TRS-80 "The Trash 80"

Page 1

Introduction to TRS-80

In the spring of 1977, I received a phone call from Ben Rosen, who at that time was a market analyst for Morgan Stanley. He was just about the only stock market analyst specializing in the infant personal computer industry and one of the industry experts. Ben, who later became the Chairman of both Compaq and Lotus, had already organized the first of his famous industry seminars, and he had invited me on a panel as a retailer. This call, however, was to tell me that I was about to receive a visit from an important person, if I had time to see and talk with him today. Ben went on to tell me that my visitor would be Charles Tandy, who owned the Radio Shack chain of some 7,000 stores. He had only that day, and he wanted to visit a successful computer store.

Mr. Tandy arrived shortly after lunch and introduced himself.

"Call me Charles," he said as I conducted him through my operation.

We started in the basement where we repaired computers, built many of them into systems, and had our stock room. Then to the selling floor, where he seemed most interested in the Apple II and the SOL. Charles was a man who could put anyone at ease, even if they knew how important a person he was. He had the knack of asking the most direct and revealing questions in a way that aroused no resentment. I really enjoyed talking with him, flattered that this powerful businessman would seek me out for advice. At the end of the day, he told me that he had visited other computer stores and in general classified them into two categories: first, stores run by computer hobbyists where a neophyte would be ignored, or snowed. The second type of store was run by ex-used car salesmen who were masters of the hard sell. They tried to completely snow the average prospective buyer. He said my store did not fit into either category (for which I was grateful,) but seemed to meet the customer at whatever level they were at. I told Charles that most of my salespeople were recruited from the hobbyist ranks, but that I had trained them somewhat in the art of retail selling.

We talked all afternoon, and at the end of the day he asked what I was doing that weekend, and would I consider going back with him to his headquarters in Fort Worth . It was common gossip in the industry that Radio Shack was going to be selling computers very soon, but nobody knew what kind they would be selling. Now it seemed that I was being invited to get an advance look. Of course I told Charles I would love to go with him.

The next morning was Friday, and I met the Tandy party in their suite at the Hotel Carlisle on Park Avenue for breakfast. After breakfast, we piled into a limo for a trip to the airport, but first we made a stop at a nearby shop where they sold novelty telephones. Charles bought a few as gifts for his friends back in Texas . Later I was told that he bought the store because they carried the most unusual phones. Phones packed aboard, we drove out to Teterbro Airport in New Jersey and boarded the Tandy corporate jet for the flight to Fort Worth .

All this was new and exciting to me. I had never flown in a corporate jet, and I had never been to Texas , either. Landing in Fort Worth , we all drove to a local barbecue which was Charles favorite, and then straight to the Tandy plant. There, Charles introduced me to most of his executives and told me they were developing a new type of computer for sale in their stores. He said that they had investigated all of the machines being offered for sale and had come to the conclusion that they were all too complicated and too expensive for the average person. They had therefore designed a completely new concept in small computers.

With that, they showed me what seemed to be a keyboard and a 12-inch TV screen, with a wire connecting the two units. The plastic case was colored with a metallic silver gray finish, and the keyboard and front of the TV was a contrasting black. The oversized logo on the front read "RADIO SHACK TRS-80" and "MICRO COMPUTER SYSTEM."

My first comment was, "Where's the computer?"

"It's inside the keyboard case," I was told.

"Right under the keyboard!" I could hardly believe it.

I was used to the Altair and Imsai_even the SWTPC 6800 and the SOL with their brute force power supplies and expandable bus. Even the Apple II, which I considered a masterpiece of compact design, took much more space than the TRS-80 keyboard unit. Then I noticed the external power supply plugged into the wall. Well, there was one reason for the size.

"We decided to use an external power supply to conserve space and keep the heat out of the computer case.

"Okay," I thought. That made sense.

I really liked the idea that the TRS-80 came with its own TV monitor. In those days video monitors were very hard to get and they were expensive. I had bought a huge order of 9-inch, high quality, security type video monitors to sell with my computers, and I sold them at a very small mark-up if the customer bought a computer.

Radio Shack had provided a 12-inch TV quality video display that was really a television with the radio section removed. This was a smart way to get a larger, reasonably priced video monitor if you had the buying power of Tandy.

"Tell me some more about the computer?" I asked.

"Well," someone answered, "it's a Z-80 based machine with 4K of RAM, and a ROM with the boot-up software and BASIC. Programs and data are loaded through a cassette. The video display has 64 characters and 16 lines and there are graphics characters as well as uppercase letters."

"This is interesting," I thought. "Just like the first Apple I."

"Tell me about the BASIC?" I asked.

