At Xerox PARC, Chuck Geschke and John Warnock
developed a language called Interpress that would
allow any computer to talk to any printer. When
Xerox seemed slow to commercialize this technology,
Geschke and Warnock started their own company,
Adobe, to produce a successor of Interpress called
PostScript.
PostScript made it possible to describe complex
documents in a simple form. In 1983, Adobe partnered
with Apple Computer to create Apple's new
LaserWriter printer. When it was introduced in 1985
it created the "desktop publishing" industry. Adobe went public in 1986 and is
the recognized industry leader in graphics and desktop publishing software
through its typefaces and its popular Photoshop, Illustrator, and Acrobat applications.
Livingston: Take me back to the PARC days and why you started Adobe.
Geschke: I came to Xerox PARC when it was first beginning. I showed up in
October of '72. When I first arrived, I had a fairly straightforward task of bringing
up a machine that simulated a then-mainframe computer that, for various
political reasons, the researchers couldn't buy but wanted to use. So we basically
built our own mainframe. When that project was done, I got involved in
programming languages and developed the tools that were used to build the
Star workstation, which came out around the same time as the IBM PC--a
little before it actually.
PARC was an amazing place. The recruiting for computer science was done
primarily by a guy named Bob Taylor. He had been the head of ARPA's
Information Processing Technology Group, which had funded many of the universities
that started up in computing in the late '60s and early '70s. He knew
where all of the talented people were and he did his best to hire as many of
281
Charles Geschke
Cofounder,Adobe Systems
21
CHAPTER
them as possible. So when you go through that list of people who were there at
PARC during those early years, it's sort of a who's who of folks who eventually
migrated on to other things--as did John and I--into other parts of Silicon
Valley.
By the fall of 1977, in my office there, I had a personal computer with a
bitmap display--oriented like a sheet of paper, not like a television set for the
obvious Xerox reasons. I had a software program running on it that was as good
as Microsoft Word--in fact it was developed by the fellow who left PARC and
went to Microsoft and built the Office product line for them, Charles Simonyi.
I had a great mail system on it that could mail to anybody in the ARPANET
community, as well as within Xerox. It was on the precursor of the 3Com
Ethernet technology, developed by Bob Metcalfe, who later left PARC and
started 3Com. The network connected the personal computers to laser printers.
We had a 60-page-a-minute black-and-white laser printer, a 10-page-a-minute
color printer. We had a file server where you could store files and share them
for projects. All of these computers were connected in both an internal and
external network throughout Xerox Corporation and into the ARPANET, which
was the precursor of the Internet. All of this was at Xerox PARC in 1977.
That fall, we put on a demonstration for the Xerox senior management.
Periodically they would bring in about 250 of the leading managers around the
world for a conference and a little bit of socializing. We were given one of
the days to put on a vision of what the future could be for Xerox. We leased two
DC-10s (personal computers weren't so small back then) and flew all this stuff
out to Florida and set up the equivalent of a trade show to show Xerox management
what we had.
It was a very enlightening experience. The body language of the Xerox executives
was to fold their arms over their chests, sort of stand back, look at this
stuff, make some pithy remarks. If you've ever been in sales, you know that this
is someone who doesn't want to buy, is probably a little afraid of what he's seeing
because he doesn't completely understand it, and hopes it goes away quickly.
Since this was a social event as well, everybody was invited to bring their
spouses and significant others. I think all of those 250 executives were men at
the time. Most of them had wives, many of whom had worked in offices. They
loved this stuff. They sat down and played with the mouse, they changed a few
things on the screen, they hit the print button and it looked the same on paper
as it did on the screen. They said, "Wow, this is really cool. This would really
change an office if it had this technology."
When that event was over and we had the postmortems and discussions
with Xerox management, it became pretty obvious that we were in an uphill
battle to get them to understand what they had and what its potential was.
Remember that 1977 was 4 years before the introduction of the IBM PC and
long before the Macintosh. In fairness to the management, I think we as
researchers were a little naïve about what it would take to get these things from
conceptual operating prototypes all the way to full-production, supportable
products. But we sort of hoped that they would hire the people who could
do that.
282 Founders at Work
Shortly after that, I was given the opportunity to start up a new laboratory
within PARC focused primarily in graphics and printing technologies, and one
of my first jobs was to hire a chief scientist to be the head researcher. I had
known John Warnock by reputation. In fact, he gave a talk when I was a graduate
student at Carnegie Mellon. He was just finishing his thesis at the
University of Utah in graphics. But we never really met or spent any time
together. So I called him up, we had lunch. He had a beard, I had a beard; he
had three kids (two boys and a girl), I had three kids (two boys and a girl);
he refereed soccer, I refereed soccer. We hit it off. I made him a job offer,
which he accepted, and he interviewed at PARC and became the chief scientist
in this laboratory.
