The Rise and Fall of Steve Jobs’s Greatest Rival

Adam Osborne was the master of momentum—until it all came crashing down

Every illustration/Antelope.Beauty.

In the Oscar-nominated film The Holdovers, the lead character, a history teacher, says, “Before you dismiss something as boring or irrelevant, remember, if you truly want to understand the present or yourself, you must begin in the past. You see, history is not simply the study of the past. It is an explanation of the present.”

This quote aptly describes the work of Gareth Edwards, a digital strategist, writer, and historian who’s previously written for Every about the secret father of modern computing, the rise and fall of Elon Musk's earlier incarnation of X, and the trust thermocline. Today’s businesses and technologies were not just defined by the names we remember, and in his new column, The Crazy Ones, Gareth will tell the stories of the forgotten men and women who thought differently and helped build the future. His latest piece demonstrates how the personal computing battles of the early 1980s—when Steve Jobs and Adam Osborne battled for supremacy—echo to today. It’s a reminder of how easy it is for founders to repeat mistakes from the past. Read this to 1) bask in the incredible writing, 2) enjoy the fascinating story, and 3) learn how others’ missteps can help solve your problems. (If you prefer an audio version, listen to Gareth's narration on Spotify.)

Gareth will be bringing a new story to light in his column on the first Monday of each month—making a subscription to Every that much more valuable for paid subscribers. As always, let us know what you think in the comments. —Kate Lee

On June 5, 1981, journalists from around the world gathered at NASA’s headquarters in Washington, D.C. to watch as the Voyager 2 spacecraft became the first man-made object to reach Saturn. In the aftermath of this historic event, the main attraction wasn’t NASA’s staff. It was fellow journalist Jerry Pournelle. Pournelle had something none of them had ever seen before: a portable computer, the first mass-market one in history.

“There were over 100 members of the science press corps packed into the Von Karman Center (the press facility),” Pournelle wrote in his regular column for Byte magazine a few months later. “Most had typewriters. One or two had big, cumbersome word processors…nobody had anything near as convenient as the Osborne 1.”

Just six years earlier, the Altair 8800 had been unveiled at the first meeting of the Homebrew Computer Club. There, Steve Jobs recognized that the future of computing lay in the consumer market, not the hobbyist. But Jobs was not alone. He stood alongside someone who would go on to become a “frenemy” of sorts. Like Jobs, he was intensely charismatic. Like Jobs, he had a near-supernatural ability to sense what consumers wanted before they knew it themselves. And, like Jobs, he knew how to sell his ideas to the world.

That man was Adam Osborne, creator of the Osborne 1 that had wowed those gathered at NASA. He was Jobs’s first true rival—one who seemed destined to beat him, until his $100 million company was no more, almost overnight. Today, Adam Osborne is mostly forgotten. He only survives as a warning whispered to business students and first-time entrepreneurs: “Beware the Osborne effect!”

This is the story of Osborne’s spectacular rise and fall. It is based on contemporary articles in publications such as the New York Times, Business Insider, Infoworld, Dr. Dobbs Journal, and Byte; published accounts from those who were there; books such as Steve Jobs by Walter Isaacson and Fire in the Valley by Michael Swaine and Paul Frieberger; and, finally, on the words of Adam Osborne himself.

The sage

In late 1943, a three-year-old boy approached Bhagavan Sri Ramana Maharshi, a Hindu sage living in Tamil Nadu, a state in southern India. The boy’s name was Adam and he lived at the Maharshi’s ashram with his mother.

To the many seekers of enlightenment visiting the ashram, a young western child on its premises would have seemed unusual. His familiarity and informal interactions with the great man would have bordered on the disrespectful. Yet the sage responded with warmth. He had offered the boy’s mother sanctuary from the war sweeping through the world after Adam’s father, a British philosopher, had been captured by the Japanese at the fall of Singapore. There had been no news of him since—until that morning when, with Adam watching on, his mother received a telegram from the War Office announcing that her husband was dead.

Adam refused to believe this was true. He pushed his way through the crowd until he caught Sri Ramana’s eye.

 “Bhagavan, please bring my daddy back safely,” Adam asked matter-of-factly in fluent Tamil.

Bhagavan Sri Ramana Maharshi looked at him, smiled, and promised Adam that everything would be okay. And it was. At the end of the war, his father was found weak but alive in a Japanese internment camp.

The pace of life at the ashram represented a stark contrast to the world outside it. While relatives his age in England were being evacuated to the countryside or spending their nights in air raid shelters to avoid German bombs, Adam and his friends were exploring the hills and valleys of Tamil Nadu. His early life was one free of materialism, in a community of devotees who believed that moderation and self-reflection were the route to happiness. It was a time free of fear and full of love, one that only became more pronounced once his father joined them after the war.

“The years after he came home from the war were, for us children, a great joy,” Adam’s older sister recalled. 

For a brief period, Adam continued to live an idyllic life in the ashram, and his creativity and desire to explore were encouraged. But it couldn’t last forever. Although his father became a devotee of the Bhagavan, he believed that Adam needed to experience the outside world. At the age of 11, Adam was enrolled in boarding school in England while his parents remained at the ashram.

