Posts Tagged ‘American Research & Development’

In Memory of Ken Olsen

February 15, 2011

Ken Olsen, the cofounder of Digital Equipment Corp, died last week.

The story of Olsen and DEC formed the heart of my book Creative Capital. I’ve been meaning to get around to publishing a blog post explaining why Ken Olsen still matters.

In the meantime, here are some of the best links to obits and memorials of Olsen, who Fortune magazine in 1986 called “America’s Most Successful Entrepreneur.”

Ken Olsen, Who Built DEC Into a Power, Dies at 84 by Glenn Rifkin of The New York Times

Innovator’s Dilemma
by Steve Syre of The Boston GLobe.

Remembering Ken Olsen by Paul Kedrosky of Bloomberg BusinessWeek

Remembering Ken Olsen by Bruce Richardson

Ken Olsen Memorial by John Furrier of Silicon Angle

Obit by IDG News Service

Obit by Chris Mellor of Channel Register

Memorial by Robert Lenzner of Forbes

Obit by Gregory T. Huang of Xconomy

Memorial by Gordon Bell on Xconomy

Deadly sins the tech industry can’t seem to shake by Bill Snyder of Infoworld

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New Memoir from Computer Visionary and DEC Cofounder Harlan Anderson

October 23, 2009

Digital Equipment Corp. cofounder Harlan Anderson, who just turned 80 this month, is publishing his memoirs next month, reports Scott Kirsner in this column.

The book is called Learn, Earn & Return: My Life as a Computer Pioneer, and is being published by Locust Press. And Anderson has also started blogging recently.

(The photo above is of Anderson’s “Employee #2” badge from DEC, which appears on the book’s cover.)

In the book, Anderson writes for the first time about his experiences at DEC during the company’s initial decade, and the events that led to his leaving in 1966 — the same year that DEC became one of the most profitable initial public offerings in Wall Street’s history. Anderson is candid about his relationship with DEC co-founder Ken Olsen: and later, how Olsen’s autocratic leadership style alienated some of the company’s most talented engineers, and ultimately contributed to Anderson’s departure.

He also discusses how American Research and Development, the venture capital firm run by Georges Doriot, financed this groundbreaking startup.

When Digital first took money from American Research & Development, Anderson writes that ARD invested $70,000 for seventy percent of the company. “This deal seems ridiculous and unfair by today’s standards; however, we never contacted an alternative source of capital,” Anderson writes. “We were very naïve and there was very little venture capital money available then. We accepted the offer without any negotiation.” (In the photo is Anderson, sitting in front of Digital’s PDP-6 computer, with Georges Doriot, the founder of ARD.)

Congrats Harlan!

Non-Manic Monday: Creative Capital Featured in WSJ Column

August 10, 2009

L. Gordon Crovitz, former publisher of the Wall Street Journal, featured my book Creative Capital in his “Information Age” column in today’s Wall Street Journal (p. A9)-calling it a “fascinating biography.”

It’s gratifying when your work gets recognized in such a respected publication. And it’s even more rewarding when readers and reviewers understand some of the big ideas that you were trying to get across in the book.

On that measure, Crovitz, totally got it. Crovitz focused his column on the government’s effort to more tightly regulate venture capital. The U.S. Treasury wants VC firms declared as systemic risks and put under tight restrictions as part of the broader re-regulation of financial firms, notes Crovitz.

In his column, Crovitz wrote that the history of American Research & Development, the venture capital firm that I profiled in the book, “is a reminder that our regulatory system, by its nature focused on avoiding risk, has a hard time dealing with investment firms whose mission is to take risks.”

To bolster his argument, he summarizes ARD’s history of run-ins with federal regulators, and quotes some of my favorite parts of the witty and wise personal memos of Georges Doriot, the visionary Harvard Business School professor who pioneered the venture capital industry as president of ARD in the 25 years after World War II.

The dangers of over-regulation is one of the primary discoveries and lessons of my research. Thanks to Crovitz for bringing that point to the attention of a much wider public.

