Doug Carlston - Software People. An Insider’s Look at the Personal Computer Software Industry

Unfortunately, Nakazawa’s relationship with his own programmers wasn’t always as successful as it was with us. He made the mistake of keeping most of the revenue he obtained in foreign royalties and giving his programmers what amounted to allowances. This was entirely in accord with Japanese custom, since it isn’t appropriate for nineteen-year-olds in Japan to have a lot of money. But nineteen-year-old programmers in the United States were making hundreds of thousands of dollars a year, and in time the word got around. The result was that Nakazawa had a revolt on his hands.

Nakazawa’s problems with his programmers didn’t get any better when he hired a translator and liaison between our two companies. She was Japanese-born but had lived in Berkeley for ten years. Nakazawa brought her to Tokyo, and while she was there she got to know all his employees. She is a very open person, and it wouldn’t occur to her to refrain from speaking frankly about the software gold rush that was taking place in the United States at the time. Of course, she wasn’t the employees’ only source of this news. Eventually many of the dissatisfied programmers broke away from his company and started working independently.

When Nakazawa’s programmers left, he didn’t have any more products to sell. I hired Nakazawa’s former translator, who had returned to the San Francisco Bay Area, to go back to Tokyo to see if she could find other opportunities for us in Japan. The programmers she already knew led us to a wider network of programmers who worked for different companies. We made contacts and began to license Brøderbund products to a few companies in Japan.

Our first contract to provide game software to System Soft, a publishing house in the city of Fukuoka, made frontpage news in a major Japanese business daily in the summer of 1983. Microsoft had already begun to dominate the operating-systems market in Japan, so Brøderbund’s incursion into games was seen by some Japanese journalists as a sign that the long-feared day had arrived when America would sell far more software to Japan than it bought from it. In fact, Brøderbund was licensing American software to a dozen Japanese software publishers in Japan by the end of 1984.

Although the microcomputer hardware market in Japan is dominated by the huge companies that already manufacture and distribute electronic hardware, a very significant part of the Japanese software industry was created by startup companies founded by the same kind of hobbyist-zealots who started the microcomputer revolution in the United States. Indeed, hobbies in general seem to have played an important part in the revolution in both countries. The microcomputer industry wasn’t started by the computer industry or by big-business men, but by people who were fascinated by, obsessed with, and intensely engaged in computing for the fun of it. And a lot of those people had other hobbies before software came along. Among the computer entrepreneurs I know or have heard about, I have noticed a definite preponderance of three different kinds of hobbyists, in both the United States and Japan: Many computer enthusiasts in both countries share a passion for model trains, ham radios, and/or music.

Perhaps the explanation for this is that people who are so dedicated to their personal interests that they spend most of their spare time bent over soldering irons or hunched over their radio receivers are made of the kind of stuff that can create billion-dollar corporations in a few years. A case in point: Among the key software people in Japan is a hobbyist extraordinaire, Yuji Kudo, who is so fascinated with model locomotives that he named his company Hudson Soft, in honor of the Hudson—his favorite kind of steam locomotive. Kudo’s company happens to be the largest microcomputer software publisher in Japan.

Yuji Kudo’s office is filled with model trains, including a four-foot-long steam locomotive that sits on his desk. Stacks of one-foot gauge track are stored down the hall. Once a year, Kudo and his friends rent the parking lot of a huge shopping center and set up all their track and run their trains for impromptu audiences of several hundred onlookers. But Kudo is an inveterate entrepreneur as well as an astonishingly dedicated hobbyist. Since he is closely associated with so many other key figures in Japan’s software world, Yuji Kudo’s story is a kind of history in miniature of the microcomputer revolution in Japan.

In 1967, while he was still a university student, he started Hudson Productions and sold the work of various commercial photographers—an enterprise that prospered for a while and then went under after six years. But commercial photography wasn’t his sole passion. He was also an ardent amateur radio operator. In 1973, the same year his photography company filed the Japanese equivalent of Chapter 11, he started Hudson Company Limited. At first, he sold ham radio equipment. Then in 1976 he saw the first advertisements in American electronics hobbyist magazines for the microprocessor chips.

Although hailed as “computers on a chip,” these microprocessers were far from usable computers. But Kudo, an accomplished amateur electronics engineer, wasn’t dismayed by the prospect of getting involved with this hardware. He wanted to know more about the potential of the chips and was drawn to the idea of building and using his own computer. He didn’t speak English, but, with an adventurousness that is characteristic of other legendary microcomputer entrepreneurs, he flew directly to Silicon Valley in 1976 to obtain one of these mysterious new devices.

A young man at Stanford University, Harry Garland, a member of the homebrew movement who would later become co-founder of Cromemco (named after a Stanford dormitory) showed Kudo an 8008 chip. Kudo had read about the chip and was fascinated by it, so he bought a one-board computer manufactured in Berkeley—the SBC80—for $1200. Kudo took the hardware home and played with it until it broke. When he came back to the United States less than a year later to buy an IMSAI, he was astonished at how quickly the technology had advanced since his previous trip. He was burning to be part of this new hobbyist renaissance, so Kudo persuaded his younger brother Hiroshi to run his ham radio store while Kudo studied programming at Hokkaido University. His intention was to gain enough expertise in programming so that he could expand his company’s interests into the microcomputer field.

Hiroshi was for a time seriously opposed to Kudo’s plan to expand their venture into a field that was then so unknown. But he relented when he realized that to Kudo this wasn’t strictly a business matter. Like his locomotives and his radio equipment, computers were objects of endless devotion, study, and wonder to Kudo, who continued to pursue his studies and to buy and program new varieties of microcomputer from the United States.

After he switched from Hokkaido to Waseda University, during a time when most of the nation was still fascinated by the single-purpose nonprogrammable arcade video games, Kudo was finding out all about their successors—personal computers. He had taught himself enough about his IMSAI to give seminars for hobbyists in Hokkaido. He bought several more computers and wrote the system software to make them run. He wrote other programs as well and then began selling them to other hobbyists. At first, business wasn’t exactly booming, since few people in Japan outside the hobbyist community had machines before 1979, but sheer enthusiasm for the subject kept Kudo creating and publishing software and writing articles for I/O, the first Japanese microcomputer magazine.

Throughout 1978, Kudo wrote games. By this time he had started Hudson Soft, his software publishing company. He also bought a PET and an Apple in the United States and produced his own version of BASIC for those machines—Hudson Basic, he even designed FORTRAN and PASCAL interpreters. He also began to train an assistant, a man named Nakamoto, who shot right past his teacher in programming expertise and became in time the leader of his development team. By the end of 1978, Kudo had seven employees.