The culture shock for young Adam was enormous. Life in India was about freedom and creativity—neither of which postwar boarding schools in England believed had a place in a young boy’s life. On top of this, Adam faced another huge challenge. While he was fluent in English, Tamil was the language he considered his own. His wardrobe of light summer clothes contrasted with the more formal shirts and gray shorts of his English peers. On arrival, everything about Adam would have screamed: foreigner. Different.

In a boarding school environment, being different was the worst thing a young boy could be. It made you a target.

This experience could have been the breaking of Adam, as it has been for many young boys before and since. Instead, he responded in the way he would learn to respond to everything in life—by changing himself and pushing ruthlessly forward.

He charmed those around him with the same easy confidence he had seen the Bhagavan exhibit time and again. It was perhaps the only part of his Indian upbringing (other than a life-long fascination with eastern philosophy) that he decided to preserve. Over his remaining years at school and later university, he would gradually shed all the other parts of his old self. How he used words changed. He discarded the southern Indian accent of his youth in favor of a more clipped, upper-class English tone. He modified how he dressed, adopting a more conservative, British style.

Adam, the young boy who had played in the hills of Tamil Nadu, was gone. He had become Adam Osborne, a young man determined to move forward without ever looking back. This would be the Adam the world would see for almost all of his life. 

A restless force of nature

Almost everyone who met Adam Osborne would describe him the same way. Well dressed. Soft-spoken. The owner of a not-quite-English accent, which still carried a hint of his Indian upbringing. In England, he’d worked hard to rid himself of it. In America, he discovered it caught people’s attention. And once Adam had your attention, you were in trouble, at least if you had something he wanted. He was viciously smart, almost impossibly persuasive, utterly ambitious, and eternally restless. He was a man driven by twin goals: to succeed and to make money. He also enjoyed indulging in the excesses that achieving those goals enabled. From parties to poker games, Osborne was a regular at them all. Nor was he afraid to broadcast his achievements to the world. 

All of these things would eventually make Osborne one of Silicon Valley’s first true tech celebrities, but they came at a personal cost. His goals and lifestyle were the antithesis of everything taught by the Maharshi back at the ashram, where his parents remained. This was not the Adam they had raised, and, to his frustration, they rarely acknowledged what he believed to be his successes. 

“He never forgave his parents for sending him away,” author and journalist Michael Swaine wrote of Osborne later. Swaine knew Osborne personally, describing him as someone driven by twin demons—a desire to be seen as worthy of their love, but determined to make them acknowledge him on his terms, not theirs.

Whether Swaine’s insight into Osborne’s motivations is accurate or not, it’s certainly true that by the time Osborne moved to Silicon Valley, his relationship with his parents was fractious. Not long after, that fracture would become almost permanent. This would also lead to a strained relationship with his siblings for most of his life. 

When the Altair 8800 was revealed in 1975, Osborne, like Jobs, had an instant vision of the future it foretold. He was in California, working as a chemical engineer for Shell until he grew bored with his occupation and became active in the world of computing. He’d always been a good writer, and his 1972 book The Value of Power—a title commissioned by a large computer manufacturer—was one of the earliest books on mainframe computing that was written for business people, not engineers. This was the start of a reasonably lucrative career as a consultant and technology journalist.

After seeing the Altair, Osborne was determined to write the first business-friendly guide to using it, so he quickly wrote his next book—Introduction to Microcomputers. Traditional publishers didn’t believe there was a market for Osborne’s book and hesitated to publish it. But his reckless energy wouldn’t allow him to wait. He decided to start his own publishing company. By March 1976, the book had sold 20,000 copies.

“Publishing was clearly a better business than consulting,” Osborne wrote later, “so I refocused my attention.”

Osborne’s company became the leading publisher of books on home and business computing in California. That landed him a regular column in Interface Age, one of the first personal computer magazines. Osborne called his column “From the Fountainhead,” and he became one of the most widely known, respected, and even feared writers on the home computing revolution.

Osborne’s bold and forthright columns were part of a calculated plan. He’d come to believe that everything was about momentum in the rapidly changing world of home computing. You had to be part of the digital zeitgeist or you would be left behind. “From the Fountainhead” was the perfect way to stay current, which, in turn, drove his company’s book sales. By 1979, Osborne was the foremost publisher of personal computing books in the world and a well-known figure in Silicon Valley. Then, in late 1979, to the astonishment of everyone, Osborne sold it to McGraw-Hill, one of the oldest and most traditional publishers in America.

Osborne agreed to stay on in a leadership role at the newly rebranded Osborne/McGraw-Hill. However, he ensured that his agreement with McGraw-Hill would allow him to pursue other projects. He could also leave the company without penalty by 1983, three years after he had sold. The truth was that Osborne felt like he’d conquered computer publishing and was losing momentum. He wanted—no, needed—to get that momentum back. And having watched the hardware business from the outside for a while, he thought he had a way to do it.

