The start-ups discussed in this chapter span hardware, software, and systems in both the Boston and Silicon Valley areas. I am on the board 6f directors of Cirrus Logic, a user of Gateway's Verilog product, an investor in Gensym and Thinking Machines, and a friend of MasPar's founders.
OVATION: THE CASE OF THE MISSING PRODUCT
Ovation was a company founded in 1982 to build "the next generation of integrated microcomputer software," a development that many were saying was upon us at that time. Ovations product was defined as a package that would seamlessly integrate word processing, spreadsheet, database-management, and communications functions. It was to have been marketed in volume to Fortune 1,000 companies at a price of $695, which was comparable to the price of the most popular spreadsheet, Lotus's 1-2-3. Healthy funding was secured from choice venture capital firms.
Despite having gotten off to a strong start, Ovation stalled and ultimately failed in stage III (product development). It declared Chapter 11 bankruptcy about two years after its founding, having spent approximately $7 million without producing a product. Since Ovation took a high-profile position in starting up, its failure attracted press coverage. The question is, what went wrong?
PRODUCT DEVELOPMENT STAGE
The relational graph in Figure 11-1 plots Ovation's actual accomplishments against the model of success for stage III (product development) at the time when the company was perceived to be at the end of that stage. The graph tells the whole story practically at a