Forbes’s Robert Lenzner Gives Creative Capital 5 Stars!!!

May 18, 2008

Robert Lenzner, the National Editor of Forbes who is one of the sharpest and most experienced business journalists working today, wrote a review of Creative Capital in his May 15 column on Forbes.com, The Croesus Chronicles. He gave it five stars and called it a “fine portrait of his character.”

Lenzner describes Doriot as one of the true blue gents of finance, a throwback character who “stood above all for principle in business and was not a money grubber.” In the column, he also compares and contrasts Doriot to another gent, Ronald Cohen, the founder of Apax Partners.

Writes Lenzner: “For 40 years, Doriot used this “study of new products, new ideas, new developments and new questions of research” as the key to improving American business practices. Had he been a larger than life character like Peter Drucker, the more retiring and ascetic Doriot might have become as famous in his time.”

Doriot WAS larger than life and his ideas were just as radical and important as Drucker’s but Doriot was not a self-promoter. While writing the book, I often wondered why Doriot was not as famous as Drucker. There is a certain formula of fame, I concluded.

One major reason is that Doriot, unlike Drucker, never poured his ideas and visions into a book that could outlive him. Drucker, by contrast, was a prolific author who wrote many influential books that live on forever. Doriot also had no children to help carry on his legacy. And third, as I relate in the book, and as Lenzner notes, Doriot made a mistake by selling his VC firm American Research & Development into the conglomerate Textron in 1972. As Lenzner writes, the sales “hampered ARD’s chance to become the dynamic leader in venture capital just as that art form was coming into its own.”

Obviously, I wrote this book partly to help revive and restore Doriot’s reputation. So it feels good to see that readers are giving Doriot his due with reviews like this one and others.

VC’s First Home Run: Digital Equipment Corp.

January 4, 2008

Before the blockbuster success of Google, Netscape and Apple, there was the first high-tech home run of Digital Equipment Corporation–a story that forms the heart of my book. Below I’ve posted two photos from the archives of Ken Olsen at Gordon College. I am the first person to gain access to these archives.

In 1957, ARD gave $70,000 to the two, young MIT engineers who co-founded Digital—Kenneth P. Olsen and Harlan Anderson—in exchange for 70% of the start-up’s equity. Olsen, who was Digital’s president and undisputed leader, wanted to build smaller, cheaper, and easier-to-use computers that would challenge the glass-encased mainframes of IBM, the dominant computer manufacturer and only one making money. In this sense, DEC was a pre-cursor to the user-friendly machines later pioneered by Apple.

Olsen at ARD
[Ken Olsen at the annual meeting of ARD, surrounded by promotional booths of the other ARD portfolio companies.]

It was a perfect match. In Olsen, Doriot found the archetypal engineer-cum-entrepreneur who was dedicated to making his company a success. “A creative man merely has ideas; a resourceful man makes them practical,” said Doriot. “I look for the resourceful man.” Olsen embodied that ideal. In Doriot, Olsen found a comforting father figure always ready to offer words of encouragement or some bit of wisdom. The fates of these two men would be forever intertwined.

When ARD liquidated its stake in Digital in 1972, the company was worth more than $400 million—yielding a return on their original investment of more than 70,000%! It was the young venture capital industry’s first home run, and it helped make the Route 128 area outside Boston a technological mecca

DEC Board
[The DEC board was stocked with ARD staffers: (left to right) Henry W. Hoagland VP, ARD; John Barnard Jr. general counsel, Massachusetts Investors Trust; Jay W. Forrester, professor, MIT and ARD advisor; William H. Congleton, VP, ARD; Harlan E. Anderson, VP, Co-founder DEC; Kenneth H. Olsen, President, Co-founder DEC; Ms. Dorothy E. Rowe treasurer, ARD; Vernon R. Alden president Ohio University; Arnaud de Vitry, European Enterprise Development; Wayne P. Brobeck, former ARD staffer who became director of consumer relations, Vitro Corp. of America]

HOW TO BUY CREATIVE CAPITAL: To pre-order Creative Capital and get a 34% discount, click here and go to Amazon