Osborne sought out the one person he trusted not to laugh at his plan: fellow Homebrew Computer Club veteran Lee Felsenstein. To Felsenstein’s astonishment, Osborne told him that he was setting up a new company to build the world’s first truly portable computer, and that Felsenstein was going to design it for him. Felsenstein objected, saying it was a bad idea. It would require squeezing a lot of components into a very small space—and was entirely contingent on whether these components could be sourced at all, and at prices that weren’t prohibitive. Unfortunately, he already knew it was futile to say no.

“He was extraordinarily charismatic,” Georgette Psaris, who would later work at Osborne Computers, said of Osborne. “When he feels that someone doesn’t get something, the whole dam of his charisma opens up. His passion was contagious.”

By the end of their conversation, Felsenstein agreed to design Osborne’s portable computer. In return, he would receive a small salary and 25 percent of Osborne’s new company, Brandywine Holdings.

Beating Apple at its own game

For several years, Osborne had been thinking seriously about what—and who—stood out in the home computing marketplace. It had grown crowded by the 1970s, and Apple, Tandy, and Commodore seemed to have cornered the market. To Osborne, his old acquaintance Jobs and Apple, which had launched the Apple II in 1977, was doing the best job.

“Technology has nothing to do with Apple's success,” he wrote later. “Nor was the company an aggressive price leader. Rather, this company was the first to offer real customer support and to behave like a genuine business back in 1976 when other manufacturers were amateur shoe-string operations.”

Osborne understood that copying Apple wasn’t enough. The company had too much of a head start. So he looked at IBM, which was still focused on mainframes, and asked himself why it had been able to secure such a significant share of its market, even when competitors had better products. He came to a realization—one that would become something of a mantra for him.

“Adequacy is sufficient. Everything else is irrelevant."

He didn’t need to design a computer that was beautiful or special. Let Steve Jobs do that. He would instead create one that did 90 percent of the basic business tasks most regular people needed it to do.

"If the market was to grow,” Osborne said, “it would have to rely on customers who would plug a computer into the wall, as they might a toaster."

Another logical step followed: If you’re going to make a self-contained computer—with a keyboard, drives, and monitor all in one—you might as well make it portable.

Felsenstein and Osborne spent early 1980 in a space they shared with a Berkeley electronic anarchist collective working on a final specification for their new machine. They used relatively cheap parts to help keep the overall cost low. It would have the popular Z80 microprocessor, 64k of RAM (the most the Z80 could support), a five-inch screen, and two disk drives. They could fit all of this into a case small enough to comply with airline carry-on luggage requirements.

Felsenstein was surprised—but happy—to admit that Osborne had been right. They could indeed build a portable computer that was powerful enough to run any software the customer decided to buy. 

Osborne then hit Felsenstein with his next masterstroke: This computer would come with all the software the customer needed, for free.

The invention of software bundling

Software bundling—the practice of including key pieces of software with the purchase of a PC or console —is universal in the modern era. But in 1980, it was considered a bad idea.

Today, only a few names dominate the world of business productivity software, which encompasses word processors, spreadsheets, and databases. In the 1980s, things were different. The market was full of products, all offering different features or optimized around certain ways of working. Nor were they cheap. Prices for a good word processor ranged from about $150 up to $500. Adjusting for inflation, that would be like paying $1,700 for Microsoft Word today.

As a result, most manufacturers considered it bad business to include major software with hardware. Osborne realized that there was a misconception that ran through the industry. Most people believed that computer buyers were technically literate, and would want to do their own research before buying software. Bundling software was seen as something that increased the price of the machine for everyone in order to appeal to a few buyers.

Osborne’s theory of adequacy allowed him to see differently. For the average business or home customer, the variety of software was a problem. They didn’t care which piece of software was best—they just wanted something good enough. So if his computer came with a range of useful software, that might be an attractive proposition.

Of course, it wouldn’t be attractive if the software license costs inflated the price of the machine, so Osborne turned the full force of his personality on his industry connections. 

The first and most important deal was struck with Gary Kildall and Dorothy McEwen, the owners of Digital Research. Kildall was the creator of CP/M, an operating system that was starting to lose market share. Osborne gambled that this slide would increase his chance of getting a better deal on the price.

He was right. First, he procured a fixed-cost universal, perpetual license for CP/M for just $55,000. Not only was this a good price, but the universal license meant that the more machines they sold, the better the value of Osborne’s purchase. CP/M would never offer such a license again. 

Osborne closed on a number of fixed-cost software licensing agreements on equally beneficial terms. Such agreements weren't generally offered to manufacturers by the major software companies of the time. However, most manufacturers weren't run by Osborne. Throughout 1980 and into early 1981, he leveraged his easy charm and personal relationships with many of the leaders in computing to great effect.

Most notably, Microsoft agreed to an unlimited license for Microsoft BASIC. Then, MicroPro agreed to the same for WordStar, one of the most popular and well-respected word processors on the market. In return, both companies got no money; they received shares in Osborne’s new company. Failing to tempt the makers of VisiCalc, the world’s first spreadsheet program, with the same deal, Osborne approached Richard Frank at Sorcim Software instead. 

