
it could come this far.

817
00:38:56,234 --> 00:38:57,997
We went out and got contacts.

818
00:38:58,303 --> 00:39:00,498
Rod was more than receptive.

819
00:39:00,805 --> 00:39:02,466
We knew a lot about
designing products

820
00:39:02,740 --> 00:39:04,867
and knew nothing about the press,

821
00:39:05,176 --> 00:39:07,144
and Ben took me under
his wing and was a very

822
00:39:07,412 --> 00:39:09,403
important influence on me.

823
00:39:09,714 --> 00:39:13,480
Ladies and gentlemen,
Miss Irene Cara.

824
00:39:13,751 --> 00:39:14,376
What a feeling.

825
00:39:17,422 --> 00:39:20,050
Even believing.

826
00:39:20,358 --> 00:39:21,655
Today, we would like to introduce

827
00:39:21,926 --> 00:39:25,225
a major addition to the
Compaq family, the Compaq Plus.

828
00:39:25,530 --> 00:39:28,328
Compaq Plus stores 30
times more than yours.

829
00:39:28,600 --> 00:39:29,328
Does it have a handle?

830
00:39:29,601 --> 00:39:31,228
Yes.

831
00:39:31,536 --> 00:39:32,434
Oh, drat.

832
00:39:32,737 --> 00:39:33,931
Introducing the Compaq Portable II.

833
00:39:35,907 --> 00:39:38,341
Compaq's sales jumped
54% for the first three

834
00:39:38,610 --> 00:39:39,702
months of the year.

835
00:39:40,011 --> 00:39:41,103
Apparently, I should
never have mentioned

836
00:39:41,412 --> 00:39:43,107
Compaq's portable computer.

837
00:39:43,414 --> 00:39:45,279
I should have been telling
you about Compaq's DeskPro

838
00:39:45,583 --> 00:39:46,709
computer.

839
00:39:47,018 --> 00:39:47,746
Today, we're
announcing the DeskPro 286

840
00:39:48,052 --> 00:39:53,388
and the Portable 286.

841
00:39:53,691 --> 00:39:55,454
Congratulations for
another terrific year,

842
00:39:55,760 --> 00:39:57,421
people of Compaq Computers.

843
00:40:03,434 --> 00:40:04,765
We got to enjoy the day and then

844
00:40:05,069 --> 00:40:07,264
we'll get back to work well,
maybe tomorrow, I guess.

845
00:40:10,575 --> 00:40:12,566
Jan, this is what the fuss is all about.

846
00:40:12,877 --> 00:40:15,471
The 8386 microprocessor from Intel.

847
00:40:15,780 --> 00:40:18,578
Now, no real operating system,
no real software, yet people

848
00:40:18,883 --> 00:40:21,647
are waiting in line to buy
computers with 386 in it.

849
00:40:21,953 --> 00:40:24,217
More talk about it than probably
anything since the IBM PC

850
00:40:24,489 --> 00:40:25,922
came out.

851
00:40:26,224 --> 00:40:27,452
Is this a lot of hype, or is this
really a major development

852
00:40:27,759 --> 00:40:28,657
of personal computers?

853
00:40:28,960 --> 00:40:30,154
Oh, this is not just hype, Stewart,

854
00:40:30,461 --> 00:40:32,725
this is a quantum leap
in personal computers.

855
00:40:32,997 --> 00:40:34,464
Right now,
people are standing in line

856
00:40:34,766 --> 00:40:37,064
to get these systems just for
the raw speed that it offers.

857
00:40:37,335 --> 00:40:39,428
The 386 chips, which give PCs

858
00:40:39,737 --> 00:40:43,229
the power and stunning clarity
of so-called workstations,

859
00:40:43,508 --> 00:40:45,999
are expected to become
commonplace in a year or two.

860
00:40:46,311 --> 00:40:50,338
IBM always had first access
to the Intel computer chip,

861
00:40:50,648 --> 00:40:51,979
so everybody else was followers.

862
00:40:52,283 --> 00:40:55,684
So IBM was always at the
tip of the spear so to speak.

863
00:40:55,987 --> 00:41:03,018
IBM for maybe 70 years, I don't
know... however long it existed,

864
00:41:03,328 --> 00:41:05,353
expected exclusives.

865
00:41:10,969 --> 00:41:12,596
Intel took the attitude,

866
00:41:12,870 --> 00:41:14,462
we're not going to
work with just you,

867
00:41:14,772 --> 00:41:17,263
we're working with everybody.

868
00:41:22,380 --> 00:41:27,283
The significance of them
being willing to release

869
00:41:27,552 --> 00:41:30,146
a microprocessor to
someone who wasn't IBM,

870
00:41:30,455 --> 00:41:34,653
was at a minimum,
a modestly hostile act towards IBM.

871
00:41:34,959 --> 00:41:36,620
Compaq Computer
will announce two

872
00:41:36,894 --> 00:41:38,885
new personal
computers today, including

873
00:41:39,197 --> 00:41:40,664
the world's fastest model.

874
00:41:40,965 --> 00:41:44,025
A development that could make
Big Blue, IBM, green with envy.

875
00:41:44,335 --> 00:41:46,826
Come on, come on,
come on, come on, come on,

876
00:41:47,138 --> 00:41:49,834
come on, come on, come on.

877
00:41:50,141 --> 00:41:52,473
Today, Compaq
Computer Corporation

878
00:41:52,744 --> 00:41:55,542
is stepping to the forefront of
the personal computer industry.

879
00:41:55,847 --> 00:42:00,250
The Compaq DeskPro 386 is
by far the most advanced

880
00:42:00,551 --> 00:42:02,416
high performance personal
computer available in the world

881
00:42:02,720 --> 00:42:03,209
today.

882
00:42:03,521 --> 00:42:06,046
The 386 era is here.

883
00:42:06,357 --> 00:42:09,383
Everyone at Intel is very
enthused about Compaq's

884
00:42:09,694 --> 00:42:10,718
announcement today.

885
00:42:11,029 --> 00:42:12,223
The system has a maximum RAM

886
00:42:12,530 --> 00:42:14,589
capacity of 14 megabytes.

887
00:42:14,899 --> 00:42:16,491
This provides more
than enough memory

888
00:42:16,768 --> 00:42:18,702
for not only today's applications,

889
00:42:19,003 --> 00:42:20,402
but for tomorrow's as well.

890
00:42:20,705 --> 00:42:22,366
Of course, Compaq
was first out of the gate

891
00:42:22,673 --> 00:42:26,439
with a 386 computer, but this
time IBM is not in the picture.

892
00:42:26,744 --> 00:42:29,508
We spent a lot of
time trying to prove,

893
00:42:29,781 --> 00:42:31,442
absolutely beyond a
shadow of a doubt,

894
00:42:31,749 --> 00:42:32,841
that this thing was going to work

895
00:42:33,117 --> 00:42:34,914
and it was going to
succeed, so how better

896
00:42:35,219 --> 00:42:36,709
than having Bill
Gates himself standing

897
00:42:37,021 --> 00:42:38,249
up and saying how great it was.

898
00:42:38,556 --> 00:42:40,956
The original vision of
Microsoft... that there would

899
00:42:41,259 --> 00:42:44,695
eventually be a machine on
most desktops for office work,

900
00:42:44,962 --> 00:42:47,692
will be fulfilled by the power
of this type of machine.

901
00:42:47,965 --> 00:42:52,868
It's gutsy, and the
industry was like, whoa.

