Bill Millard Banner
By Alison Calderbank

CONTENTS
  • Editor's Letter

  • Industry Hall Of Fame Introduction

  • Steve Ballmer General Patton Of Software

  • Paul Brainerd Desktop Publishing's Creator

  • Rod Canion The Entrepreneur Behind Compaq

  • Donald Estridge Artictect Of IBM's PC Strategy

  • Bill Gates Icon Of The Information Age

  • Andrew Grove The Driving Force Behind Intel

  • William Hewlett The Original Garage Genius

  • Steve Jobs The Man Behind The Macintosh

  • Mitch Kapor The Visionary Behind Lotus 1 - 2 - 3

  • Chip Lacy Distribution's Kingpin

  • Jeff McKeever When He Talks, The Industry Listens

  • Bill Millard The Father Of The Reseller Channel

  • Ray Noorda Solver Of The LAN Problem

  • Edward Raymund Distribution's Early Dynamo

  • Alan Shugart Pioneer Of The Disk-Drive Frontier

  • "He was, himself, the consummate entrepreneur, in that he saw the future of the computer industry before anyone else did."
    --Chad Hill, former public raltions director, ComputerLand

    ut in the streets, fireworks exploded in celebration of the bicentennial of America's victory over England. Inside, drinking coffee, a small group of executives plotted a revolution of another kind--the overthrow of the direct-sales model by a reseller channel.


    TITLE: Chairman, founder, ComputerLand

    HOW LONG AT COMPANY: 1976-1987

    BIRTH DATE & PLACE: June 2, 1932; Denver

    EDUCATION: University of San Francisco for three semesters

    SIGNIFICANT ACCOMPLISHMENT Created the first computer reseller franchisor; founded early clone maker

    The year: 1976. The ringleader: William H. Millard. The result: ComputerLand Corp.

    Forty-four-year-old Millard was not new to the possibilities of computers. He had worked for IBM Corp. and as the head of data processing for the city and county of San Francisco. From 1969 to 1972, he and his wife, Pat, formed software publisher Systems Dynamics. A year after that business went bankrupt, Millard founded IMS Associates, or IMSAI.

    "He basically created the first clone," says Alan Hald, who co-founded MicroAge Inc. that same year, and who today is president of MicroAge Enterprises Inc., Tempe, Ariz. "The IMSAI computer was a knockoff of the Altair computer, only better."

    Realizing the possibilities of Intel Corp.'s new 8080 chip, Millard had a kit designed so buyers could build their own systems. Initially sold through print ads, the computers were an instant hit. IMSAI's small staff worked day and night to ship orders.

    "The man has a tremendous amount of personal charisma," says Seymour Rubenstein, who worked at three organizations with Millard, including a stint as director of marketing at IMSAI. "He exudes the kind of personal charm that really makes you want to work your [tail] off for him."

    Most early kit buyers were employees of Jet Propulsion Labs or IBM, says Bill Lohse, who rose through IMSAI's sales ranks until he became director of the division. Lohse, who is now president of SoftBank Exposition and Conference Co., Foster City, Calif., redirected the skills he had learned selling vitamins and deodorants door-to-door to selling computer kits.

    "We thought we were doing something good by selling all this stuff, but the truth was, anybody could," Lohse says.

    The kits flew out of IMSAI's San Leandro, Calif., office. In 1976, to maintain cash flow to finance growth, IMSAI borrowed $250,000 from investment firm Marriner & Co. in exchange for a promissory note convertible to 20 percent of IMSAI stock.

    That same year, John Martin-Musumeci, a former car dealer, broached to Millard the idea of developing a computer store franchisee operation. These storefronts would sell IMSAI computers and pay a fee and margins on all products sold.

    Called Computer Shack until Tandy Corp., owner of Radio Shack, filed a lawsuit, the burgeoning company was renamed ComputerLand. The first location, in Hayward, Calif., founded in late 1976, was quickly followed by the company's first franchise in Morristown, N.J., in early 1977.

    "He saw not only the need for a basic platform," says Hald, "but a marketing channel to sell it. He made the transition from manufacturer to franchisor."

    But Millard was to leave the manufacturing business soon after. Apple Computer Inc. revolutionized the market with its Apple II. In addition, Millard had pushed his engineers to encase IMSAI's VDP80 computer in a single box. IMSAI also had switched to a new drive that, although much faster, also was hotter, says Lohse.

    "His tactical mistake was, just like Adam Osborne years later, to announce something before it was fully done," Lohse says. People started returning the overheating units en masse, and IMSAI went bankrupt in 1979.

