Exxon (Xonex), Boxing:

Exxon, in the 1960's (I think), developed a plan to remain a high profit company even after the world's oil supplies ran out. All they had to do was become a major player in the computer business, where profits seemed even higher than in oil. Exxon nurtured a series of computer startups between 1975 and 1985. In the early 1980's, they combined the most successful of these into Exxon Office Systems (EOS). Exxon pulled the plug on EOS early in 1985. They may have wagered as much as a billion dollars (over a decade) in computer companies. (In contrast, I've heard that AT&T lost a billion in one year of the computer business, in 1985.)

Today, computer profit margins are dwindling, although not everywhere, and the world's oil supply still has many years to run. I just want to share one brief observation with you, from my early years in Exxon's computer business.

In mid 1978, I joined Exxon's 19th computer startup. Its goal was to produce the paperless office. It was expected to rely heavily on the 20th startup, which tried and failed to develop the first practical office optical disk drive. Our startup was called “Xonex”. The name is an anagram of Exxon, and it is also a sort of spelling of 19 in roman numerals (X one X). For about a year and a half, Xonex worked in happy isolation, but then we got more and more involved with the other startups.

I believe that the majority of Exxon's startups were duds. (I could be wrong about this, but I never heard anything about most of them.) The non-duds were pretty exciting: the first cheap Fax; ink-jet technology; an intelligent typewriter; and the world's best (for a year or three) word processing system. After a while, Exxon forced them to try to work together, and then Exxon squeezed us all into one company.

In 1980, I often thanked my CEO for giving me more than to the opportunity to do cutting edge work. I told him that I also felt I was in the first row, watching a boxing match, as Exxon figured out how to deal with all its ventures. This “dealing” got more and more exciting to watch. It was a terrific education in business management for me.

But then, frankly, it got too exciting. That's when I realized: I wasn't in the front row watching a boxing match; I was in the ring!