During a poker game, Osborne had already persuaded Frank to write the boot-up firmware for his new machine. Now, Osborne persuaded him that Sorcim should make the first real VisiCalc rival as well. In return for about 3.5 percent of shares and $20,000 up front, Frank and his fellow programmers worked nights to create SuperCalc that would be included with Osborne’s machine.

There were plenty of other deals too. By the time Osborne was finished, the Osborne 1 would be bundled with over $2,000 ($7,000 today) of useful software at no per-unit cost to Osborne.

From prototype to production

To help finance his startup, Osborne managed to snag Jack Melchor, one of the most prominent venture capital fund managers in Silicon Valley. Melchor insisted on two conditions—that Osborne change the company name, and that they start looking for a permanent headquarters. Changing the name would better capitalize on Osborne's personal reputation, while more space would allow the company to expand quickly. Brandywine became Osborne Computers (officially known as the Osborne Computer Corporation), and they began a search for factory space that would eventually lead them to Hayward, California. Osborne tried to persuade Bill Gates, who was then running Microsoft, to join the board, but Gates declined, citing unspecified potential conflicts of interest. Microsoft was already working behind closed doors with IBM on the latter’s yet-to-be-announced mass-market “personal computer,” although nobody knew this at the time. For Gates, licensing BASIC to Osborne in return for shares was a hedged bet—nothing more.

By January 1981, Osborne’s first paid employees were hired: Georgette Psaris and Tom Davidson. Psaris was a talented young marketer who had worked with Osborne before. Davidson was forced on Osborne by circumstance. The company needed someone to oversee the purchase and supply chain, as well as manufacturing, especially since Osborne split his time between Osborne Computers and McGraw-Hill. 

Osborne tried to find someone with experience at building computers at scale, but everyone turned him down. They wanted to see the prototypes first. Osborne didn’t feel he could wait for that. Slowing down risked losing momentum. So he gambled on Davidson. Davidson was a heavy-set, larger-than-life Brooklynite with a thick accent. His previous experience was in running a large New York taxi company before moving to California to manage manufacturing for a canned food supplier. 

Both Psaris and Davidson arrived to find the pressure ramping up. Osborne told them that they had just $900,000 dollars in the bank. Based on manufacturing and operating costs, Osborne forecast that if they weren’t selling 4,000 computers a month within 18 months, they’d go bankrupt. To have a chance of reaching this figure, they needed their machine on sale by June 1981—only six months away.

As if this wasn’t pressure enough, Osborne set them an even earlier deadline. They needed the first machines ready for the 1981 West Coast Computer Faire at the beginning of April. If they missed that, he explained, the chance to build enough launch momentum would be lost.

Wave theory

Osborne’s ruthless focus on the West Coast Computer Faire was related to his obsession with momentum, or as he later described it in his book Hypergrowth, his “Wave Theory” of publicity and hype. Osborne believed that you could manage your product momentum by ensuring media attention at the right time and intervals. You needed to create waves of interest in the public narrative.

"Few journalists specifically look for good or bad stories; they look instead for interesting ones," he said. "Media stories are initiated by knowledgeable professionals. But invariably, subsequent press coverage is the work of less-informed journalists who are in mortal terror of penning a harsh statement they might be called on to defend. So they rehash previous stories, adding little or nothing new."

Osborne’s plan was simple: Dazzle the experts and early adopters. When the mainstream press would start picking up that buzz, their coverage would be positive—even if the experts had since found problems with his product. Meanwhile, Osborne would address those problems quickly, announce a new feature or product variant that would dazzle the experts, and kick off the whole cycle again.

The West Coast Computer Faire was the biggest computer industry show around. At the first show in 1977, Apple had revealed the Apple II, while Commodore had announced the launch of its personal computer, the PET. Tandy introduced a number of new products there in subsequent years as well. These three companies were those that Osborne considered to be his main rivals, and thanks to the industry connections he had built up writing his computing column, he knew that none of them had any major announcements to make there in 1981. He believed that he could encroach on their markets by stealing the narrative of the show from them.

Through extreme efforts, the prototypes were ready by the end of March. The resulting computer, christened the Osborne 1, was very heavy (only Davidson could lift it with one hand), and it grew so hot you could fry an egg on its case, but it existed. And it worked.

With excitement and trepidation, almost the entire staff of Osborne Computers headed to San Francisco, ready to reveal the Osborne 1 to the world.

On April 3, 1981, the sixth annual West Coast Computer Faire opened its doors. Upon entering, attendees were greeted by rows of booths filled with familiar names like Commodore, Tandy, and Apple… 

…and then they would have seen it. Towering high above the show floor was a multi-story plexiglass booth. At the very top was a brilliantly-lit logo—a giant “O” with wings. 

This was the brainchild of Osborne’s new head of public relations, Barbara Burdick. Osborne had told Burdick to spend as much of their remaining $900,000 as she needed in order to create a booth nobody could miss. She’d done just that.

