Background

  Marinchip Systems and many of those associated with it in various capacities have discovered that while it is possible to earn a reasonable living attempting to be a full-service computer company through the massive exertion of effort and consumption of physical capital, it is not possible to achieve the success that has accrued to those who let the mass market do their selling for them. The possessor of a unique software package such as Visi-Calc or Wordstar finds that much of the promotion of the package is done by the hardware vendor or systems house who wants to sell a system by providing the capability the package offers.

It is far too late in the game for a successful start-up of a full service computer company without massive venture capital and an organization which none of us knows how to manage. Furthermore, the chances of success against those with literally unlimited advertising budgets and marketing organizations (IBM, NEC, etc.) are very slim. However, the software business is very different. First of all, a software package can be produced out of pure effort, with only the capital needed to finance the machine and pay the programmer. Unlike hardware, the big vendors of mass market machines are mostly utterly ignorant regarding software, and software manufacturing is as easy as copying discs. In addition, independent software marketing channels such as Lifeboat Associates exist and are working in cooperation with major hardware vendors (Xerox, HP, Altos) to sell application software to purchasers of hardware systems.

I feel that at the present time it is possible to, albeit with high risk, start a software firm with the capital available from Marinchip Systems, and that this is the best possible deployment of that capital. No conceivable investment in the business of Marinchip has the probability of generating a comparable return. Unlike the hardware business, MSP will be in the middle tier of companies in its business, and will likely be in the front rank based on competence and professionalism.