902
00:42:53,137 --> 00:42:56,106
I'm sure IBM went, they what?

903
00:42:56,407 --> 00:42:57,738
We did not see it coming.

904
00:42:58,042 --> 00:43:01,273
They couldn't have been happy.

905
00:43:01,579 --> 00:43:04,548
And we couldn't have been happier.

906
00:43:04,816 --> 00:43:07,910
Compaq insists that I tell you
about their new 386 computer,

907
00:43:08,219 --> 00:43:10,380
which they say is the most
advanced desktop ever made.

908
00:43:10,655 --> 00:43:13,055
But they're still sticking
to this cock and bull story

909
00:43:13,324 --> 00:43:18,990
about it being made from
386 chips and 32 bits of a bus.

910
00:43:19,297 --> 00:43:21,162
Frankly, this is not credible.

911
00:43:21,466 --> 00:43:22,831
It's an insult to your intelligence.

912
00:43:23,134 --> 00:43:25,398
If I were you, I wouldn't
watch this commercial.

913
00:43:25,670 --> 00:43:27,433
In fact, I'll switch over for you.

914
00:43:27,738 --> 00:43:32,641
That was the first time that we
came out so far ahead of them

915
00:43:32,944 --> 00:43:36,004
that people started asking
what happened to IBM.

916
00:43:36,314 --> 00:43:39,340
I mean, you just follow
what IBM does, right?

917
00:43:39,650 --> 00:43:41,618
That was the
beginning of somebody

918
00:43:41,919 --> 00:43:46,583
putting real chips behind IBM
is vulnerable and Intel did that.

919
00:43:46,858 --> 00:43:49,622
The funny thing is that certain
other companies are still

920
00:43:49,927 --> 00:43:50,791
trying to make one of these.

921
00:43:51,095 --> 00:43:53,689
So if you work for...

922
00:43:53,998 --> 00:43:58,958
Remember, all you need are
386 chips and 32 bits of a bus.

923
00:43:59,270 --> 00:44:02,137
We still dominated the
corporate computing

924
00:44:02,440 --> 00:44:06,206
marketplace, and if they got
too big, then we would move in.

925
00:44:06,511 --> 00:44:09,446
Is it fair to characterize you,
as a competitor of IBM,

926
00:44:09,714 --> 00:44:11,978
do you really take
them on, head on?

927
00:44:12,283 --> 00:44:14,717
Well, we certainly
compete directly with IBM.

928
00:44:15,019 --> 00:44:17,647
Our intent is not so much
to compete with IBM,

929
00:44:17,955 --> 00:44:21,288
as to compete for customers
who have an alternative

930
00:44:21,559 --> 00:44:22,617
of buying IBM products.

931
00:44:22,894 --> 00:44:24,452
It has been a star performer.

932
00:44:24,729 --> 00:44:28,221
It has grown faster than almost
any other company in history

933
00:44:28,533 --> 00:44:31,058
in so short a period of
time, but this business

934
00:44:31,369 --> 00:44:33,228
is fraught with danger.

935
00:44:33,538 --> 00:44:35,972
Do you think they can
continue this pace?

936
00:44:36,240 --> 00:44:36,729
It's doubtful.

937
00:44:40,711 --> 00:44:43,578
Compaq released sales
predictions Wednesday

938
00:44:43,881 --> 00:44:45,974
saying the company will
report first quarter sales

939
00:44:46,250 --> 00:44:48,081
of more than $200 million.

940
00:44:48,386 --> 00:44:49,751
The company's two latest machines,

941
00:44:50,054 --> 00:44:53,421
a desktop and a portable,
are pound for pound the most

942
00:44:53,724 --> 00:44:55,316
powerful computers ever made.

943
00:44:55,593 --> 00:44:57,686
Compaq more than
doubled it's sales last year

944
00:44:57,995 --> 00:44:59,428
and almost tripled its earnings.

945
00:44:59,730 --> 00:45:02,198
It took Compaq
Computer just three years

946
00:45:02,500 --> 00:45:05,765
to leap into the Fortune
500 list of the nation's

947
00:45:06,070 --> 00:45:07,594
largest industrial companies.

948
00:45:07,905 --> 00:45:10,703
The press enjoyed writing
about the wild Texans

949
00:45:11,008 --> 00:45:14,205
that came from
nowhere and made a stake

950
00:45:14,512 --> 00:45:15,740
in the high tech industry.

951
00:45:16,047 --> 00:45:17,036
The Northwest Eastern storm

952
00:45:17,348 --> 00:45:18,838
is being discussed
around the country

953
00:45:19,116 --> 00:45:21,050
as one of the fastest growing
companies in recent history.

954
00:45:21,352 --> 00:45:22,683
We were having the time of our life.

955
00:45:27,692 --> 00:45:28,716
We never stopped.

956
00:45:29,026 --> 00:45:30,721
We worked hard, we played hard.

957
00:45:31,028 --> 00:45:32,689
Compaq plans to
announce what amounts

958
00:45:32,964 --> 00:45:34,431
to the Lamborghini of PCs.

959
00:45:34,732 --> 00:45:36,063
As time went on you

960
00:45:36,367 --> 00:45:38,699
see neater and cooler cars
show up in the parking lot.

961
00:45:38,970 --> 00:45:43,566
I bought a 1982 Porsche 928.

962
00:45:43,874 --> 00:45:45,273
He showed up at my
house one morning,

963
00:45:45,576 --> 00:45:47,806
about 10 o'clock with a
pitcher of Bloody Mary's, and he

964
00:45:48,112 --> 00:45:50,376
said, c'mon,
let's go buy a couple cars.

965
00:45:50,648 --> 00:45:51,774
I had my wife, my kids,

966
00:45:52,083 --> 00:45:53,880
and we went to the
Corvette dealer to get me

967
00:45:54,151 --> 00:45:55,618
a red and white
Corvette convertible.

968
00:45:55,920 --> 00:45:59,219
I drove a four cylinder Tempest
with a cracked windshield,

969
00:45:59,490 --> 00:46:03,950
so that was more or less
the kind of cars that were

970
00:46:04,262 --> 00:46:05,559
in the parking lot before then.

971
00:46:12,737 --> 00:46:17,071
Those of us who were
used to eating McDonald's

972
00:46:17,341 --> 00:46:19,070
and drinking Budweiser beer, were

973
00:46:19,343 --> 00:46:22,073
suddenly eating smoked salmon
and drinking Don Perignon.

974
00:46:22,346 --> 00:46:23,677
I was looking out
the window one day

975
00:46:23,981 --> 00:46:26,506
and a helicopter landed.

976
00:46:26,817 --> 00:46:29,411
And this girl I worked
with left the building,

977
00:46:29,687 --> 00:46:31,518
walked out, got in the helicopter,

978
00:46:31,822 --> 00:46:32,846
and then a little
while later came back.

979
00:46:33,157 --> 00:46:33,953
And I said, what were you doing?

980
00:46:34,258 --> 00:46:35,520
She said, went to lunch.

981
00:46:35,826 --> 00:46:37,521
Every once in a while we
slow down enough to step back

982
00:46:37,828 --> 00:46:42,629
and look at it, and it's been
tremendously rewarding,

983
00:46:42,933 --> 00:46:44,366
and it does seem
like a dream at times.

984
00:46:44,669 --> 00:46:46,500
Sales at the halfway stage this year

985
00:46:46,804 --> 00:46:48,635
were just under half a billion dollars.

