Software Hits Make ‘Alien’ Frenchman a Success
While listening to Philippe Kahn’s tales of Silicon Valley, it is easier to imagine him dressed in a robe and wreath and playing a saxophone than addressing prestigious business schools.
He has done both since leaving a humdrum job teaching math in France in 1982 and kissing his wife and children goodby to seek riches in the land of venture capital.
His family is together again, but life has changed dramatically for Kahn, 33.
Success in Computer Software
He is millions of dollars richer--on paper, at least--because of two smash hits on the computer software charts, Turbo Pascal and SideKick. The venture capitalists shunned him, but Kahn made his fortune anyway, working 15 to 20 hours a day designing, packaging and shipping his $49.95 products.
He is also 60 pounds heavier than when he arrived here, a condition he blames on a fondness for American ice cream.
Kahn is founder, president and chief stockholder of Borland International, a two-year-old company that he said recorded $10 million in sales in fiscal 1984 and expects about $30 million this year.
Kahn started his company in true Silicon Valley fashion--in a garage, as did Hewlett-Packard and Apple Computer. Aside from that and an annual salary that he said is about $500,000, he has little else in common with other entrepreneurs.
An illegal alien who stayed long after his tourist visa expired, Kahn said he has not been able to return to France because he would not be able to get back into the United States as a non-immigrant.
Permanent Visa Sought
He applied for a permanent visa last summer and expects to return to Paris within the next few months to pick it up.
Kahn disdains market researchers, hires people “for their merits, not for their resumes” and refuses to wear a tie.
Borland’s staff includes a former manager of a Japanese restaurant, who is vice president for operations; a former punk-rock cocktail waitress, who is director of personnel, and an ex-Campbell soup salesman, who heads dealer sales.
“Shipping software or serving food in restaurants are about the same thing,” Kahn said. “You laugh, but it’s true. You have to keep the customers happy, you’ve got to serve them on time and the meal has to be good. Otherwise they won’t come back.”
Kahn was described by one software analyst as “almost a cult figure” and “not a fly-by-night type of guy.” Others are more skeptical.
“Maybe he’s a cult figure to some, but in my mind he still has a long way to go to compete with other computer industry pioneers,” said Robert Lefkowits, an analyst for Infocorp of Cupertino. “Two products do not a successful software company make.”
Marketing Praised
Another analyst, Kathy Lane of Dataquest in San Jose, noted that Kahn “seems to do things that catch attention.” She lauds him for coming up with good products at a low price and marketing them cleverly to “technoids” who read computer magazines.
SideKick, a desk-top organizer that puts a calculator, note pad, calendar or phone directory on a computer screen while a word-processing program is in use, won raves when it was introduced.
Kahn said more than 200,000 copies of SideKick have been sold, despite competition from similar products by other companies, including IBM’s $149 Topview.
Kahn likes to talk about his early days in the business. He said he cooked up a comic scheme to trick an ad salesman for a trade magazine into thinking he was going to give his business to other magazines. As a result, he got the advertising on credit at a special rate.
The ads launched a successful mail-order campaign for Turbo Pascal, software that helps programmers write in the Pascal computer language.
Kahn tells how he was victimized by a Silicon Valley shyster who conned him out of “my last $2,000” with a promise to introduce him to potential backers and get him a business license.
“He told me he knows all these great people, but he didn’t know anybody,” Kahn said. “The valley is full of people who do that.”
Kahn said he came to the United States with about $5,000 and took a variety of odd jobs with computer companies. He had the idea of selling software cheaply, as little as 10% of the going rate of $400 to $600.
“Everybody thought software would succeed only in the business market,” he said. “My idea was there was a huge market in education. Universities and high schools had just switched to Pascal. That’s millions of potential customers who are renewed every year, but nobody recognized it.”
A leading market research group said only 20,000 copies of Turbo Pascal might sell in five years, according to Kahn.
“We were lucky,” he said. “If someone at that time had given us $100,000 for the product, we would have given away our souls. We sold 250,000 in one year. That program generated probably $7 million in sales in the first year.”
His seed money came in a $20,000 loan from his father.
“I sold him stock in my company for a very reasonable price,” Kahn said. “For him, it was a lot of his savings. I think he believed from France that I had something.”
$1 Million on Paper
That $20,000 is now worth more than $1 million on paper, Kahn said.
“It’s kind of neat to start out with nothing and see a whole organization grow and get a lot of people working,” he said. “We have over 100 people, with families and kids really depending on our success.”
Kahn said he thrives on long workdays and does not mind getting only three or four hours sleep.
“I enjoy my work,” he said, “and I need very little sleep. I think people get burned out if they hate what they’re doing.”
