THE CREATION OF ALDUS

Excerpts From and Interview with Aldus' Founder, Paul Brainerd

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_Interviewed by Suzanne Crocker excerpted by Len Shutek

The Computer History Museum has an active oral history program to gather videotaped histories from the pioneers of the information age. These interviews are a rich aggregation of personal stories that are preserved in the collection, transcribed, and made available on the web to researchers, students, and anyone curious about how invention and entrepreneurship happens.

Presented here are excerpts from an interview with Paul Brainerd, the founder of Aldus, whose flagship product PageMaker established the PC-based “desktop publishing” industry. The interview was conducted on May 16, 2006.

 

What was your early publishing experience?

In graduate school, I was the editor of the University of Minnesota Daily, a 35,000-circulation daily with a staff of over a hundred students. I learned a lot of valuable lessons there both on the editorial side as well as from a business perspective. I then went to work for the Minneapolis Star Tribune for seven years as assistant to the operations director. We converted from “hot type” composition in the composing room to “cold type” using computer typesetting, and I developed the contracts and the specifications with the various companies. The most important was Atex, who made a text-editing system using computer terminals for reporters to write their stories.

It was an exciting time, getting grounded at a newspaper that had been there for a long time, and being mentored by some excellent people. But it would have been pretty hard to advance there unless I stayed for another 10 or 15 years.

So I joined their supplier, Atex, and moved from newspapers to high-tech. Things moved a lot faster! At the Star Tribune, everything required a proposal and two or three months to make a decision. At Atex, things were decided around the water cooler, sometimes in a matter of minutes. I stayed until Atex was purchased by Eastman Kodak in 1983.

 

Why did you start Aldus?

This whole idea of page layout was near and dear to my heart because I had done it the hard way with exacto knives and razor blades and wax on the back of cold type. Atex was a better but very costly system, mostly used for the larger metropolitan dailies and publications like Newsweek. It was fairly arcane, and it could take a month to learn the commands.

So I took the small nest egg from Atex stock plus all my savings—roughly $100,000—and gave myself six months to write a business plan and build a prototype. The engineers worked for half salary, and I worked for no salary. I wrote the business plan, and with the engineers developed the functional specifications for what became PageMaker.

During the summer of 1984, I tried to raise money and was told “no” 49 out of 50 times. The venture capitalists felt that a software company didn't have any long-term market value. Microsoft hadn't gone public yet! We got to our drop-dead date in September with less than $5,000 left.

Finally, we got a commitment from Vanguard in Palo Alto, who understood why software might have value. We raised $864,000 based on our business plan and a very rough prototype, and we shipped PageMaker 1.0 the following July.

 

Who was the customer?

When we formed the company in January of ‘84, it was the professional user. But I made one really smart move, which was we loaded everybody up in my Saab—myself and the three engineers—and took a trip to talk with potential customers about what we had in mind: a page-layout solution for small newspapers. We learned that all these newspapers were owned by chains or other corporate entities, and that their decision-making was typically a one-to-two-year process. That trip convinced us that we would be out of business by the time we sold anything.

That's why it's so important to talk to customers. They loved it, but I realized it wasn't the right market. So I totally revised the marketing section of the business plan to focus on small businesses, churches, schools, and small publishers.

We really underestimated how fundamental the value proposition was—what the “three-legged stool” of Page-Maker, the Apple LaserWriter and the Macintosh could do. We were providing an order of magnitude gain compared to the frustrating and costly proofing cycle using a typesetter.

We showed it in January of 1985 when the LaserWriter came out, and people couldn't believe that we could do output of that quality.

 

Who was the competition?

Our first competition, before we even released the product, was Microsoft, which we were very scared of even then. They had acquired a product from a third party, and put marketing materials together describing pretty much exactly what we were planning on doing. But the product never worked. The code was riddled with bugs and they had to withdraw it from market.

I'd say about half of our competition was like that, and simply dissolved over time. The other half stayed around but made other errors along the way.

 

What was the association with Apple like?

The alliance was critical to both companies. For Apple, it was critical to the success of the Macintosh, and for Aldus, it was critical to our survival because we did not have the budget to bring PageMaker to the broader market.

We developed a whole desktop publishing marketing plan, which they funded a lot of, including full-page ads in The Wall Street Journal. Apple was putting a million dollars plus a month into it, and that gave us incredible momentum. We could never have done that without them.

 

What challenges arose?

When PageMaker was first released at a price of $495, that was almost unheard of on the Macintosh. But it allowed us to have a gross margin of almost 90 percent and gave us all the money we needed to reinvest in customer service, support, and product development.

The problem was that as the industry started to mature in the early ’90s, it became more about marketing and distribution. The margins started to go down, and you either had to acquire other companies or be acquired to continue to be successful.

We had become a public company in 1987, which fundamentally changes a company because suddenly you have public shareholders that are no longer interested in long-term product development. I ended up spending way too much of my time dealing with attorneys and shareholders, and less time doing the things I really enjoyed: talking to customers, understanding their needs, and working with the engineers to develop the products.

After seven or eight years, I went to the board and said, “I've really got to work out a transition plan here.” The initial concept was to find a replacement, but we tried that two times and it didn't work. It's very hard, as you know, to replace a founder in this industry.

Instead, I actively solicited Adobe to acquire us. I felt that overall there was good synergy with our product lines, even though there was some overlap with FreeHand and Adobe Illustrator.

 

What made Aldus and Adobe compatible?

At a 30,000 foot level, we had similar approaches to running a company. But at a working level, there were some very definite philosophical differences.

There was a definite difference in the customer orientation. We spent a lot more time talking to customers. Adobe's philosophy was more of an engineering-based one: if we make a great product, like PostScript, sooner or later people will want it.

But the reason I even considered Adobe was their underlying ethical standard of running a high-quality company that was fair to their customers and their employees. Unfortunately, that couldn't be said of all the companies in the industry.

A lot of thought went into the merger, and I think it was one of the best. We were very honest with employees, and very clear about who would be staying and who would not. We gave a fair severance package, and a bonus to those who needed to stay through the transition. I think 99 percent of the employees felt that they were treated very fairly.

I then made a clean break with the business world and technology, and was off on my new career in the non-profit world. I endowed the Brainerd Foundation, which gives out about $3 million a year in support of environmental and social programs. It is very gratifying work because of the impact it has on people's lives. And we are grateful for the impact that Aldus had.

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CHM has conducted more than 300 oral histories since this initiative began in 2002. The online collection provides 150 transcribed interviews available to the public.

For pictures and full transcript of Brainerd's oral history, and the full 25-page transcript of Brainerd's oral history, visit: computerhistory.org/collections/oral histories. Title: Brainerd (Paul)Oral History CHM#: 102657986

Oral history interviews are not scripted, and a transcript of casual speech is very different from what one would write. We have taken the liberty of editing and reordering freely for presentation.