We began to focus on the problem of how to take a variety of different
printers--different speeds, different characteristics, some black-and-white,
some color (we already knew about ink jet technology even though it wasn't
broadly available at the time)--how do you integrate that all so that any computer
could talk to any printer? We did a project for Xerox called Interpress. It
was actually the precursor of PostScript, which was the first technology developed
at Adobe. The idea was that you could build a network of printers and
computers and they could all talk to one another.
We showed Interpress to Xerox management and they were extremely
excited about it. They said, "We're going to promote this as an internal standard
that we're going to use on all our products." I said, "That's fantastic. When can
we start the marketing program to go out and talk to the world about that?"
They said, "Oh, wait a minute. At Xerox it takes us at least 7 years to bring a
product out." I said, "7 years? In our industry, that's two to three generations.
This will be very old news by the time you get a product out, and the world will
have passed us by." "Sorry, that's how fast we can get a product out and so that's
what we're going to do."
That made both John and me very frustrated. We were talking one day and
he said, "I'm going to go and see if there's a way that we can take our ideas and
start our own business." His thesis advisor at the University of Utah was a man
by the name of Dave Evans, and Dave sat on the board of Hambrecht & Quist,
a venture capital company up in San Francisco. He introduced us to Bill
Hambrecht, and we went up and met with him. The idea that we talked about
was to build laser printers and typesetting equipment that could produce not
only text, but also images--imagesetters they're called today--combine that
with all of the software and market it to the Fortune 500 as internal publishing
systems that they could use to have more control and more rapid response in
their printing needs.
Bill liked the idea--partly because he was always frustrated with the financial
printers to get his prospectuses out--and so he said that he would support
it. "But neither one of you guys have ever run a business before, right?" And we
said, "That's correct." He said, "Well, I've checked around and you have a lot of
respect in the technical community, but I'm going to hire a guy to be a consultant
for you who is a marketing person. He'll help you write a business plan
because I need to have a business plan to talk to the investors."
Charles Geschke 283
We said, "Fine." So we wrote our business plan. John and I had managed
enough projects that we knew what the costs would be to bring out a first product.
We put that together in a plan, gave it to Bill, and he said, "Fine, you can
quit your jobs." We said, "We don't exactly have the money yet." He said, "You'll
have to trust me." So John and I quit. Bill loaned us $50,000 just as a personal
note so that we could go out and start leasing a Vax computer to do our work on.
We eventually found the name Adobe Systems and we were in business.
Livingston: How did you choose the name Adobe?
Geschke: We originally started thinking of names that were vaguely associated
with what we were going to do, and we ran into the problem that there were so
many corporations founded in California that it was difficult to get a unique
name. So we thought, "Well, maybe we shouldn't put too much of what we're
going to do in our name, because who knows where this will lead?" At PARC,
we literally threw a dart at the map when we were starting a new project and
needed a code name. If it landed on a river or a town, then that was the name
of the project. I was looking at a map of this area and I noticed Adobe Creek--
in fact, it runs right behind my house--and I said, "How about Adobe?" John
thought about it and said, "Fine." And that's how Adobe Systems came to be.
Livingston: So you and John quit your jobs at the same time?
Geschke: Yes. My father and mother thought I had lost my mind, because I had
this great job at Xerox, a nice big office overlooking the whole Bay Area. They
said, "What are you doing?" I said, "You know, my ego may get bruised if this
doesn't work, but I'll always have a job. If you have a PhD in computer science,
you're not going to be looking for work very long. This is something to give a try
and branch out on our own."
Livingston: You were about 40 when you did this. You had a family; were you
nervous about starting a startup?
Geschke: Both John and I were in our early 40s. Maybe my kids were nervous
that I wouldn't be able to put them through college, but no, I really wasn't nervous
because I knew I could get another great job, partly from the experience at
PARC and from watching people in the venture world. I knew one founder who
seemed to get more money every time one of his companies failed than the last
time! You fail and people figure that you won't make that set of mistakes the
next time.
So I never really felt scared. The only thing that would have been hard to
deal with would be the stigma of failing. But I thought we had a reasonable
chance of succeeding.
The first thing we did was find a place, through a friend of John's who sold
commercial real estate. We got a place over in Mountain View, a few thousand
square feet. We began talking to people about hiring them, and of course we
talked to people we knew. Initially, most were currently at PARC or had
recently been at PARC.
Before long I got a phone call from one of my professors at Carnegie
Mellon, Gordon Bell, who had since left Carnegie and gone back to Digital
284 Founders at Work
Equipment and was running research and development for the company. He
said, "I hear you started a business and I want to come out and talk to you about
what you're doing." So he came out and we showed him. We explained our
business plan about building the computers and the printers and putting it all
together in a package and he said, "That all sounds great, but I don't need computers.
I'm Digital Equipment. I already have a deal with Ricoh for laser
printers, so I don't need the printers. My problem is that I've got several development
teams trying to build the software to interface between the two of them
and they're getting nowhere. That's very frustrating to me. Why don't you just
sell me the software?"--which we had already shown him, the precursor of
what became PostScript--"That's what I need."
