Founding my Own Company in 1983 – A Retrospective Analysis

logo-HITLooking for a HIT logo, I found this article. It is based on an interview I gave in August 2014. It was perhaps during one of those (totally confusing) many state-sponsored contests for founders of medium-sized firms. Well, one of those many sponsoring opportunities. I no longer know the name of the person who interviewed me at the time.

The article was published in:

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The basic message of the article is:

My own company founding process went well because many necessary requirements were met. Yet we had not planned them a-priori and rationally. Instead, we only found out about them a-posteriori.

It is a personal report on how InterFace was founded. I will modify it a little for publication in dev.if-blog.de, because it is part of my personal life story. With this report, I would like to encourage young founders and also prepare you for the almost finished fourth instalment of my series “vintage project management”, which is soon to come. Here is the text:

Ever since the early 1980ies, I was tempted to become self-employed. One of the reasons was that I (like many founders of today I know) wanted to take responsibility for an enterprise and decide its future, thus also enjoying my work more. Another reason was that I wanted to earn more money. Strangely enough, this is a motive that does not seem to be so important to many founders of today I know – perhaps because today the restrictions at the work-place are a lot more than they used to be and many people are no longer prepared to sacrifice their private life for their career.

For starters, I set out looking for the “ideal partner” as early as 1982 (I did not look for the “ideal business idea”, because even then I firmly believed that there is no such thing as an ideal business plan). Mind you, it was not easy to find the “ideal partner”, either, but after a little more than a year, I was lucky enough to find Wolf Geldmacher.

He brought enormous entrepreneurial power and was down-to-earth, just like I was. With Wolf, founding the “InterFace Connection Gesellschaft für Datenfern-verarbeitung und Entwicklung von Software mbH“, which was the predecessor of InterFace AG, did not take long. Our topics were IT and Unix. On the then new Unix platform, we wanted to create a successful product. It was important for us to actually have a product, because we assumed it was harder to scale a service. Besides, in 1983 (before the foundation in 1984), we were not sure if body-leasing was going to be a business that would endure. Even then, we believed that Body Leasing (“Letting of Workers” AÜG) would be a sector that, from the legal point of view, occupies a grey zone at the least.

Consequently, it was clear that we wanted to build a product. After various ideas (data base, networking,…), we decided in favour of an office-compatible typing system on Unix. As a name, we chose what we wanted it to become: a HIT: Seen in retrospective, we actually succeeded with something rather risky. It took us only a few years to become the most successful text system by far on Unix in Europe. It was like a dream!

Thinking about it later, I identified persons and important requirements or events without which it would never have worked. We simply were moving in the right time and had enormous luck that made so much just right.

The duo “Wolf & Roland“
Even in the early 1980ies, the two of us firmly believed in agile, lean and open. We were in favour of self-organization and self-determination, formulated our ideas and our requirements and then let our teams do the job. It was all done in a profound sense of belonging together.

Necessary “skills“
In 1960, my parents had managed to get me a place at the Augsburg “wirtschafts-wissenschaftliche Oberrealschule Jakob Fugger” after the four years of primary school at Wittelsbacher Volksschule. This had by no means been an easy task. Later, this school was re-named “„wirtschaftswissenschaftlichen Gymnasium“ (until 1960, it had still been a business school). Book-keeping and business administration, both of which I was taught at the “wirtschaftswissenschaftlichen Gymnasium”, were certainly useful skills when it came to founding a company, but they were not an absolute necessity. The things I had learned at TUM in computer science were basically also not much use. I had learned programming as a student at Siemens. In the Siemens Laboratory, I had learned team work, in the sales department communication, and at Softlab: business.

“The method“
We had developed and lived our own private method of software development. It was a little like what they call SCRUM today. Wolf was the “SCRUM-Master“ (and more than that). He was responsible for the technology and the people. He pointed the colleagues towards quality and made it clear to them that they had to live and give quality, first and foremost for themselves. And I was something like the “product owner” and business director.
There are a few persons who hugely contributed to our success. I would like to give my special thanks to them:

Anton Böck
Stenography and typing had been obligatory at the Jacob Fugger school until 1960, and later, during my time, elective courses. My father forced me to learn both, because he considered these two techniques important advantages when it came to fighting for your professional position.

