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Software Arts: The First Killer App

It’s easy to forget that when the first personal computers arrived in the late 1970s, many people questioned what value such machines would have beyond entertainment and diversion for hobbyists. After a few years, nobody asked that question anymore-thanks largely to the pioneering work of Dan Bricklin and Bob Frankston, who met during the early 1970s while working together in Project MAC and then went on to co-found Software Arts.

“Dan and I had been talking since our MIT days about doing a business,” recalls Frankston. Bricklin, who had gone off to get a master’s degree at Harvard Business School, discovered firsthand a problem that was ripe for solution by personal computers. Confronted with the typical kind of repetitive calculations that come from the school’s case studies, Bricklin devised a program that would automate the work: the electronic spreadsheet. In 1978, Bricklin and Frankston started playing around with a prototype, which they called VisiCalc. They thought at first that VisiCalc would be a “nice home accounting program,” says Frankston. “I started working on the real implementation in late November and we were able to demo it in January 1979. It took only a few more weeks-about 40 of them-to start a company, find a real office, buy a Prime 550 [minicomputer], hire some staff, finish the program and ship the product.”

VisiCalc is credited with bringing personal computers to the attention of businesses and fueling the sales of the Apple II computer, the machine on which it first ran. Many of Apple’s first customers bought the machines specifically to run VisiCalc; it was the first “killer app.” The program let business managers manipulate numbers with undreamed-of flexibility.

Today, alas, Software Arts is no more. Following the introduction of the IBM PC in 1981, domination of the spreadsheet market slipped away from Bricklin and Frankston. The new champion was Lotus Development Corp., with a more advanced PC spreadsheet called 1-2-3. Eventually, Lotus bought Software Arts. Frankston went on to work in high positions at Lotus and Microsoft and is now an advisor to many companies. Bricklin is founder and chief technology officer of Waltham, Mass.-based Trellix, which is developing tools for publishing documents on the Web.

RSA: Masters of Encryption

Life on computing’s cutting edge can be a disadvantage, as it accentuates the difficulty in establishing a market niche. Sometimes, in fact, the technology turns out to be a solution looking for a problem, at least for a while. RSA Data Security-a pioneer in commercializing an ultra-secure form of data encryption known as “public key”-is a case in point.

“We put together a business plan thinking that secure telephones would be the place to start the business,” remembers Ron Rivest, who founded the company in 1983 along with LCS colleagues Adi Shamir and Leonard Adleman. While the company tried to finance and build a prototype, Rivest started working on a software implementation of the RSA encryption system that would demonstrate the technology. In those days, he recalls, “one of the problems with encryption was that nobody understood it at all. So we were developing demonstration software for education purposes-to illustrate what public key could do.” After a few years of failing in the secure telephone market, RSA’s management realized that secure telephones “were not the best place to start the market.” Meanwhile, those “educational” software demos turned into real products, which found a ready market.

RSA’s path to riches was not through selling either hardware or software, it turned out, but by marketing “tool kits” that other companies could use easily to build the RSA algorithms into existing products. RSA’s first big customer was Iris Associates, which built RSA’s technology into a “groupware” program called Notes that it was creating for Lotus. Its second licensee was Novell, which built the technology into its Netware software for running local area networks.

Although Shamir and Adleman soon ended their affiliation with RSA, Rivest stayed with the company, which was sold to Security Dynamics in 1996 for $250 million. Rivest now divides his attention between RSA and his teaching and administrative duties at MIT. He is an assistant director of the LCS-another case of the Lab’s ability to nurture and sustain innovators after (or between) their entrepreneurial exploits. Rivest continued to invent cryptographic algorithms, many of which RSA commercialized.

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