Mitch Kapor founded Lotus Development with
Jonathan Sachs in 1982. Their spreadsheet
software, Lotus 1-2-3, quickly surpassed
VisiCalc to become the new industry standard.
VisiCalc had been the original “killer app”
for personal computers. Kapor was a VisiCalc
product manager at Personal Software when
he wrote VisiPlot and VisiTrend, companion
products to VisiCalc. He left to found Lotus
just as legal conflicts were distracting
VisiCalc’s developers, and the arrival of the
IBM PC opened a window of opportunity for a
better spreadsheet. Lotus 1-2-3 could handle...

computer. It was incredibly innovative. It started generating sales of Apple IIs,
and it was a cut above everything else.
The authors of VisiCalc were Software Arts. The publishers were Personal
Software, which then changed its name to VisiCorp somewhere along the way.
I knew the VisiCalc authors because they came to the meetings of the Apple II
user group that I had cofounded, and that’s where I first saw VisiCalc in probably
1979.
They introduced their publisher to me—this is Dan Fylstra and Peter
Jennings—and they said, “We would like you...

that I needed to totally rewrite Tiny Troll to be much better, and give it a totally
new user interface, and so on. Based on that misunderstanding of what done
was, I said to the publisher, “What I want to do is to come out to California”—
which was where they were—“and you should hire me to be your new product
manager. I can finish this thing in my spare time. It’s almost done.”
Now why did I want to go out there and be the product manager for the
publisher? There were a...

VisiPlot. That was important because it provided a way to actually make graphs
out of spreadsheet data, which was an obvious piece of functionality.
Bob Frankston had developed something called the data interchange format,
and VisiPlot was one of the first other software applications to support it.
I’d worked with Bob on that—he played the lead role, far and away. But while
there was a way of moving data between these two programs, it was really
cumbersome. There were no hard drives in those days. Everything was on
floppy disks, which had limited...

and that I was getting was very high. My royalty rate was 33 percent of their
gross margin. And VisiCalc’s was higher—they got 35.7 percent. At the time the
contracts were done, the economics of the business, which was a new business
of packaged software for PCs, was not well enough understood to know that
that was obviously an insupportable thing to do. But it quickly became apparent,
because huge sums were flowing back to the authors, but the publisher was
the one that was incurring very significant expenses for support—which was
their...