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I was very impressed with the engineering. When I looked at the floppy disk drive for the Apple II and I saw that it was a Shugart SA-400, but it was missing most of the chips that every other computer had in it, and realized that Woz had hacked the thing and was doing a lot of it with a combination of software and hardware, I was deeply impressed with the engineering. But it was not something that I could see an average person using. I could see, probably, more likely someone using that than a CP/M machine. Remember, this is before even the IBM PC. But I was ready to leave the world of computers. I was working at Coleco in 1983. At the beginning of 1984, I was calling up Lucasfilm and other people in the film industry because I thought, Well, the IBM PC which was introduced in 1982 is taking over the world. Its graphics display is so poorly architected. It doesn t even have square pixels. It has a palette of just eight primary colors actually two grays and six colors. Clearly, it s being driven by business applications and so on. My dream of where computers would go turns out to be the wrong one. It s not going more toward the average person; it s going more toward businesses. And that s OK. So I figured, If I can t do it in people s homes, at least I want to be involved in creating exciting experiences on the silver screen and on television. Then I saw an ad in 1984 for a Macintosh, and it changed everything. I saw that it had all this cool graphics capability. They clearly were interested in the user experience: it was designed for an average person in simplicity; it was very graphically oriented, albeit in black and white. I decided that there was hope. I kept calling Apple again and again, trying to find somebody who would talk to me, to get an interview there. Finally, Alan Kay, who I had worked under at Atari and now was running a research group at Apple, came to visit Connecticut to give a talk. I told him what I thought about the Macintosh and said, I want to make a color Mac and make it low cost. He said, OK, OK. I ll see if I can talk to somebody and get you an interview with the Mac team. That led to three interviews, and I ended up not working on the Mac team, but for the team secretly making the color Macintosh.
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Livingston: Then you moved out to California Perlman: Yes. Actually, it was the second time. I moved out here before to
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work for Atari. Then that went bust, so I came back to Connecticut and worked for Coleco.
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Livingston: Do you think there are major differences for a new startup in
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Silicon Valley versus the East Coast
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Perlman: Oh yeah, phenomenal differences. I can t speak for every kind of
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startup, but for something involving technology and even a lot of things involving content it s just so much easier to do it here. You have resources here and people who understand technology. There s a high concentration of talent that you can draw on. You don t have to relocate people to get them there.
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Steve Perlman 187
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Then there s Sand Hill Road with all the VCs and other potential investors, who are all clustered together. You literally might do two or three presentations to different VCs all in the cluster of buildings on Sand Hill Road. The other thing is that there s kind of an attitude here that people should try things, and, if they fail, if they understand why they failed, they may actually be a better investment in the next round than somebody who quickly succeeded just by sheer luck.
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Livingston: Were there any powerful interests who did not like what you were doing and tried to stop WebTV Like maybe Microsoft saw it as a threat to Windows Perlman: With WebTV . . . Microsoft, I found out over time that they probably . . . I mean, they re a very cautious company, and they proactively worry about any potential threats. I don t know if they saw WebTV immediately as a threat, but they saw it as a potential threat. We didn t sell that many units the first Christmas. We were too high-priced. We were $329 when it came out, and the lesson learned there is that you don t charge both a high price and a subscription fee. Just one or the other, right When we repriced WebTV at $99, then we sold a lot of them. So when Microsoft came to acquire us, we only had 56,000 subscribers, which was a fairly modest number. But they still were very interested in us and that convinced me perhaps wrongly, but nonetheless convinced me that their real objective was to capitalize on this market, to grow from what we were doing. Also their desire to create the campus here in Silicon Valley was the other thing. So I kind of thought and maybe even this was their objective at the time that they really were going to develop this area of advanced television systems. But, as time went on, it became apparent that they simply wanted to make sure that nobody else successfully deployed a product in this area. I think they saw WebTV as the only viable player out there. Who knows Maybe it was a compound decision for them. Maybe they thought, Well, maybe there s a market here, and maybe we can protect our flank to make sure nobody else does it. I don t know. But there were some things that I was not allowed to do, which made it impossible for me to stay. They reneged on their commitment to support RealNetworks and Java, and I didn t know how we were going to build a good web-surfing experience without Real and Java compatibility. Then, as we went through the budgeting process and everything else there, and I began to get to know the other top executives at Microsoft, they were talking about negotiating this and that funding, and cutting back products to the point where they no longer made sense. I said, Look, can t we all agree on what is the right objective for the whole company and then fund that I don t care if it s in your group or my group or whatever, but we should do the right thing. It didn t work that way and, of course, any big company is like this. People have certain things they control. That s why there s politics in large companies. I can t operate in that environment. I m just far too focused on the end result. And so for all those reasons the fact that they were very resistant to
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