Mitch Kapor remembers Lotus' Macintosh bomb

After developing 1-2-3, the first popular spreadsheet for the IBM PC and compatibles, Lotus hoped history might repeat when it came to the Mac. But Lotus Jazz for the Mac failed to deliver.

Microsoft's Bill Gates, Lotus Development's Mitch Kapor and Software Publishing's Fred Gibbons promote the Macintosh and their applications for the new machine. Apple advertisement

This article is part of a CNET special report on the 30th anniversary of the Macintosh, looking at the beginnings of Apple's landmark machine and its impact over the last three decades.


As the Macintosh was going through its painful development process in California, Mitch Kapor was sitting on top of the world. In 1982, after a stint with VisiCorp, makers of the first spreadsheet, he co-founded Lotus Development, which created 1-2-3, a spreadsheet application for the PC that quickly became the market leader.

Lotus shipped 1-2-3 in January 1983 for $495, and by year's end the company had booked an amazing $53 million in revenue.

Kapor heard rumblings about Apple's secret project and was curious about what Steve Jobs might do to compete with the IBM PC.

"There was a lot of mystique about Apple even then, and about Steve Jobs. The mystique went all the way back to the beginning to the Apple II era," Kapor said. "He was always a showman. It was clear that the Lisa was out, and was not setting the world on fire. It was really interesting, but it was expensive and it didn't perform all that well. There were all these rumors swirling about what Steve was working on. Of course, I was on the East Coast, and there was no Internet. You have to remind people. News traveled slowly, not instantaneously."

Mike Boich, Apple's evangelist targeting software developers in hopes of convincing them to create applications for the Macintosh, came to visit Kapor in Cambridge, Mass. "We had a very strange and disjointed conversation, because we wanted to port 1-2-3 to the Mac," he said. "He was trying to steer us in the direction of doing some other kind of product for it, like a personal finance something. In my young and naive ways, I was mystified by that. I said, 'Well, this isn't very interesting to us.'"

Kapor later discovered that Lotus rival Microsoft had an exclusive contract to bring its Multiplan spreadsheet to the Mac. "That fact was not disclosed and that's why Mike Boich was discouraging to us, and he was embarrassed or was difficult," he said. "It was Bill [Gates] being brilliantly strategic again, cutting us out from being there early, so 10 points to Gryffindor on that."

Mitchell Kapor Dan Farber

Boich confirmed that Microsoft had a special relationship with Apple. "Our original deal with Microsoft had a couple of provisions. One was that Apple had the option to publish their apps (Multiplan, Word, and a Chart program), and some people felt that we should bundle them with every Mac," he said. "Second, the pre-release access to prototype Macs and SDKs Microsoft and a few other developers enjoyed wasn't supposed to be granted to developers who were doing apps competitive with theirs. In return, they were making a substantial investment in the Mac.

"I couldn't disclose Microsoft's plans to Mitch, but I felt that even if I could support a port of 1-2-3, they would be more than a year behind Microsoft, and would need to completely rethink the user interface, which was very similar to Visicalc's. Plus they might be competing against a bundled product or an Apple-branded product. So I found myself in the odd position of encouraging them to do a personal finance app."

Despite being aced out by Microsoft, Kapor participated in a "dating game" skit, playing off the popular TV game show, as part of Apple's annual sales conference in Hawaii in October 1983. With a beaming 28-year-old Jobs as the host, Microsoft's Bill Gates, Software Publishing's Fred Gibbons and Kapor answered questions, such as "When was your first date with the Macintosh" and "What is your ideal relationship with Apple?" Gates predicted that Microsoft would get half its revenues from Macintosh software sales in 1984.

Lotus didn't have a product to ship when the Macintosh was unveiled in January 1984, but spent millions of dollars developing an integrated suite of applications called Jazz that eventually shipped in 1985. "It took longer than it should have. It never really worked," Kapor said. "It was just asking too much of the Mac. It was overly ambitious, and it had bugs in it. We spent a fortune on advertising, including TV advertising, which was one of the worst business decisions I ever made. It was just like setting fire to bales of hundred-dollar bills.

Magazine advertisement for Lotus Jazz in 1985. Ebay screenshot

"Jazz was a bomb. That was also the low point of Mac sales. People had just written it off. We were doing business products, and a spreadsheet was an enterprise product. The Mac in 1985 and the enterprise was a complete nonstarter. Lotus's efforts around the Mac were pathetically unsuccessful, which is sad."

Lotus tried to follow up Jazz with an update, Modern Jazz, and then a Mac version of 1-2-3, but by that time Microsoft has sewn up the spreadsheet market with its follow-on to Multiplan, Excel.

"I think the Mac, as I look back on it, where it intersected what I was doing at the time, had strengths in different areas than Lotus. I routinely failed to understand that simple and straightforward would have been a much better product strategy for Lotus."

While Lotus failed to ride the Macintosh wave, Kapor -- who went on to co-found the Electronic Frontier Foundation and chair the Mozilla Foundation -- appreciates how the friendly Apple computer transformed perceptions about personal technology.

"It set the tone for a consumer information technology product that was about elegance and simplicity, and aesthetics. In hindsight, we could see it was mostly selling the promise," Kapor said. "At the time, because I was so in the geek world, it really seemed like this was it. Now, when you look where things have gotten in 30 years, you go, 'Oh, it just had the taste.' I think it's one of Steve's great creations. As a cultural artifact, people are going to be talking about it for centuries. That's part of its legacy."

 

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