We said, "Well, Gordon, we raised $2.5 million and this is our business plan
and that's what we're going to do." He said, "I'm disappointed, but if you
change your mind, give me a call."
About 2 months later we got a call from a fellow by the name of Bob
Belleville, who had been at Xerox and then had moved on to Apple and was
responsible for the overall engineering management for the Macintosh. He
said, "I want to bring Steve Jobs over and see what you guys are doing." So they
came over, we went through the same spiel, and Steve said, "I've got this computer
coming out called the Macintosh," which he showed us, and he said, "so I
don't need a computer. And I have a deal with Canon on the laser printer. But
the development team trying to interface between the computer and printer is
just failing miserably. Why don't you sell me your company?" We said, "Steve,
we're not for sale, we're really out to build a business on our own." He said, "All
right, why don't you just sell me the software?" We said, "We have this business
plan, we raised $2.5 million, and this is what we said we're going to do." He
said, "I think you guys are crazy. Think about it a little bit and I'll call you back."
So John and I went to talk to the fellow that Bill Hambrecht had asked to
chair our board, named Q.T. Wiles. He'd been in business for a long time and,
when we described what had happened with both of these episodes, he said,
"You guys are nuts. Throw out your business plan. Your customers--or potential
customers--are telling you what your business should be. The business plan
was only used to get you the money. Why don't you rewrite a business plan that
is focused just on providing what your customers want?"
We called back Steve Jobs and he said, "Great! Sell me your company." We
said, "Steve, we're not for sale." He said, "Well, all right." And basically he helped
construct a proposal for how we would license him this software. We agreed on
a royalty per printer. We also closed a deal shortly after that with Digital
Equipment.
We began developing the laser printer for Apple, which eventually became
the LaserWriter. We signed an agreement with Apple in December 1983,
roughly a year after we went into business (we incorporated in December
1982). Unlike any startups that I'm aware of, we turned a profit within our first
12 months, as a result of that contract with Apple. So it's a very atypical story.
Steve did a prepayment on royalties to make sure we had the resources to stay
in business, and Apple also bought a little less than 20 percent of the company,
Charles Geschke 285
which quintupled the value of the original investors' money. Steve wanted to
make sure that we would finish this product, because it was critical for him that
he have the LaserWriter.
In the meantime, we were talking to other companies--IBM and other
folks. We had deliberately not gone to IBM early because we knew that, if we
didn't have a couple of business deals in hand, they would be extremely difficult,
if not impossible, to negotiate with.
We found that we were outgrowing our facilities in Mountain View, so after
about a year, we moved into a larger building on Embarcadero across from the
Palo Alto Golf Club. By about the fall of 1984, we had the LaserWriter pretty
well completed and we ran into a hiccup. Steve had gone to his annual sales
meeting in Hawaii with the senior sales management at Apple, and it was the
first time that he really spent time talking to them about this new product, the
LaserWriter. They all got very upset. They said, "We can't possibly sell a printer
that costs more than the computer!" (In fact, inside of this printer was a more
powerful computer than the Macintosh.)
Livingston: Because that's where all the pages were actually rendered?
Geschke: That's where the pages were rendered, and that's where all of the type
was generated. It was a sophisticated computer and so it cost a lot of money.
RAM prices had just gone up the preceding year. Fortunately, right before the
product hit the market, RAM prices came back down. It had to have 1.5 MB of
RAM, which seems tiny today, but in those days it was a lot of memory.
So he came back from that meeting and sent his marketing guy and Bob
Belleville to talk to us and they said, "We think we may end up canceling this
product if we can't do something about this."
John and I called up Steve and we sat down with him and said, "This will be
a disaster. You really have got to get this product out because it's the only thing
that's going to differentiate you from IBM." He agreed, and then he told us that
RAM prices had just dipped again. So it didn't matter what his salespeople said;
he said, "I'm going to put this machine out."
So he did, and it got a great deal of fanfare when it was introduced--people
really loved it. There were industry analysts like Jonathan Seybold, who were
very in touch with the publishing industry and were following computers' influence
and the changes going on. As soon as he saw it, he completely got it and
understood what was happening.
At the same time the LaserWriter was introduced, we introduced a piece of
typesetting equipment, which was a full image setter, with Linotype Corporation,
and announced that we had licensed the Linotype typeface library. It was
extremely important for the publishing customers to know that they had the
trade names of the original type vendors in the products and in the technology
that we developed.
So the product launch went out and it was very well received, but as we
began to track sales, while there was the initial pent-up demand, as it got
toward summer, the sales began to drop off. Everybody got pretty worried
about what was happening. At that time, Apple was marketing their computers
286 Founders at Work
and the LaserWriter around a marketing program called the Macintosh office,
which was an attempt to take IBM head-on. And frankly, it was not going well.
