Lotus 1-2-3, a walk down memory lane and lessons learned

Lotus123-smallI recently encountered this article over at The Register that discusses how the final version of Lotus 1-2-3 just reached end of life and so is effectively dead.  This is no surprise as the product has been in a long decline; however, I cannot help but feel a bit melancholy because Lotus 1-2-3 was a killer app in the day and it is sad to see it slide into obscurity and now cancellation.

In the early days of personal computing, users and vendors were struggling to justify the existence of the complex and powerful machines like the Apple 2 or IBM PC. Just to be clear, these machines were barely more powerful than today’s desktop calculators and lacked virtually all of the advanced technologies we take for granted today; however, at the time they were cutting edge.  Out of this chaos of technology and software development emerged Visicalc which was the first spreadsheet program and was the first killer application for personal computers.  It was instantly a best seller; however, it still had significant limitations.

Mitch Kapor founded Lotus Corporation and one of its first products was Lotus 1-2-3 which was a spreadsheet program that stayed close to the Visicalc model.  1-2-3 brought significant improvements in speed, functionality and reliability to the market and became an instant hit when it was launched in January of 1983.  Lotus’s application rapidly overtook Visicalc in sales and would maintain in a dominant role for years to come.  I remember 1-2-3 and being amazed about its functionality.  At the time, I was using a Mac Plus and remember jealously  eyeing my PC brethren who had access to 1-2-3 while I awaited the long promised Mac version then called Lotus Jazz.

The story of the downfall of Lotus 1-2-3 is a common one experienced by first movers who lose sight of evolving markets.  The computing market continued to mature as Windows asserted its position as the dominant desktop OS.  Lotus 1-2-3 while leading in the DOS environment struggled to migrate to the Windows platform while Microsoft’s original spreadsheet program Multiplan evolved into Excel.  It is during this transition that Lotus made numerous mistakes including delayed and buggy product releases and an unfortunate focus on IBM’s OS/2.  The result is that Microsoft Excel overtook 1-2-3 as the market leader and the product’s market position continued to decline until we eventually reach today when it is effectively dead.  It is a sad story of the decay of a once dominant solution and an application that I remember fondly.

As we look back, the learnings are clear.  Lotus missed the critical market transition to Windows and once they realized their mistake, it was too late.  This is an important lesson for companies of all sizes. Management teams must be vigilant about changing market trends and not be afraid to move ahead of the market even if the process is disruptive or painful.  Missteps or lack of vision provides an opportunity for competitors like Microsoft in this case and can result in failure.  This concept seems patently obvious; however I have worked for multiple companies big and small that still struggle with this core tenet.  As Lotus 1-2-3 fades into the sunset, I want to acknowledge the contribution it made to PC computing and hope that we can all learn from Lotus’s mistakes.

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