A Spreadsheet Way of Knowledge

A generation ago, a tool unleashed the power of business modeling — and created the entrepreneurial boom that has transformed our economy

Steven Levy
Oct 24, 2014 · Unlisted

I learned, belatedly, that last October 17 was Spreadsheet Day, marking the 35th anniversary of VisiCalc, the Apple II program that started it all. This moved me to republish a long piece I wrote 30 years ago about the significance, as well as the dangers, of this advance. (This was so long ago that I had to define what a cursor was!) The piece first appeared in Harper’s, November 1984.

As Dan Bricklin remembers it, the idea first came to him in the spring of 1978 while he was sitting in a classroom at the Harvard Business School. It was the kind of idea—so obvious, so right— that made him immediately wonder why no one else had thought of it. And yet it was no accident that this breakthrough should have been his.

Why not design a program that would produce on a computer screen a green, glowing ledger, so that the calculations, as well as the final tabulations, would be visible to the person “crunching” the numbers?

Why not make an electronic spreadsheet, a word processor for figures?

VisiCalc running on Apple IIc, 1983. Photo by Mark Mathosian.

A virtual cult of the spreadsheet has formed, complete with gurus and initiates, detailed lore, arcane rituals – and an unshakable belief that the way the world works can be embodied in rows and columns of numbers and formulas.

It is not far-fetched to imagine that the introduction of the electronic spreadsheet will have an effect like that brought about by the development during the Renaissance of double-entry bookkeeping. Like the new spreadsheet, the double-entry ledger, with its separation of debits and credits, gave merchants a more accurate picture of their businesses and let them see – there, on the page – how they might grow by pruning here, investing there. The electronic spreadsheet is to double entry what an oil painting is to a sketch. And just as double-entry changed not only individual businesses but business, so has the electronic spreadsheet.

“The spreadsheet in that comparison is like the transcontinental railroad. It accelerated the movement, made it possible, and changed the course of the nation.”

Kapor’s comparison is an apt one. The computer spreadsheet, like the transcontinental railroad, is more than a means to an end. The spreadsheet embodies, embraces, that end, and ultimately serves to reinforce it. As Marshall McLuhan observed, “We shape our tools and thereafter our tools shape us.” The spreadsheet is a tool, and it is also a world view — reality by the numbers. If the perceptions of those who play a large part in shaping our world are shaped by spreadsheets, it is important that all of us understand what this tool can and cannot do.

Bob Frankston (standing) and Dan Bricklin. 1982. Photo by Jim Raycroft.

Yet what really has the spreadsheet users charmed is not the hard and fast figures but the “what if” factor: the ability to create scenarios, explore hypothetical developments, try out different options. The spreadsheet, as one executive put it, allows the user to create and then experiment with “a phantom business within the computer.”

“Before the spreadsheet, you barely had enough time to do the totals,” said Archie Barrett, a Capitol Hill staff member who uses an IBM PC-XT to work up spreadsheets for the House Armed Services Committee. “Now you put in a number and see whether you’re above or below the total. You can play what-if games. What if we don’t order as many tanks? What if we order more?”

Mastery is important, not for art’s sake but to win. A brilliant model is not only beautiful, it yields insights impossible to attain by any other method.

Dick York, a private real estate investor in Sausalito,changed his entire business to revolve around his Lotus 1–2–3. “I’ve used it to reduce everything in my operation to cash flow,” he said. “The spreadsheets give me constant updates, and I’m able to pinpoint property that isn’t bringing in money — I dump those properties immediately. This is information I’d always tried to get manually, but couldn’t.” York told me about the time he negotiated a commercial lease that included both a monthly rental and a percentage of the profit of his operation. In the course of making the spreadsheet model, he discovered there was a point at which going along with a raise in his rent would actually decrease the amount he’d pay the landlord. (The landlord did not have his own spreadsheet to divine this fact.)

Spreadsheets have no way of dealing with hunches, either, no formulas for telling their users when lightning will strike- when a product will be not merely a product but a trend-setting blockbuster.

There were no formulas in Lotus’s spreadsheet projections that did justice to the fantastic consumer acceptance of 1–2–3.”Our own projections were violated on a daily basis,” said Ezra Gottheil. “It was beyond our wildest assumptions.”

Lotus 1–2–3 on the screen of the Tandy 3000NL computer used in 1988. Photo by Rick Payette.

Spreadsheets are at the heart of this movement. Using electronic spreadsheets, everyone can run his or her own business. Thousands of Americans are attending classes to learn about the spreadsheet way of knowledge.

Some will lose themselves in the rows of columns, the grids becoming their windows on the world. They will spend their evenings in front of their computers, the dark dimly lit by the glow of green phosphorescent numbers, fiddling with scenarios, trying to make the profit line perfect.

Backchannel

Mining the tech world for lively and meaningful tales and…

Unlisted

Backchannel

Mining the tech world for lively and meaningful tales and analysis.

Steven Levy

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Writing for Wired, Used to edit Backchannel here. Just wrote Facebook: The Inside Story.

Backchannel

Mining the tech world for lively and meaningful tales and analysis.