New Memoir from Computer Visionary and DEC Cofounder Harlan Anderson

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!

Wicked Cool: Come See Me Speak in Boston Next Week

Next week, the Spencer Ante book tour is coming to Boston for three special events.

1. I have helped to organize a great panel on Sep. 23 from 6:30pm – 9:30pm being hosted by Financial Dynamics. The timely topic of the panel: What Will Drive the Next Wave of Growth?

Edward J. Reilly, Chief Executive Officer of FD Americas is the host, & Scott Kirsner, Innovation Economy Columnist at the Boston Globe will be moderating the panel at the Taj Hotel.

The panel will discuss the collaborative role of venture capital, start-ups, the legal community, and academia in innovation, job creation and entrepreneurship. Cocktails and appetizers will be served afterwards.

Scott Kirsner will moderate a distinguished panel of experts including:

* Spencer Ante, Associate Editor at BusinessWeek and author of Creative Capital: Georges Doriot and the Birth of Venture Capital
* Bob Davis, General Partner, Highland Capital Partners
* Ed Goldfinger, Chief Financial Officer, Zipcar
* Richard Bergin, PhD, Managing Director, FTI Consulting
* Andy Goldfarb, Executive Managing Director Co-Founder, Globespan Capital Partners

2. On Sep. 24, I am giving a talk at the former home of Georges Doriot, a drop-dead gorgeous Beacon Hill townhouse now owned by Jim and Cathy Stone. I am really excited about this talk as well since a lot of the Doriot friends and family will be in attendance. This is a private event.

3. Last stop is the morning of Sep. 25 at the Boston French Library, a wonderful institution created by Georges and Edna Doriot. This event is open to the public. I will be giving a talk about the legacy of Doriot and why he remains a very relevant figure for today’s turbulent times. Tickets are $20 for members, and $30 for non-members. Click here for more info on the event.

In Entrepreneurs We Trust

Trust may be the most scarce commodity around right now.

Wall Street can’t be trusted much these days, thanks to the financial crisis and a guy named Madoff. A lot of corporate executives haven’t done much to inspire trust. People have never much trusted their politicians. And even seemingly harmless athletes are finding ways to lose the trust of the public.

So who can you trust these days? Friends and family, of course. But beyond that close circle I would say that in the public sphere entrepreneurs still deserve to be trusted. Entrepreneurs represent the very best of America: They work very hard, they often develop products and services that improve our lives, and they create jobs that help our communities and the nation at large.

So as we continue to try to dig ourselves out of this deep hole, let’s try to keep finding ways to help entrepreneurs and small businessmen and businesswomen. Entrepreneurship flourishes in a climate of economic freedom, with low taxes and little regulation. You don’t hear too much about entrepreneurs in the discussion about the stimulus package and in talk about the economy. Wall Street firms and banks and Detroit seem to hog most of the attention.

But it’s the entrepreneurs and small businesses that will likely play a key role in reviving our animal spirits and lifting us out of this recession. Thomas Friedman of the New York Times wrote a great and timely column today related to this issue when he slammed the Senate’s version of the stimulus, which banned banks and other financial institutions that receive taxpayer bailout money from hiring high-skilled immigrants on temporary work permits known as H1-B visas. More than half of Silicon Valley startups were founded by immigrants over the last decade. It is dumb and shortsighted to keep these industrious and smart folks out of our country–a subject I’ve written about before at BusinessWeek.

General Doriot, the focus of my book, was all about supporting entrepreneurs–from across the globe. The Doriot bucks above inspired me to write this post. Doriot used to give out this fake money at the annual meetings of his venture capital firm American Research & Development. last year, Scott Kirsner of the Boston Globe was kind enough to send me a few of them. And now I am happy to share them with you.

Boston Globe Covers Creative Capital and Doriot

Scott Kirsner wrote a great story about Doriot and my book Creative Capital in today’s Boston Globe. He covers the launch of the book and the key arguments I make in it; he chronicles Doriot’s influence; and he even mentions that American Research and Development still exists! Click here to read the whole 1162-word piece in his Innovation Economy column.

I’m totally pumped since this is the first major newspaper to write about the book–and because the Boston Globe is the perfect paper to break the story. When Doriot was in his heyday during the 40s/50s/60s operating out of the John Hancock Building, the Globe wrote about him quite often.

