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Monday, December 28, 2015

Are Theranos and Holmes Really That "Out There?"


In the 1970's some quack from a company called RSI called me in my office at One Chase Manhattan Plaza.  I was involved in using Unix (from Bell Labs) for data and word processing work and we needed a database.

This "quack" had some "relational database" program for sale he'd written himself that ran under PDP-11 Unix that was based on a a document he had seen from IBM Research in San Jose about something called "System R."

Meanwhile I was taking a class in San Jose from two guys (Bob Epstein and Mark Hoffman) who worked for a company called Britton Lee that sold a relational database database machine.  I liked Hoffman and had some discussions about working with him and Epstein but I wasn't interested in living in California.

(In the 1970's IBM dominated the database world and there were only non-relational network "mainframe" databases.  They cost tens or hundreds of thousands of dollars and were intense, complex OS-360-based tools.  The database market was huge and totally non-relational.  No one, and I mean no one, believed that "relational" database operations could ever be as fast as network database operations.  It was considered heresy to even suggest it.)

The "quack" turned out to be Larry Elison.  

Hoffman and Epstein quit Britton Lee and started Sybase which contributed source code to Microsoft's (presumably for their SQL) and reached a billion in sales on its own.

Was this crew any different than Theranos and Holmes?

I think not... 

IBM was one of the biggest companies on the planet in the 1970's, network databases were all that there would ever be, OS 360 was the best operating system there ever would be (probably using CICS).

Would relational databases ever take over?

No way!!!!!

How would UNIX ever replace IBM?

We used to joke about it at Usenix conferences in Toronto Canada. 

"Ha ha, someday mainframes would run Unix" I remember joking with a guy named Mark Kreiger from a company called UniPress around 1978 or '79.  I eventually had a job working on fixing code Gosling had left behind at CMU.

But apparently some venture capitalists did believe.

And these companies where a great success.

How many failed along the way?  Probably too many to count.

How many billions of 2015 dollars were lost?

Plenty.

But in those days no one cried and blubbered like they do now.

The market decided who was a winner and who was not.

Instead the socialist WSJ tells us how bad Theranos is...

But, in fact, if their ideas are really good, they will win...

If not, someone will buy up the used junk, equipment and technology and use it for something else.


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