WOMEN / PC SPECIAL................. HOW TWO BORED 1970S HOUSEWIVES HELPED CREATE THE PC INDUSTRY

HOW TWO BORED 1970S HOUSEWIVES HELPED CREATE THE PC INDUSTRY

VECTOR GRAPHIC BECAME ONE OF THE BEST-KNOWN COMPUTER MANUFACTURERS OF ITS ERA. IT WENT PUBLIC. THEN THE IBM PC CHANGED EVERYTHING.

In April 1977, Steve Jobs and Steve Wozniak rented a booth at the formative industry conference for the personal computer, the First West Coast Computer Faire in San Francisco. They were there to launch Apple's first breakthrough machine, the Apple II.

What few people know today is that only a few rows away at the same show, two women from Southern California were busy launching an innovative machine of their own. Lore Harp and Carole Ely of Westlake Village brought along the Vector 1, a PC designed by Lore's husband, Bob Harp. The computer derived its title from the name of their young company, Vector Graphic, Inc.

At a time when Vector and Apple were both tiny firms looking to gain a footing in an entirely new market, it was not instantly obvious which company would become more successful—for example, Byte magazine's report on the conference mentioned Vector but spilled no ink on Apple, which would eventually become the most valuable company on the planet.

For its part, Vector Graphic went on to become one of the best known PC makers of the late 1970s. Like Apple, it was one of the first computer companies to go public, and like Apple, it set its products apart from the crowd with its attention to industrial design.

But unlike Apple, Vector vanished from the face of the earth. It faded from our collective memory because it did not survive the massive industry upheaval brought about by the release of the IBM PC in late 1981. Very few PC makers did. But the story of how the Vector trio went from nothing to soaring success—and then collapse—is a tale worth retelling.

"I CANNOT STAND BEING AT HOME"

Traditionally, people move to the suburbs specifically to avoid novelty. And yet, in 1970s California, suburbia often served as a crucible for entrepreneurial risk-taking.

Many know the story of how Steve Jobs and Steve Wozniak launched Apple with a foothold in the Jobs family garage in suburban Los Altos, California. Around that same time, about 350 miles south, a spirit of entrepreneurship similarly captivated an entire Westlake Village household. In fact, it pulled in the neighbors, too.

The Harps, who moved into the area in the early 1970s, were a typical suburban family: a father that worked in an office all day, a stay-at-home mom, and two elementary-school-aged girls. That father, Dr. Robert Harp, spent his days as a senior scientist for Hughes Research Labs in Malibu, and his wife, a recent German immigrant named Lore, kept house.

When Lore Lange-Hegermann first visited California in 1966, on a solo trip at the age of 20, she discovered an energizing atmosphere of freedom from parental meddling and a general sense that anything was possible. "I felt as though I was cutting the umbilical cord for the second time," she recalls.

Against the wishes of her parents, Lore decided to remain in the States. She picked up odd jobs until she met Bob Harp, who worked as a member of the faculty at Cal Tech. The two got married and had two daughters, and Lore earned a bachelor's degree in anthropology from Cal State, Los Angeles.

By 1975, Lore began to feel antsy. She found her talents wasting while her kids spent their days in class and her husband did the 9-to-5 at Hughes. Against this, as with her parents, she rebelled. ''I cannot stand being at home,'' said Lore in a 1983 New York Times article. ''It drives me insane. Everybody thought I was strange because I would not go to the bridge club or have my fingernails done.''

Lore Harp met a kindred spirit in the form of a neighbor, Carole Ely, whose kids shared classes with the Harp children. Like Lore, she found the life of a homemaker wanting. "We were bored doing the housewife thing," recalls Ely today. "I was ready to be something." Just a few years prior, Ely had worked for large investment firms such as Merrill Lynch on the east coast, and she was itching to get back to business.

Together, the pair of bored housewives decided they needed something more productive to do. They began to explore ideas for starting a new business. Drawing from their shared love of travel, they first considered starting a travel agency, but the licenses required to operate one proved too burdensome and the possibility of profits too slim.

