Lee Felsenstein

Lore & Background

Felsenstein was one of the original members of the Homebrew Computer Club, which formed in 1975 in response to the appearance of the Altair 8800 computer kit. With a handy yardstick, he moderated meetings at the SLAC Auditorium, described as less a chair than a keeper of chaos. Before the Osborne, Felsenstein designed the Intel 8080 based Sol-20 computer from Processor Technology, the PennyWhistle modem, and other early S-100 bus era designs. These existed in a market space with early generation hobbyist microcomputers from Altair, IMSAI, Morrow Designs, Cromemco, and other vendors.

Felsenstein was the engineer for the Community Memory project, one of the earliest attempts to place networked computer terminals in public places to facilitate social interactions among individuals, in the era before the commercial Internet. The project began as a project of Resource One, Inc. in 1972 and later incorporated in 1977 by Felsenstein with Efrem Lipkin, Ken Colstad, Jude Milhon, and Mark Szpakowski. It placed terminals in such places as Berkeley supermarkets to attract casual use by persons from all walks of life.

His work featured a concern for the social impact of technology and was influenced by the philosophy of Ivan Illich, particularly the book Tools for Conviviality, which advocated a convivial approach to design allowing users to learn about technology by encouraging exploration, tinkering, and modification. Felsenstein summarized his conclusions in several aphorisms: 'In order to survive in a public-access environment, a computer must grow a computer club around itself,' 'To change the rules, change the tools,' and 'If work is to become play, then tools must become toys.'

Reader's Guide

Felsenstein's significance lies in his central role in the development of personal computers, particularly through his design of the Osborne 1, the first mass-produced portable computer, and the Processor Technology VDM-1 video display module, which was widely copied and became the basis for the standard display architecture of personal computers. Many of his designs were leaders in reducing costs of computer technologies for the purpose of making them available to large markets. His work featured a concern for the social impact of technology, as exemplified by the Community Memory project, which was one of the earliest attempts to place networked computer terminals in public places to facilitate social interactions among non-technical individuals before the commercial Internet. Felsenstein was influenced by the philosophy of Ivan Illich, particularly the concept of convivial tools that encourage exploration and modification. His legacy includes being named a Pioneer of the Electronic Frontier in 1994, receiving the Editor's Choice Award for Creative Excellence in 2007, being named a Laureate of The Tech Museum of Innovation in 2003, and being made a Fellow of the Computer History Museum in 2016. In 2003, he designed an open-source telecommunications and computer system for remote villages, dubbed the Pedal-Powered Internet, though installation of the first system in Laos was unsuccessful.

Did You Know?

• Felsenstein was one of 768 arrested during the Sproul Hall Sit-In of December 2–3, 1964, as a participant in the Free Speech Movement.
• He designed the Osborne 1, the first mass-produced portable computer, while employed at Osborne Computer Corporation from 1981 to 1983.
• His older brother is evolutionary biologist Joseph Felsenstein, a National Academy of Sciences member whose PHYLIP system was one of the earliest examples of bioinformatics.
• Felsenstein founded the Free Speech Movement Archives in 1998 as an online repository of historical information.

Designing the First Portable

After Adam Osborne sold his computer book-publishing business to McGraw-Hill in 1979, he envisioned an affordable portable computer that came with a full software package. To bring that vision to hardware reality, he recruited Lee Felsenstein to handle the design. The machine that emerged—the Osborne 1—packed a 5-inch, 52-column cathode-ray tube, two floppy-disk drives, a Z80 microprocessor, and 64 kilobytes of RAM into a chassis small enough to slide under an airplane seat yet sturdy enough to survive an accidental drop. The bundled software suite was ambitious: CP/M, two BASIC dialects, WordStar, SuperCalc, project-management tools with PERT and Gantt charts, and communications software for a 300-baud modem. Osborne secured much of this software by offering equity in the newly founded Osborne Computer Corporation; MicroPro International, for instance, received 75,000 shares plus $4.60 per WordStar copy shipped. Unlike typical startups that spent years in development, the company's first product was ready almost immediately after its January 1981 founding, and the very first units rolled out of the door in July of that year.

Two People, Then Three Thousand

The Osborne Computer Corporation began with exactly two employees: Adam Osborne and Lee Felsenstein. Within twelve months of the Osborne 1's July 1981 debut, that pair had grown into a workforce of 3,000 generating $73 million in revenue. The numbers were staggering even by the standards of a booming industry. Eleven thousand units sold in the first eight months, with another 50,000 sitting on backorder. Peak monthly sales hit 10,000 units—a figure that exceeded the original business plan's total lifecycle projection for the entire product. The pace of expansion was so vertiginous that an executive returning from a one-week trade show found her team had been relocated and had to hunt through two separate buildings to locate them. By October 1982, a temporary bundling deal with Ashton-Tate's dBase II pushed production to 500 units per day, a throughput that severely strained quality control. Early units carried a 10-to-15 percent failure rate, a reminder that the machine was being pulled from the factory faster than it could be properly tested.

A Market That Moved Faster

The portable-computer window that Felsenstein and Osborne had opened was quickly crowded. Kaypro Computer launched rival portables that also ran CP/M with bundled software but featured noticeably larger 9-inch screens, giving them a visual edge in retail. Apple's machines carried a deep native software library and, through aftermarket expansion cards, could run CP/M as well. IBM's personal computer was simply faster and more advanced, and its software ecosystem was expanding rapidly. Felsenstein and Osborne were not unaware of the threat; they attempted to raise $20 million in capital to rush an IBM-compatible design to market, but the financing fell through. The competitive pressure was felt internationally as well. In Australia, President Computers Pty Ltd had become the largest global distributor of the Osborne 1 outside the United States, yet a corporate decision to split the dealership agreement pushed that partner toward the Kaypro line. Local distributor Tom Cooper had even warned Osborne not to announce the successor Osborne Executive until Osborne 1 inventory was exhausted—a caution that went unheeded.

The Effect That Broke a Company

In early 1983, Osborne began showing the upcoming Osborne Executive to journalists. The theory later dubbed the 'Osborne Effect' holds that this premature reveal triggered a cascade: dealers, anticipating the new model, cancelled pending orders for the Osborne 1, and unsold inventory mounted on warehouse floors. Desperate price cuts followed—the machine dropped from $1,295 in July 1983 to $995 by August—but sales never recovered. On September 13, 1983, Osborne Computer Corporation filed for bankruptcy. At an all-hands meeting, the first wave of layoffs swept through sales, production, domestic marketing, and most clerical support; affected workers were handed their final paychecks and sent home. The management that lingered was drawn mostly from the international marketing division. Nine days later, a group of 24 investors filed suit against the company and several individuals, seeking $8.5 million in damages and alleging that the true financial picture had been concealed and that some directors had engaged in insider trading. Historians remain divided on whether the early product reveal was the true cause or merely the final blow.

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