Anton Böck was my teacher of these two elective courses. I always did quite well in stenography. Whenever I was forced to learn at home, I spent hours drawing stenographic symbols. For me, this was just like calligraphy. Beautiful. And my parents thought I was learning. In reality, I fled into some kind of “meditative drawing”, thus finding solace in my dreams.
Mr. Böck was a strict teacher and he rather liked me because I was an excellent stenographer. But he also forced me to sit behind the typewriter. I hated the typewriter and even when I was sixteen, I dreamed of what a “nice” and “beautiful” typewriter would have to look like. It may sound a little ridiculous, but I am sure that, without this early negative experience of mine with the generation of text, the InterFace Connection would never have developed a text processing system. Which means it would never have become the rather successful product enterprise it was.

Hans Strack-Zimmermann
Hans was my mentor and the person who had made Unix big, both in Europe and at Siemens (here under the brand name Sinix). He awoke my enthusiasm for his vision and believed in our team. And he helped us a lot. This is how, in the end, our success proved him right.

Dr. Peter Schnupp
Peter was a second generation IT pioneer (I see the generation Zuse as the first and myself as part of the third). IT expert, column writer in the Computer-Woche and also quite famous for many other activities. He had an excellent reputation as an expert.

Peter managed to convince the strategic decision-maker of a huge agency that the future of IT lies in Unix and that there is a great local product for text on the market.
Without this stroke of luck, the project CLOU/HIT would never have been a success.

My projects
Even as a young software developer for Siemens AG in the mid-1970ies, I had worked on a great task. In the course of the development of Transdata, I had developed the “Connection Handling“ and also been part of the team that developed “APS“ (user programming language). “Connection Handling“ has a central importance for “Remote Data Transfer”, as it was then called. With APS, it was possible to decentralize computing power to local “data station computers” (operating system PDN) and thus to be the first to break the centralized main frame principle.

With this “superior knowledge”, it was easy for me to shine during big projects and as a logical consequence of this, I was able to change into the department “special projects sales” at Siemens AG. In this department, my most important project was DISPOL, a central project of the Bavarian Police Force – which, early in the 1980ies had given itself the task of changing from paper filing (data), typewriters (documents) and teletext machines (communication!) to electronic data processing.

I accompanied this project until I founded my own company and in the process, I understood how market, customers and in particular authorities work.

Without this personal history of mine, HIT/CLOU would never have become a successful product.

The people at InterFace 
We employed very young persons for production. More often than not, they were still students when they first came to work for us. And in (almost) all cases, they were the right persons to hire. The speed with which these people became overachievers and took upon them a high responsibility was truly amazing.

The right principles
Along with product development, almost as an accidental by-product, a high-quality counselling and co-operation with Siemens in the field of “Unix Operating Systems” developed. Technologically, we were at the source and we learned many extremely helpful things from our operation systems partner. For instance, we were among the first who started using tools that were not at all common in Europe. And we created many novelties, such as for instance the “National Language Support (NSL)”, which later even made it into XOPEN, becoming the basis for all Unix systems.

We used methods (or rather, we invented them intuitively) such as the four-eye-principle of programming, peer2peer-reviews, “extreme programming“, developer rotation and much more. Those methods did not even exist at the time, or else were not known to us. But it just made sense to do it in this way. In fact, it brought us more than fundamental advantages when it came to developing speed, user-orientedness and quality.

Our developers were always in direct contact with the customers. For instance, they taught the HIT courses for our customers themselves and thus understood what the customers wanted. All these factors contributed hugely towards the quality of our product.

