It was in the early days of the Personal Computer. Many small businesses were using them for word processing, spreadsheets, billing and inventory. It was a very fast evolving marketplace, and lots of new software was imagined, programmed, and sold. It seems ridiculous now, but in the early times these programs would be in baggies hanging on carousels by the cash register in the local computer store, containing one or two floppy disks of magic software.
Imagine it: Software as Impulse Buy! Might was well get some extra software for the new computer, right? After all, the more it can do, the more profits, right? That’s just Business 101. Cheap, too… games for 5 bucks at the low end to inventory software for 50 bucks or more. The best and most expensive software came with binders in boxed sets, hundreds of pages of documentation to explain how to use the software.
But it was all awful…
That statement comes from a guy with, at the time, 20 years experience imagining, designing, programming and selling business application software.But the people who were writing software for the PC were learning on the job, and there were not a lot of other ways to learn. Video did not exist on computers, there was no internet. It was a simpler time, in some ways
Patents were not issued on software at the time. So if you had an idea, you had to program it fast and start selling it before the next guy comes along and copies it and starts selling it for less, trying to steal your lunch and put you out of business. The software business was a race, and a gamble, and a game of smarts playing against some of the smartest.
VC money was not a concept until later. Act! appeared in 1986 backed with VC money.
It was the Wild West of the Software evolution. There was no clear leader in the application software business for PCs. It was very fragmented, lots of small bit players. These small players could stand out by gambling on an ad in the industry magazines Byte and PC. One page cost a small fortune. Software publishers who could afford it showed up in Las Vegas in August, the world’s biggest trade show, Comdex, takes over the whole town with non-stop innovation and deal making and partying.
As these very early years of the Personal Computer revolution were changing the way we do business, there was a guy, call him DoubleM, whose fortunes were about to change for the better but only after changing for the worse.
It was on March 17, 1983 that personal bankruptcy was DoubleM’s only option, the bottom was hit, and there was no place to go but up.
When faced with the reality of the line that was crossed, from success to failure, from luxury to poverty, and when it happens so suddenly, it gets your attention and forces immediate action or there will be nothing to eat…
DoubleM had some skills and some good experience with business due to having two previous startups and they were both business software that was used as a service (not SaaS, which came much later).
Another factor that helped align the stars for the birth of CRM was the fact that in this one person there existed a combination of skills, talents, whatever. it was this rare combination of all of them in one person that defied the odds by a big margin. For example…
There exist two worlds: the world of the nerd and the world of the ”suits”. Very rarely do they inter-breed. You either spent your time with your head inside the computer, learning and programming and debugging and fixing stuff… or you were running the business, and selling and marketing and focused on taking care of business. The nerds hadn’t a clue about business and the suits had no clue whet the nerds were saying. This caused no end of problems in those early years, still does.
And then there are two other worlds when it comes to business: the owners on the one hand, and the salespeople / customer service people on the other hand, and they create the money that pays everyone else’s salary. The bosses don’t have a clue what or how to do the sales and service, and live in fear that someday all the sales will stop when the salespeople go work for a competitor. These two kinds of people existed on opposite sides of the world of business. Rarely did they mix in any individual.
So we have one individual with multiple essential and yet mutually exclusive experiences. Highly improbable.
The kicker is that he was ambitious, he had something to prove, he was ”hungry”, and that can make all the difference. He didn’t like being bankrupt. He wanted to get his Ferrari back.
He decided to return to basics and do what he did 20 years earlier when working at IBM as a sales rep / systems engineer, right out of college. IBM was the greatest company in the world in 1964. He learned a lot. His assignment was to roam parts of 4 states, and find factories and sell them computer systems and then get them to do whatever was needed; to design and deliver the systems and procedures and software solutions. This time he would do it in San Diego, as an independent computer consultant.
The story has been told many times about what came next, how he asked a young and pretty lady friend to hand out some posters and deliver a one-word script (”Computers?”) with a smile. The phone rang the next day with a call from a company who would soon become the first user of a Customer Relationship Management (CRM) software product.
The name of that company is Coffee Ambassador in San Diego, California, and the guy who bought that first CRM is still working there, because he’s the owner. Sean Curtis the guy who got one of the first posters and took the bait, possibly hoping the pretty lady would return.
Instead, it was ”DoubleM”, the previously un-named person in our story, the man who had no illusions about building any software product, he just wanted to pay the rent and eat, and save up for a car. It was a humbling time.
The first meeting went well, the office coffee company was growing quickly and having trouble keeping up with the paperwork. They needed a computer, fast, and a good bit of hand holding and programming. He made a proposal to do an analysis of their needs for $950, with $475 at the start, the balance payable on delivery of what would essentially be a plan for using computers most effectively.
The coffee company bought the proposal, gave him a check for $475 and the pressure was off for at least a week.
Other calls came in, and in short order he had enough cash to buy his own PC, which was essential because he knew nothing about the PC. This was one essential ingredient in his plan to survive. If he was going to master this new technology he needed to have his own PC, full time, instead of learning on the job at a customer’s office. It’s embarrassing looking through manuals in front of customers; it’s erodes confidence.
Soon enough there was enough cash to buy the bits and pieces of an office space in his studio apartment. For a desk it was two 2-drawer filing cabinets with a block of wood as the table top. The chair was a folding wooden torture device, cost all of 15 bucks at Sears.
He picked up a mattress, cast off from a relative upgrading, so there was a place to sleep, but the PC was the greater attraction.
