Commodore Legends: Michael Tomczyk – Part I
Commodore was a legendary company with legendary employees.
The company, built by Jack Tramiel had geniuses on the technological side like Chuck Peddle, Al Charpentier, … and featured bold pioneers on the side of management and marketing, like Michael Tomczyk, Kit Spencer, …
In this series, I will be talking to some of these computing legends, asking them how they saw their careers at Commodore, what they’re doing now, and how Commodore has changed their lives.
In this first interview, it’s Michael Tomczyk in the chair, the former U.S. Director of Marketing and International Product Marketing Manager, the man behind the first million selling computer, the VIC 20.
The interview will be published in 2 installments, with the first one zooming in on Michael’s career at Commodore and the VIC 20. Part 2, next Friday, looks at the future and looks back with some personal views on Michael’s happiest and saddest moments at Commodore.
Robby: Michael, how did you start your career in the IT industry?
Michael: In 1978, I earned my MBA from UCLA and was working as a management consultant in Beverly Hills. My work involved the launch of the first automated teller machines, promotion of the first CT scanning systems, the national rollout of Century 21 from a regional to a national realtor, and lots of other interesting projects including launching a new bank in Los Angeles, promoting a private clinic in London…lots more. When I graduated, I wanted to manage something, so I accepted a position as general manager of Metacolor, a small (12 employees) graphic design agency in San Francisco. A film-making group based in Toronto and Hollywood had purchased this agency from an entrepreneur and needed someone to manage it. Metacolor used a device called a Quantizer developed by NASA for lunar missions, to provide special effects which we provided for several Hollywood movies including Time After Time and Logan’s Run.
Atari was also a Metacolor client, and one day we were invited to be a beta test site for their new Atari game computer, which came with a cartridge game called Star Raiders – the player piloted a space fighter and enemy fighters swooped in from all directions – the “star field” that created the 3D effect was hard-wired into the firmware. Almost immediately, everyone got hooked on that game so I took it home to keep them from wasting their time on this. Three days later, I looked up and saw a thin shaft of light streaming in through the curtains and realized that I had stayed up all night playing that game and only had 3 hours of sleep in 3 days! Very soon after that I quit my job, lived off my savings, and spent the next 6 months taking a BASIC programming course at a local computer store, reading everything I could about computing – and I used my skills as a former journalist to write articles for COMPUTE! Magazine. My first article was an interview with the designer of Atari’s Star Raiders game! I started hanging out at Apple and got to know Steve Wozniak, Andy Herzfeld and Mike Markkula, … some of the Apple staff would get mad at me because I would come in and wander back to the offices without a security/visitor badge. After 6 months, I was almost broke but got myself some interviews and received job offers from Apple, Atari and Commodore.
Apple invited me to go to the cafeteria, check out the job requisitions posted there (it was a sheaf of about 20 jobs) and pick the one I was qualified for, and they’d hire me. But Apple had too many geniuses. They were “papa bear” in personal computing. I would be lost in the crowd.
Atari had very few geniuses – that was the “baby bear.” I was offered the position of software director by Conrad Juston at Atari, but I had a strange feeling about the company – my instincts were correct. Atari lost $1 billion in about 5 years, despite the success of the Atari game systems.
Commodore had half geniuses and half idiots (ok, idiots is a strong word – but let me say they were under-qualified). I went to see Jack Tramiel, had a very blunt, straight-talking interview where I indicated that I knew the company, and Jack, had a ruthless reputation, but also (in my opinion) the best core computing system. I told Jack that Commodore was missing a lot of marketing opportunities. At that time their marketing materials looked like something created in the 1940s. Really bad.
When I came in to talk with him, he saw me as someone who would have to “learn the religion” (he called his business philosophy “the religion” – and in our first meeting he wondered whether he had the luxury to hire someone he would have to “teach.” I very candidly told him all the things I thought were wrong with the company – a laundry list of about 20 things I recall. I told him I thought Commodore’s marketing was horrible. Apparently my bluntness impressed him.
