If things associated with this company are chaotic, there is a good reason. Starting in October, our sales volume has been growing at an average rate of over 30% a month. As this has happened, the workload on everybody has increased at this exponential rate. The telephone volume, manufacturing, shipping, and customer support loads have tracked these increases. Although we have been adding new people to bear the load, and will be taking additional space to avoid packing people like sardines into the current building, it takes time to find good people and time for them to learn the job, time to locate office space and move into it, and time to remedy the execrable phone ``system'' we have now.
For the moment, about all we can do is hang on and wait for the solutions to these problems which are on the way. Even in the most foamy bubbles of optimism, nobody expects a 30% compounded month to month growth to continue. If it did, our monthly sales at the end of this year would be over 2.8 million dollars per month (an annual rate of 33 million per year), and at the end of next year would be running at the rate of about half a billion dollars a year. Hi ho. Look out General Motors.
But seriously folks, what we can most reasonably expect is a series of plateaus with up-slopes between them. We're on one of those giddy up slopes now, but I think we'll have a chance to recover before the next expansion. But then, let's not get too cocky....
New Entrants, Undeterred by Mounting Casualties, Crowd the Software Field.
Sofsearch International, a San Antonio, Texas company that helps computer users locate software has lost track of almost 1700 vendors in the past year.
No matter, the company's count of active software vendors is nonetheless up about 57% from a year ago, to 13,500. Says a distributor, ``For every supplier that goes away, another 15 or 20 come up behind''.
But prospects may be poor for many of the new suppliers, ``Before word of mouth was enough to make your product known.'', says a distributor of software, ``Now it takes national advertising and huge budgets.''
The Wall Street Journal, February 8, 1984
We are indeed playing in a very different arena than the one we entered when we started this company. We started out with some product ideas, a commitment to work hard for little or no money, and the idea of building a company which would develop creative products, provide the highest standards of quality, do well by our customers in both service and responsiveness to requests, and reward those who did the work with the fruits of their labours if and when the company was a success.
Platitudes maybe, but all of us have worked lots of other places that didn't even pretend to do things that way.
And what do you know, it's working.
Now we have to face the challenges posed by our successes so far. We have to build the company rapidly, maintain the safety factor which has allowed us to survive lean times in the past, and continue to adhere to the principles that have been working so well for us up to now. This may be a lot easier to say than to do. There is a powerful force which pushes organisations toward mediocrity and insensitivity as they grow, and resisting it must have a high priority here.
And yet, we must change. We are working with much larger sums of money, many more people, numerous outside consultants and vendors, and with a vastly increased workload. The old informal channels of communication just cannot handle the load any more. We have been and will continue to institute the internal procedures we need to make information flow smoothly and to enable us to make the most of our limited funds. We must control our money very carefully now. Prudent use of our money now is one of the keys to making this company a success, so we will continue to watch expenses very closely.
If we obtain an infusion of money from venture capital sources, this will only increase the need to manage our money very carefully. When we obtain outside funding, we are committing to use that money as carefully as we can to make the company a success. We will control and deploy that money even more carefully (if that be possible) than the hard earned dollars we invested in this company or the sweat-stained dollars we pour back in from the sales we've made so far.
Explosive Growth Foreseen In CAD/CAE
The computer-aided design (CAD) market will reach $6.9 billion by 1987, according to the Yankee Group (Boston). CAD industry revenues were $1.3 billion in 1982; the CAD market is expected to grow at 40% annually through 1986.
Systems and Software, February 1984
Who can doubt that we are in the right place at the right time?
Now let's talk about what isn't supposed to change as this company grows.
This company was formed as a vehicle through which people who had in the past worked very hard with little reward could not only reap rewards, but control their own destinies and make the decisions, for better or worse, which would determine whether we succeeded or failed. This company has never put people into boxes or told them that they couldn't try something they wanted to do. There has always been more work to do than people and hours to do it, and nobody who has asked to try something has been refused a chance at it.
The computer programmer, is a creator of universes for which he alone is the lawgiver. Universes of virtually unlimited complexity can be created in the form of computer programs. Moreover, and this is a crucial point, systems so formulated and elaborated act out their programmed scripts. They compliantly obey their laws and vividly exhibit their obedient behaviour. No playwright, no stage director, no emperor, however powerful, has ever exercised such absolute authority to arrange a stage or field of battle and to command such unswervingly dutiful actors or troops.
Joseph Weizenbaum, Computer Power and Human Reason
But in the real world it's a whole lot harder. Our freedom to make decisions is constrained by money, by time, by the realities of working in the real world with real people. By succeeding in this domain as well as by creating the best computer program of its kind, we can gain the real rewards, both material and internal, that we started this company to achieve. But is it any wonder that it's easier to program up a storm than come to terms with this rapidly growing company? Between the risks inherent in the software business (where else can somebody copy a $1500 product for $5, or destroy an industry by a Kamikaze marketing strategy of, say, $50 per?) and the potential of being the leader in the fastest growing corner of a business growing 40% per year, is the reality we make out of the opportunity we have created by all those nights we worked straight through.
And that reality can be best served by making this company work as well on a large scale as it did when it was just a few wild eyed maniacs in various basements. This means that we have to make the company responsive to what people want. This is a lot harder to do as we necessarily increase the distance between the people developing the product and the people using it in the field. But we have to do it. We need to feed ideas back and forth rapidly. Anybody may come up with an idea which could make AutoCAD usable to a whole new group of people. Anybody may hear a customer suggest such an idea. We have to make sure that ideas like these aren't forgotten or left unacted on.
This product and this company aren't successful because we've spent loads of money advertising and whipping up a demand for a product. We've done so well because we created a product which fills a basic need. This is a product which excites people by its very existence. It's fun to use, and it lets people do work they couldn't otherwise do without spending hours of tedious labour. This product has put in the hands of the individual and small company the power which previously was only available to large companies--which contributes to leveling the playing field and eliminating advantages of scale.
We can continue to build on this success without losing track of how we got here. We have to continue to listen to each other, to customers, to anybody with a bright idea. We can't let schedules, budgets, meetings, departments, and memos dim the spark of creativity which built this company, or structure out the immediate communication of ideas and rapid response to requests which firmly established our reputation as ``good guys''.
When we advertise, all we're trying to do is tell the 98% of people who can use our product, but don't know that anything like it exists, ``Hey, look here''. When we try to obtain publicity, we can succeed best by telling stories of people who solved problems by using AutoCAD. These ideas and these stories will not be dreamed up by advertising people--their job is to communicate, not to invent. We have to find these stories and present them in a form where they will be understood.
And so we must not look at advertising as a black box where you feed money in one end and sales come out the other. It's one of the many means of communicating. More important than the advertising budget is what we want to communicate. Who are we? What do we sell? Why do people need it? What problems does it solve? Why is ours better than theirs? We have to answer these questions. Nobody else can.
And so, I see our challenge here as mainly keeping on track. If we can continue to be responsive, to act quickly, to get a lot done with a little money, to make one piece of work benefit us in multiple ways; if we can continue to make this company a humane place to work where people are rewarded for their intense labours and where anybody can advance rapidly just by carving out additional responsibilities, then I think that the success we have experienced so far will be multiplied by many times over the next few years.
Editor: John Walker