It was very hard to replace all those feet on the street in corporate America,
"You've never lost your job buying IBM,"--all the stuff you've heard.
Fortunately, there was a young marketing guy at Apple named John Scull,
who was aware of what was going on (as were we) at Aldus up in Seattle,
because PageMaker came out at the same time as the LaserWriter did. He
came up with the idea of getting the three companies--Apple, Aldus, and
Adobe--together to put together a marketing campaign called "desktop
publishing." That had a huge impact on Apple, Adobe, and Aldus, and on
the publishing industry, and completely turned around the fortunes of the
Macintosh and the LaserWriter.
Livingston: Because the desktop publishing idea was brand new?
Geschke: Yes. Up until then, people used basically analog, labor-intensive technologies.
It turns out my grandfather and father were both letterpress photo
engravers, and so I knew what it was like to work with the etching baths and the
copper plates and all of the emulsions and everything. It was very toxic work,
very expensive and very labor intensive. What we were beginning to demonstrate
pretty early on was that you could do as good, if not better, quality using
a computer and PostScript than you could with the old analog technologies.
Desktop publishing became very popular. For an investment of a few thousand
dollars you could, in effect, be your own printer and publisher. So it
opened up a whole lot of new businesses. As graphic artists and designers began
to learn how to use a computer, we brought out products like Adobe Illustrator.
All of a sudden, the whole industry began to move, and within less than a
decade the entire printing and publishing industry went from the old analog
world completely over to the digital world. That was a tremendous thing to see,
and of course it was a huge benefit to us.
Livingston: When you first started, you planned to build the computer, the
printer, and the programming language that would make everything talk. Did
you have a name for it before it was called PostScript?
Geschke: No, PostScript was the name that we picked shortly after we started
our business.
Livingston: Did you use the same ideas that were in Interpress?
Geschke: There were several things that weren't done in Interpress. It wasn't
really a programming language the way PostScript was; it was a little more
static. And in the design of Interpress, we never were able to figure out how to
deal with type. In the world before Adobe, the presumption was that to get
high-quality type at laser printer resolutions, let alone ink jet resolutions, you
would have to hand-tune bitmaps for every type style and every point size.
Extremely labor intensive. Also, what would look good on a laser printer
wouldn't necessarily look good on an ink jet printer and probably not look at all
good on a computer screen. So in fact you not only had to design for different
Charles Geschke 287
point sizes and different typefaces, but you had to design for different imaging
devices. If you begin doing all that multiplication, you could hire all of the hightech
workers in China and not keep up. It wasn't going to work.
Livingston: So you created scalable fonts?
Geschke: We came up with the idea of using a pure mathematical description
of the outline of the type and then worked on some sophisticated algorithms
about how to decide which bits to turn on and which ones not to turn on to give
the highest-quality rendering on the particular device. That was really the
breakthrough technology that differentiated PostScript from anything that preceded
it, including Interpress.
Livingston: When you were working on Interpress, what were some of the big
ideas that you couldn't believe that Xerox didn't appreciate?
Geschke: At a conceptual level, it was the same idea as PostScript. From any
computer running any kind of application software, you could, over the network,
interface to any printer at any resolution, any characteristics, and be guaranteed
that the file would transport between the two. For a company that's in the printing
business, such as Xerox, that meant they only had to provide a single digital
interface on the front end and they could connect to anything. The converse
was also true for software writers, because they could print to this PostScript
string and it would look good on any PostScript printer. And the same was true
for platform vendors like Apple and Microsoft: they only had to write one print
driver to be able to generate output for any PostScript device--or would have
for a Xerox device running Interpress.
Livingston: Did you build the hardware for the printer too?
Geschke: We helped design it in concert with people at Apple. We did not
manufacture it, but we did know some of the design characteristics that it
needed to have in order to be able to handle both the rasterization of PostScript
and some things about how it had to control the engine to get the best possible
output. But that was a shared piece of work and the hardware belonged to
Apple. Eventually we did do some hardware design, and we would offer the
designs to our OEM customers so that they wouldn't have to start with a blank
sheet of paper--so they could get to market faster. But we never really went
into the manufacturing business.
Livingston: Why did Apple and DEC have such difficulty in creating what you
guys did?
Geschke: I think it was partly a lack of understanding of the requirements of
the printing and publishing industry. Even though John's background wasn't as
closely tied to it as mine, he had worked for a company called Evans &
Sutherland who did contract development for a lot of high-tech companies
including RR Donnelley in Chicago, which was at one time the largest printer
in the United States, maybe in the world. So he had a pretty good appreciation
of what was involved. Plus, with his graphics background, he understood
the issues about the conversion from an abstract definition in terms of the
288 Founders at Work
mathematics of a shape and how to get that into raster data that would drive a
bitmap printer or a bitmap display.