He told me to call him the next day and I called ELEVEN times! Each time his secretary told me Jack was still thinking what to do with me, he was in meetings, on the phone, at lunch, always promising earnestly that Jack would get back to me. Nothing happened. Finally, at 7 p.m. I made one last call, vowing that if nothing happened in that call, I was going to Apple and that was that. As luck would have it, Jack was walking by the secretary’s desk (he was the last person in the office) and picked up the phone. He said he knew what to do and asked me to come to the office, and offered me the job of Assistant to the President – adding, “your job won’t be to assist me – your job is to follow me around, learn the company, and after 6 months we’ll find something for you to do.” I thought it was very perceptive of him to know that I was capable of learning his “business religion” and his trust was immediate and earned my loyalty. I told him I’d like to sit in on any meetings and phone conversations and he agreed. I spent a lot of time wandering in and out of his office.
An interesting sidenote – after that I noticed that whenever I went to a computer convention, Steve Jobs at Apple totally ignored me and in fact wouldn’t even speak to me. I wasn’t sure if he resented the fact that I went to Commodore instead of Apple, or if he was simply arrogant and didn’t think I should be on his radar screen. Bill Gates was exactly the opposite – always friendly, congenial, happy to chat, generous – one year Bill and I shared the stage at the Consumer Electronics Show, each of us giving a keynote presentation. I was encouraged by Jack to speak at events, talk to the press whenever I wanted, and I also gave briefings on our home computers at securities analyst meetings in New York, and at press conferences.
Robby: Once with Commodore, you would rise very high, very fast and become one of Jack’s inner circle, his “family” as he referred to it. How did this come about?
Michael: My first job title was “Assistant to the President and Marketing Strategist”. My first day with the company was at a meeting of international managers and engineers. We met around a large square arrangement of tables, at the Fox and Hounds estate outside of London. It was a cool, sunny day. Ironically, the date was April 1, 1980 – April Fool’s Day.
At that time, Commodore was the 3rd largest personal computing company in the U.S., behind Apple and Radio Shack, but number one in Europe. Commodore was number one in Europe, however. The company had introduced handheld calculators there in the late 1970s and was the leading brand. Commodore’s first personal computer, the P.E.T. (Personal Electronic Transactor) was also introduced in Europe before the U.S. so we were number one in personal computing in Europe, also.
At that meeting in London, Jack announced that he wanted a small low-cost color computer. The engineers were working on a higher end color computer and rejected the idea. The general managers thought it was too soon to “cannibalize” the market and that we should be milking the higher end of the personal and business desktop market before introducing a color home computer. Jack left for some meetings and returned the second day. He asked what people thought about his idea. Almost everyone argued against it except Kit Spencer and Bob Gleadow from the U.K., Tony Tokai and his engineer Yash Terakura from Japan…and me. Hm. Jack silenced the discussion by standing up, pounding once on the table and declaring, “Gentlemen, the Japanese are coming…so we will become the Japanese.” I’m not sure if I have those exact words on tape but I recently ran across an audio tape that captured a portion of that discussion.
My first 3 weeks with the company were exciting, invigorating and a frantic blur of activity. During my first 2 days, we basically gave birth to the first affordable home computer. Next, we flew to Germany and Jack convinced the German government to essentially give him a failed electronics factory which would become Commodore’s computer manufacturing center in Europe. Then we returned to the United States where Jack fired the marketing department. While this move was appropriate, it did catch me by surprise.
For several days, I interviewed the members of the marketing department and found all kinds of deficiencies, including virtually no advertising, all of our software contracts had lapsed (which could have been disastrous since we were preparing to develop some new computers that would use some of this software), our user manuals were really bad, the Commodore user clubs were frustrated trying to work with us and receiving no support…and so on. I shared these concerns with Jack.
One day I went to lunch and when I returned all the marketing offices except one were empty. I asked the secretary what happened and she calmly replied without looking up from her work, “Jack fired everyone just before lunch.” I was surprised to say the least. She seemed so unconcerned, I had to ask, “Does this sort of thing happen often?” To which she replied, “Actually, yes.”