986
00:46:48,939 --> 00:46:50,304
Only one company in history

987
00:46:50,608 --> 00:46:53,475
has exceeded $1 billion in
sales in his first five years.

988
00:46:53,778 --> 00:46:55,803
It happened just last year,
and the company was

989
00:46:56,113 --> 00:46:57,876
Compaq Computer Corporation.

990
00:46:58,182 --> 00:47:01,276
One Wall Street analyst
says sales could tap a billion

991
00:47:01,552 --> 00:47:03,884
and a half dollars next year.

992
00:47:04,188 --> 00:47:06,486
Holy shit, what the hell's
going on here, right?

993
00:47:06,791 --> 00:47:09,316
I mean, I go and ask the people
who've been the investment

994
00:47:09,627 --> 00:47:10,525
business along time, have you ever

995
00:47:10,828 --> 00:47:12,352
seen anything like this before?

996
00:47:12,663 --> 00:47:13,561
And of course nobody had.

997
00:47:20,805 --> 00:47:22,898
My name's Rod and I'm proud of us.

998
00:47:23,207 --> 00:47:25,175
Setting records fast and furious.

999
00:47:25,476 --> 00:47:26,704
Put some cable here, a shock

1000
00:47:27,011 --> 00:47:29,707
mount there, put it in a
box that ain't quite square.

1001
00:47:30,014 --> 00:47:32,642
We are Compaq's computer
crew, shufflin' on down,

1002
00:47:32,917 --> 00:47:33,884
doing it for you.

1003
00:47:34,185 --> 00:47:36,050
We're so phat, we know we're good.

1004
00:47:36,354 --> 00:47:38,720
Selling the like we knew we would.

1005
00:47:45,563 --> 00:47:54,528
The success of the
company was tremendous,

1006
00:47:54,839 --> 00:47:58,502
but on a personal level
there were some, I'd say,

1007
00:47:58,776 --> 00:48:01,404
difficulties.

1008
00:48:01,712 --> 00:48:04,579
There was a definitive gap

1009
00:48:04,882 --> 00:48:09,615
between yourself, your spouse,
sometimes your family,

1010
00:48:09,920 --> 00:48:11,854
which caused a lot of problems.

1011
00:48:12,123 --> 00:48:16,583
A lot of challenges
and a lot of ill feeling.

1012
00:48:19,096 --> 00:48:20,120
Now there were certainly

1013
00:48:20,431 --> 00:48:21,955
some things I did miss, but I worked

1014
00:48:22,266 --> 00:48:26,430
as hard as I could to do both.

1015
00:48:26,737 --> 00:48:33,404
Coaching Little League and
spending time at school.

1016
00:48:33,711 --> 00:48:36,578
I think it's always sad
when families split up.

1017
00:48:39,884 --> 00:48:44,048
There's nothing I can do about
anybody else's, in my own case

1018
00:48:44,321 --> 00:48:46,118
there were a lot of
factors that lead to a point

1019
00:48:46,424 --> 00:48:51,794
where ended up getting a divorce.

1020
00:48:52,096 --> 00:48:53,586
And I remember
coming home one day,

1021
00:48:53,898 --> 00:48:59,131
and my wife said,
Chris, who's my son,

1022
00:48:59,437 --> 00:49:05,103
mistook the gentleman working
on the ice machine as you.

1023
00:49:05,409 --> 00:49:08,071
Wait, OK, that's a problem.

1024
00:49:08,345 --> 00:49:09,334
This isn't working.

1025
00:49:12,616 --> 00:49:18,612
And he said, I want to retire.

1026
00:49:18,923 --> 00:49:21,756
And that was a shock.

1027
00:49:22,026 --> 00:49:24,995
It's always been am I
enjoying what I'm doing?

1028
00:49:25,296 --> 00:49:27,491
And the moment I'm not, change it.

1029
00:49:31,302 --> 00:49:33,634
This is what happens
to all big companies.

1030
00:49:33,938 --> 00:49:35,667
There are none, I don't believe,

1031
00:49:35,973 --> 00:49:39,932
that ever can keep what
they had in the beginning

1032
00:49:40,211 --> 00:49:41,940
throughout their growth.

1033
00:49:42,213 --> 00:49:42,770
It's impossible.

1034
00:49:48,719 --> 00:49:55,648
That happened during one
of the toughest times...

1035
00:49:55,960 --> 00:49:59,487
toughest periods of my
leadership of the company.

1036
00:49:59,797 --> 00:50:01,560
While many of the IBM
compatible companies

1037
00:50:01,866 --> 00:50:04,334
have already gone under,
literally, Compaq

1038
00:50:04,635 --> 00:50:05,966
has yet to really falter.

1039
00:50:06,237 --> 00:50:08,899
Compaq Computer has
tried to outsmart IBM.

1040
00:50:09,206 --> 00:50:11,037
First, Compaq took on the big boys,

1041
00:50:11,342 --> 00:50:14,573
then became one of them,
and now must fight to stay.

1042
00:50:31,028 --> 00:50:33,360
I knew what IBM was capable of,

1043
00:50:33,664 --> 00:50:36,098
and I knew that they
would come sooner or later.

1044
00:50:36,400 --> 00:50:37,992
I can't help but be
reminded about that joke,

1045
00:50:38,269 --> 00:50:39,395
how do you dance with an elephant?

1046
00:50:39,703 --> 00:50:41,432
Very carefully, right, exactly.

1047
00:50:41,739 --> 00:50:44,230
There was these
industry rumors that IBM

1048
00:50:44,542 --> 00:50:45,668
was going to sue Compaq.

1049
00:50:48,746 --> 00:50:50,270
Let me just say Compaq

1050
00:50:50,581 --> 00:50:53,778
was practicing a large number
of IBM's patents, large number.

1051
00:50:56,787 --> 00:50:58,755
They were beginning to
sense that they weren't

1052
00:50:59,056 --> 00:51:00,546
going to be able to
control the PC industry

1053
00:51:00,858 --> 00:51:02,723
and make the kind of
profits they were used to,

1054
00:51:03,027 --> 00:51:06,758
so they were looking to make
money off of their patents.

1055
00:51:07,064 --> 00:51:10,397
Bob Jackson showed up at our door

1056
00:51:10,701 --> 00:51:14,432
and asked to see the
CEO of the company.

1057
00:51:14,738 --> 00:51:17,400
IBM is here.

1058
00:51:17,708 --> 00:51:20,700
When IBM came they
brought an army of people.

1059
00:51:20,978 --> 00:51:22,536
I don't really know who they were.

1060
00:51:22,813 --> 00:51:24,747
IBM would do this thing called

1061
00:51:25,049 --> 00:51:27,381
filling the skies with lawyers.

1062
00:51:27,651 --> 00:51:30,984
I got very concerned,
very concerned.

1063
00:51:31,288 --> 00:51:32,778
Holy shit.

1064
00:51:33,090 --> 00:51:35,149
The idea was that
lawyers would descend on

1065
00:51:35,459 --> 00:51:39,395
you in such a huge number
it felt like the airborne was

1066
00:51:39,663 --> 00:51:41,130
parachuting into your office.

1067
00:51:41,432 --> 00:51:42,831
These guys could shut us down.

1068
00:51:43,133 --> 00:51:46,625
I mean, if they really
want to go to the mat

1069
00:51:46,937 --> 00:51:50,134
that's a distinct possibility.