"Well, it's out. Level I contained in a ROM. This is an integer-only version with only two character variables. Our Level II will be out shortly and will have enough advanced features for anybody."

By now I was very impressed with the TRS-80, and I fully realized that it was going to be hard competition for anything I sold, except possibly the Apple II. The big question in my mind was, how much would they sell it for?

As if he was reading my mind, Charles asked me, "How much do you think should I sell it for?"

I really had no basis of comparison except possibly the SOL (I had not received an Apple II yet,) and it sold for $1,400 with a video monitor. Well, this machine is a lot simpler, so I should figure about $1,000. However this is Radio Shack so it must be cheaper. I'll say $900.

"Well," I said, "about $900 would be a fair price."

"What would you think about $600?" one of the Tandy people answered.

"If you are going to sell this system with a video display and built-in BASIC for $600, you better build a hell of a lot of them," I returned.

"Stan, just how many do you think would be enough?" one of the Tandy people asked.

"Enough," I said, "would be about 50,000."

"You are out of your mind," answered one of Tandy's staff. "No one has ever built more than 5,000 of the same type of computer, and we are thinking 12,000."

"You have 7,000 stores," I returned. "If you have only one to show and one to sell, that's no way for a big company to do business."

"We don't think all of our stores can sell computers; it's a specialized business."

"True," I answered, "but this computer may change all that."

After this exchange, I sensed a division in the company. Charles and all the people he had brought on board to develop the TRS-80 were convinced that the TRS-80 would be a tremendous success and would change their business. The older electronics people whose thinking was fixed in the audio, radio, and hobby electronics business did not understand the fascination of the computer for even the most conservative business person.

Charles then showed me folders containing cassettes and manuals for all kinds of home and business software. There were accounting programs, home management programs, and educational programs. They were all going to sell for less than $30.

At this I smiled and said, "Keeping business records on a tape cassette program has not proved very practical. (I was being very kind!) You would be well advised to keep your programs very simple until you get a disk-based system."

They ignored me and changed the subject. "How many of these computers could you sell in your store?"

"I would start with 10 per week and end up selling 40 or 50 a week," I replied.

They obviously did not believe me, but they didn't challenge my statements.

The meeting broke up at that point, and I was taken to a hotel to freshen up for some Texas hospitality later that evening. The next day was Saturday, and about 9:30 I received a phone call that Mr. Tandy was tied up, and that I should have my breakfast. He would pick me up later.

About 10:30 , Charles picked me up at the hotel and took me to the yet uncompleted Tandy Center . He showed me the building and parking lot with its subway into the center. He told me that it would become a center of life in Fort Worth , and he wanted it to be his contribution to the city he loved.

Then Charles told me how he had started in business making leather hobby kits and selling them in his craft stores. How he had bought the failing Radio Shack company, which was a retail electronics distributor that had evolved from ham radio equipment. He had built Radio Shack into the world's largest electronic retailer and one of the largest distributors in the United States . He believed that the personal computer industry was going to become very important in the near future. He also said that most of the companies then in business would fall within a year of two. The reason, he said, was because they were so disorganized and had no idea how to manufacture and market their products. I was very impressed with Charles' statements because I had staked my future on the industry, and I had the same feelings about some of the companies I did business with.

After we left the construction of Tandy Center , we went to the temporary offices of the corporation where we resumed our meeting. There I was told that Charles wanted to buy my store and hire me to train managers for his computer stores. The purchase price offered was not very liberal, but I was assured that my employment contract would be very good. I told them I would take it up with my partners.

When I returned to New York , I consulted my wife, who actually owned the store, and her parents, who had supplied some of the starting capital.

They said. "Do what you think best."

My partner, Mike Alpert, said that as long as he got back his investment and some return, he would go along with anything I wanted to do. So the decision was mine alone to make. One thing bothered me about this sale, and I called to talk it over with Charles Tandy. When I started the store in 1976, I did not draw any salary for a full year. We lived on my wife's salary as a New York City school teacher. It had always been my intention to pay myself that back salary when the store income allowed it. Now, if I sold out, that year would be down the drain. I explained this to Charles and told him that all I wanted was $25,000 for that hard year. He could not see it and told me that I was getting my foot on a high rung of the ladder at Radio Shack. He told me that all of the men who stuck with him when he took over Radio Shack were now millionaires. This attitude turned me off to the deal, and I decided to turn it down. The TRS-80 became the most popular computer ever built, but Charles Tandy passed away a year later. Most of the people he brought in to develop the Model I computer were gone shortly after his death. John Ratliff, Charles Tandy's assistant, told me that I would have never made it at Radio Shack.


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