Kirsner’s piece is called “Venture capital’s grandfather: Georges Doriot helped lay groundwork for 128 tech cluster.”

Here’s the beginning of the story:

“Without him, Digital Equipment Corp. might never have gotten started, and the electronics-testing company Teradyne Inc. might not have survived beyond infancy.

He backed an oil rig-manufacturing company run by George H.W. Bush. The current Secretary of Energy, Samuel Bodman, once worked for his Boston firm. And a half-century ago, he put $50,000 into a company called Ionics Inc. that was trying to find new ways to desalinate seawater; GE bought the company in 2004 for $1.1 billion.

Georges Doriot is the forgotten grandfather of the modern venture capital industry. His Boston firm, American Research and Development, or ARD, helped lay the foundation for the Route 128 technology cluster.

“After World War II, all the textile mills had gone away, and war time production was going away,” says Spencer Ante, a Business Week editor who has written a new book on Doriot, “Creative Capital,” that is hitting stores this week. “Doriot and ARD were really trying to revive the New England economy after the war.”

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

Boston Globe Video on Doriot and ARD

In connection with his forthcoming story on Creative Capital in The Boston Globe’s Sunday’s Business section, Globe columnist Scott Kirsner produced a video about American Research and Development and one of the entrepreneurs ARD backed: Adage’s Tom Hagan. Adage was a Cambridge electronics company. Check out the video here.

It’s a pretty interesting interview in which Hagan praises Doriot and ARD for inventing modern venture capital. “His whole approach was finding people who wanted to build a business, rather than finding a quick road to riches,” said Hagan. “What ARD did was create a channnel for old line New England money into these new ventures, which were started in many cases by young technologists who otherwise had no entree to that money. It was a very signficant thing they did. A lot of people don’t realize how staid and stodgy Boston was at the time.”

But on the other hand, Hagan argues that ARD retarded the growth of the New England venture communtity. His thesis is that by only investing $70,000 into Digital Equipment Corp., ARD created the impression that startups did not need a lot of money to build a business.

“The venture capital community in Boston has acquired a reputation, which I attribute to ARD, for being less adventurous, less ready to put a pile of money on the table, than is true in Silicon Valley,” said Hagan. “They acquired the notion, and it spread in Boston, that was ‘how you did it.’ You started with a relatively modest amount of money and turn profitble very quickly. The notion of needing a reasonably substantial startup nut was just plain foreign to ARD and the companies they spawned.”

While it is true that Doriot was criticized by some people for not investing large amounts of money in a few companies, I have to respectfully disagree with Hagan’s main point that ARD helped to retard the growth of New England venture capital. It is just not true. Without ARD, venture capital in Boston might not have ever taken off. ARD pioneered the model, which inspired many, many people in New England to enter the venture capital business and invest in startups. And one of ARD’s spin-offs, Greylock Capital, is one of of the best VC firms operating in New England, if not the best.

Second, it is NOT TRUE that ARD only invested $70,000 in Digital. In 1958, ARD invested another $30,000 in Digital to provide working capital for Digital’s expanding operations. And in 1962 ARD invested another $300,000 in Digital. That comes to a total of $400,000–a pretty significant sum even for the early 1960s. ARD was not just an early stage VC–they often invested multiple times in the companies they backed.

Third, it’s absurd to say that ARD had anything to do with Boston’s rep for being less adventurous. ARD always thought in big and bold terms and took enormous risks. I say blame the generation of Boston-area VCs after Doriot for not being more adventurous–and for not focusing more of their energy and time in Northern California where the microprocessor and biotechnology revolutions exploded.

What do you think? I am really curious to hear from other New England folks on this topic.

A Link from Scott Kirsner’s Blog Innovation Economy

One of the surprising results generated from Googling “Creative Capital and Spencer Ante” was my discovery of Scott Kirsner’s blog, Innovation Economy–an offshoot of his column in the Boston Globe. A few months ago, Scott was nice enough to publish a post about my book.

I’ve been a fan of Scott’s work over the years. He’s one of the smartest tech writers working these days. And his blog is pretty cool, with a focus on the New England tech scene.