Philippe+Kahn

=Philippe Kahn= ==

Lessons in bootstrapping – Philippe Kahn and Borland International, 1983
Philippe Kahn led Borland International into a top company for computer programming products. This excerpt from The Pragmatic Bookshelf describes Borland's first product and pricing approach and shows how Kahn did this using bootstrapping methods and a lot of guile. Was it too much guile?

“…Turbo Pascal was astonishingly fast, and so compact that it easily ran in the limited memory of the PC. It was flat-out better than anything you could get on a mainframe or minicomputer. And it was exceptionally easy to use and well documented. The product, as it stood, was a tool anyone could learn programming with. It was a compiler, but felt like an interpreter. Compilation was lightning fast, and it produced reasonably fast code for the time. And the compiler took up 28k.

“But Turbo Pascal’s importance extended beyond the product itself. Because Kahn broke all the rules in selling it. He priced it at $49.95 by mail order. At the time, Microsoft was selling a Pascal compiler for roughly ten times that price. And Kahn eliminated all the complexities of licensing then current in the market. Turbo Pascal had no copy protection and was sold under the famous “Book License”: “You must treat this software just like a book... [it] may be used by any number of people... may be freely moved from one computer location to another, so long as there is no possibility of it being used at one location while it’s being used at another.”

//**“And, further terrifying** (business partner) **Tim Berry, Kahn had scheduled ads to run in Byte magazine and elsewhere before even sharing with his board even the existence of the product. On an ad budget of zero, he bought $18,000 worth of advertising—take my word for it, that was substantial back then. He talked the ad salesperson from Byte into extending him credit mostly through the force of his personality, but also by calling friends in to sit in chairs and pretend to be employees in order to create the impression of a large, successful company.**//

“Some perspective from Wikipedia: “In the early IBM PC market (1981–83) the major programming tool vendors all made compilers that worked in a similar fashion. For example, the Microsoft Pascal system consisted of two compiler passes and a final linking pass (which could take minutes on systems with only floppy disks for secondary storage). This process was the cumbersome product of the extremely limited resources of the early IBM PC models. Vendors of software development tools aimed their products at professional developers, and the price for these basic tools plus ancillary tools like profilers ran into the hundreds of dollars.”

“In November, the ads appeared in Byte. That month, Borland brought in enough in sales to pay his advertising bill and buy twice as much advertising for the next month. Which is just what Kahn did. He kept putting all his chips back in the game, and in four months Borland was raking in a quarter million a month. It would go on to become one of the defining software tools companies of the young personal computer industry.”

Kahn apparently r elished his deceptive advertising arrangement with Byte Magazine. This interview appeared in Inc. Magazine:
 * Why be honest if honesty doesn't pay? **


 * Inc.: The story goes that Borland was launched by a single ad, without which we wouldn't be sitting here talking about the company. How much of that is apocryphal?
 * Kahn: It's true: one full-page ad in the November 1983 issue of BYTE magazine got the company running. If it had failed, I would have had nowhere else to go.
 * Inc.: If you were so broke, how did you pay for the ad?
 * Kahn: Let's put it that we convinced the salesman to give us terms. We wanted to appear only in BYTE-not any of the other microcomputer magazines-because BYTE is for programmers, and that's who we wanted to reach. But we couldn't afford it. We figured the only way was somehow to convince them to extend us credit terms.
 * Inc.: And they did?
 * Kahn: Well, they didn't offer. What we did was, before the ad salesman came in--we existed in two small rooms, but I had hired extra people so we would look like a busy, venture-backed company--we prepared a chart with what we pretended was our media plan for the computer magazines. On the chart we had BYTE crossed out. When the salesman arrived, we made sure the phones were ringing and the extras were scurrying around. Here was this chart he thought he wasn't supposed to see, so I pushed it out of the way. He said, "Hold on, can we get you in BYTE?" I said, "We don't really want to be in your book, it's not the right audience for us." "You've got to try," he pleaded. I said, "Frankly, our media plan is done, and we can't afford it." So he offered good terms, if only we'd let him run it just once. We expected we'd sell maybe $20,000 worth of software and at least pay for the ad. We sold $150,000 worth. Looking back now, it's a funny story; then it was a big risk.