Then a uniquely 1970s opportunity popped up. During an era when the typical small computer came in a refrigerator-sized chassis and cost tens of thousands of dollars, an Albuquerque engineer named Ed Roberts took advantage of the incredibly-shrinking microprocessor to create a computer that hobbyists could build themselves from a kit.

That machine, the Altair 8800, debuted on the cover of the January 1975 issue ofPopular Electronics, which reached a wide audience of technically-minded people. Roberts's company, MITS, became the pioneering firm of the personal computer revolution.

One of the many electronics buffs who saw that article—and placed an order for an Altair kit—was Bob Harp. When it arrived, he found its memory board poorly designed. Instead of returning the kit, Bob reacted like most engineers of the time: he created his own memory board to replace it.

As a kid, Bob began experimenting with electronics when his family moved to a farm without electricity. He sought to build his own battery-powered crystal radios so he could pick up the radio shows he had grown fond of at his old house. It was frustrating, but the quest ignited a love of science which led him to acquire degrees in physics from Stanford and MIT.

Bob's first computer electronics project emerged from the Altair in the form of that 8K static memory board. It plugged into the Altair's 100-pin expansion bus, which the industry later dubbed S-100 in a nod to vendor neutrality. That bus became the basis of the first personal computer hardware standard—one that typically ran Digital Research's CP/M operating system. A rich industry sprouted around this fertile oasis, with multiple companies providing plug-in CPU, memory, video, and other peripheral cards for S-100-based systems. Meanwhile, other firms specialized in the software necessary to make those systems useful—including an outfit known at first as Micro-soft, founded by Bill Gates and Paul Allen.

Bob Harp's memory board worked well, and he recognized that it could serve as a lucrative commercial product. Lacking the time and resources to commercialize it, he put it on the back burner for almost a year. But in 1976, when his wife and Ely were trying to hatch a business, he offered his Altair memory board as a potential product.

As exciting as the opportunity sounded to Lore, computers represented completely foreign territory for both her and Ely (and, for that matter, nearly everyone else on the planet in 1976). Lore recalls: "I called my friend and I said, 'Carole, what do you think about starting a computer company? I have this little 8K RAM board.' She said, 'What’s a RAM board?'"

To familiarize Lore and Carole with the nascent field of personal computers, Bob Harp took the pair to a local computer show. There, the trio witnessed an eager, untapped market full of enthusiasts peeling off wads of cash to purchase unrefined, half-baked products. "It was an entirely new industry," recalls Bob. "In modern industries, the products are all good. They've been perfected over many years. But at that time, the competition was very poor."

Lore and Carole found the idea of having their own physical product to sell appealing. With a good technical underpinning and a focus on style and aesthetics, they knew their boards could stand ahead of the pack. The pair even went so far as to seek out specifically-hued capacitors that would not clash with the other components on their circuit boards. "I don’t know what people thought of us: two females looking for colored capacitors," Ely toldInfoWorld in 1982. "But we were interested in what colors went into our boards."

As the duo geared up to start the machinery of a new corporation, which they registered in August 1976, Bob suggested the title of the new firm: Vector Graphic. He based the name on a certain type of video board he wanted to design. He never did design that board, but the name stuck.

Despite originating the name and the product, Bob decided to keep his steady job at Hughes while Lore and Carole ran the Vector business. (When they couldn’t answer a customer question, they called him at work.) Lore Harp became president and CEO, and Ely specialized in marketing and communications. Bob Harp, who became chairman, didn’t join the company on a full-time basis until July 1977.

Lore Harp and Carole Ely started Vector with $6,000 in capital. The pair soon hit upon a formula for selling Bob's board in kit form via mail order, advertising in nationwide magazines. By requiring cash-on-delivery and allowing no returns, the company found itself cash flow positive from the very beginning.

Lore and Carole set up two desks in a spare bedroom of the Harp residence, and for a short time, the whole family helped assemble the computer boards in their suburban electronics factory. According to a 1982 Time magazine article, they tested computers on the dining room table and kept packing materials in a shower.

When it came time to negotiate with component suppliers, Lore initially had trouble convincing them that the pair meant serious business. Lacking a formal office, she tried to take meetings outside of the house whenever possible. (Eventually, Vector grew big enough that it moved its operations into a former department store.) AMD wanted astronomical prices for memory chips, but finally, they struck a better deal with Fairchild, which supplied Vector's chips for some time.

