ComputerLand

» see computerland.com as it lived, on the wayback machine

~ the last words ~

Before ComputerLand there was no obvious place to go and buy a computer. There were hobbyist shops and there were mail-order ads in the back of magazines, and if you wanted a machine you were expected to already know which one. William Millard opened his store in Hayward in September 1976 with ten thousand dollars and called it Computer Shack, until Tandy pointed out what it owned, and the name changed to ComputerLand before the chain got going.

The idea underneath was franchising, not retail. Millard hired Ed Faber, who had come out of IBM sales, to design a store that could be copied, and then sold the copies. Franchisees paid royalties of up to eight percent of monthly revenue and were required to buy the overwhelming majority of their stock from the parent. The chain went from 24 stores in 1977 to 147 by 1980, and then IBM launched the PC in 1981 and picked ComputerLand as one of the channels that would carry it. Sales went from $151 million that year to $1.4 billion in 1984. By 1985 there were more than 800 outlets across 24 countries.

Then the reason for a computer dealer stopped existing. Clone makers drove the price of a PC down until margin disappeared, mail order took the customers who already knew what they wanted, and a franchisee paying eight percent for the privilege of buying at the parent's price could no longer compete with a shop in a strip mall selling the same beige box. Most of the retail locations were gone by 1990. The corporate entity was sold on repeatedly through the nineties and finished in February 1999.

The store where you go to buy a computer and get taught how to use it never existed where I grew up. What existed was a small shop with a glass counter and a printed list of parts, and you turned up with your own list, and either the shop put it together or you did. Around 2003 that list was my forum signature on frmtr, processor and graphics card in one line, which is how people introduced themselves. Nobody sold a package with training in it because nobody would have bought one. The thing Millard invented and got very rich from is a solution to a problem Turkey solved a completely different way.

~ the record ~

~ what a computer store was for ~

Faber's store was not a shelf. It was a room with machines running, a person who could show you what a spreadsheet did, and a service counter, because in 1978 a personal computer was a purchase most buyers could not evaluate on their own. The franchise manual specified the layout. The point was that a small business owner in a city with no computing culture could walk in and come out with something that worked, and that the same experience would be waiting in the next city.

This is why the chain got the IBM PC. IBM needed dealers who could support a machine it was selling to businesses, and there were not many organizations in 1981 that could do that at national scale. The dealership was worth more than any product ComputerLand ever sourced itself, and it also set the clock running, because once the PC became a commodity the support was the only thing the dealer had left to sell and it was not worth eight percent.

~ the promissory note ~

In 1976 Millard's earlier company, IMS Associates, took a $250,000 loan from a group of investors. IMS made the IMSAI 8080, the machine with the row of front-panel switches that later showed up in WarGames, and it needed cash. The note carried a conversion right. The investors, operating as Micro/Vest, eventually claimed that right applied to Millard's holdings, and Millard fought it for years on the grounds that ComputerLand was a separate company.

On 11 March 1985 a California jury decided against him. Micro/Vest was awarded twenty percent of ComputerLand's stock and $115 million in punitive damages on top, over a loan of a quarter of a million dollars taken nine years earlier. It is the single largest thing that ever happened to the company. Millard stepped back from the chief executive role that year, and by 1987 he had moved to Saipan and sold what was left of his stake for $80 million.

~ what was left of the name ~

Warburg Pincus and William Tauscher took over in 1987 and spent the next years trying to turn a franchise business into a corporate reseller, which is a different company wearing the same sign. Merisel bought the ComputerLand name and the franchise network at the start of 1994. The corporate-owned stores were renamed Vanstar. Synnex bought the franchise operation from Merisel in 1997 and Inacom bought Vanstar in 1998. Inacom itself went under in 2000.

Because the thing had been a franchise, individual owners kept trading under the name in some towns for years after there was nothing at the center. That is the strangest part of the ending. A chain that once had 800 stores did not close so much as evaporate upward, leaving the sign on a few doors and no company behind it.

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