It was a combination of all those skills and backgrounds that he and I had
that put us in a unique position. And then the good fortune to get a business
deal with two or three very important customers early on.
Livingston: Did your work at PARC on the programming language Mesa give
you any critical insights that helped you make PostScript better?
Geschke: Not directly. Mesa was very focused on conventional programming,
the kind that was done to build operating systems. It had one characteristic that
conceptually is similar to PostScript, in that in both Mesa and PostScript, we
had the idea that you didn't have to program at the level of the machine. In
PostScript, you can program at a higher level, in a language that is more in tune
with what you wanted to print as opposed to how it printed. In Mesa, we actually
developed both a programming language for programmers to organize
large, complex programs and a machine that would take the output of that language
and operate on it very efficiently. That was built into the Star workstation
that Xerox introduced in 1981.
Livingston: What were some other major turning points?
Geschke: Well, certainly if you remember back to that time in the office printing
market, HP was in a very strong leadership position with the LaserJet.
When we found out from HP that they wanted to come back and talk to us, that
was a very important moment because we were, in fact, able to sign an agreement
with HP and have them adopt PostScript on their LaserJet printers. That
was a big coup for us as a company. It was at the same time that we managed to
sign up IBM. So our strategy of not going to IBM early had paid off. Once they
saw the market mushrooming for Apple, both IBM and HP decided they had to
pay attention to it and that's how we got those business deals.
The other lesson that we had to learn, though, is that you can't be a oneproduct
company. There's a very high risk when you're a single-product company
that eventually a combination of changes in the technological landscape
and changes in the competitive landscape will eventually cause you to begin
losing market share. And once you lose market share, then your revenue and
earnings begin to fall. Fortunately, we had decided that in order to be able to
really demonstrate the capability that was inside the LaserWriter, we couldn't
rely on the standard business applications--and even the graphics applications--that
were out there. If you remember, Apple had a product called
MacDraw, and they had another product called MacPaint. They were organized
around the concept that you were going to be doing your printing on an
ImageWriter; they didn't have the characteristics that could really show off the
fact that the LaserWriter was in fact a full printing press. On the LaserWriter,
you could combine graphics and images and text in innovative ways that none of
the application packages were enabling. More importantly, designers knew they
wanted to be more creative but had no tools to enable their creative expression.
Charles Geschke 289
But there was also another reason for developing Illustrator. John's wife was
a graphic designer, and once we brought out the LaserWriter, she wanted to get
some of her design concepts out on that machine. So John was programming in
PostScript by hand to get this output to come out and he said, "This is stupid. I
need to build a tool that behaves more like what a graphic artist would expect to
have in terms of pen and ink and drawing and so forth, and then let the tool
write the PostScript code." So that's where Illustrator came from.
It was introduced in the winter of 1987. We also had been working with
scanning equipment and photographs. Scanners were still very expensive at
that time and so there wasn't a lot of opportunity in the area of photography yet,
but we instinctively knew it was going to come.
We were introduced to two brothers from Michigan: Tom and John Knoll.
They had built a package that would let you work with a photographic image
and change it, modify it, enhance it, do a variety of things. But of course it was
doing that on a Macintosh with 512K of RAM, a little black-and-white monitor
screen, no color, a disk drive that maybe held 10 or 20 megs. There were no digital
cameras and scanners cost $20,000. But the software looked really good. We
thought that this had to be a great idea eventually and it was the missing component.
There were applications that produced text. We had Illustrator, an
application that could produce line art and drawings. But we didn't have
an application that could deal with photographs, even though the printer could
print them. So we began investing in Photoshop, and we paid a lot of attention
to the Japanese who were beginning to work on digital cameras and lower-cost
scanners. We introduced Photoshop probably 2 or 3 years before the market
was ready for it.
I am not a hunter, never have fired a gun, but I'm told that if you want to
shoot a duck, you have to shoot where the duck is going to be, not where the
duck is. It's the same with introducing technology: if you're only focused on the
market today, by the time you introduce your solution to that problem, there'll
probably be several others already entrenched. It will be hard to dislodge them,
and hard to convince people that what you have is so much better that they
should make a change. Much better to figure out where the marketplace is
going to be in a few years, focus on providing a solution to that, and let the market
forces catch up to you. That's what we did with Photoshop and it turned out
to have been a great decision for us, and good for the Knoll brothers. It paid a
lot of royalties for their work and developed a whole industry around digital
cameras and digital photography.
Livingston: If you were coming out a little before the market was ready for
your products, did you ever have people just not understand how great the
products were?
Geschke: In those early renditions of the product, we would focus on a select
community of people who understood both technology and the potential. So we
would market primarily through technical analysts and product research kinds
of people, and not attempt to go to a mass market, because there was no mass
market.