Over the next three days, attendees flocked to the Osborne booth. What was on offer there seemed fantastical. For just $1,795—less than the price of Tandy’s TRS-80 microcomputer—you could get a portable computer. 

That was also $500 cheaper, Osborne told show-goers and journalists, than the price of the Apple II. The Apple sales staff at the show repeatedly pushed back against this comparison. They countered that the newest Apple IIs came with almost twice the memory of the Osborne 1, which also had a barely adequate five-inch screen. The Apple II was a beautiful machine in comparison to the Osborne 1.

Sure it is, Adam would point out. But what good is it if you can’t afford any software to run on it? Without the right software, the perfect machine is just the perfect paperweight. The Osborne 1 came bundled with a word processor, spreadsheet software, BASIC, and more—all the business productivity software you would need, with no extra purchase necessary. 

By the end of the first day, the Osborne 1 was the talk of the show. Digital Deli was a major chain of dealers that supplied computers to buyers across the country. At the Faire, it had the stand directly opposite Osborne's. The company immediately started taking pre-orders for the new machine from the show's attendees and received enough over three days to cover half of Osborne’s sales target for its first month after launch.

Osborne reveled in the limelight. Speaking to the tech and business journalists present, he issued a public challenge to Apple, Commodore, and his other rivals. He declared that the Osborne 1—with its bundled software—was the future of computing.

“Do as I have done,” he declared flamboyantly, “or perish!”

Shortly after this hit the newswires, the phone rang at Osborne Computers’s near-empty headquarters in Hayward. Almost everyone was at the show, and only a young intern was there to answer it.

“Hey. It’s Steve Jobs,” the voice on the other end of the phone told the astonished young temp. “Is Adam there?”

The young man stammered that Osborne was still out of town. Unsure what to do, he asked Jobs if he wanted to leave a message.

“Yeah,” Jobs replied. “Tell Adam he’s an arsehole.”


It’s hard now to grasp just how quickly the Osborne 1 propelled Osborne Computers to the top ranks of the home computing pyramid. Demand for the machine—enabled by Osborne’s avoidance of the standard distributor network—was instant. Traditionally, computer manufacturers sold machines to large distributors, which provided consistency to the order pipeline, made revenue easier to manage and predict, and lowered overall risk. These distributors supplied local computer shops and dealers, who sold them directly to customers.

The trade-off with using a distributor network was that new computers, or models, could take time to reach dealers’ shelves. It also increased unit price as the distributors took a cut of each sale.

Osborne decided that these negatives outweighed the positives. They would compromise his company’s momentum. So Osborne Computers ignored the risks and sold directly to dealers.

The response suggested that Osborne had once again been right. The number of Osborne 1s hitting the market continued to climb, and the company often struggled to meet demand throughout the rest of 1981. It achieved its first 4,000-machine month long before Osborne’s June 1982 target. Indeed, by June 1982, Osborne Computers already had 3,000 employees and had shipped 50,000 machines worldwide. Behind the scenes, the company was developing the Osborne Vixen, a low-price variant. It had also started working on the Osborne Wayne, a purely desktop IBM-compatible computer. 

The Wayne was as close as the company had come to acknowledging the existence of the new computing elephant in the room: the IBM PC. It had hit the computer market in August 1981 and demand for it was continuing to grow. Increasingly, it seemed the only way other manufacturers could compete was to offer IBM-compatible computers—machines that could run the same software, and use the same peripheral hardware and plug-ins, as the IBM PC.

Most importantly, though, the company had begun development work on the Osborne Executive. This would represent a step-change over the Osborne 1. It would have a larger screen, better disk drives, and a raft of other improvements aimed at making it the must-have machine on the portable market.

By summer 1982 Osborne Computers was the darling of the business and computing press. The apparent dynamism of Osborne was increasingly contrasted with a period of stagnation for Jobs, his old friend and rival. While Osborne was announcing three new machines, for example, all Apple seemed able to offer was yet another iteration of the Apple II.

"I liken myself to Henry Ford and the auto industry," Osborne said in one interview. “I give you 90 percent of what most people need.”

In his Cupertino headquarters, Jobs raged at comments like these. Apple employees remember their charismatic founder wandering the corridors, mocking Osborne’s pronouncements that good enough was enough.

“This guy doesn’t get it!” he’d tell random employees. “He’s not making art. He’s making shit!”

Whatever Job’s opinion, the press and industry seemed to disagree. They wanted what Osborne was selling, and they wanted to know more about the man himself. Yet, strangely, this was a topic that Osborne generally avoided. He was happy to talk about his achievements and his company. He was happy to tell them his ideas on libertarianism and management. He was happy to show them his cars and his houses, and to party with friends. Who he was in his head, however, seemed known to Osborne alone. 


The rise of Osborne Computers seemed unstoppable. In late September 1982, 60 Minutes aired a special called The Silicon Valley Boys. It focused on Osborne Computers, which was by then a $100 million company. The show triggered another of Osborne’s waves and spurred sales. 