A short time later, in a routine management meeting, Jack announced that he was appointing me U.S. Director of Marketing. He told he, “You recruit a new marketing team, the kind of people you think we should have, and I’ll recruit a new marketing vice president.” My first action as marketing director was to call the editors of the top computing and electronics magazines to lock in the back covers for Commodore ads. Owning the back cover of these magazines was a huge coups. Later a vice president tried to cancel these ads and the editors called me and I vetoed that decision.
We had an unusual corporate culture at Commodore. There was an infrastructure of people who did not have VP titles who actually had more authority than some VPs in the formal organization. This was what Jack called the “family” – a group of insiders who he felt understood the “religion” very well and had his authority to use their judgment to make things happen. A good example is a story told to me by Dick Sanford, Commodore’s Executive VP (and second in command) who said when he was controller, he fired a general manager who technically outranked him – then called Jack to report what he had done. He was concerned that he might have overstepped his authority but he knew he was right, and Jack backed him up and complimented him.
I didn’t realize that Jack really had a “family infrastructure” until one day I was invited to meet with Jack and when I showed up there were about a dozen people also waiting in the hallway, mostly senior managers who had been with Jack for a fairly long time. One of them said to me, “Congratulations” to which I replied “What for?” and he responded, “You’ll see…” When it was my turn, Jack informed me that I was now officially “in the family” and that meant I had been included in a group of about 20 “insiders” who were considered the core of the company management. I was told that I would receive a 100% bonus – which was the reason for the meeting – and some other perks. Jack’s intention was to provide the core with lifetime employment like a Japanese company – in fact he often said, “If you can last a year at Commodore, you’ve got lifetime employment.” He was only half-joking. What was unusual about the “family” is that they included vice presidents, engineers, chip designers, marketeers and some people without “power” titles – it was essentially a group of people who understood Jack’s philosophy well enough that we could be trusted to use our judgment and “do the right thing” when required, we had more freedom than most people in the organization, and received higher compensation. For example, I was one of the few people in the company authorized to talk to the press whenever I wanted.
Effectively, I wore several hats. I have business cards that list me as: Assistant to the President and Marketing Strategist, U.S. Director of Marketing, VIC Czar, VIC Product Manager and International Product Marketing Manager. If Jack had not left the company in 1984, I was in line to become a vice president.
Robby: The VIC Czar, that is indeed how many people refer to you, as you were the driving force behind the VIC 20. How did this million selling computer come about?
Michael: As I began to build the new marketing team, I kept thinking about the home computer Jack had said he wanted to develop. One day I typed a 30 page single-spaced memo and put a large happy face with a beard and mustache on the cover. I tossed it on Jack’s desk. “What’s that?” he asked. “That’s everything that should be done for the new computer. Make sure that whoever develops the new computer reads that.”
A few days later he came into my office and tossed it on my desk. “What’s that?” I asked. “That’s everything that should be done with the new computer,” he echoed my words. “You’re responsible for making it happen. I’ve told everyone involved they have to run everything by you.” He added that this would be a challenge for me because none of the people reported to me, and I would have to accomplish this by persuasion, and with his tacit authority. I still had to make the case for such things as the name of the computer, price and full size typewriter keys (Jack wanted a flat panel keypad because it was cheaper but I insisted on full size keys). I also insisted on programmable function keys which was my idea – stolen from a prototype of a Japanese computer I saw in Tokyo. We also built in an RS232 interface for communication purposes, which was another innovation. These types of innovations were designed to make the computer as flexible as possible and put the responsibility for innovation in the hands of software and accessory entrepreneurs, which was a big deal. We also provided a 400 page programmer’s reference guide that I co-authored, to help the user community. I worked closely with Tony Tokai and Yash Terakura in Japan and we came up with the colors for the case and keys.