290 Founders at Work
We also had to fight the antibodies inside the company. When we introduced
Illustrator, we realized that the profit margins were going to be very different
because we had to actually package the software, distribute it physically,
build business relationships with a different sales channel--because when we
sold PostScript, we sold directly to the major OEMs, so we literally only had
tens of customers for PostScript. Now we had to get thousands and eventually
millions. Very different business proposition, very different market, different
sales channel. So there were a lot of people inside the company who said, "This
is crazy. We're going to invest all this money in this? What if it doesn't work?
We're going to lose our profitability."
John and I were convinced early on not only that you couldn't restrict yourself
to a single product, but you couldn't restrict yourself to a single sales channel
to get your product to market either. Business relationships can eventually
decay or fall apart and then you're stuck. You have no way to get your products
out and no way to respond to the market.
Livingston: Did Adobe have any major relationships decay?
Geschke: Of course. The most famous one was in the fall of 1989. We had been
working on technology to make high-quality text on the display, not just the
printed page. Up until that time, all text on computer displays were bitmaps
that were handcrafted. We wanted to be able to demonstrate that you could use
the same technology on the screen that you used on the printed page.
Apple had actually been working on that for a while. Their technology was
called TrueType. We were trying to market our solution to Apple, not with a lot
of success. By then Steve Jobs had left. He'd been the primary Adobe champion
inside Apple. Now Jean-Louis Gassee had taken over the product side of
the business, and for whatever reason, Jean-Louis and Adobe never got along.
So we were beginning to really have a problem with Apple. They were getting
tired of paying us royalties for the LaserWriter; they thought that they shouldn't
have to pay anymore.
We decided that one way to deal with that would be to convince Microsoft
that they should adopt our technology for Windows. In fact, we were able to get
one of their biggest customers at the time, IBM, to agree to adopt our technology
on both OS/2 and on their versions of Windows. But when we tried to sell it
to Microsoft, we just couldn't come to a business deal. The thing that was frustrating
is that it was already proven technology. We could demo it. And we
already had all typeface licenses set up with the major vendors, so you knew
that you would have that requirement satisfied, and, more importantly, we
weren't going to charge. We were trying to give our customers the same feeling
on both Macintosh and Windows machines, so we wouldn't be forcing them to
make a decision about whose products to buy in order to use our technology. It
had always been our strategy to be platform-neutral.
It came to a head at the Seybold Conference in San Francisco in September
of 1989. Microsoft told us they weren't going to license our technology and, in
fact, that they were going to form an alliance with Apple. So our biggest customer
and our biggest competitor got together on the stage, and Bill Gates
Charles Geschke 291
announced that he was going with TrueType for Windows and that he had
acquired a clone implementation of PostScript, which he would license to
Apple so Apple would no longer have to pay royalties to Adobe. On the platform
that morning were Gates, Steve Jobs talking about NeXT, and John
Warnock (he and I used to alternate and he was the lucky guy who was on stage
that year).
This quote has been repeated a lot because John spoke after Gates, and
Gates had talked about how this was going to improve the world for publishing
and printing--but they couldn't even demo the technology at the time. John got
up and he said, "I've never heard so much garbage mumbo jumbo in all my
life." And then he proceeded to talk about Adobe Type Manager (ATM) and
what we were going to do. Once we learned the Apple-Microsoft alliance was
going to happen, we decided that our only response would be to get to market
immediately and to make ATM available on both the Apple and Microsoft platforms
as an aftermarket product very inexpensively. I no longer remember the
price, but it may have been $99, which at the time was considered very lowpriced
for software.
We sold hundreds of thousands of units in the first year, and it took Apple
and Microsoft 3 years before they ever actually shipped a product. By then it
was a moot point. During that time, Apple decided that they couldn't build a
product using a clone implementation, so they came back and redid the
PostScript deal with us.
The thing that was really most important, as a startup--though by then we
weren't really a startup--by then we were public, but a young company--is the
relationship that we had built with our customers. We wanted them to feel that
a) they were given a decent deal and that b) they trusted us to lead them to
where they needed to go. So at that same conference, the organizers decided
very quickly to put an extra panel on the last day and have a live debate over
whether the attendees--and this was all the major players in printing and
publishing--preferred to have Apple and Microsoft take over their future or
whether they wanted to stay with Adobe. Before the panel started, the moderator
got up and said, "I'd like to get a feeling for what the sense of the group is
before we start this. I'd like everyone who wants Apple and Microsoft to succeed
in putting Adobe out of business to raise their hands." There were a few
Apple and Microsoft employees in the audience, but out of about 1,500 people,
only a couple dozen hands were raised.
So that reinforced a message that John and I had always preached inside the
company about how to treat our customers. Listen to them very carefully.
Understand what their requirements are and what their needs are. Not necessarily
do what they asked us to do, but to have the vision to do more than they
expected. We had worked religiously at that. We had indoctrinated in all of our
employees that you treat a customer the way you'd like to be treated. That you
are responsible for that customer's success and, if you fail at your job, you may
cause their business to fail. I think sometimes the cynics would look at that and
say, "That's sort of goody-two-shoes. Maybe this guy's reading too much of the
Bible or something." But it's just good business. And that event demonstrated
292 Founders at Work
it; basically everybody voted for us. In fact, while there was a hiccup in the stock
because of the Apple-Microsoft announcement, our business never faltered.