Finances
We were well aware of the difficulties. Consequently, we shared the IF computers during our initial founding phase. For the second phase, the marketing, we had planned to share tasks. The InterFace Connection developed the product and looked after our big customer Siemens. InterFace Computer did the porting to the many other Unix systems and the sales for more hardware producers and partners. Until, later, the InterFace Connection took over the entire affair.
Developing a product necessitates a huge “man power”. And men cost money. In 1984 and the year after that, we solved this problem in a very simple way. Wolf Geldmacher and yours truly worked as consultants. Evenings and sometimes also Saturdays were used to look after the product and the team.

As consultants, we charged 150.- DM per hour. That was a terrific rate and the only reason we got away with it was that US consultants with equal know-how were a lot more expensive.

Now you can do a simple calculation: A good month will bring you 200 man hours (we were rather industrious). Multiplied with 150.- DM, that would earn us 30,000 DM in a good month. Subtracting our salary of 5,000 DM each, after taxes, which makes around 6,000 before taxes, this left us with 18,000 for hardware, Heidi (our assistant, who worked for us right from the start) and our students, the product developers.

As early as a few months after our foundation on April, 1st, 1984, we were able to recruit, and immediately use as consultants, some young computer scientists. They brought us similar money to dispose of. Money we used exclusively for product development. And from late in 1985, the product itself saw to it that we quickly had increasing marginal returns.
Events 
Moreover, there were some rather lucky circumstances that helped us very much.

For instance, Siemens had started a very huge project, wishing to develop their own text system for BS 2000 and Unix. Regardless of the fact that these projects had several times more people working for them than our development team, and also regardless of the fact that the Siemens project developers were all grown software developers, none of these projects seemed to get anywhere. They all turned out more or less complete failures.

Yet the concern Siemens needed such software in order to achieve what they wanted to achieve. Consequently, they had to buy licences from two providers – we were one of them. This is how we became the provider and licenced producer of the then market leader in Germany on Linux.

The “technological time frame” worked in our favour: At the time, Unix replaced the numerous varying computer systems of the “medium-sized data technology” MDT. Our product HIT could not have come at a better time.

Those were also the times when using databases became more and more common. As a brand new definition, you had SQL as a “query language“ based on natural language. There even was a German SQL version! So what better than to extent CLOU, the 4GL (programming language of the fourth generation) that enabled HIT to program text elements, to also include an “embedded SQL“ which would suddenly make it possible to send dynamically generated queries to a database during the running of an element program and to then automatically use the received data for creating a document? That was really sensational, and it also came at exactly the right moment.

Lots of luck and just a little ill luck
It was certainly something special that a federal agency was courageous enough to base its future technology on a totally new technology created by a very small provider. A wonderful market development favouring UNIX. Then there were many more courageous and, for us, lucky customer decisions. And a super team…

There were also some problems
Buying the hardware for the development was extremely expensive. As early as 1985, we had to buy MX500 – which at the time was listed at more than 300,000 DM. For us, this was an unbelievable sum. But it was clear that, without this system, we would never be able to manage the necessary speed of development. Two years later, the machine was already totally outdated. We worked on SUN computers and quasi overnight, new fast PC-s with diverse Unix variants that were considerably less expensive came onto the market.

InterFace Computer backed out, the strategic cooperation was no longer working. Consequently, we were forced to buy the rights to the product. This was a huge investment and a hard decision, yet, in retrospect, it was a decision that paid off.

Other necessary requirements
I am sure there are several more causes and incidents without which the enterprise HIT/CLOU would never have become a success. Some of these might be things I no longer even remember or things I am not really consciously aware of. But without all the aforementioned factors, the InterFace Connection as the producer of HIT/CLOU would never have existed. Many special circumstances and coinciding events taken together caused our huge success.

With this article, I wanted to use my own example to show that many requirements must be met if you want to succeed. And that there are things you cannot plan. I also wrote this to encourage you towards having a (reasonable) readiness towards leaving things undone. Yet I also want to show you that it is not all that easy to found a company and that a pragmatic approach is fundamentally important.

RMD
(Translated by EG)

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