"LET'S DO THE WHOLE SYSTEM"

Vector's memory board proved wildly successful—by the standards of the still-minuscule industry—and its sales fueled rapid growth. Soon, Bob designed other boards for S-100 bus machines, including a PROM board that eliminated the need for hobbyists to manually enter a boot-up program sequence via front panel switches (as was the norm with the Altair at the time). He followed that with a text-based video board, another memory board, a serial I/O board, a power supply, and a motherboard that allowed the boards to connect together. Hobbyists received each of these constituent pieces with enthusiasm, and they all sold fairly well. As business continued to grow, the next step for Vector became an obvious one. "We saw that there was a good market for the individual boards," recalls Bob, "so I said, 'Well, let's do the whole system.'"

The result was the Vector 1, launched in 1977, which shipped in two case colors, green or orange (or "rust" as they called it at the time). Lore and Carole's emphasis on visual aesthetics led them to offer this choice of colors at a time when many companies gave little thought to what their computers looked like (and it was only starting to become a given that PCs shipped in a case at all). An attempt to order orange circuit boards to match the orange case went awry when the first batch of fifty came back pink.

Distinctively, the Vector 1 came equipped with only two front panel buttons—power and reset—which symbolized ease-of-use in an era marked by rows of intimidating toggle switches. (A later variant called the Vector 1+ built a floppy disk drive into the case; it was the first PC to offer this feature, which eventually became an industry standard.) The Intel 8080A-based Vector 1 retailed for $849 fully assembled (about $3,288 today when adjusted for inflation) or $619 as a kit.

WE ALWAYS LOOKED AT THE APPLE II AS MORE OF A TOY.

At the time of the Vector 1's launch, personal computers retailed through mom-and-pop shops and tiny chains. To market their PC, Lore and Carole began contacting every dealer they could find, building valuable relationships that turned into an impressive international dealer network within a few years. The retailers would sell Vector's products to local customers, and soon, Vector began training the dealers with a certification process for customer support as well. The loyalty of this network would became the company's ace-in-the-hole during the intensely competitive years ahead.

In April 1977, when the Vector 1 and Apple II both launched at the West Coast Computer Faire, the two firms (who happened to be located hundreds of miles apart) never dealt with each other. Vector felt it was targeting the high-end of the relatively mature S-100 market, while Apple was marketing an entirely untested new architecture for the everyman. As a result, Vector did not find Apple's products threatening at first.

"We always looked at the Apple II as more of a toy," recalls Lore, "We went immediately after the business market, and not so much the personal computer market." Bob Harp agrees, although he greatly appreciated Wozniak's design of the Apple II. Carole Ely remarks that she envied the Apple II's stylish design and appealing nature to individuals.

The PC market as a whole grew at a torrid pace, with revolutions in design and price rolling in every week. Within two years, the industry moved away from hobbyist build-it-yourself kits and into more whole-widget, plug-and-play systems. All the hallmarks of an S-100-based system—the large, individual boards with numerous components, the hulking metal chassis, big power supplies, and expensive connectors—meant that S-100 machines could not compete cost-wise with less complex home PC systems.

As those budget machines (such as the TRS-80 and Commodore PET) captured the lower end of the PC market, S-100 vendors like Vector, Cromemco, and IMSAI quickly shifted into the upper-end of the personal computer market where profits were comfortable, and where sophisticated business customers regarded the endless customization options afforded by S-100-based machines as a boon.

The difference in price between the old-school S-100 computers and the new consumer PCs could be dramatic: In 1979, a floppy disk-based Apple II+, the high-end of the home PC market and the low end of the small business market, retailed for around $2000 in a bare-bones configuration. A Cromemco or Vector S-100 bus system (depending on RAM and if it shipped with a hard disk) could cost between $4000 and $20,000—and that's not even counting for inflation, which reveals that the modern price equivalents of those higher-end computer systems soars into Mercedes-Benz territory.