Livingston: Why weren't Microsoft and Apple able to make a competitive
product?
Geschke: They were mostly working on speculation of what they thought they
could do. When we were talking to Microsoft and Apple about licensing this
technology from us, we already had working prototypes. They were an example
of what a poor duck hunter does. They were shooting at where we already were,
and we were long past them by the time they were able to bring that product
out. It became basically irrelevant to the market.
Livingston: Was there ever a competitor out there in the early years that you
worried about?
Geschke: There were some. When we got our money for that original business
plan, there were about half a dozen companies who had raised money to do
something similar. Not the same, but similar. Fortunately, the other five all executed
that business plan, and we didn't. And they all disappeared.
It shows you the power of getting good advice and having the nerve to take
that advice. Because literally, there were half a dozen companies all formed
within about a 12- to 18-month period with venture capital both on the East
Coast and out here in Silicon Valley, all trying to do the same thing. And sometimes,
when they would get up and talk at events and conferences, that would
be pretty scary.
HP continued competing with us with the LaserJet--we could see the
potential that over time, some of their products, especially in the office, would
become good enough. It also became clear that once ink jet technology became
higher quality and lower cost and of comparable speeds, we wouldn't be able to
put our software on a controller in the printer, because the printers were throwaway
devices. They were just razors and the money was in the blades. So we
began really pushing hard on other products and other market opportunities
knowing that eventually PostScript would fade as a revenue opportunity for us.
Today we still have laser printer contracts with a number of manufacturers--
probably the biggest one now is Xerox, ironically--and several image setter
contracts with the companies who make high-end printing equipment, but
there's very little business in the desktop market and none in the ink jet business
for PostScript. So while it's still a profitable piece of our business, it's certainly
no longer critical. Acrobat and our other retail products and now the
acquisition of Macromedia have more than taken over for PostScript.
So the other lesson is that you have to be willing to move on, even if you've
got a real success. That was, in fact, the same problem that Xerox had. Because
the 914, the original copier, was so successful, they couldn't look at a business
that didn't have a "b" in the dollar amount. Unfortunately, new businesses start
out small and grow. You have to be willing to make some risky decisions and
invest in them in the hopes that a few of them will succeed. Xerox was not very
good at that. Hopefully they've gotten better over the years.
Charles Geschke 293
Livingston: PARC was famous for overlooking the commercial value of things.
Were you surprised that they didn't see the value of what you and John were
working on?
Geschke: I wasn't so surprised by our experience with Interpress, because I
had seen what had happened with all the other technologies that preceded it.
They never figured out a way to commercialize the Ethernet. They had managed
to commercialize the original laser printer (it was called the 9700), but it
was for mainframe computers; it replaced line printers. Line printers were the
old printers that used to be on mainframe computers, and they were big, noisy
devices that could only print text. The 9700 could print pages that were more
sophisticated. But it was mainframe printing, it wasn't office printing, and it
wasn't focused around publishing and the graphic arts. If you look at a typical
office memo coming out today, you would never have seen anything like that
20 years ago. It would have been Courier or Elite typefaces on a typewriter. It's
all completely different now and people don't even think about it. They just
have expectations that the text will look high-quality, that it will be proportionately
spaced, and the pages will contain illustrations and photographs.
Livingston: We just take for granted what you guys created.
Geschke: That's what's really cool. That's when you know you've had an impact.
I know I can speak for John on this too, but the biggest thrill is frankly not the
financial success, it's the ability to have an impact. Because we're both engineers
at heart and that's every engineer's dream--to build something that
millions of people will use.
People with no training in the graphic arts could now develop materials that
got a message across and did it more dramatically. I remember very early on, I
gave a talk in Chicago somewhere--some guy in a small brokerage business
somehow convinced me to give a talk. He said, "We use your stuff, but we
always print it in Courier (which is the typewriter typeface) because people
who see it printed in a high-quality typeface think it's old news." You see, he was
on a cusp of a change. Now people don't think about it that way, but in those
days, if it didn't come out in Courier, it must have gone to a printer and a typesetter
and it must have taken 2 to 3 weeks to get prepared.
Livingston: What surprised you most about the early days?
Geschke: To me, the most surprising thing was how responsive people in the
publishing industry were to accept and embrace change. After thinking about it
later, I realized that as I had listened to my dad talk about his profession--and
he of course told me never to go into the printing business--it was because he
recognized intuitively that change had to happen in that industry. He wasn't
sure where it was coming from but he knew it wasn't just doing what he did better
or more efficiently. It was going to come from somewhere else. So I suspect
it was a market that was already looking for a solution and we provided it at the
right time.
