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    INTERVIEW WITH MICHAEL TOMCZYK
            March 30, 2000
            by Paul Panks


"It was like wildcatting in a new oil
field..." - Michael Tomczyk


Paul: How did you get your start at
Compute!'s Gazette? What duties did
you have while at the magazine? When
did you first start using
microcomputers?

Michael: Ironically, when I first
entered the computer industry, it was
because I was managing a small firm in
San Francisco and we became a beta
site for the first Atari 2600 game
computer. My staff wouldn't stop
playing "Star Raiders" so I took the
Atari home. Three days later I looked
up and saw a thin shaft of light
streaming in through the curtains and
realized I had been up 3 nights in a
row, playing that space game.

    A few weeks later I quit my job,
took all my savings and spent the next
six months learning everything I could
about computers. I used to hang out at
Apple Computer and got to know Steve
Wozniak and Mike Markula and some of
the 'technical gnomes' at Apple.

    Since I was basically a journalist
with an MBA (from UCLA), I used my
reporting skills to do interviews with
several people in the "new" personal
computer industry. My first interview
was with the inventor of the Star
Raiders game (of course!), for
COMPUTE! Magazine.

    After 6 months I had job offers
from Apple, Atari and Commodore. Apple
had too many geniuses. Atari had no
geniuses. (They lost $1 billion in 5
years which proves it!) Commodore had
half geniuses and half "duhs." So I
brazenly set an interview with
Commodore founder Jack Tramiel but
after 6 months I only had, literally,
$10 in the bank and $6 in my pocket
and I didn't know if that would pay
for the gas to get down to Santa Clara
and back for my interview with Jack.

    So I asked Robert Locke, the
Editor of COMPUTE!, to wire me $140
for an article I'd written and he did
and it was the first time I ever got
money via Western Union.

    The next day I went to see Jack
Tramiel and got hired as Assistant to
the President. My first day was at a
meeting of Commodore general managers
in London and my second week was in
Germany. The third week we came back
and fired the entire marketing
department. The fourth week I wrote a
30 page single spaced memo on
everything I could think of that
should be in the new low-cost color
computer we were planning and the next
thing I knew I was in charge of the
VIC-20 product line.

    Later, to promote the VIC-20, I
started writing a column called The
Vic Magician in Compute's Gazette and
I really used this column to teach
myself new ways of working with BASIC.
What you really saw in these articles
was Michael Tomczyk learning something
new in BASIC and sharing it with the
VIC community at large, in the
magazine.

Paul:  What memories do you have of
the people/places/events concerning
Commodore and the early days of
microcomputing?

Michael: In the early days, no one
knew what a computer would be used
for. The first users were writing
their own programs in BASIC (remember
that?). I knew store owners who were
writing their own mail list programs
on Radio Shack TRS-80's and trying to
get 80 columns of text out of a 40
column Apple so they could do
correspondence, and so on. Engineers
were using SIM boards and other
computers in kit form to drive various
machines and systems.

    The three leaders in personal
computing at the time were Apple,
Radio Shack and Commodore, in that
order. The market was pregnant and the
demand was incredible. It was like
wildcatting in a new oil field.

    A few of us figured out that there
was a "core" set of uses for personal/
home computers: wordprocessing,
spreadsheets, databases, and
telecommunications. When we launched
the VIC-20 there was no software, so I
came up with the concept of a "six-
pack" of software on tape. We
programmed everything in BASIC or
assembly code on Commodore desktop
computers. We started with two six-
packs, just to seed the market.

    This was also a clever retail
strategy. I figured retailers could
either sell the packs intact, or split
them up, mark up the price and sell
them individually if they wanted. In
any event, the retailers (and
hopefully customers) had to buy six
tapes at a time instead of one and
this was more efficient for us as a
company.

    Keep in mind, I had an MBA and
most of my early decisions, while they
looked like "fun" to the outside
world, were based on business motives.
For example, I set the price of the
VIC-20 at $299.95 because my instinct
told me that $300 was the "magic"
price point for a home computer.
Actually, each VIC system wound up
capturing $1,000 to $1,500 in revenues
from accessories and add-ons. We were
rewarded when the VIC became the first
microcomputer to sell one million
units, beating even Apple and Radio
Shack to this level.

    My own favorite product idea was
the VICModem, a direct connect modem
priced under $100. I contracted an
outside design team to develop this
modem to my specification. It had to
be on a cartridge, and cost less than
$33 so we could retail it at $99.

    Then I negotiated deals with
CompuServe, The Source and Dow Jones
for $197.50 worth of free
subscriptions and time to these very
early telecomputing services and put a
sticker promoting this on the package.
The VICModem sold like hotcakes and
became the first modem priced under
$100 and the first modem to sell 1
million units. In 1982, the Commodore
Information Network that we created to
support the VicModem was the highest
traffic area on CompuServe.

    In 1981, I noticed that Atari had
trademarked the phrase "Computers for
People" and that really made me angry.
So I trademarked the phrase, "The
Friendly Computer" so no one else
could use "friendly" with their
computer. I was one of the first
people to promote the use of the
phrase "user- friendly."

    The prime directive to ALL
developers and marketeers at
Commodore, from me, was that this had
to be a "user friendly" computer. One
day the editor of BYTE Magazine -- who
knew that I was evangelizing "user
friendliness" -- sent me an article
and told me that "user friendliness"
in German was "Benutzefreundlichkeit"
so I had brass plaques made up that
had this word in big letters and under
it, "Official Motto of the VIC
Commando Team."

    The VIC Commandos were the real
heros of the VIC success story. The
VIC product line was developed by a
small group of 5 young hackers I
recruited. They were all young - 18 to
23 - and this group wrote or adapted
the first 12 programs on tape.