PCs were only part of the rich tapestry of hardware and software that he worked with during the years of 1983 and 1984. Other systems included IBM mainframes, Apple II machines, and mini computers such as Altos and others. The hardware had its own unique operating systems, and languages, and application software. And it was always a challenge learning the tech fast and deliver the solution.
This guy, DoubleM, was just selling his time by the hour to whoever needed help, on whatever computer, operating system, application, language, and he even got different systems talking to each other, something rarely achieved at the time.
DoubleM was soon eating regular and paying the rent, and in a couple of months got a used car, a ’65 Mustang, in red, because it reminded him of the car he drove when he worked as a sales rep / systems engineer at IBM almost 20 years previously, except then the Mustang was brand new and not a 20 year old beater. But it was a car, and it could get him to clients without borrowing a car from friends. It was a great step in recovery from bankruptcy.
DoubleM considered work a meditation during those two years, a total focus on service to others, without focus on dreams of grandeur, without ambition, just keeping his head down and doing the work and earning the money for food and rent.
He had one fork, one spoon, one knife, and one bowl. Life was simple.
There was a detail that needed to be solved, however. The maximum earnings that could be achieved was limited by the hours that could be billed by one person, DoubleM himself. If he wanted to play frisbee on the beach, not a billable activity, usually, he would be taking a pay cut to do it.
The ”suit” within him know that he needed a product that could be sold by others and that revenue could still flow IN when he played frisbee or was sleeping. A software product, a product that was unique, something that didn’t compete with existing products, a software product for people like himself… sales people and entrepreneurs and customer service people, a program that would do the work that the suits needed done, and a program that the workers would want to use.
That was the big issue with software of the day, it was so difficult to use. it was crazy how some of the stuff was put together. And it was buggy of course. The biggest issue with that seemed to be that programmers of the day didn’t understand users, and users didn’t understand programmers. To make it worse, programmers liked to show off their skills and knowledge of software features, and that would result in software that users found baffling.
But DoubleM had skills as a programmer, as well as a suit, and a sales rep and a manager. He saw things others couldn’t, not because he was some kind of genius, but because of the combination of so many experiences that just do not usually occur in one person at that time.
For those two years, the idea was brewing for what would eventually become a whole new category of software, and because it was new, there wasn’t even a category, it existed alone, a free=standing and unique creation.
The idea was presented to Sean Curtis, at Coffee Ambassador in late 1984, and it went like this: the product imagined would cost the company $5,000 and the company could use it forever at no additional charge, and would as a bonus get free updates and upgrades with new features and bug fixes. The only catch is that the ownership of the software would stay in the name of DoubleM, who would sell it to other companies, hopefully. The deal was agreed.
After the check was signed, DoubleM did the name test and offered Sean Curtis his choice:
1. TeleMagic, or
2. Michael’s Magical Money Machine
He chose option 1, and so it was.
Going from idea to reality was the difficult part, of course. There was zero money to hire a programmer for the work, so DoubleM had to do it himself, nights and weekends, when he was back from the paying customers offices. Don’t give up your day job, the one paying the bills. Violate that rule and you wind up homeless and hungry. So the days were long during that winter, but eventually the demo day was set in early 1985. The customer loved it. CRM was born.
DoubleM gave the software to friends who used it in their businesses, getting excellent results with it. It was time to take the next step so the first sales rep was hired, John Briches, a waiter in a local restaurant, who started part time as a commission only telemarketer, using the software to sell the software, to Value Added Resellers (VARs), people who would in turn use the software to sell their software and services and consulting, which is exactly what DoubleM was doing before he built the software. it was magnificently recursive and self feeding. People who saw it ”got it”. It was off to the races.
Soon enough, competition popped up. Act!, maximizer, SaleMaker, GoldMine, and a cast of what seemed like hundreds of products. it was as if the wold of software all got the idea very quickly starting in 1986-88. When there were a few of them that seemed to do similar things, someone put them into a category and called it ”Contact Management”, and the for a while it had a category called ”Sales Automation” because you could get more money if you called it that. Then way later it was changed again to ”Customer Relationship Management”. But it was all the same, really. Just an electronic Rolodex, a name and address list, on steroids, with lots of bells and whistles that improved the productivity of all who used it.
That first software product went on to version 14.5 for the DOS platform, and then there was a Windows version in ’93.
The software was primitive by today’s standards but it was amazingly effective. Among all of the early CRM products, the first of them, TeleMagic, was that it was so easy to use, and yet so powerful. By the time competition appeared, that first product had lots of iterations of build, sell, learn and was far superior to other software companies’ first tries. But they were catching up fast and it was always a game of cat and mouse, rapid development, and mad selling
There are lots of stories out there that credit the first CRM to Act!, which appeared much later, in 1986, and even GoldMine, which published in 1988 at the earliest, but TM was there before them all, running every day at Coffee Ambassador in San Diego. They continued to use the software for the following 25+ years and many companies still use the earlier DOS versions to run their entire businesses. Besides the PC, for DOS and Windows, TM versions were built for Unix, Mac, AS-400 systems, and was translated into foreign languages and sold in many countries, but the USA was the primary market.
DoubleM knows this, because he was there. He conceived of the product and programmed it for the first several years, until Gary Bagheri demonstrated he could do it way better, which freed DoubleM to build and manage the company that continued to sell and support it until October 2, 1992, when the company was sold to Sage Group, Plc, a UK accounting software company. TM is still selling, 33 years later, even though development was stopped many years ago; it’s the software product that will not die.
Del Mar, California