There was one thing I did which surprised the others. I went out and bought the best computer I could buy. While the others had seen them, and Jake Senior had even had bought a home computer for his kids to play with or for games, they were still very exotic in 1982. I spent what was a small fortune at the time for an IBM 5150 PC with a CGA video card and color monitor and dual 5¼" floppy drives, with PC-DOS as the operating system. I had been away from math and computing for years, and needed to get back to it.
I kept it at the office and went there to study and practice programming in DOS and GW-Basic. I also bought a matching unit for home, since I could store stuff on the floppy disks and take them back and forth. That didn’t work out so well. Marilyn balked at putting it on the dining room table and Charlie would see it and want to play with it.
We had a big meeting in my new office once it was livable and I had refamiliarized myself with DOS and Basic. It felt like I was moving back to the dawn of time, but I had done a shitload of DOS and Basic programming back in the day. I looked around the room and then pointed at the computer on a side desk. “That machine there is the future, and I want to invest in it,” I told them.
“You want to buy stock in IBM?” asked Melissa.
I shook my head. “Absolutely not. Remember when I told you about computers a few months ago? There are three parts of any computer system. You have the hardware, the box and the TV screen and the keyboard and all the hard parts.” I reached over and rapped lightly on the metal case to the computer.
“Next you have two types of programs. One is called the operating system. It tells the box what to do, how to make the pieces run and turn on and turn off and do stuff. That’s the second part of the system.”
“And the third part?” asked John.
“Those are the programs that you run, like an accounting program or a typing program.”
“And those aren’t the same as an operating system,” he replied, with a half question and half statement tone.
“No.” I grasped for an analogy. “It’s like a railroad system. The computer is the rails. They go everywhere and you absolutely need them, but without any engines or the cars, they are pretty much useless. The operating system is the locomotive. It drives around on the rails and can do things, but by itself, it’s pretty useless. What it needs is cargo to haul around, the boxcars and tankers and whatever. Those are the programs, or applications. Following me?”
He nodded slowly. The others were watching the two of us, but not weighing in. “And you can’t do anything without all three pieces, rails, locomotives, and cars.”
“Precisely.”
“Okay, and you don’t want to buy the companies that make the hardware, the rails in your analogy,” he asked.
“Nope. It’s just like with the railroads. Any idiot can make steel rails and lay them out on the ground. The guy who can make the cheapest rails wins. It’s a commodity business and nobody makes any money, at least not for very long. No, you want to be the guy building locomotives and boxcars,” I answered. “I want to invest in the operating systems and the application programs.”
Jake Senior chimed in at that. “For all the types of computers out there, or just that IBM type you bought?”
“IBM. Within a few years almost everything will be an IBM or an IBM compatible anyway. All those others will be gone,” I told him.
“All of them!? I just got the kids a Commodore 64!”
I shrugged and gave him an evil grin. “So, if we do this right, in a few years, you’ll be able to afford to buy each of them an IBM computer.”
“Shit!” he said disgustedly.
I explained how the IBM open architecture allowed them to greatly increase the speed of innovation and improvement, but made the hardware end of the business a game for suckers. I also explained, like I had done before, how Microsoft and their operating system, was going to be the big deal in all of this.
“So you want to invest in Microsoft?” asked Missy. I nodded and she continued. “I looked into them a few months ago, when you first mentioned their name. You can’t buy them. The company isn’t publicly traded. By the way, they aren’t in Redmond, but in Bellevue.”
Damn! That was right! They moved to Redmond later! “It’s just a different Seattle suburb. Anyway, that just means I can’t buy them on the stock market. We can offer to invest, however. When they do an IPO, we make a small fortune. That’s if we sell. If we hold our shares, we make an even bigger fortune down the road.”
“So, what’s the plan?” asked Jake Junior.
“The sooner we do this, the better. I promise you all, this is the company to do business with. It will only get more expensive in the future.” I looked at Melissa and said, “I want you to find out as much as possible about Microsoft and the founders of the company. Most of all, I want to get an appointment with Bill Gates as early as possible. I’ll fly out and meet him as soon as he’ll see me. This week or next.”
Next I turned to Jake Junior. “Okay, Vice President of Operations, I want some cash to buy stock with. Figure out how to raise $5 million in cash by the time I fly out there. If we have to sell some stocks, which ones? Can we free up some cash by using margins or selling options? Can we do this without going broke or going to jail?”
The young man goggled at me. “Five million?”
“More if we can. I don’t want to buy the company, but I want a piece of the action.” I looked at the other two men and said, “And keep an eye on them and help them. If I can do this, I want to do it quick, so figure out the mechanics of doing this and doing the paperwork and the due diligence. The longer this takes, the higher the price will be and the lower the amount of stock we can buy.”
Everybody kind of stared at me and each other for a moment, but then they left. John lingered in the doorway. “You think these things are worth investing five mill?”
“John, if you could have invested five million with Thomas Edison a hundred years ago, what would it be worth now?”
He rolled his eyes and left. I thought about what I was doing, and then drove home. As a budding tycoon, I wanted a little afternoon action with Mrs. Tycoon.
And so I found myself flying out to Seattle-Tacoma on Monday, July 19. Missy had gotten me an appointment to meet with Gates on Tuesday morning. I figured it was a little ostentatious, and reckless with the company money, to charter a flight direct, but I did take one of Lloyd Jarrett’s turboprops to Philly, where I caught a non-stop American flight to Sea-Tac. I did insist on flying first class.
I had offered to take Marilyn, suggesting we could do another little parents-only trip, but she had put me off. “Remember, one trip for us, one trip for the family. You owe us a family trip, first.”
“We can stick Charlie in one of those doggy carriers down in the luggage compartment,” I countered.
“Forget it! Anyway, we still need a real family trip. I was talking to Anna Lee yesterday and she said we hadn’t seen each other since last summer, and she’s right!”
I gave her a wry smile at that. It was true. The last time we had seen our friends was right before I deployed to Honduras. Now, Harlan had gotten his promotion to captain and was assigned to the 25th Infantry, commanding a mobile artillery battery. “You’re right, we need to visit them. Where are they stationed, anyway?” I knew he was with the 25th, but for the life of me I couldn’t remember where they were based.
Marilyn grinned. “Hawaii!”