The company had also announced the appointment of Bob Jaunich, who used to work at Memorex, a major manufacturer of computer peripherals, as its new CEO, allowing Osborne to focus on strategy as its chair. Whispers that Osborne Computers planned to go public began to spread. It seemed a likely next step for one of Silicon Valley’s biggest success stories, and Jaunich was exactly the kind of experienced operator you’d appoint in order to make it happen.

In 1983, when Osborne revealed the new Osborne Executive to excited dealers in a country-wide tour, that IPO seemed even more likely. Press coverage of the new machine was enormous. As usual, Osborne’s wave theory seemed to be working. This was exactly the kind of hype a company would want to generate before an IPO.

Everyone knew it would be a big one. Initial expectations were of an offering somewhere in the $7-per-share range, just $1 less than Apple was trading at the time. There were even whispers that Osborne Computers shares would trade for more. Adam Osborne was not just catching up with Steve Jobs. He seemed about to eclipse him.

Finally, in September 1983, the company indicated it had a major announcement to make. Excited investors and existing shareholders who had preferential purchase rights tuned in with baited breath…

…to see Osborne Computers announce it was filing for bankruptcy.

The Osborne effect

Do not announce future products too early. You will cannibalize your existing sales. This is referred to as “the Osborne effect.” It is taught in MBA programs around the world.

“If you take a look at the record of right and wrong decisions, we did damned well—as good as anyone.” Osborne told the New York Times in November 1983 in a story about the bankruptcy. He made some general comments about how difficult IBM had made the home computing market. He said very little else.

This was a mistake.

Adam Osborne soon discovered the problem with his wave theory: If you stop creating the waves, the media starts manufacturing them itself. So it was that a narrative began to form in the business press.

Adam Osborne’s announcement of the Osborne Executive was too early, the narrative said. Dealers and customers were spooked, and they canceled their orders for the Osborne 1, preferring instead to wait for the newer machine. This collapsed Osborne’s sales, stories in newspapers and magazines contended, and created a sudden, catastrophic cash-flow crisis—one that took down the company before any kind of financial relief package, or the IPO, could be organized and provide an urgent injection of capital. As a result, the company was forced to declare insolvency.

Osborne realized his mistake in not speaking out and tried to take back control of the narrative. In early 1984, he appeared on PBS’s The Computer Chronicles, one of the most respected TV shows covering the computing industry. Coincidentally, his interviewer was Gary Kildall, the man from whom he’d licensed CP/M.

“The company plain and simple committed suicide,” Osborne told viewers. “All I will say about it right now is that everything you have read in the papers you can hit the reset button on, because it’s not right.”

In June 1984, he published Hypergrowth: The Rise and Fall of Osborne Computers. It was put out by a small Berkeley publisher—the only one that would agree to do so, given its contents. In the book, he went to great lengths to explain how the collapse of the company was not his fault. He blamed it on Jaunich, Davidson, and others. He wrote of bad financial decisions behind the scenes, and made veiled claims that there had been collusion between the banks and his rivals. He was fighting to keep the company’s momentum going, he argued, but these forces had conspired to make it stop.

Osborne’s book didn’t change the narrative. Even if everything Osborne claimed in the book had been true, the tone hardly screamed “reliable narrator.” Track down one of the few copies in circulation today, and you’ll discover that over a third of its length is a prolonged personal assault on Bob Jaunich’s professional ability and character. The book even comes with a threat of litigation for libel from Jaunich himself published just inside the cover.

Osborne published this threat of litigation from Jaunich in his book. Source: the author.

So what did kill Osborne Computers?

The death of a company

In late 1981, at the height of Osborne Computers’s early growth, Barbara Burdick noticed that the company’s only accounts receivable clerk seemed to be doing odd jobs around the office. Confused, she asked why he wasn’t focusing on his work. Burdick was told that the computer they used for processing payments and sending invoices was broken. They’d asked about having it fixed, but nobody had turned up yet.

“What are you doing about it?” Burdick asked, trying to remain calm. “Have you told Adam?”

“Oh, no.”

“I think you should tell Adam before he finds out,” Burdick said, firmly but gently. “I think he would like to know that no one has been billed in two weeks.”

Scratch beneath the surface of Osborne Computers and you’ll find many accounts like this. Many even feature in Osborne’s own book—including a mention that the 1982 budget for the whole company was put together by Burdick and Osborne using a copy of SuperCalc and a spare Osborne 1. This was hardly appropriate for a multi-million-dollar computer manufacturer with over 3,000 employees spread across multiple departments and U.S. states, and with subsidiaries around the world.

When tech commentators have written about Osborne Computers in more recent years, they have tended to side more with Osborne, taking his account of events at face value. To believe that the company was killed by financial mismanagement and poor decisions by figures like Jaunich who were too “establishment” to understand the startup culture required for “hypergrowth.”

The truth, however, is that the media was right. The Osborne effect happened. It did kill Osborne Computers. 

It just shouldn’t have been able to.