1070
00:51:50,441 --> 00:51:53,137
I said, IBM has 9,000 patents.

1071
00:51:53,444 --> 00:51:56,436
OK, maybe half of
them don't apply to you,

1072
00:51:56,747 --> 00:51:58,681
but we've shown you 20.

1073
00:51:58,983 --> 00:52:03,283
There are hundreds more, and
you can invalidate some of them,

1074
00:52:03,587 --> 00:52:06,920
but you can't invalidate them all.

1075
00:52:07,191 --> 00:52:08,988
They wanted a
percentage of our sales price

1076
00:52:09,293 --> 00:52:12,751
for all of our sales.

1077
00:52:13,030 --> 00:52:13,928
They were at $2 billion,

1078
00:52:14,198 --> 00:52:16,598
and we were at $2 million.

1079
00:52:16,867 --> 00:52:21,964
It could end a company,
stop a company in its tracks.

1080
00:52:22,272 --> 00:52:25,002
If they misbehaved...
loosely used term,

1081
00:52:25,309 --> 00:52:29,439
but if they misbehaved we
had the howitzers lined up.

1082
00:52:29,713 --> 00:52:32,648
I went in to Rod and
told him we had to get

1083
00:52:32,950 --> 00:52:34,281
serious about the negotiations.

1084
00:52:34,551 --> 00:52:40,012
They weren't going to settle
for a few million dollars.

1085
00:52:40,324 --> 00:52:42,292
He was very serious
that if we didn't take

1086
00:52:42,559 --> 00:52:46,017
this offer, then they were
going to come after us,

1087
00:52:46,330 --> 00:52:48,992
and they weren't going to back off.

1088
00:52:49,299 --> 00:52:53,668
We went up to about $130
million and that closed it.

1089
00:53:03,814 --> 00:53:05,179
The sword hanging over our head,

1090
00:53:05,482 --> 00:53:08,474
which was what's IBM
going to do to shut you down,

1091
00:53:08,752 --> 00:53:14,019
seemed like it had left
until April the second.

1092
00:53:14,324 --> 00:53:16,224
Hey, everybody,
the new computers are here.

1093
00:53:16,527 --> 00:53:17,494
New computers?

1094
00:53:17,761 --> 00:53:19,854
Who may I ask
authorized new computers?

1095
00:53:20,164 --> 00:53:20,823
Yeah, who?

1096
00:53:21,098 --> 00:53:21,587
You did.

1097
00:53:21,899 --> 00:53:22,388
Who did?

1098
00:53:22,700 --> 00:53:23,689
I did?

1099
00:53:24,001 --> 00:53:26,060
IBM... of course I did.

1100
00:53:26,370 --> 00:53:29,271
The new IBM Personal
System II, the next generation

1101
00:53:29,573 --> 00:53:30,870
of personal computing.

1102
00:53:31,175 --> 00:53:32,665
It was the biggest IBM
product announcement

1103
00:53:32,943 --> 00:53:34,706
since the original PC.

1104
00:53:35,012 --> 00:53:37,378
IBM's Personal System II computer

1105
00:53:37,681 --> 00:53:39,911
with the so-called
microchannel, an entirely

1106
00:53:40,217 --> 00:53:41,946
new computer
system that offers lots

1107
00:53:42,252 --> 00:53:43,742
of extra speed and capacity.

1108
00:53:44,054 --> 00:53:46,249
We built an excellent product.

1109
00:53:46,557 --> 00:53:48,252
The micro channel is,
by technical specs,

1110
00:53:48,559 --> 00:53:49,890
superior to the alternative.

1111
00:53:50,194 --> 00:53:51,354
Permitting computer users

1112
00:53:51,628 --> 00:53:54,290
to perform several
functions at the same time,

1113
00:53:54,598 --> 00:53:56,065
like writing and printing.

1114
00:53:56,366 --> 00:53:58,630
Functions that on many computers
can only be done in succession.

1115
00:53:58,936 --> 00:54:01,029
Another new feature is that
it has a port where we can

1116
00:54:01,305 --> 00:54:03,432
plug this mouse,
this pointing device,

1117
00:54:03,741 --> 00:54:05,800
directly into the system.

1118
00:54:06,110 --> 00:54:09,910
My first reaction when I saw
the announcement of the PSII,

1119
00:54:10,214 --> 00:54:11,647
was oh, shit.

1120
00:54:11,949 --> 00:54:15,282
IBM is introducing a new
line of personal computers

1121
00:54:15,586 --> 00:54:17,884
that will be compatible
with its own software

1122
00:54:18,155 --> 00:54:21,056
but difficult for
competitors to duplicate.

1123
00:54:21,325 --> 00:54:23,225
Microchannel was their way

1124
00:54:23,494 --> 00:54:27,089
of breaking the whole
compatibility thing

1125
00:54:27,397 --> 00:54:29,160
and putting it behind them forever.

1126
00:54:29,466 --> 00:54:31,400
IBM, it's just us, it's nobody else.

1127
00:54:31,668 --> 00:54:34,296
This is our operating system,
it only runs on this machine.

1128
00:54:34,605 --> 00:54:36,300
You can't have it, you can't
have it, you can't have it.

1129
00:54:36,607 --> 00:54:38,939
You have to buy this
machine in order to run

1130
00:54:39,243 --> 00:54:40,733
our software, end of story.

1131
00:54:41,011 --> 00:54:41,978
There was no doubt they were just

1132
00:54:42,279 --> 00:54:44,406
absolutely trying to kill everybody

1133
00:54:44,681 --> 00:54:45,807
else... kill all the clones.

1134
00:54:46,116 --> 00:54:48,243
IBM has come out,
and in response to the market,

1135
00:54:48,519 --> 00:54:49,918
is lean and mean.

1136
00:54:50,187 --> 00:54:53,315
It's the next revolution and
evolution of microcomputers,

1137
00:54:53,624 --> 00:54:55,524
and logically enough,
it comes from, still,

1138
00:54:55,826 --> 00:54:56,815
the market leader in PCs.

1139
00:54:57,127 --> 00:54:58,822
United was the first corporate buyer

1140
00:54:59,129 --> 00:55:01,120
of the Personal System II
computers with

1141
00:55:01,431 --> 00:55:03,695
an order for 40,000 Model 50's.

1142
00:55:04,001 --> 00:55:07,198
It was the Death Star of our era.

1143
00:55:07,504 --> 00:55:09,096
Something designed to destroy all

1144
00:55:09,373 --> 00:55:10,806
the competition on the planet.

1145
00:55:11,108 --> 00:55:13,941
IBM has developed in the
shape that will set the standard

1146
00:55:14,211 --> 00:55:15,371
for the next five
years that the others

1147
00:55:15,679 --> 00:55:18,648
will have to play against.

1148
00:55:18,949 --> 00:55:21,884
We had our first PSII inside Compaq

1149
00:55:22,186 --> 00:55:25,053
within three hours
of the announcement

1150
00:55:25,355 --> 00:55:26,982
and started tearing
those suckers apart.

1151
00:55:33,297 --> 00:55:35,999
We were very confused
about this microchannel.

1152
00:55:38,368 --> 00:55:40,461
The drawback is that,
for the most part,

1153
00:55:40,737 --> 00:55:42,466
the new microchannel system is not

1154
00:55:42,739 --> 00:55:44,707
compatible with the existing system

1155
00:55:45,008 --> 00:55:48,375
most personal computer companies
now use that IBM developed.