But as those cheaper machines became more and more capable, Vector found Apple nipping at its heels. A key moment came in 1979, when the first spreadsheet, VisiCalc, prompted many businesses to consider buying a computer for the first time—and VisiCalc only ran on the Apple II. "It was just huge competition from both sides, from the top to the bottom of the market," recalls Ely. "The top end, the systems end, and the bottom end, the personal end, with Apple."

ONWARD AND UPWARD

With the small-business strategy in mind, Vector's sales rocketed, and the firm introduced successor machines throughout the late 1970s that served their desired market with ample productivity software packages and complete turnkey systems.

Soon, the story of the California housewives who created a multi-million dollar company captivated the press, and Lore Harp found herself on the cover of multiple magazines.

Vector was quickly becoming a big deal—one of the earliest examples of a PC brand that broke free of the industry trade mags and into the mainstream. "While Godbout, Morrow, Cromemco, and a number of new S-100 machines and and cards can be seen in the latest issue of Byte," wrote pundit-to-be John C. Dvorak in InfoWorld, "you'll find Vector Graphic advertising in BusinessWeek and Lore Harp on the cover of the March 1981 issue ofInc., a small-business magazine."

In the industry, Lore and Carole became known as the "girls in green and white" for the company colors they often wore to trade conferences. Lore became a press darling. She enjoyed friendships with industry luminaries like Bill Gates and pundit-turned-PC-company-founder Adam Osborne. In the early 1980s, she would even end up partying in Paris, France, with California governor Jerry Brown and Steve Jobs as part of a delegation of California technologists.

Lore wasn't just regarded as a tech celebrity, but as a business maven in her field. In a1983 article published after Vector began to run into trouble, the New York Times' Michael S. Malone said that "Lore Harp quickly showed she was more than just a business manager as she guided the company with a shrewd sense of the market’s needs and possibilities."

As chief executive, Lore prided herself on frugality, positive cash flow, and avoiding debt. And on a personal level, she says that she found her role as a mother of two young girls to be a significant business asset, parlaying her maternal instinct into a respect for the well-being of her employees and their families. "Vector was a very close family, and a good bit of this was directly attributable to how Lore ran the company as our CEO," recalls Dennis Wingo, who worked as a technician for Vector during the early 1980s.

According to Wingo, Lore became known for her people-centric management style, running her company as a meritocracy with promotions accorded by accomplishments and actual skill rather than educational bona fides or gender. When asked in a 1981 interview why she did not specifically hire more women at Vector, Lore remarked that she hired whomever was best for the job, regardless of sex.

Today, Lore says she never encountered significant opposition from men in the industry. When she heard rumors of the the term "ice maiden" used to describe her, she took the name-calling as a sign of her effectiveness and moved forward.

In her prior career on Wall Street, Carole Ely had witnessed fewer opportunities for the advancement of women in those firms. At Vector, she found no such troubles—perhaps due in large part to the fact that she and her boss, both women, had defined a company culture that strived to operate in an equitable manner.

Meanwhile, Bob Harp felt the media paid too much attention to the fact that Carole and Lore were women, when it was he, in fact, who made the company possible with his hardware designs. (Still, he admits today, he admired Lore's tenacity and ability to lead.)

As head of PR, Carole understood the appeal of a woman tech executive, and had no trouble stepping aside while Lore emerged as the face of the company. "It just happened naturally," says Ely. "People would meet Lore. She was out there all the time." But this unrelenting focus on the company's female president began to ruffle Bob's feathers. Carole recalls that when press attention turned to technical interview questions, she always included Bob Harp in discussions with journalists. (Looking back over press coverage of the time confirms this, although he was never featured as prominently as Lore.)

In retrospect, it's clear that the early success of Vector resulted from a team effort, and that the company thrived on the unique combination of talents of its founders. Between them, Lore, Carole, and Bob represented three of the primary divisions of any technology company—management, marketing, and engineering—and that is a powerful recipe for any founding team to have. "It was a good group, the three of us," says Ely. "A good trio."

With great successes come great pressures, however, and in 1980, the partnership began to crack at the seams. The stresses of the company took a heavy toll on Bob and Lore's marriage, prompting them to seek a divorce, which sent ripples of discontent throughout the company. (Time quoted Bob Ely: "It was an ego conflict. She wanted to do things one way; I wanted to do them another.") While Lore hoped that the break-up would have little impact on the future of the firm, the split between the company's president and its chief product designer set the stage for rough times. It was a bad time to be having problems, because Vector's toughest days lay just ahead.