A blessing and a curse

From the day Adam Osborne started boarding school in England, he had been restless. His sister recalled that his interests seemed to constantly shift. A fascination with poetry gave way to science. Science gave way to engineering. Adam wanted to understand and master it all. That constant drive forward, his obsession with momentum would lead him to abandon a promising career with Shell for the unknown promise of  computing and Silicon Valley. It created unprecedented growth that pushed Osborne Computers to the top of its industry in less than 18 months. But it also meant that Osborne never stopped to address any of the logistical or financial risks that growth brought with it, until it was too late.

In 1984, as part of his attempt to clear his name, Osborne published copies of sale-and-return sheets, balance statements, and a wide range of other internal papers from Osborne Computers. To him (and to later commentators), these clearly demonstrated that overall sales continued to climb, well beyond the point at which the media said they had stopped. This is true, but it is the returns part of them that tells the real story.

For the majority of its production life, the Osborne 1 experienced a unit failure rate somewhere between 10–15 percent, roughly five times the industry average. This was in no small part due to Tom Davidson’s inexperience managing computer production. Perhaps if the Osborne 1 had been a more traditional computer, Davidson’s inexperience wouldn’t have been a problem. But its compactness was genuinely revolutionary, and alongside quality assurance failures that a more experienced industry hand would have avoided were fresh issues that arose because the design was cutting-edge. For example, the monitor was so close to the disk drives that it created radio signals that would disrupt the way the drives read data. The solution was to add some shielding around the monitor, but it was only implemented in 1982. Until then, hundreds—if not thousands—of Osborne 1s were returned for new disk drives, as it was assumed there was a failure in manufacturing.

Osborne’s commitment to creating waves worsened this situation, because it meant that he was constantly iterating and improving the machine rather than pausing to optimize its production. Each wave of publicity would create another wave of issues, such as a glut of returns that would need to be fixed (often for free, at Osborne’s insistence). It would also lead dealers to hold off on placing orders until they were confident any new issues had been resolved—after all, it was their reputation that was at stake with their customers.

Osbornes waves were propelling the company forward, but each of them set the company rocking upon them. He didn’t create one giant Osborne effect. He created tens of smaller ones, on a regular basis.

In each instance, they would lead to a minor crisis, as Osborne Computers’s direct relationship with its dealers left it highly vulnerable to minor cash-flow issues should a month-on-month sale-or-return imbalance occur.

None of these Osborne effects should have been large enough to trigger a catastrophic collapse—not as long as Osborne could secure short-term financing to bridge the crisis. This is probably why Osborne himself took so long to start addressing the problem, beginning with firing Tom Davidson in April 1982. But short-term financing requires someone to fund it, and that someone has to trust your financial management. 

And, as Barbara Burdick discovered in 1981, Osborne Computing was terrible at securing financial trust.

In September 1981, at the peak of the machine’s initial hype, Osborne Computers asked Bank of America for credit to cover the unexpected fluctuation in accounts-payable and -receivable.

Bank of America said no.

For the company, this wasn’t a huge problem. It was solved by a $1.6 million cash injection from funds managed by Jack Melchor. But it should have been a warning. Banks don’t make decisions based on how good your narrative is. They make them based on how well you keep your books.

Over the next 18 months, Osborne would repeatedly trigger the Osborne effect. Worse, external factors— such as the entry of Compaq and Kaypro into the portable market, and the behemoth that was the IBM PC—started causing additional minor sales crises. Each time one occurred, it would collapse whatever small financial runway the firm had managed to build up. Or it would require another cash injection from shareholders (including Osborne himself) or a funding round. The company became overly reliant on sourcing funding from places where a growth narrative mattered more than accurate financial data until there was only one untapped source left: an IPO.

The last gamble

In November 1983, the New York Times asked Jack Melchor what would have happened if Osborne had relinquished the CEO role more quickly and Bob Jaunich had been hired six months earlier.

“Well, the company probably would have been okay today,” he replied.

Bob Jaunich was about as close to an establishment figure as you could get in Silicon Valley. He was a man the banks trusted to do things the right way. He knew how large businesses should be run. He was hired to shepherd the IPO and address the chronic structural issues that Adam Osborne’s constant quest for momentum was creating.

The two men hated each other instantly.

By April 1983, Osborne wasn’t blind to the firm’s oversized exposure to even minor crises. He agreed it needed to be addressed. But he believed that anything that collapsed the company’s momentum would kill it faster than the cure. They needed to issue the IPO, then maybe, maybe ease off a bit. Jaunich, by contrast, believed that the only way they could secure the IPO was to ease off first. They needed to address the QA issues. They needed better organization structure and people in senior roles. They needed, above all else, to have a full understanding of Osborne Computers’s finances that could be included in the offering.

The problem was that, by April 1983, the company was likely impossible to save, because both men were right. Osborne Computers was surviving on the momentum created by its announcement of new models and its entry into new markets in Europe and beyond. But all that activity drew focus away from Jaunich’s efforts to fix the instabilities in its manufacturing and distribution chain. It also prevented him from creating the stable financial environment required for an IPO.

