What You See Is What You Get: My Autobiography (44 page)

A lesson I learned was that for all the genius of the people working on our project - and trust me when I use the word genius - their technical expertise did not extend to entrepreneurial nous or, dare I say, common sense when it came to solving problems in a clear-thinking way. The answer I got from my line-up of geniuses - Bill, Roland and Mark Jones - was a casual, 'Oh yes, there are others who produce this stuff. Ferranti aren't the only ones - in fact, the Japanese are quite good at it now.'

When I heard this casual, 'Oh yes, there are others,' I felt like smacking them round the head. I asked, 'Why the bloody hell didn't you tell me this six weeks ago when we knew we were in trouble with Ferranti?'

'Well, Alan, I thought we were . . . erm . . . well, I don't know really.'

They had focused on the fact that we'd engaged Ferranti and paid them a development fee and it didn't occur to them that writing it off and moving on was an option. That development fee paled into insignificance when one considered what was at stake.

After letting off steam, I told them to ditch Ferranti and start again with a reliable Japanese maker. I think Ferranti got there in the end and we did buy a few chips off them, but had we relied solely on them, it's fair to say we would have never succeeded in the computer business the way we did because
time to market
was the essence of our success. That episode served to demonstrate the difference between brilliant academics, bless 'em, and entrepreneurial businesspeople.

By early 1984, rumours were rife throughout the industry that Amstrad was about to launch a microcomputer. We'd built a couple of samples by using two giant PCBs spanning the entire length of the keyboard and containing over a hundred chips. In fact, we could have mass produced computers like this, though they would have been really expensive, but until we had the new superchip, it was the only way of demonstrating a working computer.

We launched the CPC464 in the Great Hall of Westminster School on 11 April 1984. The place was jam-packed with City analysts, as well as a vast array of journalists from the press and computer magazines. The launch had been organised by Malcolm Miller and a certain Mr Nicholas Hewer, a PR consultant from the firm Michael Joyce Consultants, Amstrad having now grown to a size where it needed a PR firm to deal with its affairs with the media.

As I stood there in the packed room, I couldn't resist using my one-liner about the Sinclair computer being just a pregnant calculator, which the press picked up on. I seem to have this knack of coming up with one-liners that the press, I am told, call 'Sugarisms'. That was the first of many.

I went on to tell the audience that we had made a major breakthrough. I showed them the two giant PCBs covered with chips and explained that the sample computers that were being demonstrated here were being driven by these PCBs. However, we were going to make a breakthrough in price and sell the whole computer, including monitor, for PS199 because we were going to condense the contents of these two PCBs into one tiny chip. I remember holding up the two PCBs in one hand and a blank Ferranti chip in the other. The audience was amazed. The general media couldn't quite believe it, but some of the technical people there knew exactly what I was talking about and the story grabbed the headlines. Prior to the launch, as I have explained, the market had felt that Amstrad was on the wane, but after this press conference in Westminster, our share price shot up.

We took advantage of this by having a rights issue on 11 May 1984, offering additional shares in the company to existing shareholders, raising PS12m to help finance the stocks we required to build up the computer business. On top of this, we were in the process of constructing a custom-built factory in Shoeburyness, which needed funding. Once again, we were bursting at the seams at Eastwood and needed a much larger factory and warehouse. We acquired some land from the Ministry of Defence and got planning consent to build a 400,000 sq ft facility. Consider this: my first factory at Great Sutton Street was 1,000 sq ft; Shoeburyness was 400 times the size!

With supplies of the superchip in sight, we could see that computer
production would be starting shortly. However, another big issue suddenly reared its head. While we had produced the computer itself, no software existed that would run on it! This was a point which I personally, and naively, had overlooked and it became a top priority. We needed to have a range of software available, otherwise the youngsters wouldn't be driving their mums and dads mad to buy the computer itself. Plus, of course, the media wouldn't be writing reviews about the great games one could play on it.

With computers the hot new item, parents at the time thought it was a great thing to buy for the kids. They had visions of themselves sitting down with little Johnny at the keyboard, accessing educational stuff, helping him with his homework and other worthy things. The truth of the matter was that the kids only wanted to play games, so it was necessary that interesting and attractive games were made available. Roland and Bill were tasked with finding software companies who had already been successful writing games for people such as Sinclair and Commodore and convincing them to invest their time developing games for the Amstrad platform.

Many of these software companies were run by technically smart people who had started out as engineers and thought that they'd turned into businesspeople - these were the worst kind. The problem was that in many cases they'd stumbled upon a gold mine and these hairy hackers who wrote games in their spare time now found that people wanted to buy them in big volume. They surrounded themselves with lawyers and accountants and before you knew it, you were confronted with a bunch of people who thought their shit didn't stink. Their policy was, 'We'll write games for the company which has the most computers in the marketplace.' On the face of it, this was a logical way to go, but if you continued with this philosophy, you would never move forwards or allow any other computer to come into the market.

Because of this, I was hauled in from time to time to sit in front of these geeks who'd made a few bob to try to convince them that we were going to put thousands, if not millions, of our computers into the European marketplace and thus it would be worth their while to convert some of their games to run on our platform.

I recall one such meeting with an arrogant bunch of tossers from Psion, a leading player in the software market. The boss, Dr David Potter, was having it off big time, selling hundreds of thousands of games based on the Sinclair platform. He didn't come along himself, but instead sent some skinny little posh twit, all suited and booted. He spoke
at
us rather than to us, as if we were some low-level pond life that had no right to be in the world of computers. His attitude was, 'This sector is confined to the fine intellects
emanating from Cambridge. How dare you vulgar Amstrad people, who sell those audio things, encroach on our elitist world?'

