Last month, only two and a half years after it was born, Osborne Computer Corp. filed for bankruptcy under Chapter 11, a failure some perceive as the first tremor of a full-scale quake in California's Silicon Valley, the heart of the computer manufacturing world. The industry is still healthy and growing, but some companies in it are hurting—among them such big names as Atari and Mattel. Many are cursed with the same blessing that proved fatal to Osborne: They grew too fast.
In his column, "From the Fountain-head," Osborne used to warn companies about fast growth. "My advantage as an observer," he wrote last year, "allowed me to see the mistakes of others and to avoid making the same ones. The key to success is good management." Jim Warren, founder of the West Coast Computer Faire, finds the irony only too obvious: "He didn't take his own advice. It's like the Lord not following his commandments."
Among the other commandments Osborne broke: He waited too long to bring in a professional businessman, Robert Jaunich II, former chief of Consolidated Foods, to act as president. He announced a new product, the Executive, long before he was ready to sell it, thus hurting sales of his Osborne 1 (which dropped from almost 10,000 sold in February to about 100 in April). And when IBM entered the personal computer industry, Osborne was not quick enough to keep up. His long-anticipated IBM-compatible machine, an upgraded Executive, never made it to the marketplace. Osborne's mistakes were, Warren says, "classic blunders, and ones he had very accurately observed in his column."
Osborne, 44, was the most interesting character in an industry otherwise populated with high-tech nerds. Born in Thailand, he is the son of a British professor, a countermissionary who tried to convert Christians in India back to Hinduism. Adam himself, in an early but typical stroke of rebellion, switched to Catholicism. He earned a science degree at England's University of Birmingham, then a Ph.D. in chemical engineering at the University of Delaware. He went to work on computers for Shell Oil in California but, as he recalled in an interview last year, "I did not get along well. I was an extremely aggressive and frustrated overachiever." So he left to consult and then wrote his seminal book, An Introduction to Microcomputers, which sold 300,000 copies and was the foundation of a publishing house Osborne started and later sold to McGraw-Hill.
Osborne became known through his column as a canny if caustic observer of the computer business, able to "see what was right and wrong and to point it out," says Thom Hogan, one of Osborne's former editors at InfoWorld magazine and later his software chief at the computer company. "He had what they call a golden gut about such things."
He was also, Hogan says, "a very charismatic man, a charmer. When he gets enthusiastic, he can get the people around him enthused." Witness Denise Penrose, Osborne's secretary at his publishing house (now an editor there): "He had that kind of magnetism—you believed in him and wanted to participate in his dream." He stayed brash, vowing only last Christmas to produce two new computers that, by the summer, would leave "the industry reeling." Instead, it's Osborne who's reeling. "Chaotic is probably the nicest word I can use about working at Osborne Computer," says Hogan.
How the bankruptcy will affect Osborne's future remains to be seen. He has a large but not luxurious home in Berkeley, Calif., which he shares with his second wife, Barbara Burdick, 26, a former marketing employee of his company. (Osborne and his first wife, Cynthia, with whom he had three children, divorced in 1980.) After Osborne Computer filed Chapter 11, it received loans, buying the company time to tackle its $45 million in debts.
For now Osborne is most assuredly down if not out, and his dream's bad end does not bode well for all the other flashy computer geniuses of Silicon Valley. As one industry analyst said in a computer trade magazine last month, "Adam Osborne went from the Second Coming—the good-idea guy who walked a foot off the ground—to the first going."
His is a tale of brags to riches to ruin. Only last spring computer owners in San Francisco were lining up to get his autograph. He was, as one former colleague called him, a "god of the computer world." He was the author, in 1975 of one of the first personal computer books. He went on to make a name for himself writing a brash computer trade magazine column in which he lambasted the biggies, Apple and Radio Shack, for making expensive, inconvenient machines. Then in 1981 Adam Osborne set out to show them how it should be done. He produced his own computer. At $1,795—including all the necessary equipment and programs—the Osborne 1 was less than half the price of a comparable Apple. It was the first portable computer, a 26-pounder that spawned a new industry. His company took off, growing faster than Apple and selling $70 million in computers in its first full year.