Computer manufacturing is--after cars, energy production and illegal drugs--the largest industry in the world, and it's one of the last great success stories in American business. Accidental Empires is the trenchant, vastly readable history of that industry, focusing as much on the astoundingly odd personalities at its core--Steve Jobs, Bill Gates, Mitch Kapor, etc. and the hacker culture they spawned as it does on the remarkable technology they created. Cringely reveals the manias and foibles of these men (they are always men) with deadpan hilarity and cogently demonstrates how their neuroses have shaped the computer business. But Cringely gives us much more than high-tech voyeurism and insider gossip. From the birth of the transistor to the mid-life crisis of the computer industry, he spins a sweeping, uniquely American saga of creativity and ego that is at once uproarious, shocking and inspiring.

For eight years, Robert X. Cringely's "Notes from the Field" column appeared weekly in Info World. Currently he can be seen in the public television series Triumph of the Nerds, based on this book. A former Stanford professor and foreign correspondent, he lives in Palo Alto, California.

Chapter One

The Demo-God

Years ago, when you were a kid and I was a kid, something changed in America. One moment we were players of baseball, voters, readers of books, makers of dinner, arguers. And a second later, and for every other second since then, we were all just shoppers.

Shopping is what we do; it's entertainment. Consumers are what we are; we go shopping for fun. Nearly all of our energy goes into buying-thinking about what we would like to buy or earning money to pay for what we have already bought.

We invented credit cards, suburban shopping malls, and day care just to make our consumerism more efficient. We sent our wives, husbands, children, and grandparents out to work, just to pay for all the stuff we wanted--needed--to buy. We invented a thousand colors of eye shadow and more than 400 different models of automobiles, and forced every garage band in America to make a recording of "Louie Louie," just so we'd have enough goods to choose between to fill what free time remained. And when, as Americans are wont to do, we surprised ourselves by coming up with a few extra dollars and a few extra hours to spare, we invented entirely new classes, of consumer products to satisfy our addiction. Why else would anyone spend $19.95 to buy an Abdomenizer exercise machine?

I blame it all on the personal computer.

Think about it for a moment. Personal computers came along in the late 1970s and by the mid-1980s had invaded every office and infected many homes. In addition to being the ultimate item of conspicuous consumption for those of us who don't collect fine art, PCs killed the office typewriter, made most secretaries obsolete, and made it possible for a 27-year-old M.B.A. with a PC, a spreadsheet program, and three pieces of questionable data to talk his bosses into looting the company pension plan and doing a leveraged buy-out.

Without personal computers, there would have been--could have been--no Michael Milkens or Ivan Boeskys. Without personal computers, there would have been no supply-side economics. But, with the development of personal computers, for the first time in history, a single person could gather together and get a shaky handle on enough data to cure a disease or destroy a career. Personal computers made it possible for businesses to move further and faster than they ever had before, creating untold wealth that we had to spend on something, so we all became shoppers.

Personal computers both created the longest continuous peacetime economic expansion in U.S. history and ended it.

Along the way, personal computers themselves turned into a very big business. In 1990, $70 billion worth of personal computer hardware and software were sold worldwide. After automobiles, energy production, and illegal drugs, personal computers are the largest manufacturing industry in the world and one of the great success stories for American business.

And I'm here to tell you three things:

It all happened more or less by accident.

The people who made it happen were amateurs.

And for the most part they still are.

Several hundred users of Apple Macintosh computers gathered one night in 1988 in an auditorium in Ann Arbor, Michigan, to watch a sneak preview demonstration of a new word processing application. This was consumerism in its most pure form: it drew potential buyers together to see a demonstration of a product they could all use but wouldn't be allowed to buy. There were no boxes for sale in the back of the room, no "send no money, we'll bill you later." This product flat wasn't for sale and wouldn't be for another five months.

Why demonstrate it at all? The idea was to keep all these, folks, and the thousands of people they would talk to in the coming weeks, from buying some competitor's program before this product--this Microsoft Word 3.0--was ready for the market. Macintosh users are the snobs of the personal computer business. "Don't buy MacWrite II, WordPerfect for Macintosh, or WriteNow," they'd urge their friends and co-workers. "You've got to wait for Microsoft Word 3.0. it's radical!"

But it also didn't work.

To make the demonstration even more compelling, it was to be given by Bill Gates, Microsoft's billionaire boy chairman of the board who had flown in from Seattle for that night only. (This follows the theory that if Chrysler issued invitations to look through a telescope at one of its new minivans circling a test track, more people would be willing to look if Lee Iacocca was the driver.)

There is an art to demonstrating a computer program like this--a program that isn't really finished being written. The major parts of the program were there, but if the software had been complete, Microsoft would have been taking money for it. It would have been for sale in the back of the room. The fact that this Was only a demonstration and that the only fingers touching the keyboard that night would be those of the highly talented Bill Gates proved that the program was in no way ready to be let loose among paying customers.

What the computer users would be seeing was not really a demonstration of software but a virtuoso performance of man and machine. Think of Microsoft Word 3.0 as a minefield in Kuwait and Bill Gates as a realtor trying to sell a few lots there before all of the land mines have been cleared. To show how safe the property is, he'd give a tour, steering prospects gently away from the remaining mines without telling them they were even in danger.

"Looks safe to me, honey," the prospective buyer would say. "Let's talk business while the kids play in the yard."

"NO!!!"

That night in Ann Arbor, according to testers back in the Microsoft quality assurance department, the version of Microsoft Word that Gates was demonstrating contained six land mines . . .