THE LUMBERING GIANT AWAKENS

Around 1980, IBM began knocking on doors in the microcomputer industry under the pretense of potentially licensing existing computer hardware to serve as its own IBM-branded personal computer. IBM used its clout as the leading mainframe computer maker to convince many small PC companies to "open the kimono" (in the parlance of the day) to reveal the nature of their technology and information on how lucrative the PC business really was. The company famously conferred with major software developers Digital Research (which didn't take the visit too seriously) and Microsoft (which did).

Vector received one of these visits from IBM in 1980. Don Estridge, head of the new PC project at IBM, arrived with seven associates at Vector's headquarters, which was then in Thousand Oaks, Calif. Lore recalls the scene: "I looked at him and said, 'You know, this is a joke. You have $25 billion in revenue. We’re a $25 million company and you want to OEM from us?'"

No agreements were made, but the meeting ended on polite terms and IBM walked away with a Vector 3 system for evaluation. "I called a meeting immediately afterwards and said, 'We have one year before they come in, and the whole world is going to change,'" recalls Lore.

From her vantage point in marketing, Carole Ely was terrified of IBM entering the business. "It totally freaked me out," she says. "IBM bought one of our systems and took it down to Boca Raton where they had their new development labs. We thought, 'Well, there we go. Let's see what happens.'"

With clear signs of IBM entering the small systems business, Lore knew the clock was ticking. She set a goal to take Vector public while she still had the chance.

While IBM did not end up using Vector's hardware (or even copying it, as some at Vector had feared), IBM did something even more devastating: they studied the very effective relationships Vector had made with its business software suppliers, including Peachtree Software, maker of a popular accounting package. Before the launch, IBM had extended secret contracts to several of those software vendors, assuring that the IBM PC would also be able to run the applications right from the start. This undermined a great deal of Vector's software-derived competitive advantage in the small-business PC world.

It was not yet obvious to everyone in the industry that the battle over the future of personal computing would be fought through software on a commoditized platform, but Bob Harp had a strong hunch, and he saw the IBM PC as an existential threat to the entire company: "It was clear to me that IBM was going to drive the software in the architecture of the systems," recalls Bob. "And in order to survive, you had to be compatible."

Bob fought with Vector's board of directors, insisting the company should sell an IBM PC compatible machine, but Lore and the board resisted. From Vector's point of view, the choice to become IBM PC compatible was far from clear-cut. Had the company switched abruptly to a new, unproven platform, it would have alienated its customers by abandoning the CP/M-based systems that that been a proven success for over half a decade.

The fight over PC compatibility brought Bob's discontent to a head. He was already uncomfortable working for his soon-to-be ex-wife, and now he saw impending doom on the company's horizon. According to Bob, he began working on a side project on company time with the express intention of irritating Vector's board of directors.

"I felt that I had to leave the company and start another one based on PC compatibles," says Bob. Vector's board granted his wish, firing him in 1981. The following year, Bob founded Corona Data Systems, which created one of the first IBM PC clones. Losing the engineer who had designed almost all of its hardware products since 1976 was a huge blow for Vector.

But things weren't all doom and gloom in 1981. Earlier in the year, as Vector prepared to go public, Lore made sure that every Vector employee shared in the fruits of the sale, granting 100 shares of stock for every year they worked at the company.

"The underwriters were up in arms," she remembers, "They said, 'Our stock is for management.'" Lore explained that, in her mind, the lowest paid employee on the assembly line is as important as everybody else in the company. If he missed a screw or made a mistake, she explained, they would all take the blame.

Needless to say, this was a popular move within the company itself. As for the founders, they ended up with over $3 million apiece when Vector went public in October, offering one million shares at $13.

"It was exhilarating. It was fantastic," recalls Lore of the IPO, which would represent her crowning achievement at the company. With that launch, Lore became the first female founder to take her company public on the New York Stock Exchange.