    One game we called "Blue Meanies
From Outer Space" and it became a
minor hit. We also did the obligatory
mortgage calculator and so on.
Because of our youth, everyone at
Commodore kept stealing our
development systems to take to
conventions because we never had
enough computers in the company (we
were selling them as fast as we could
make them).

    So one day I convened our group in
an open bay and

  1) told them we would henceforth
     call ourselves the VIC COMMANDOS
     because this was a guerilla war
     and we had to be prepared to
     fight to hold our ground,

  2) I announced in a loud voice that
     the next person who stole a
     computer from our area would be
     fired, I would see to it, and

  3) I handed out the new "symbol" of
     our group. Neil Harris, who was
     the de facto "second in command"
     in the VIC group and a VERY
     talented guy with great instincts
     for technology AND marketing, had
     access to advertising premiums
     and brought in some "lucky gold
     coins" about the size of silver
     dollars. Those became our
     symbols.

    Pretty soon you could see us
standing in the entrance to our small
open bay, flipping those coins like
George Raft in an old gangster movie.

    I never lost my coin flipping
skills, by the way. And after that
day, no one ever borrowed another
computer system from our group.

Paul: Tell me a little bit about "The
Home Computer Wars". Could you
elaborate on Jack Tramiel's speech
about the Vic-20?

Michael: At that first general manager
meeting I attended on my first day, we
met at an old English country estate
outside of London, in April 1980.

    Jack told the group that he wanted
to develop a low cost color computer.
The U.S. engineers were already
working on a high cost color business
computer and were deadset against the
idea of a cheaper version. Jack told
everyone to discuss it and said he
would return the next day to discuss
it further.

    At this time Commodore was the
number THREE personal computer maker
in the U.S., but number ONE in Europe.
Commodore had beaten Texas Instruments
to Europe with handheld calculators in
the 1970s and every- one in Europe
knew Commodore and they have VERY
strong brand loyalty there. So
Commodore computers easily became
number one there.

    The bottom line was this -- most
of the managers felt that it was too
soon to lower the cost of personal
computers. We were still making good
margins, why change? When Jack
returned and asked the group again,
what did they think about the idea of
a low cost color computer, a huge
debate broke out with everyone not
only talking to the group, but also
debating among each other in small
groups.

    Actually, only a handful of people
were in favor of this: Jack; Tony
Tokai, the general manager from Japan;
Kit Spencer, the general manager from
the U.K.; a Japanese engineer named
Yashi Terakura;...and me. Jack
listened for awhile, then he stood up,
banged his palm on the table to get
everyone's attention and declared,
"Gentlemen, the Japanese are coming -
so we will become the Japanese." That
silenced the group and they grudgingly
accepted the idea.

    Well, the Japanese never came. We
developed the VIC partly in Japan and
partly in the U.S. We introduced the
VIC as the VIC-1001 in Japan and
showed our first prototypes at Seibu
Department Store in September 1980.

    At this time, NEC had a terrific
looking computer called the NEC PC
5000 and it had function keys, 32K of
memory and retailed for around $600.
But because of the VIC's introduction
in Japan, NEC and all the other
Japanese companies never entered the
home computer market in the U.S. By
the time they were ready, we had the
Commodore 64 and by staying ahead of
them, we stopped them from moving in.

    During the 1980s they tried to
pool 12 companies around an outdated
operating system called MSX but it was
based on really dated technology (the
pixels looked like little cubes) and
the moment I saw it I declared it
"MS-Dead."

Paul: Finally, what accomplishment are
you most proud of? What stands out in
your lifetime as having been the most
important event?

Michael: I would count as a major life
achievement my role in the development
and launch of the VIC-20 and Commodore
64, the first million-seller
microcomputers (sometimes called the
first home computers).

    But in a larger context, I was
always gratified to be able to help
bring computing to people from all
income and social levels, who could
not previously afford to participate.
This was always something we held as a
goal in the back of our minds, and
this was a motivation I shared with
Jack Tramiel.

    For example, the VIC-20 allowed
elementary schools to afford
computers, which were previously
limited to high schools and colleges.
At one time, many school districts
refused to teach algebra to children
under the age of 13 because they
weren't capable of grasping the
concepts.

    The VIC and C64 proved that four
year olds can learn the write a BASIC
program that says A=1; PRINTA. And
that's a variable and that's algebra
and that proves that MANY things can
be taught sooner in life to children.

    These are just a few of the
results that I sometimes think about
when looking back.

    I think it's also interesting that
I am able to count myself as a pioneer
in the earliest version of the
Internet, but I believe the first
million people who bought the
Commodore VICModem and surfed the
Commodore Information Network and
other tele-services can also count
themselves as Internet pioneers.

    One of the many lessons I was
taught by my mentor Jack Tramiel is to
"live in the future" -- I am still
doing that. My current job at the
Wharton School keeps me busy studying
critical issues in emerging
technologies, from the Internet to
Gene Therapy, and the nice thing about
emerging technologies is that they
keep emerging.

    I am currently working on a
website portal that will involve me in
what I feel will be the next big wave
for the Internet and eCommerce, which
is the "Wireless Internet." This site
will be a homebase for early adopters,
developers and application-seekers in
the wireless community, and will be up
and running during May or June. I am
developing this with a small group of
Wharton students, and friends. Anyone
interested in seeing this project can
visit our "placeholder" site at:

        www.wirelessfrenzy.com

 and you'll see a photo of me hugging
a shark underwater.

    So the answer to your last
question is this: The "most important
event" in my lifetime probably hasn't
happened yet, because I'm still living
in the future and eager to see what
happens next, and still trying to
figure out where and how I can help
"make the future happen faster."

Best regards,
Michael Tomczyk

 PP