The obituary squib caught my eye, and gave me pause. I knew Paul Brainerd, briefly. https://lnkd.in/gBPmHenV brainerd-1947-2026-aldus-founder-devoted-his-second-chapter-to-the-planet/?
When I moved to Palo Alto for HP as their new Corporate Engineering Director in 1982, I had little exposure to the wider electronics and computer communities. Yes, I had led the HP Logic Analyzer business, and in that connection met with key developers at many computer companies around their diagnostic issues. Yes, I'd led the first computer graphics display project at HP, the HP 1300A, even earlier. But except for a few stalwarts there, I didn't develop deep ties to any of the graphics teams.
In Colorado Springs, we were pretty remote, all things considered.
In Palo Alto, it was happening all around us. And one day, an old colleague from HP--Tom Whitney--called me to invite me into a dinner club that purported to be a small-time investment club. Tom was the lead manager for HP's (and the world's) first personal computer, the HP 9100A that I had used to develop the COPD thesis for the Colorado Air Pollution Control Commission in 1970. He also was the lead manager for the subsequent HP 35A, the world's first scientific pocket calculator. And then he left HP to become Apple's VP of Research and Development. That assignment didn't go so well--yes, he made $60M in stock from Apple's IPO, but his team produced the ill-fated Apple III, and he was bounced out in favor of his HP protege John Couch. Couch also foundered, leading the LISA project before Jobs took over its slimmed-down version, the MacIntosh.
Whitney proposed a small dinner group, meeting monthly starting in late 1983, where he would invite friends and colleagues to chat about what they were working on, which inevitably led to requests for investment. Well, we did do a little bit, but it was cursory to say the least. The group was titled SummerHill Partners, since Tom and Donna lived on Summerhill Road in Los Altos Hills. And SHP stood for "Since HP" for Tom.
Our third speaker was a young earnest fellow named Paul Brainerd, who was an escapee from Atex, a start-up in word processing automation tools. One of their focii was productivity for the newspaper industry, and Brainerd had been deep into that world for awhile. When Kodak bought the computing business, circa 1981, the word processing group was terminated. Nearly all of the team went off on their own tangents, but almost all started some version of the same business. Brainerd was the marketing guy, and he lacked the technical chops to invent another version, so instead he focused on a 'low-ball' derivative that he thought might be of interest for small-time newspapers.
NBI in Boulder, CO (stood for Nothing but Initials) was one version, Interleaf Inc. in Cambridge, MA was the best-known and most successful for a time. David Boucher founded Interleaf, which developed the first commercial WYSIWYG (What You See Is What You Get) document processor. Stephen Kirsch would later found Framemaker, which was a dominant product for a time. Wang acquired key folk from the group, as did Lanier, and others.
And in my role at HP Palo Alto, I had been using (and loving) the Interleaf system for my own work for a year, when Brainerd came to our dinner in late 1983, along with a colleague, Charles Ying. The dinner group had eleven members that night, and essentially none of them understood the value of the ideas presented. What they did understand was the beauty of a new computer shown--a preliminary MacIntosh. This was maybe eight weeks before the famous Apple ad at the SuperBowl, announcing the new MacIntosh. The entire group had seen the Apple Lisa, and I believe that most of them had already seen the Xerox PARC devices. So the idea of an icon-driven screen, rather than raster-based lines of text, was not novel to this group. The idea of WYSIWYG printing was less familiar, but not unknown--although in fact, my usage of the Interleaf system had probably given me an edge here.
The way the club worked was each of the members (we had fourteen in total) put up $50,000 to play, and the club would vote where to invest, in small chunks of $50,000 total. We took a vote when Brainerd finished, and the vote was 2 in favor (Tom Whitney and me) and nine against (including Bill Krause, CEO of 3Com at the time; Dave Norman, founder and CEO of BusinessLand; and Walt Loewenstern, co-founder (and the L) of ROLM Inc, about to be bought by IBM. Ying was apoplectic, sahying something like "this will be big, you guys should support it."
I stepped in and described why I was excited. Next thing you know, the group said, "Okay." We gave Brainerd $50,000, of which each member had a $3,500 share. Over seeral years time, it became $12.5M when Aldus was bought by Adobe a decade later . It was the only significant winning investment that Summerhill ever made. So, $3,500 became $900,000! The worst one we made was two $50,000 votes for Manny Fernandez and his brilliant Gavilan computer, plus several of us invested some additional private money (I did another $50,000 on my own). Gavilan declared bankruptcy 30 days after our investment!!! Talk about sucker-punched.
The sequels are perhaps worth recording. Tom had loaned me my entire grubstake ($50,000) to be in the club. I had recently arrived from Colorado and a big divorce, into what even then was Palo Alto real estate woes, so discretionary money was scarce. His terms were to pay it back from club earnings, and I had done so for half of it within a few years. And then, a second divorce gave up half of my small share. So, running the numbers, I wound up investing a net $75,000 ($25,000 paid to Tom to clear the original debt, and $50,000 into Gavilan), and got back (1/2)*(1/2)*(1/14)*($900,000) = $160,000 after eleven years total time, which is a whopping 7.2% compound interest--not exactly a smash hit.
The other sequel of interest was many years later, when the Computer History Museum conducted an oral interview with Paul in 2006. And we learned that his work to get funded was indeed difficult. Here are the relevant passages from CHM's interview (https://archive.computerhistory.org/resources/text/Oral_History/Brainerd_Paul/Brainerd_Paul_1.oral_history.2006.102657986.pdf)
I started trying to raise money during the summer of 1984; I called upon 50 different venture capital firms both in Seattle and Silicon
Valley and was told ‘no’ 49 out of 50 times. We got all the way to September which was our
drop-dead date. We had less than $5,000 left in our bank account. Finally, we got a
commitment from a group of venture capitalists in Silicon Valley – Palo Alto – that was made up
of some partners who had been former Apple Computer executives, and they understood what
we were trying to accomplish and why software might have value. The basic reason I was told
‘no’ is that no one felt that a software company had any long-term market value; that basically
anyone with an idea could come up with this in his garage, and in a matter of a weekend or two,
write the software. Microsoft hadn’t gone public yet; it was still a private company, and people
just didn’t see how a software company was a worthy investment. It was too risky.
(Who was the VC?). It was Vanguard, and the partner was Douglas DeVivo; he was on our board until we
sold the company. The former Apple person was Gene Carter. So, in the summer of ’84, we
raised $864,000 in one round of early-stage financing based on our business plan and a very
rough prototype. The product shipped a year later. The Macintosh was introduced in January,
and we shipped PageMaker 1.0 the following July.
These passages reveal the difficulty historians have with oral interviews, when they complain that the facts are not always 'correct'.
Point 1: It wasn't 1984, but 1983. Which shows up in the 2nd paragraph, noting that the MacIntosh introduced 'the following January' (and we all know from the 1984 SuperBowl ad when it debuted.
Point 2: It wasn't Vanguard, it was Summerhill Partners, who were indeed partially former Apple execs. We only gave them $50,000, and then Tom and Charlie Ying called Doug DeVito to persuade hin to give Paul 'real money'.
The facts otherwise are great, and while I mentioned these tidbits once to the CHM chairman, Len Shustek, he and I both agreed that this will have to stand as recorded.
The other thing that is fabulous in Paul's interview is the story of their 'big marketing trip'--a classic story of brilliant entrepreneurship. But I will save that for now, and maybe put it up later or in a separate. blog.
Cheers