    That ComputerLand would start a multibillion-dollar industry was unclear, too.

    "We started out with no money, only $10,000 in capital from IMSAI," says Sugu Aria, ComputerLand's first chief financial officer, who is now a management consultant and certified public accountant in Cupertino, Calif. "I couldn't imagine what kind of financial wizardry we'd need to make it grow. I think the franchising concept being applied here was really fantastic. It's one of the only ways you can grow fast without going out and getting bank loans."

    Adds Sheldon Adelson, founder of Comdex: "They sensed the opportunity and they capitalized on it."

    Although the franchisee model attracted much attention, early respondents had little business know-how, Aria says, and they required basic business and accounting training. "At that time, the people who were interested were really technocrats," he says.

    In addition to technocrats, the self-realization philosophy est, or Erhrad Seminar Training, played a role. Millard and his family were longtime followers of this movement.

    "[Est training] was a requirement," says Rubenstein, who today is chairman and chief executive of Internet software developer Prompt Software Inc., Novato, Calif. "I had to go through it. And I had to say I was doing it voluntarily, but that was baloney."

    ComputerLand lingo was sprinkled with estian phrases and concepts, which could be unintelligible to nonadherents, some say.

    "[Millard] tended to promote a culture where people were hired because of 'their potential,' not their qualifications," says one former ComputerLand manager. "He tended to let his est background enter too much into the business opportunity."

    In fact, dealing with est followers was hard, says Hald, referring to sales calls IMSAI made to MicroAge. "They would never take no [for an answer]," he says. "They'd almost reconstruct a 'no' to be a 'yes.' "

    But, whatever their personal philosophies, few could argue with ComputerLand's success. The franchisor debuted IBM's newly minted personal computer in 1981. In 1982, ComputerLand's sales were expected to reach $400 million, a 75 percent increase from the prior year. President Ed Faber in a published report credited IBM's entry into the channel for prompting much of this dramatic sales growth.

    ComputerLand and its central purchasing model aided vendors, wrote Mike McConnell, ComputerLand's executive vice president, in a 1982 column for CRN. "We offer the opportunity for a manufacturer to come to one place, get a bulk forecast in the form of a large committed order for a product, a central distribution point, and quality control over its retail outlets that is currently available nowhere else," he added.

    Obviously, others agreed: By 1984, ComputerLand hit the magic $1 billion in sales, and Millard became the industry's first Billionaire Bill--at least on paper.

    But not all was running smoothly. Musumeci had left ComputerLand in 1977 and formed competitor Micro/Vest. In 1980, Millard rejected an offer to buy back the promissory note. Marriner then sold the note to Micro/Vest, which then sued Millard for 20 percent of ComputerLand stock in 1981.

    In late 1982, as Millard's role at ComputerLand grew, the popular Faber left. Then, in 1984, the franchisee sign-up pace slowed due to a contract overhaul. Millard also faced lawsuits from two former employees who claimed they had been promised, but never received, ComputerLand stock.

    About this time, franchisees formed the International Association of ComputerLand Dealers, later renamed the International Association of Computer Dealers (IACD) after Millard threatened legal action for unauthorized use of the ComputerLand name. And, in November of that year, Millard named his 26-year-old daughter, Barbara, president and chief operating officer of ComputerLand.

    Then, in 1985, everything collapsed. A jury found in favor of Micro/Vest, awarding the reseller $141 million in punitive damages and 20 percent of ComputerLand. Also, IACD members were angered by policy and financial matters.

    "Toward the end, there was somewhat of a revolt in the franchisee organization," says Chad Hill, public relations director from 1982 to 1985, who now heads Hill Communications, Pleasant Hill, Calif., and had IACD as one of his first clients. "I think there was a little disenchantment . . . with the corporate culture."

    That is most likely an understatement. IACD called a special meeting, and another reseller group, the Network Advisory Council, told Barbara that she and Millard must remove themselves as ComputerLand officers and name Faber chief executive. Barbara Millard complied, although Millard remained as chairman and majority owner of the company. In an effort to deter rebellion, Faber quickly cut fees and expenses.

    In 1986, Millard moved to Saipan, a South Pacific island with tax benefits. In 1987, after his victory over the employees' lawsuit, Millard sold ComputerLand to E.M. Warburg, Pincus & Co. for about $200 million. Then, he disappeared.

    Wherever he is today--Saipan, Brussels, Cupertino--Millard must be awed and proud of the industry he helped create and shape, and which evolves and reinvents itself each year: the reseller.

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