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The Rise and Fall of VisiCalc: How the First Spreadsheet Software Drove the PC Revolution

In the late 1970s, personal computers were still mostly a hobbyist‘s toy. That changed almost overnight when VisiCalc launched and became a sensation. Dubbed "The Killer App", VisiCalc showed that PCs could be indispensable business tools and catalyzed widespread corporate adoption. This is the story of how the first spreadsheet software took the computing world by storm.

Understanding VisiCalc: A Technical Deep Dive

Before exploring VisiCalc‘s immense business and technology impact, it‘s important to understand exactly how the software worked and what made it so revolutionary.

At its core, VisiCalc introduced the A1 coordinate-based grid format that has become ubiquitous in spreadsheets today. Text and values are entered into "cells" that form columns and rows. For example, the cell C7 refers precisely to the cell located at the intersection of column C and row 7.

Formulas can then refer to values in other cells. For example, the formula =A1+B1 would calculate the sum of whatever numeric values appear in cells A1 and B1. This enables powerful financial modeling and other applications.

But what made VisiCalc truly groundbreaking was its ability to recalculate everything instantly whenever any underlying value changed. This eliminated tedious and lengthy manual recalculations whenever data inputs were tweaked.

To illustrate, imagine a simple monthly budget spreadsheet tracking categories like Housing, Food, Transportation, etc. per month. Changing the Housing estimate from $1000 to $1100 would require manually recalculating multiple formulas to identify the new total spend. In VisiCalc, this happened near-instantaneously once the housing value was tweaked – a gamechanger.

Behind the scenes, Frankston‘s efficient assembly language programming for 6502 microprocessor allowed VisiCalc to run within the tight 32KB memory constraint of Apple II machines. Further technical innovations included:

  • Dynamically updating displayterminal graphics as values changed
  • Optimizing algorithms to minimize recalculation demands
  • Packing formulas and parameters into less than 1KB each

This technical ingenuity is what translated Bricklin‘s vision into a spreadsheet application practical enough for routine business use – an enormous leap forward.

The Road to VisiCalc: Early Spreadsheets & Personal Computing

VisiCalc marked a landmark breakthrough in ease of use and performance that opened spreadsheets to casual business users. But it drew on previous scattered technical advancements.

While Bricklin and Frankston are credited with inventing the electronic spreadsheet for microcomputers, earlier software existed for larger enterprise systems. In 1961, Richard Mattessich pioneered conceptual work on computerized spreadsheets for accounting use. In 1969, developers created LANPAR – an early spreadsheet application for mainframes deployed internally at companies like GM and Bell Canada.

These business-centric systems required significant training and technical skill, relying on punched cards and terminals. They were inaccessible to most outside of scientific and engineering roles commonly staffed by the few "computer people" within large organizations at the time.

Meanwhile, hobbyist computing was emerging in the 1970s centered around niche kits like the Altair 8800. User groups sprung up around early personal systems from Apple, TRS-80, and Commodore PET. But affordable microcomputers had not yet crossed over into major businesses.

They remained a relatively niche hobbyist market through the end of the decade – with little software to demonstrate practical utility. This set the stage for VisiCalc to deliver the first must-have application that drove widespread corporate PC adoption.

VisiCalc Launches: The First Killer Spreadsheet App

In 1979, VisiCorp began selling VisiCalc for around $100. It was an immediate sensation. VisiCalc made it simple for anyone to set up a grid of rows and columns, input data into "cells", then apply formulas to automate calculations. Change a single number and everything recalculates instantly.

Realizing VisiCalc‘s immense potential, Apple bundled the software with Apple II systems, fueling meteoric sales growth for both. VisiCalc established spreadsheets as a must-have business tool and helped drive early personal computer adoption.

By 1983, VisiCalc commanded an astonishing 85% market share of all spreadsheet software running on personal computers according to market research firm Future Computing. The application sold over 700,000 copies by this peak, accounting for an estimated 35-40% of VisiCorp revenue which approached $50 million at height.

VisiCalc was not just successful – within a few years it had defined and utterly dominated the nascent market for spreadsheet apps. By 1984, InfoWorld declared that it had "gone through a complete life cycle, from conception in 1978 to introduction in 1979 to peak success in 1982 to decline in 1983 to a probable death according to industry insiders in 1984."

The Downfall of VisiCalc: How Lotus 1-2-3 Overtaken the King

So how did the first spreadsheet software fall so far so fast?

A key factor was inertia on the part of VisiCalc‘s developers to meaningfully improve it over time. They waited until 1983 to release VisiCalc Advanced for the Apple II. However, competitors were catching up with new offerings tailored to more advanced hardware.

The biggest threat emerged in 1983 – Lotus 1-2-3. Mitch Kapor, a former VisiCorp employee, made the critical decision to build 1-2-3 specifically for the graphics capabilities and expanded memory capacity of the hot new 16-bit IBM PC.

Lotus delivered significant user interface advances, including charting and graphing, database sorting and querying functions, macros for automating complex tasks, and greatly improved memory management. Expert InfoWorld columnist Esther Dyson noted that it had "significant qualitative and quantitative advantages over VisiCalc" – while actually being cheaper at just $495 retail pricing.

And Kapor cleverly made 1-2-3 backwards compatible – able to import VisiCalc worksheet files. This enabled a smooth transition for the many business users already locked into existing VisiCalc documents and models. The superior feature set quickly made 1-2-3 an easy choice for new customers as well.

The impact was immense and immediate. As esteemed technologist and author Steven Levy wrote:

"The day after Lotus 1-2-3 came out. October 1983 sales of VisiCalc immediately halted. Quarters of 50-70 percent annual growth suddenly turned into 40-50 percent annual declines. Within 2 Years Mitch Kapor had snatched the market lead from [VisiCorp founders] Bricklin and Frankston”

Bricklin ruefully agreed in later interviews:

“Basically, Mitch did to me with 1-2-3 what I did to others with VisiCalc…By 1985 VisiCorp was out of business."

The company and software that catalyzed the PC revolution just 6 years earlier were purchased and discontinued by Lotus – completing a shocking downfall. But VisiCalc‘s influence was only beginning.

VisiCalc‘s Legacy: Paving the Way for Modern Spreadsheets

Though short-lived, VisiCalc changed the game by demonstrating the immense utility of personal computers for business purposes. It transformed PCs from hobbyist toys to essential productivity enhancers. VisiCalc set the stage both for mass corporate PC adoption and for later killer apps like word processors and databases.

Dan Bricklin‘s vision and Bob Frankston‘s execution quite literally "empowered thousands of business managers to escape the data processing department for mundane planning work," as technologist Stewart Alsop wrote in 1984. They proved that everyday users could self-serve critical data-driven business analysis without specialized skills – once unthinkable.

The functions and grid-based interface pioneered by VisiCalc still form the foundation for modern giants like Microsoft Excel. Excel now boasts over 1 billion users who likely give little thought to the once revolutionary idea that started it all.

Macintosh pioneer Steve Jobs reflected that VisiCalc “propelled the Apple II to the success it achieved” in fueling the PC revolution. Tech visionaries Fred Gibbons and Alan Kay assessed that VisiCalc helped “legitimize” personal computing within business contexts far more than any technology that preceded it.

Thanks to Bricklin and Frankston‘s visionary first spreadsheet software, PCs conquered the business world and found their way onto every office desk. More than 40 years later, VisiCalc‘s DNA lives on in the spreadsheet apps we rely on today. While short-lived itself, it helped birth an entire industry.

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