No. of Recommendations: 28
Every quantum leap in technology breeds euphoria with investors (speculators) pouring money into everything that sounds remotely like the "cool stuff". While I lived through the original dot-com period with its manic stock market driven by companies who didn't make a dime, followed by the crash which developed when they couldn't justify the money invested in them and they went belly up, it wasn't the first mass extinction I lived through.
Just for fun, I looked up what I think was my first ad in Byte Magazine (a nationally distributed technology magazine popular enough that they ran over 500 pages long) which ran in 1981 found on the right-hand page here:
https://archive.org/details/byte-magazine-1981-11/...Out of the dozens of manufacturers listed, Xerox is still around (though diminished) as are the Japanese printer manufactures (Epson, Okidata, NEC and C.Itoh - which doesn't sell printers and is now known as Itachu, one of Berkshire Hathaway's Japanese holdings) as well as Texas Instrument (manufacturer of the "TI"-810). And Microsoft has a cameo mention. While not listed in my ad, Apple was already around is a survivor.
The average annual rate of inflation in the U.S. from 1981 to 2025 is approximately 2.93%, based on the Consumer Price Index (CPI). This resulted in a cumulative price increase of about 256.41% over 44 years, meaning that prices in 2025 are roughly 3.56 times higher than they were in 1981. Taking that into account, prices taken for granted back then, like a 10mb hard disk for $5,000 would be over 15 grand in todays bucks. Daisy wheel printers were over $1,500 dollars in 1981 dollars or nearly $5,000 in todays equivalent.
Incidentally, my business plan (such as it was) was required due to having very little in the way of capital. I spent half my budgeted bankroll by buying three months of full page ads in Byte Magazine (on the premise that a company's stature was based on the size of their ad. I hired a typesetter from a local newspaper to moonlight to do the copy). I had spent a fair amount of time, in advance, setting up vendor relationships with manufacturers and distributors throughout the US. The deal was the customer sent me a check. If it was certified, I would immediately buy the items he/she ordered from the nearest source to their location to be drop-shipped with my paperwork (as if from my local warehouse). If the check wasn't certified, I shipped when it cleared my bank. Since I was buying on 30-day credit, my inventory was an ever-growing pile of cash. I made certain to pay every bill on time (against the advise of the professors when I took my MBA). While it took a while to build up a reputation, the practice gave me virtually unlimited credit and far more negotiating leverage with vendors than a company my size should have had. For a number of months, I had one employee (me) and ran the operation out of around 100 square feet (10 square meters). I did have the advantage of it being located at my on-going business which kept the lights on, the phone bill paid and provided a bookkeeper sufficient to handle the handful of sales each day. I had positive cash flow and was profitable from day 1.
This fortunate business model allowed me to begin bidding on sizable government contracts. The government required the ability to buy on credit at a time when my competitors had their money tied up in ever depreciating inventory and lousy credit to boot. Throughout my business's tenure, I actively tried to keep inventory at a minimum, but to speedily fulfill products acquired from the large network of sources I had curated when we were primarily a mail order operation. Long story made short, things worked out well.
Interestingly, almost all of the manufacturers who replaced the guys I advertised are also no longer in the business today. The market is now dominated by Asian manufacturers and a small number of US ones whose equipment is all built by Asian companies on their behalf.
Jeff
