Page 104 - MS Year in Review 2020

“had existed only eighteen months in terms of operation – hardly time to get my

feet wet; all of a sudden the job was a whole different order of magnitude. I
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realized it was no longer an entrepreneurial operation in any conceivable way.”

He and his firm were in crisis and despite this recognition, Osborne was unable to
make the required changes in himself or his company.

Some of the problems faced by Osborne Computer were present from the

company’s earliest days, but they were masked or at least made less acute by its
rapid sales growth:

 Engineering problems and manufacturing disputes were buried under an
avalanche of orders created, in part, by a very successful advertising
campaign.

 Money flowed into Osborne Computer and the firm received a great deal of
visibility, but it was actually a profitless prosperity:

o Although revenues were $5.8 million in 1981, the firm incurred a loss of
$1.3 million.
o The next year, when sales exploded to $68.9 million, the company still

incurred a loss of $1 million.
o During the first quarter of 1983, sales were $34.4 million, for an annual

running rate of more than $137 million, but the firm still had a loss of
$600,000 for the quarter or $2.4 million on an annualized basis.

Clearly, something was wrong with its operations. There was also a leadership and
management problem attributable to Osborne himself.

Osborne recognized that he was in over his head as a manager. As he stated:

“Growth had taken Osborne Computer Corporation to a size where I had to question
my own qualifications. I had no professional training whatsoever in finance,
management, or business administration, the very disciplines within which I was

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making critical business decision every day.”

88 Robert A. Mamis, “Face to Face with Adam Osborne” Inc. (November 1983), p. 21.
89 Osborne and Dvorak, op. cit., p. 88.

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