The amount of printing has not decreased because of the "paperless office,"
it's increased. We're the people (Adobe and the others we've partnered with)
294 Founders at Work
who are responsible for all those catalogs you get in the mail. If you think back
25 years ago, you didn't receive many catalogs. They were too expensive to
produce.
Livingston: If you had a background in printing, did you create the products to
purposely encourage good design?
Geschke: I understood the difference between good and bad design. We also
understood that, if you are in the hammer business, you can't require that a person
who buys a hammer be a good carpenter, so we opened up our tools to a
much larger community. And some of the early printouts looked like ransom
notes. People would put every available typeface on one page, which is not
good design. So there was a lot of bad design going on. It wasn't the fault of the
technology; it was the fact that people were given a new medium from their
point of view, as opposed to the professional's point of view, and they were
struggling to figure out how to do it well.
I think that's gotten a lot better--not perfect, but better. More importantly,
the people who are great designers have been given more creative freedom
now. They can do things at a lower cost and faster than they ever could have
before. A lot of design work now wouldn't have been practical to try to do some
other way using hand methods, but now with the ability to manipulate layers
within photographs and do all this kind of really sophisticated kind of art,
people can do design that they never could do before. What we believed in very
strongly was that the rules of quality for what was produced were not set by the
computer industry, but by the publishing industry. It didn't matter whether or
not some guy at IBM thought it looked good. What mattered was someone at
Random House or Time-Life or Ogilvy & Mather or someone like that appreciated
it.
I remember in the early days bringing home our first color separation work
and showing it to my dad. He still had an engraver's loupe. He pulled out his
loupe and he looked at the halftone patterns and he looked up at me and said,
"Not very good." And I said, "I know, but it's going to get better." And then a
few years later I brought home something that I knew was pretty good. I
showed it to my dad and didn't say much. He looked up with a big smile on his
face and said, "Now that's good." That was a wonderful moment.
Livingston: Is there anything that Adobe does now to preserve the efficiency or
the "startupyness" of a young company?
Geschke: It gets harder as you get bigger. What John and I have tried to do as
chairs of the board is to reinforce to the current CEO, Bruce Chizen, the
importance of innovation and the importance of taking some of the investment
of the company and not immediately pouring it back into the current businesses.
As I described earlier, as we were trying to develop our retail sales channel,
people thought that was a waste of time and money. The product lines that are
bringing in the most revenue believe that they have a right to all the resources
of the company. Part of good management, and part of the attitude of a startup,
is to recognize that, while those businesses are incredibly successful today and
Charles Geschke 295
you hope they'll be successful for a long time, the law of averages and experience
tells you that at some point they will peak and they will probably begin to
decay. So you've got to be investing today in what your future's going to be 5 or
10 years out.
We do try to maintain that attitude; we try and have projects focused on
new ideas and concepts, but it's hard. So we've done a combination of both
internal investment over the years and acquisitions. We've done several acquisitions
of the style of Photoshop, where we've seen a new idea and a new concept
partially developed and we can bring in the resources of getting it to market and
integrating it with other products to make it much more successful than the
group could have done probably on their own.
Livingston: You and John are engineers and researchers, yet you were the main
executives up until a few years ago. You were obviously better at running a business
than originally predicted back when you raised money.
Geschke: I don't think there's any mystery in running a business. I think it
helped that we were in our 40s, that we had worked for a variety of organizations.
We had worked in other companies, but tried to leave their bad ideas as
proprietary to them. We tried to pick the best things that we saw.
When we started, we wanted to build a company that we would like to work
at and we kept applying that criterion. I remember, when we first hired people
in the original days, John and I would take turns hand-delivering a dozen roses
to the spouse if it was woman, a bottle of cognac if the spouse was a man, and
then champagne to the employee.
We did that for the first 18 months and then it got to be too much and we
started giving it to them at work. I suspect we don't do that anymore. Doing
things like that to make people feel like they were part of a community helped
build a rapport inside the company so that our turnover rate has been among
the lowest in the Valley ever since we've been in business. Particularly with people
who are the top performers, our turnover rate has been not only single digit,
but typically 1 or 2 percent. And that's because we've made it an interesting and
rewarding place to work. So I get frustrated sometimes by people who have
never run a business who are legislating things like stock option accounting and
so on. They don't have a clue of what it takes to run a business.
Livingston: Is there any other advice you would give to someone who was
thinking of starting a startup?
Geschke: If you aren't passionate about what you are going to do, don't do it.
Work smart and not long, because you need to preserve all of your life, not just
your work life. One of the things that I felt really good about is that we--from
the very first employees, including John and me--enabled telecommuting from
day one. So everybody had a phone line and a modem and a terminal in their
house, the day they joined the company. (Now, of course, they have their own
personal computers and everything).
It's devious, because I suspect we got a lot more hours of work out of them.
It's the same reason we give them a great lunch at a discount price.