1156
00:55:48,679 --> 00:55:50,544
It was faster than the
computer it replaced,

1157
00:55:50,848 --> 00:55:54,147
but it made useless $12
billion worth of software

1158
00:55:54,418 --> 00:55:55,976
already bought by business.

1159
00:55:56,253 --> 00:55:57,481
Will it hurt the consumer?

1160
00:55:57,754 --> 00:55:59,688
Well, it is a problem for
a company who has a lot

1161
00:55:59,990 --> 00:56:01,890
of existing PCs installed.

1162
00:56:02,192 --> 00:56:03,181
Like Metropolitan Life

1163
00:56:03,493 --> 00:56:04,824
Insurance Company,
where they have more

1164
00:56:05,095 --> 00:56:07,154
than 8,000 personal computers.

1165
00:56:07,431 --> 00:56:10,696
More than half of them IBM,
but while Metropolitan continues

1166
00:56:11,001 --> 00:56:15,335
to buy PCs, none of them has the
new IBM microchannel standard.

1167
00:56:15,606 --> 00:56:16,937
The cat's out of the bag.

1168
00:56:17,241 --> 00:56:19,869
The customers now realize
you can buy something that's

1169
00:56:20,177 --> 00:56:22,839
not IBM, and not get fired.

1170
00:56:23,113 --> 00:56:26,048
And in fact,
it works better sometimes.

1171
00:56:26,350 --> 00:56:28,784
The ground underneath us
is starting to come apart,

1172
00:56:29,086 --> 00:56:30,713
but we're making
that last ditch effort.

1173
00:56:31,021 --> 00:56:33,387
It's kind of like the two minute
drive at the end of the game

1174
00:56:33,690 --> 00:56:38,889
to try to get this back under
control, but it's not working.

1175
00:56:39,196 --> 00:56:41,926
The PSII was the biggest
mistake they made.

1176
00:56:42,232 --> 00:56:43,859
They handed us the
keys to the PC city

1177
00:56:44,134 --> 00:56:46,102
and we took them.

1178
00:56:46,403 --> 00:56:47,961
Now, the question is, did IBM make

1179
00:56:48,272 --> 00:56:49,899
a mistake that's irreversible?

1180
00:56:50,207 --> 00:56:52,198
One that may lead
to even more erosion

1181
00:56:52,476 --> 00:56:54,239
in its share of the
personal computer market.

1182
00:56:54,544 --> 00:56:57,604
IBM just screwed all new customers.

1183
00:56:57,915 --> 00:56:59,644
They walked away
from compatibility,

1184
00:56:59,950 --> 00:57:01,884
and you're going to pay the price.

1185
00:57:02,152 --> 00:57:07,749
If we could take that
message and isolate IBM,

1186
00:57:08,058 --> 00:57:09,958
then it became a much
stronger message.

1187
00:57:10,260 --> 00:57:11,887
There is a revolt of the
clones this morning.

1188
00:57:12,162 --> 00:57:13,459
The nine personal
computer companies

1189
00:57:13,764 --> 00:57:16,062
whose business has always
followed IBM's design lead.

1190
00:57:16,333 --> 00:57:18,893
It's a case of IBM versus the
rest of the personal computer

1191
00:57:19,169 --> 00:57:20,568
industry.

1192
00:57:20,837 --> 00:57:22,327
Let's call them the gang
of nine, a who's who

1193
00:57:22,639 --> 00:57:24,937
of heavyweights in
the computer industry.

1194
00:57:25,242 --> 00:57:27,733
Gunning for the increasingly
disputed champion, IBM.

1195
00:57:28,011 --> 00:57:30,479
The little guys got together
and said, that's enough.

1196
00:57:30,781 --> 00:57:34,273
The first one we
went to was Microsoft.

1197
00:57:34,584 --> 00:57:38,247
Bill thought it was a great idea,
but he also feared IBM.

1198
00:57:38,522 --> 00:57:40,683
IBM was still his largest customer,

1199
00:57:40,991 --> 00:57:44,119
and he just invested a
whole bunch with IBM.

1200
00:57:44,428 --> 00:57:48,626
Microsoft knows it
has a market with IBM,

1201
00:57:48,932 --> 00:57:52,493
but they recognized,
relatively early on,

1202
00:57:52,803 --> 00:57:55,499
that all of their capabilities
were going to be providing

1203
00:57:55,806 --> 00:57:57,034
to the largest number of users.

1204
00:57:57,341 --> 00:57:58,535
He was looking for opportunities.

1205
00:57:58,842 --> 00:58:00,673
He would have jumped
at any opportunity

1206
00:58:00,978 --> 00:58:02,809
to do something for Microsoft that

1207
00:58:03,113 --> 00:58:04,444
would build their business.

1208
00:58:04,715 --> 00:58:07,343
If I was Bill Gates, I would
see the compatible market

1209
00:58:07,651 --> 00:58:09,312
as the reason why I am eventually

1210
00:58:09,619 --> 00:58:12,281
going to be a multi-billionaire,
and one of the most successful

1211
00:58:12,556 --> 00:58:14,023
people on the planet.

1212
00:58:14,324 --> 00:58:16,189
The way you were
supposed to deal with IBM was

1213
00:58:16,493 --> 00:58:19,485
that a smile and a
hand shake in one hand,

1214
00:58:19,796 --> 00:58:21,889
and a knife to stab them in
the back with the other hand.

1215
00:58:22,199 --> 00:58:23,894
Bill said, yep, I'll contact

1216
00:58:24,201 --> 00:58:26,499
all the other manufacturers and give

1217
00:58:26,803 --> 00:58:29,499
you a inroad to their CEOs.

1218
00:58:29,806 --> 00:58:31,501
Compaq, Tandy, Hewlett-Packard,

1219
00:58:31,808 --> 00:58:33,639
Olivetti and NEC.

1220
00:58:33,910 --> 00:58:35,343
It reads like a who's who

1221
00:58:35,645 --> 00:58:38,341
of the high tech world with
the notable exception of IBM.

1222
00:58:38,648 --> 00:58:41,173
Now it's not only
Compaq, but you've

1223
00:58:41,485 --> 00:58:45,546
got a whole group of people
that they've got with them, too.

1224
00:58:45,856 --> 00:58:48,256
You're thinking,
wow, maybe this thing

1225
00:58:48,558 --> 00:58:49,991
is bigger than we thought.

1226
00:58:50,260 --> 00:58:51,522
Can you get all the little guys

1227
00:58:51,828 --> 00:58:54,695
together and beat Goliath?

1228
00:58:54,998 --> 00:58:58,365
That wasn't like a sure thing,
it was not a sure thing.

1229
00:58:58,668 --> 00:59:03,571
Rod got a call from Lowe the
day before we announced it.

1230
00:59:03,874 --> 00:59:05,535
There was no way I
wasn't going to go forward,

1231
00:59:05,842 --> 00:59:07,400
and there wasn't any way
I was going to indicate

1232
00:59:07,711 --> 00:59:09,008
any weakness to him.

1233
00:59:09,279 --> 00:59:10,871
And he said, I think you're making

1234
00:59:11,181 --> 00:59:13,547
a big mistake by doing this.

1235
00:59:13,850 --> 00:59:15,681
I said, well, we'll see.