For the last few months of its existence, Osborne Computers was a collapsing empire torn between two emperors and their rival factions, beset by issues that were invisible to everyone on the outside.

Until, finally, it fell. 

The end of momentum

Adam Osborne didn’t stop after the collapse of Osborne Computers. He founded Paperwork, a software company focused on a new idea: cheap business software for home computers. In 1989, a lawsuit from Lotus Software, one of the giants in the business, drove Paperback into bankruptcy. His health ruined by the stress of its collapse, Osborne finally lost his momentum. He looked around and decided to do something he perhaps hadn’t done since the day he left the ashram.

He stopped.

You will struggle today to find recorded interviews with Osborne. Yet in the media of the time he stands tall, shoulder to shoulder with his rival Steve Jobs, both leading technological evangelists for the new computing age. He wrote several books on where he thought computers were going and how businesses would use them, some of which remain visionary today. All are out of print, nor are there any biographies of him.

More than any other major figure in computing at the time, Adam Osborne was a man who lived in the moment. He wrote of the future. He built computers for it. He had no time for the past and so, it seems, the past has no time for him. He weaponized momentum, and his own restlessness, in a way no other tech founder has managed before or—if we allow for inflation and other factors—since.

And perhaps he was only able to do that because for so long, he was scared about stopping and looking back.

"He never forgave his parents for, as he saw it, abandoning him,” his sister Katya confirmed years later. “And he resented it for the rest of his life.”

Adam Osborne’s relationship with his family had always been complex. There was no doubt he loved them. He was also married twice (his second time to Barbara Burdick) and had three children of his own. But the contrast of his life in Silicon Valley with his upbringing in India was, through his own doing, extreme. By creating that contrast, he avoided for a long time having to ask himself who Adam Osborne really was.

With his health failing, however, Adam Osborne perhaps realized he was running out of time to face his demons and do just that.

In 1991, Adam returned to India, now suffering from a brain disorder that triggered frequent minor strokes. It was a place he hadn’t visited much since he had left it as a child, especially after the death of both his parents. He hadn’t intended this visit to be a long one. Just a way to bring closure. Perhaps to quieten some of those memories he’d never quite managed to forget. After all, the green hills of reality could surely never match up to the green hills in his mind.

But once there, back in Tamil Nadu, he reconnected with his siblings, his elder sister Katya in particular, who had returned to India many years earlier herself. So he stayed a bit longer, then longer still. Over time, and as he reconnected with the countryside and Tamil people of southern India, he realized something about himself. He didn’t have to be either the young Adam who had loved the hills and mountains of India or Adam Osborne the Silicon Valley entrepreneur. He was allowed to be both.

“How could anyone, even an English boy, grow up in Tiruvannamalai, in the ashram of Sri Ramana Maharishi, and not acquire a pride in his roots?” Osborne wrote in an article for Indian computing magazine Dataquest at the time. In it, he acknowledged that he realized now what he had always been. Something he’d never known he was allowed to be: not English, not American, but Tamil.

And with that, Adam’s life came full circle. He moved in with Katya. He spent his remaining years living with his elder sister in the hills of Tamil Nadu where he had grown up. The restlessness was finally gone. He was happy with what he achieved, and he was happy with who he had become. 

When Adam Osborne passed away in his sleep, at the age of 64, he was finally at peace.

Did you work in the nascent computing industry and have memories about this era that you'd like to share? If so, please email us at [email protected].

Gareth Edwards is a digital strategist, writer, and historian. He has worked for startups and corporations in both the UK and U.S. He is an avid collector of old computers, rare books and interviews, and abandoned cats. Follow him on X, Mastodon, and BlueSky.

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@dou.alexander about 2 months ago

What an incredible story. I'm currently really fascinated by this idea of Superpowers and Shadows: how weaknesses are often the other side of the coin of a strength. And to wish the "fixing" of a weakness is equivalent to muting the superpower

For Osborne, perhaps the advice for governance and proper accounting felt like a rejection of his desire for more Waves—a surfer doesn't need to count the number of waves he or she catches in a day

I also do really love the ending. It's funny how we often come back home after a long time of striving like salmon swimming upstream. I'm _obviously_ projecting a ton here, but it sounds like he passed away more "complete". As in when he got sent away from the Ashram originally, he maybe rejected all of the trappings because he felt like it (well, his parents) rejected him. But in returning again, 50 years later after ascending to the top of industry and coming back down, he got to rediscover and "complete" that part of him

Anyway! Thanks for writing this. Looking forward to the next :)

@vidshankar001 about 1 month ago

Just incredible at so many levels! the India influence of Osborne and Jobs with differing results! and the idea of success at the end of their lives, on reflection, leaves one thinking, wondering and mildly amused at life itself!

@Liferules about 2 months ago

Great article! Lots of learning lessons there--and a personal story to tie them together. I heard once that true visionaries, and those who create companies are not often well suited to RUN those companies. Seems like the situation here.

@heatmiser75 about 1 month ago

Great article!! extremely insightful but I just don’t understand why the iPhone hasn’t fallen victim to “the Osborne effect”?

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