But the celebration was short-lived. IBM PC's jump into the personal computer market in August of that year had a clarifying effect on the industry. Businesses which would have bought an S-100 system in the past instead began buying IBM PCs or machines compatible with IBM's hardware and Microsoft's MS-DOS operating system.

Vector responded to the IBM threat—two years later—with a dual-processor approach in the Vector 4, a machine which combined the company's longstanding CP/M support with limited MS-DOS compatibility as an intended bridge to an IBM PC-dominated future. But it was too little, too late. The company's fate had been pre-ordained as soon as it turned away from true IBM PC compatibility. Vector was already dead; it just didn't know it yet.

THE BEGINNING OF THE END

In 1982, Lore married tech media magnate Patrick McGovern, the founder of research firm IDC and publisher of Computerworld and InfoWorld (and, later, PC World, Macworld, and GamePro). She sought a new beginning with more time devoted to her marriage. In June of 1982, she passed the reigns of president and CEO to Honeywell veteran Fred Snow, while remaining chairman. Snow's tenure coincided with a downturn in sales, so in May of 1983, Vector's board convinced Lore to return as president and CEO. She began commuting over with an 800-mile round trip every day from her home in San Francisco.

By 1983, managing Vector was like trying to chart the destination of a sinking ship. Sales began to tank due to small businesses industry switching to IBM PCs in droves. Between the grueling daily commute and a lack of love from the board of directors, Lore had had enough. She stepped down once again, this time for good. It was 1984; she was 40 years old.

In her absence, Vector grew desperate. The firm's revenue slid from a peak of $36.2 million in 1981 to just $2.1 million in 1984. One of the company's final models, the Vector SX, served the company like a Band-Aid on a jugular wound. In a 1983 InfoWorld article during its launch that April, Vector marketing director Ron Tharpe cluelessly claimed that the SX's IBM-compatible floppy drives put Vector on "an evolutionary path toward greater IBM compatibility." At that sluggish rate, one can only surmise that the goal was being 100% IBM PC compatible by 1990.

Instead, time ran out, and quickly. The ugly end game for Vector graphic involved plunging revenue, desperate loans, defaulting on debt, and management losing control of the company to a loan guarantor. The company filed for bankruptcy in 1985, ceased operations in 1986, and a holding company liquidated all its assets, marking the final demise of Vector Graphic, Inc. in 1987—a decade after the launch of its first computer.

FORGOTTEN HISTORY

The truth is that, from 1982 on, no one could have saved Vector. The firm ultimately shared its fate with the every other PC maker that didn't jump on the IBM clone bandwagon. The only consumer PC company that survived into the 1990s with its own significant platform was Apple, and even then, just barely. In the end, Vector had one heck of a wild ride, made its mark on the PC industry, and helped create the template of business-oriented software and services that IBM could mimic with its PC for a dose of guaranteed success.

Since then, personal computer history has been written by the victors. The firms that survived were able to dictate the historical narrative of the industry—and that history usually places the two Steves at ground zero in Silicon Valley battling evil giants like IBM, leaving little room for outsiders from southern California, much less the rest of the world.

Reality is less tidy. By the time of Vector's disintegration, all three of the original founders had moved on to other businesses (Ely left Vector without drama in 1983). As usual, Lore Harp McGovern remained fearless: her very next venture pioneered a disposable device that allowed women to urinate standing up. "It was a little bit ahead of its time," she says, without any hint of understatement.

In 2015, the tech industry's gender gap remains a topic that generates headlines. It would be easy to conclude that this gap was an original sin of a male-dominated industry. But we've forgotten how two women from California ran a firm that pioneered influential practices such as attention to product aesthetics, vertical integration (Vector has its own in-house software developers), and establishing training networks, providing packaged PC solutions, and treating employees like an extended family. Some of what Vector pioneered is now intertwined into the tech industry's DNA.

Thanks to Vector, the origins of the personal computer cannot be separated from the story of women in technology. The personal computer has always belonged to all of us.

BY BENJ EDWARDS

http://www.fastcompany.com/3047428/how-two-bored-1970s-housewives-helped-create-the-pc-industry?utm_source=mailchimp&utm_medium=email&utm_campaign=fast-company-daily-newsletter&position=1&partner=newsletter&campaign_date=0722