1236
00:59:15,952 --> 00:59:18,113
Led by Compaq Computer,
IBM rivals

1237
00:59:18,422 --> 00:59:20,185
will unveil the new
machines at a major news

1238
00:59:20,457 --> 00:59:21,754
conference in New York.

1239
00:59:22,059 --> 00:59:23,424
They decided to develop
their own computer

1240
00:59:23,727 --> 00:59:26,787
standards, called extended
industry standard architecture.

1241
00:59:27,097 --> 00:59:28,462
Or EISA for short.

1242
00:59:28,765 --> 00:59:29,925
Challenging the very standard

1243
00:59:30,233 --> 00:59:32,428
IBM is pushing with its highly touted

1244
00:59:32,736 --> 00:59:34,260
Personal System II computers.

1245
00:59:34,571 --> 00:59:37,597
They're not afraid of IBM.

1246
00:59:37,908 --> 00:59:42,902
They are taking on IBM,
and the tide is starting to turn now.

1247
00:59:43,213 --> 00:59:46,580
And the microchannel
has a real threat to it.

1248
00:59:46,883 --> 00:59:48,612
All of the companies that
gathered at the industry

1249
00:59:48,919 --> 00:59:52,719
forum endorsed EISA
because it maintains capability

1250
00:59:52,989 --> 00:59:55,150
with the almost 20
million computers

1251
00:59:55,459 --> 00:59:56,892
that exist in the world today.

1252
00:59:57,160 --> 00:59:59,492
Therefore, it protects the
investment of today's millions

1253
00:59:59,796 --> 01:00:01,229
of PC users worldwide.

1254
01:00:01,498 --> 01:00:03,227
While offering just as
much speed and memory

1255
01:00:03,500 --> 01:00:06,901
as microchannel, and armed
with a host of heavy support.

1256
01:00:07,170 --> 01:00:09,434
It is important that
we provide system

1257
01:00:09,739 --> 01:00:14,733
software products which fully
support EISA based machines.

1258
01:00:15,011 --> 01:00:20,574
This event exemplifies the
industry's determination

1259
01:00:20,851 --> 01:00:23,251
to create and to expand standards.

1260
01:00:23,520 --> 01:00:29,584
The industry together stood
up against IBM and prevailed.

1261
01:00:29,860 --> 01:00:31,521
Letting the world
know that Big Blue isn't

1262
01:00:31,828 --> 01:00:33,489
calling the shots anymore.

1263
01:00:33,797 --> 01:00:36,322
Their ability to change
the market in directions

1264
01:00:36,633 --> 01:00:38,601
that don't make sense
to a lot of people

1265
01:00:38,869 --> 01:00:40,598
is just simply not there anymore.

1266
01:00:40,871 --> 01:00:42,998
Some analysts think it
was a day that left

1267
01:00:43,306 --> 01:00:45,433
Big Blue looking black and blue.

1268
01:00:45,709 --> 01:00:47,939
The genius of Intel and Microsoft

1269
01:00:48,211 --> 01:00:52,204
was that they both decided
to take a chance on Compaq.

1270
01:00:52,516 --> 01:00:54,609
Because essentially,
Compaq became

1271
01:00:54,885 --> 01:00:57,649
the canary in the coal
mine for the strategy

1272
01:00:57,954 --> 01:00:59,854
of divorcing from IBM.

1273
01:01:00,157 --> 01:01:04,560
And their willingness
to place their future

1274
01:01:04,861 --> 01:01:06,954
in the hands of this
group from Houston

1275
01:01:07,230 --> 01:01:10,893
was pretty brave,
and in retrospect, brilliant.

1276
01:01:26,149 --> 01:01:28,083
One final question,
and kind of a personal one,

1277
01:01:28,385 --> 01:01:30,876
are there some mountains
out there still for Rod Canion

1278
01:01:31,188 --> 01:01:32,519
to climb?

1279
01:01:32,822 --> 01:01:35,416
I think my biggest challenge
for the foreseeable future

1280
01:01:35,725 --> 01:01:37,852
is to keep Compaq together.

1281
01:01:38,161 --> 01:01:41,062
Keep the culture, keep it rolling,

1282
01:01:41,364 --> 01:01:42,831
and reach whatever
potential's there.

1283
01:01:43,099 --> 01:01:45,932
Nobody really knows how fast and
how far a computer company can

1284
01:01:46,236 --> 01:01:47,362
go, and I'd like to see that.

1285
01:01:47,671 --> 01:01:49,662
Compaq Computer is
one of the fastest growing

1286
01:01:49,940 --> 01:01:51,373
personal computer makers.

1287
01:01:51,675 --> 01:01:54,166
There's a company whose sales
have grown from $111 million

1288
01:01:54,444 --> 01:01:57,936
in 1983 to more than
$2 billion last year.

1289
01:01:58,248 --> 01:01:59,408
So what's to worry about?

1290
01:01:59,716 --> 01:02:02,913
It was a very different company.

1291
01:02:03,220 --> 01:02:05,188
How do you manage 17,000
people in the same way

1292
01:02:05,455 --> 01:02:06,854
that you manage a
hundred... it's not possible.

1293
01:02:07,123 --> 01:02:10,889
Every time you hire
you end up, potentially,

1294
01:02:11,194 --> 01:02:13,719
starting to dilute,
and then over time you

1295
01:02:14,030 --> 01:02:16,430
end up with an
organization that isn't

1296
01:02:16,733 --> 01:02:18,701
the same as the
organization you started with.

1297
01:02:18,969 --> 01:02:20,436
Has the fun gone out
of it now that you've

1298
01:02:20,737 --> 01:02:21,795
built this successful company?

1299
01:02:22,105 --> 01:02:22,594
Will you stay with it?

1300
01:02:22,906 --> 01:02:23,930
What are your plans?

1301
01:02:24,241 --> 01:02:25,970
Oh, no, the fun is still there.

1302
01:02:26,276 --> 01:02:29,803
The challenge is different,
that's all I can say.

1303
01:02:30,113 --> 01:02:31,740
There's nothing quite
like starting a company

1304
01:02:32,048 --> 01:02:33,640
and having it grow rapidly.

1305
01:02:33,950 --> 01:02:36,783
As we moved to a
Fortune 500 status

1306
01:02:37,087 --> 01:02:38,987
and then approaching
the billion dollar level,

1307
01:02:39,289 --> 01:02:41,757
the problems are different.

1308
01:02:42,058 --> 01:02:43,582
We knew we needed a leader

1309
01:02:43,893 --> 01:02:48,592
to build a team in Europe,
and through a recommendation,

1310
01:02:48,898 --> 01:02:50,957
we contacted Eckhard
Pfeiffer and very

1311
01:02:51,268 --> 01:02:52,428
quickly he joined the
company and began

1312
01:02:52,736 --> 01:02:53,930
to build our European team.

1313
01:02:54,237 --> 01:02:56,967
We decided that we would
go into the major markets

1314
01:02:57,274 --> 01:03:01,335
right from the start, which were
Germany, the UK and France.

1315
01:03:01,645 --> 01:03:03,078
And from then on expand gradually

1316
01:03:03,346 --> 01:03:05,143
into all the other countries.

1317
01:03:05,448 --> 01:03:10,511
He was more accustomed to
high volume manufacturing,

1318
01:03:10,820 --> 01:03:15,348
get the cost out kinds of situations

1319
01:03:15,659 --> 01:03:18,822
and that's exactly what Compaq
needed with the new lower

1320
01:03:19,129 --> 01:03:20,187
cost product line.