Bob Watkins, who knew my temperament very well by then, took one look at my face and, just before I whacked this tosser, jumped in and said, 'Alan, I think you have an appointment upstairs. Shall I carry on with this meeting?'

Psion declined to work with us, but with the combined efforts of Roland, Bill and my persuasive, if slightly muscular, charm, we did manage to get some software companies to support us, though one of the things holding us back at the time was supplying enough machines to these guys so they could develop their software. In the end, there was a respectable amount of software for our machine when it hit the retailers.

With the software in place, the next plan was marketing. The price for the complete system with a green monitor was PS199, but I added a colour monitor version of the system for PS299. It was the same tactic I'd adopted on CB radio and tower systems and, as before, consumers at the point of sale tended to choose the more expensive version, even though PS199 was the lead-in price that hooked their attention. I would say that 90 per cent of the total sales of CPC464 were for the colour version, but had our lead-in price been PS299, the computer would not have had the impact it did when it hit the market.

The CPC464 went on sale for the first time in the UK on 21 June 1984. We had only a limited supply to distribute, so we did a deal with Rumbelows whereby they would be the first to launch the computer, in return for them pushing it in their advertising. It was a fad in those days to announce the exact date and location of when a new computer went on sale, so that the first wave of saddo anoraks could get their hands on them. We chose the Edgware Road branch of Rumbelows. As expected, the queue started to form early in the morning, at about 7.30. Within three hours, Rumbelows had sold out.

The all-in-one concept had really captured the imagination of consumers and the CPC464 took off like a rocket in the UK market, outselling all the competition. Sales of this item dwarfed what we had seen before, even with our tower systems, and although they did not impact our 1984 financial results, by June 1985, our profits had jumped to PS20m on a turnover of PS136m, with computers representing 70 per cent of sales.

The CPC464 was the product that really broke us through into Europe. The German market was the biggest in Europe (the biggest after America for consumer electronics) and we'd started doing business there with a company called Schneider. Run by two brothers, the boss being Bernhard Schneider, the business was very similar to Amstrad, focusing on audio equipment. We
had hammered out a deal whereby we would supply them with raw chassis for our tower system under the Schneider brand, based upon their own front-panel artwork. The goods were shipped direct from Korea to Schneider via Amstrad's Hong Kong office and Schneider established our product range in Germany under their own brand. The tower system became as successful there as it was in the UK. During the development of the CPC464, I'd been discussing with Bernhard Schneider the possibility of selling it in Germany. Schneider was a very conservative company and the thought of diversifying from their traditional audio and TV business into an area such as computers was completely alien to them.

I sent a sample to Schneider with one piece of software - a chess game. Being a typically efficient German, he sent it to a so-called expert he found in Munich, who reported back to him that our CPC464 was a very good computer compared to some of the other machines in the German market, such as Commodore. Schneider agreed to take some CPC464s, but wanted them under his own brand name. I agreed at the time, simply because we were
all
entering new territory and his brand was well known and well connected in Germany's retail trade, whereas no one had heard of Amstrad.

His first order was for a few thousand units which, when they hit the stores, sold within days. This made Bernhard Schneider panic like crazy. He asked me to supply him with more, as if I had some kind of tree in the garden I could pick them off. I had a big row with him, telling him that as a manufacturer himself, he should see how stupid his ranting was. How could I immediately click my fingers and deliver him 20,000 or 30,000 units? No, he would have to place an order for them in the normal way. It's strange when people panic like this - they suddenly forget the basic principles of manufacturing. I reminded him that
he'd
insisted on having his own brand name on the product, so even if I had more stocks of Amstrad computers in England, he couldn't take them anyway.

The success in France was just as phenomenal and changed the fortunes of Amstrad SARL, my first European subsidiary. The company had been set up in 1981 at the suggestion of Marion Vannier, Pierre Sebaoun's sidekick at Cogel. She'd called me and I'd known from the tone of her voice that something was wrong. It turned out to be nothing to do with business but involved her private life. The long and short of it was that there had been a big falling-out between her and Pierre.

I wasn't surprised, as on previous visits to Paris over the years I would get strange messages from her such as, 'Don't call Pierre at home tonight because his wife thinks he's with you.' I didn't particularly want to get involved in any
web of lies, but it was clear I was Pierre's alibi when he was with Marion. Inevitably, the relationship between them had broken down. She also told me that she no longer worked for Pierre, who had sold the Cogel business and was concentrating on a new venture.

I was due to visit Paris later in the week and she asked me if we could discuss opening a small office there for Amstrad. In hindsight, our business in France
had
slowed down somewhat, but it really hadn't bothered me, as we were so busy in the UK. Pierre was a bit like a grasshopper. He would jump from one idea to another and was renowned for starting businesses with a view to selling them on for large capital sums. Along with a partner, he had now become the sole representative for Mitsubishi in France and wasn't interested in Amstrad any more.

I had a strange meeting at the Meridien Hotel in Paris with both Marion and Pierre, the purpose of which was for me to ask Pierre whether he had any objection to me employing Marion and letting her take over the Amstrad business in France. There was a very tense atmosphere between the two of them, who were clearly not on speaking terms, and I was stuck in the middle. Pierre agreed there was no problem and that we could go our separate ways. Over the course of the next few weeks, Marion's enthusiasm returned. She was not only a fantastic salesperson, but also a great organiser and, under her management, Amstrad SARL established a respectable position within the retail trade.

Like Bernhard Schneider, Marion was sceptical about computers. However, news had travelled fast in the French media about Amstrad launching a computer and she was being contacted by them asking what stance Amstrad would be taking in France.