Although I wanted to call the new computer the “Commodore Spirit” showing a direct line of descent from Commodore calculators and the Commodore P.E.T. and C.B.M. desktop computers, at the last minute I received a frantic note from Japan saying we couldn’t use “Spirit” because in Japan, “spirit” isn’t like “Casper the Friendly Ghost” – the word can describe a horrible ghoul from hell or whatever, so I had to scramble to come up with a new name on short notice. Grudgingly, I went with “VIC” which stood for Video Interface Chip, one of the microchips designed at our MOS Technology facility, the “heart” of the computer. When I told Jack I was going with “VIC0-20” he said, “Why 20?” The number didn’t relate to anything associated with the computer. I replied, “Because VIC by itself sounds like a truck driver and 20 is a friendly number.” I used the opportunity to propose $299.95 as the retail price, because most computers at the time were in the $600 price range. He agreed.
I did recruit my own product development/marketing team which I named the “VIC Commandos” who implemented a lot of innovations involving user manuals, core software, packaging and marketing ideas, and so on. The VIC Commandos were all in their teens and 20s, and every one was absolutely brilliant, creative, ingenious, dedicated, and all of us were 24/7 workers – we didn’t get much sleep, but we were driven with an almost religious zeal. All of us could sense that we were making a mark on history.
Jack Tramiel and Michael Tomczyk – celebrating the sale of 1 million VIC 20’s
(Picture courtesy of Michael Tomczyk)
I told every engineer and marketing colleague I was involved with, that the prime directive for the VIC-20 was “user friendliness” – this would be the guiding principle and was easily understood by everyone. Yash Terakura was the Japanese engineer who did a lot of the work on the first VIC prototype, which was actually introduced in Japan in September 1980 (and in January 1980 in the U.S.). In Japan the computer was named the VIC-1001 as a spin-off from 2001: A Space Odyssey.
I told Yash that this had to be a “friendly computer” and I can still recall him looking up and smiling back at me. “This will be a friendly computer,” he grinned, “because I am a friendly engineer!” Yash and I had dinner recently and caught up on our 30 years of memories, and we still share the same philosophy of innovation and user-friendliness.
While we were developing the first home computers, Chris Morgan the Editor-in-Chief of BYTE Magazine knew I was championing this phrase wherever I spoke or gave interviews, and he sent me a note saying that there is a German word – “Benutzefreundlichkeit” that means “user-friendliness.” Consequently, I had brass and wood plaques made with this word, and “official motto of the VIC Commandos.” Most people don’t recall that the concept of a “user friendly computer” was actually scoffed at during the 1970s and early 80s. I asked our legal team to trademark the phrase “The Friendly Computer” and this became a motto on all of our packaging and in our promotional materials. This was a shrewd strategy at the time because it also made it difficult for competitors to use the phrase “friendly computer!”
Later I asked Jack if I could have the title “VIC Product Manager” and he refused, saying “I don’t believe in product managers.” “So what should I be?” I asked. At that time, the U.S. had an “energy czar” in Washington so Jack thought about it a moment and replied, “You’re the VIC Czar.” And that’s what we put on my business card. Later as things started coming together, he relented and I became the VIC Product Manager.
Robby: The price for the VIC 20 was very low. I remember Jack Tramiel in an interview a couple of years ago for the Computer History Museum stating that to be able to prevent competition from playing in your area, keep your prices as close as possible to the actual production costs. That way, no-one can be cheaper. A very shrewd tactic if you ask me.
Michael: I set the price at $299.95 because it was a “friendly number” and also about HALF the cost of comparable personal computers. We did in fact make a profit on the CPU (the basic computer) as well as the peripherals and software. Later, in 1983, we used this profit margin to push Texas Instruments out of the market because our engineers discovered that they were losing money on their CPU and trying to make money on peripherals. Jack cut the cost on the peripherals and software, which forced TI to leave the market in one week. Unfortunately, that decision also resulted in T.I. dumping computers on the market which hurt our Christmas season and resulted in our retailers asking for free product to “stock balance” their inventory in the wake of the price drop…and this fateful decision indirectly led to Jack Tramiel’s departure from the company.
Next Friday, we’ll have part II of the interview, focussing on Michael’s current career and a look back at some of the happiest and saddest moments at Commodore as experienced by Michael. Stay tuned!