1321
01:03:20,497 --> 01:03:22,124
In our CEO forum this
week, we take a look

1322
01:03:22,432 --> 01:03:25,026
at the art of competing
on the international scene.

1323
01:03:25,335 --> 01:03:27,462
American companies
versus the Japanese.

1324
01:03:27,771 --> 01:03:29,932
Do you worry about
the competition that's

1325
01:03:30,206 --> 01:03:32,106
coming from the Far East
and from Europe,

1326
01:03:32,375 --> 01:03:33,672
particularly in the
computer industry?

1327
01:03:33,977 --> 01:03:36,377
The Japanese certainly
have a lot of strengths.

1328
01:03:36,680 --> 01:03:39,513
The Japanese company has major
competitors in the long term.

1329
01:03:39,816 --> 01:03:41,875
Foreign manufacturers
got to be pretty good.

1330
01:03:42,185 --> 01:03:45,621
Quality improved,
and essentially, for someone

1331
01:03:45,889 --> 01:03:49,325
like Compaq, they no
longer could get that price

1332
01:03:49,626 --> 01:03:51,184
advantage that they once had.

1333
01:03:51,494 --> 01:03:54,657
You wouldn't want to buy these
things for $3,000 anymore.

1334
01:03:54,964 --> 01:03:56,693
Could you buy them for $1,000?

1335
01:03:57,000 --> 01:03:58,365
Do I hear $950?

1336
01:03:58,668 --> 01:04:01,296
The new notebooks
like Toshiba's T-1000,

1337
01:04:01,571 --> 01:04:04,734
Tandy's 1100-FD and
Zenus Mini Sport are

1338
01:04:05,041 --> 01:04:06,975
in the $1,000 to $2,000 range.

1339
01:04:07,243 --> 01:04:12,374
At the high end,
about $4,000 Compaq LTE 286.

1340
01:04:12,682 --> 01:04:14,673
We had companies like
Dell Computer actually

1341
01:04:14,984 --> 01:04:17,384
begin to build better
and better products,

1342
01:04:17,687 --> 01:04:19,655
and they were selling
them at a lower price.

1343
01:04:19,923 --> 01:04:21,550
Compaq, the Houston giant,

1344
01:04:21,858 --> 01:04:23,849
has been facing an advertising
assault from the much

1345
01:04:24,160 --> 01:04:25,559
smaller Dell Computer.

1346
01:04:25,862 --> 01:04:28,831
The industry can't recall
anything like these biting ads

1347
01:04:29,099 --> 01:04:30,896
comparing features and price.

1348
01:04:31,201 --> 01:04:35,365
The Dell ad calls Dell
appealing and Compaq appalling.

1349
01:04:35,672 --> 01:04:37,105
Dell, top of the mark.

1350
01:04:37,407 --> 01:04:39,602
Compaq, top of the mark-ups.

1351
01:04:39,909 --> 01:04:41,877
Compaq is not amused.

1352
01:04:42,178 --> 01:04:45,375
You can't survive, I believe,
for very long at least,

1353
01:04:45,682 --> 01:04:47,445
just by selling the same
products at a lower price.

1354
01:04:47,751 --> 01:04:49,116
And there were people

1355
01:04:49,419 --> 01:04:51,717
who said we need to get a
low cost product out there now

1356
01:04:52,021 --> 01:04:55,081
and take on these people.

1357
01:04:55,392 --> 01:04:57,553
That was primarily led by Pfeiffer.

1358
01:05:01,131 --> 01:05:02,530
I think it has been a little bit more

1359
01:05:02,799 --> 01:05:06,394
difficult for them to keep
up with the changing

1360
01:05:06,703 --> 01:05:07,761
in technology.

1361
01:05:08,071 --> 01:05:09,368
Compaq, a darling of Wall Street

1362
01:05:09,639 --> 01:05:11,573
that could do little wrong in the past,

1363
01:05:11,875 --> 01:05:14,366
found itself on the
market's bad side last week,

1364
01:05:14,644 --> 01:05:16,077
Compaq's stock plunged.

1365
01:05:16,379 --> 01:05:19,041
On paper, combined
losses to all shareholders

1366
01:05:19,315 --> 01:05:21,715
of more than $740 million.

1367
01:05:21,985 --> 01:05:25,250
It certainly is a stumble in
the eyes of the stockholders.

1368
01:05:25,555 --> 01:05:30,822
We didn't want to disappoint
relative to expectations,

1369
01:05:31,127 --> 01:05:32,287
but I think you've got
to differentiate that

1370
01:05:32,595 --> 01:05:34,085
from the actual
health of the company.

1371
01:05:34,397 --> 01:05:38,561
Ben, with some
prodding from Pfeiffer,

1372
01:05:38,835 --> 01:05:42,236
was becoming paranoid that we
would not be able to recognize,

1373
01:05:42,505 --> 01:05:46,168
and switch, and move, from as
high a quality provider as we

1374
01:05:46,476 --> 01:05:49,843
were to low cost computers.

1375
01:05:50,146 --> 01:05:52,011
We certainly started seeing changes

1376
01:05:52,315 --> 01:05:58,447
in marketing strategies,
changes in the competitor base,

1377
01:05:58,755 --> 01:06:01,417
changes in the
importance of pricing.

1378
01:06:01,691 --> 01:06:03,659
The essential view
was that Rod could not

1379
01:06:03,960 --> 01:06:06,656
adapt to what the company
needed going forward.

1380
01:06:06,963 --> 01:06:08,328
Ben had other concerns about it.

1381
01:06:08,631 --> 01:06:14,763
He was more
concerned about me losing

1382
01:06:15,038 --> 01:06:16,027
commitment to the company.

1383
01:06:16,339 --> 01:06:20,173
Rod was working on
a low cost concept,

1384
01:06:20,477 --> 01:06:26,382
but I don't think he was pushing
it enough to satisfy the board.

1385
01:06:26,683 --> 01:06:29,015
The chairman of your company
is a guy named Ben Rosen.

1386
01:06:29,319 --> 01:06:32,618
What's the chemistry
between the two of you?

1387
01:06:32,889 --> 01:06:34,618
I'd say Ben and I are
very good friends.

1388
01:06:34,891 --> 01:06:38,622
Ben joined Compaq at a time
when we were just forming,

1389
01:06:38,895 --> 01:06:40,692
and I think he's played
a key role in helping

1390
01:06:40,997 --> 01:06:42,692
guide us along the way.

1391
01:06:42,999 --> 01:06:44,557
We have a lot of mutual
respect, and we bring

1392
01:06:44,868 --> 01:06:47,735
different things to the party.

1393
01:06:48,037 --> 01:06:49,868
You have to give Ben
credit for two things.

1394
01:06:50,173 --> 01:06:52,368
One, he saw that the
vision was a real vision.

1395
01:06:52,675 --> 01:06:56,543
He got it right away because
they did finance the plan,

1396
01:06:56,846 --> 01:06:59,906
and then at each stage thereafter

1397
01:07:00,216 --> 01:07:03,674
he encouraged and supported.

1398
01:07:03,987 --> 01:07:06,854
Without Ben Rosen
Compaq Computer Corporation

1399
01:07:07,156 --> 01:07:07,986
would not be where it is today.

1400
01:07:11,094 --> 01:07:13,153
The board did not want

1401
01:07:13,429 --> 01:07:23,031
to take any action against Rod,
but they got to the point

1402
01:07:23,339 --> 01:07:26,775
where they felt like we
had to do something.

