40 Years Ago, "Spreadsheet" Didn't Mean Excel, It Meant VisiCalc

I like to find specific events that change the trajectory of the semiconductor industry, such as June 29, 2007, when the iPhone was announced. Today is the 40th anniversary of another such event. Forty years ago today, on October 24, 1979, Dan Bricklin's VisiCalc went on sale. It was the first spreadsheet. It was the moment that personal computers went from being toys to serious tools. I use the term "personal computer" in the same way as it was back then, in the era before the IBM PC existed, as a computer that sat on one person's desk. In fact, when it was released, VisiCalc only ran on the Apple II.

I said above that VisiCalc was the first spreadsheet. Today, spreadsheet has come to mean Excel, but the term "spreadsheet" was already in existence and referred to large pads of paper marked out in rows and columns to make doing the same sorts of calculations by hand. In the days before VisiCalc, doing a what-if calculation like "how will our revenue by month change if we increase prices by 5%?" was an enormous amount of work.

It was so much work that people in finance departments immediately started to buy Apple II computers simply to run VisiCalc. At the time, the Apple II cost $2000, while VisiCalc was $100. There is plausible evidence that the overnight success of Visicalc in business, and the associated success of the Apple II, was a big motivation for IBM to create the PC on a crash schedule.

I don't think the term was used back then, but it was the first killer app, something that was so important that it almost forced people to buy the hardware to run it. Later, Lotus 1-2-3 (and WordPerfect) would take over the killer app mantle for the PC. I think probably Pagemaker (and the laser printer) did the same for the original Mac, allowing most newsletters and brochures in the country to be produced by non-professionals. Before the killer app, these computers were toys; after, they were useful tools. Before they were a discretionary purchase like a high-end SLR camera; after, they had a business ROI.

VisiCalc was created by Dan Bricklin. There are a lot of software patents for things that are either obvious (xor the cursor onto the screen) or very esoteric (an incremental improvement in a graph coloring algorithm). If ever there was a software idea that was a true paradigm shift, it was the invention of the spreadsheet. Unfortunately for Dan, he never patented it. Apparently, they did think of it and consulted a patent attorney who estimated a less than 10% chance of a software patent being granted. Back then, software was usually regarded as too close to mathematics to be patentable.

Although VisiCalc was successful at first, it was Lotus 1-2-3 on the original PCs, and then Excel later, that got all the money. When Lotus 1-2-3 was released in 1983, VisiCorp rapidly became insolvent when sales dried up immediately. Lotus purchased them and end-of-lifed VisiCalc.

Of course, VisiCalc was primitive compared to a modern spreadsheet program like Excel. But it did introduce something that is still with us today: cells were named with the A1 notation. If you want all the details, here is the Visicalc Reference Card. The entire program was originally designed to run in 16K bytes of memory, but in the end, they had to increase that to 32K. When Apple started shipping with 48KB of memory, they could add more features.

The usual story is that Dan Bricklin conceived VisiCalc while watching a presentation at Harvard Business School. The professor was creating a financial model on a blackboard that was ruled with vertical and horizontal lines (resembling accounting paper) to create a table, and he wrote formulas and data into the cells. When the professor found an error or wanted to change a parameter, he had to erase and rewrite several sequential entries in the table. But on Dan's own website, the story is a little different:

The idea for the electronic spreadsheet came to me while I was a student at the Harvard Business School, working on my MBA degree, in the spring of 1978. Sitting in Aldrich Hall, room 108, I would daydream. "Imagine if my calculator had a ball in its back, like a mouse..." (I had seen a mouse previously, I think in a demonstration at a conference by Doug Engelbart, and maybe the Alto). And "...imagine if I had a heads-up display, like in a fighter plane, where I could see the virtual image hanging in the air in front of me. I could just move my mouse/keyboard calculator around on the table, punch in a few numbers, circle them to get a sum, do some calculations, and answer '10% will be fine!'" (10% was always the answer in those days when we couldn't do very complicated calculations...) The summer of 1978, between first and second year of the MBA program, while riding a bike along a path on Martha's Vineyard, I decided that I wanted to pursue this idea and create a real product to sell after I graduated.

A story that may well be apocryphal is that Steve Jobs was shown a floppy disk that read “this is going to be a revolution” on the label. Talking of floppy disks, in an interview in 2006, Dan Bricklin said that "the main special thing about the Apple II was that it was easier to buy floppy drives for it at the time than their competition. From a software viewpoint for a product like VisiCalc, the TRS-80 and PET and upcoming Atari were just variations, and we could have coded for them first if Personal Software had wanted."

Whether or not the story about the floppy saying "this is going to be a revolution" was true, it certainly was a revolution.

Sign up for Sunday Brunch, the weekly Breakfast Bytes email.