1403
01:07:48,031 --> 01:07:49,623
Ben decided that he might want

1404
01:07:49,933 --> 01:07:51,195
to create a situation where there's

1405
01:07:51,467 --> 01:07:54,561
kind of two bosses, Pfeiffer and Rod,

1406
01:07:54,871 --> 01:08:00,309
because of a loss
of confidence in us.

1407
01:08:00,610 --> 01:08:01,907
There are some
management changes

1408
01:08:02,211 --> 01:08:05,271
that you make because
an opportunity is created

1409
01:08:05,582 --> 01:08:09,416
by bringing that new person in,
and even at the time,

1410
01:08:09,719 --> 01:08:14,088
there was no evidence
of that at Compaq.

1411
01:08:14,390 --> 01:08:15,948
I don't question the motives of it.

1412
01:08:16,259 --> 01:08:20,389
I think Ben was
genuinely concerned,

1413
01:08:20,663 --> 01:08:24,622
I mean there's just
no doubt about it.

1414
01:08:24,934 --> 01:08:26,094
Rod wouldn't compromise

1415
01:08:26,402 --> 01:08:27,835
and take the dual leadership.

1416
01:08:31,240 --> 01:08:33,800
We were getting ready to have a
board meeting and Rod told me.

1417
01:08:34,110 --> 01:08:35,907
He said, you know, Jim,
they're going to vote

1418
01:08:36,179 --> 01:08:38,909
today on whether to remove me.

1419
01:08:39,182 --> 01:08:40,843
My attitude when we
started Compaq was

1420
01:08:41,150 --> 01:08:44,347
I would be ready to move aside
if that ever was necessary,

1421
01:08:44,654 --> 01:08:46,178
and I thank the other
founders of Compaq

1422
01:08:46,489 --> 01:08:48,980
had the same attitude.

1423
01:08:49,292 --> 01:08:51,920
That night of the board meeting,

1424
01:08:52,195 --> 01:08:57,758
it was 10:30,
11:00 o'clock at night.

1425
01:08:58,034 --> 01:08:59,592
I got a call from Jim.

1426
01:09:12,815 --> 01:09:13,804
I can only say there was

1427
01:09:14,117 --> 01:09:15,482
open weeping in the hallways.

1428
01:09:19,455 --> 01:09:21,446
Going on without him
was almost unimaginable.

1429
01:09:26,362 --> 01:09:28,193
I had quit Compaq that day.

1430
01:09:31,300 --> 01:09:32,460
It was like the heart and soul

1431
01:09:32,735 --> 01:09:34,566
of the company being torn out.

1432
01:09:37,740 --> 01:09:39,640
I went ahead and
turned my resignation in.

1433
01:09:43,546 --> 01:09:46,674
I cannot even think
of being tired of what

1434
01:09:46,983 --> 01:09:48,917
I'm doing and
the opportunity that

1435
01:09:49,218 --> 01:09:50,845
I see at Compaq in the same fault...

1436
01:09:51,154 --> 01:09:52,052
They are two different things.

1437
01:09:52,355 --> 01:09:55,051
I see so much challenge out there,

1438
01:09:55,358 --> 01:09:57,417
a challenge that,
I believe, we're capable of,

1439
01:09:57,727 --> 01:09:59,592
and yet I really want
to see it through.

1440
01:10:03,566 --> 01:10:05,261
Ben convinced himself that this

1441
01:10:05,568 --> 01:10:06,694
was the right move to make.

1442
01:10:09,772 --> 01:10:11,034
He lost it.

1443
01:10:11,340 --> 01:10:14,537
He said several tears
over the decision.

1444
01:10:19,515 --> 01:10:23,417
It was inevitable that
there'd be a change.

1445
01:10:33,596 --> 01:10:34,620
It was a very sad time.

1446
01:10:39,635 --> 01:10:43,469
It sunk in, what had really
happened and what it meant.

1447
01:10:46,909 --> 01:10:48,774
It took a very long time before it

1448
01:10:49,078 --> 01:10:52,809
finally began to feel normal
not to be there every day.

1449
01:10:53,116 --> 01:10:56,415
It was tough, it was tough
on... it was hard on me.

1450
01:11:39,929 --> 01:11:42,159
Compaq's focus on portability

1451
01:11:42,465 --> 01:11:44,330
was the beginning of
mobility and mattering

1452
01:11:44,634 --> 01:11:52,973
to the technology industry,
and everything that we do today

1453
01:11:53,276 --> 01:11:56,143
is really driven by
the ethic that if you

1454
01:11:56,445 --> 01:12:00,006
can't do it while you're moving
around, it's not very valuable.

1455
01:12:00,316 --> 01:12:02,614
And we can thank
Compaq for all of that.

1456
01:12:02,885 --> 01:12:05,615
My dad would always look
at some of these cell phones,

1457
01:12:05,888 --> 01:12:08,448
or some of the newer
computers, and say,

1458
01:12:08,724 --> 01:12:11,215
are you responsible
for all of this stuff?

1459
01:12:11,527 --> 01:12:12,619
Well, yeah, it's a good thing.

1460
01:12:12,895 --> 01:12:14,795
I use iPhones, I use iPads, and

1461
01:12:15,064 --> 01:12:17,794
I do know that if Compaq
developed those products... now,

1462
01:12:18,067 --> 01:12:19,398
I'm not taking anything
away from those guys.

1463
01:12:19,702 --> 01:12:21,499
Those guys did magnificent job,
and they can sell them

1464
01:12:21,804 --> 01:12:25,900
to dead people, but if we
did them they'd work better,

1465
01:12:26,209 --> 01:12:27,836
I know that.

1466
01:12:28,144 --> 01:12:31,238
If anybody had tried to
tell me how successful

1467
01:12:31,547 --> 01:12:35,643
Compaq would become,
I would've just said,

1468
01:12:35,918 --> 01:12:38,751
you're blowing smoke.

1469
01:12:39,055 --> 01:12:40,044
That's not possible.

1470
01:12:40,356 --> 01:12:44,588
We never ever had
any idea that this

1471
01:12:44,894 --> 01:12:48,386
would be as explosively
successful as it was, never.

1472
01:12:48,698 --> 01:12:50,165
I don't think we were
ever trying to take

1473
01:12:50,433 --> 01:12:53,493
down the biggest company ever.

1474
01:12:53,769 --> 01:12:55,703
We were trying to survive.

1475
01:12:56,005 --> 01:13:00,669
Here was a product and
an idea for a start up

1476
01:13:00,943 --> 01:13:04,379
that should have been in
Silicon Valley, if anywhere.

1477
01:13:04,680 --> 01:13:05,237
But Houston?

1478
01:13:05,548 --> 01:13:06,515
Give me a break.

1479
01:13:06,782 --> 01:13:09,444
I had no idea we
were going to be doing

1480
01:13:09,752 --> 01:13:10,582
a billion dollar company...

1481
01:13:10,887 --> 01:13:13,048
I mean, the billion
dollar baby was IBM.

1482
01:13:13,356 --> 01:13:16,018
How can I even conceive,
or think, that we

1483
01:13:16,292 --> 01:13:20,058
would be an IBM in that sense?

1484
01:13:20,363 --> 01:13:24,561
No way, not the slightest.

1485
01:13:24,867 --> 01:13:28,030
I would still like to have
a Mexican restaurant.