-Book Excerpt September 22, 2016
JOHN ARNOLD: Journey to Wealth
Most of my childhood friends and I remained close during and after college. We talked often about the journey to truth-which at the time we characterized as; a quest to end the poverty and suffering that we convinced ourselves was our current lot in life. It wasn’t true-we were all middle class had come from nice two parent families lived in pristine integrated neighborhoods and nowhere near fit the common stereotypes that we’d read about. In some way the fear or even thought of being poor acted as a motivator.
Our childhoods by any measure were good. Needs or wants that weren’t met by our educated working class professional parents were met by what some called hustling or as I liked to call it
arbitrage. I was a huge sports fan growing up. I wanted to be a broadcaster, play by play voice of the Sonics, Seahawks or Mariners. I’d go back and forth from Vin Scully to Howard Cosell to Pat Summerall, Brent Musburger, Marv Albert you name em’. I was 12 years old. I’d later get to meet most all of my childhood hero’s when I began working in broadcasting for the CBS affiliate in Seattle (KIRO TV/RADIO) which forever shaped my life. I had a pre-game dinner seated next to NBA Hall of Famer Oscar Robertson. I got to meet Yankee play-by-play announcer Bill White. I had never seen a black play-by-play announcer, because to my knowledge there were none. Meeting that brother changed my life forever it was truly inspirational.
We’d scalp tickets, which usually meant catching the bus to the stadium, asking everyone who walks by if they have any extra tickets. If we didn’t have any money we’d have to get the tickets for free. If we had $10 then we’d offer to buy the $50 tickets then proceed to sell them for double what we paid for them. This was a full time job for many of us. I loved sports and wanted to be a broadcaster so I did it to make money but also to enjoy the major sporting events I enjoy. Not sure what to think of this but I’ve never bought a ticket legitimately in my life. If I want to go to a sporting event I don’t care what it is, I go to the stadium hours before the game and either buy a ticket off a scalper or get one from someone who has an extra ticket. I think they call that teaching a brother how to fish.
Another source of income we came up with was throwing parties. House parties were common in black neighborhoods throughout the 70’s & 80’s. You charge anywhere from 5 to 10 dollars get a DJ who’d spin records-you might sell drinks and food-it was a good way to earn an income and meet Sista’s and have a good time. As we got older we started renting out venues. The Fire House was one of the first venues we’d rent out, it was an old Fire House in Seattle’s Central District.
Our go to DJ in those days was my good friend John Arnold. John was a natural when it came to all things tech from the equipment, turn tables equalizers and the like. He had a pure love of all things tech before tech meant anything to anyone. John GAVE me my first computer -a Commodore 64- I used it to type my assignments in college.
Also at this time was the emergence of RAP as a viable genre in the black community. One of the popular Soul music DJ’s on the radio at that time was Nasty Ness Rodriquez he was on KYAC Radio back then. I was at Franklin, John and another good friend, PJ Daniels were at Rainer Beach High School. When Rappers Delight by the Sugar Hill Gang debuted I was certain that Ness was talking over the track until John obtained the actual record. Sugar Hill dominated for what seemed like years but it was actually only a few months but when you’re young months and years kinda’ blur.
By the time Run DMC burst on the scene with “It’s Like That (And That’s The Way It Is)” we were ready to try our hand and rapping. John provided the instrumental to the Run DMC hit, PJ and I penned the lyrics and along around 1982 I’m guessing, “It’s Like That, And You Are A Big Pimp” debuted on the University of Washington Campus and on High School radio stations.
“So you want to be rich and be a basketball pro, but the draft came around and you did not go, now you want to make a living off the weed you grow, ITS LIKE THAT and YOU ARE A BIG PIMP”. And there was this verse; “You don’t like the cards that you were dealt, I really don’t know, how you felt, now you go to night school at Roosevelt, IT’S LIKE THAT and You Are A Big Pimp…”
I can’t speak for John or PJ but for me it was about the message, which was; we’re all on that journey to get paid to become wealthy but there’s a right way and a wrong way, let’s try to do it right. PJ later would join the Marines and is currently working for Boeing in Seattle. John took a job at Nordstrom’s because he had an aunt who’d worked for the company for many years who recommended him.
Johns job at Nordstrom’s was to watch the computer of credit card bill statements print out, insure there was ink and paper in the printer it was printing straight etc. basically to trouble shoot any problems that might arise that would result in a customer not getting a accurate bill statement. I can only imagine the boredom staring at a printer all night while your friends are across the street at Sydney’s-the popular night club at the time-shaking our grove thing.
My girlfriend in college (Baby) had a dorm mate named Edwina. John was dating a floosy who none of us liked because she was dishonest and all around not good for him. I never considered myself a college type guy in the sense that I had been working in radio and television since I was 16 years old. The only reason why I went to college was they told me I couldn’t move up at the station unless I had a degree. I later found out that was nonsense but at the time it seemed logical. So while I had no problem stepping out of “college world” into real world, I did find a better grade of black woman in college than in nonacademic circles. John was hesitant and so was Edwina but I knew both of them and was certain if they ever met they’d be great for each other. Edwina was studying to be a lawyer John wasn’t, so how was this supposed to work. “Trust me, I’d tell them, trust me.” So one night I’m at Sydney’s and yes, it was literally across the street from Nordstrom’s. John’s hours were like 9pm to 5am so when Edwina showed up I called him and said; “She’s here!” One thing all of us bonded over was professional attire. We stayed in suits and ties even if we didn’t have anywhere to go and while John has a job that didn’t require he wear a suit and tie, he wore them anyway each and every day(and night). I couldn’t wait to introduce them and there’s no question about it, they trusted my judgement- because I did know both of them so well. Today they have-I think- four beautiful kids and maybe one day we’ll make a movie about their love story. At least in this instance the journey was as rewarding as the prize for reaching your destination. OK back to John’s journey.
He told me that there were two young White guys that came from back East to pitch Nordstrom’s on some new software that would connect all the cash registers in their stores. How it works is; every sale at every store is tallied on a central computer so at the end of the day you don’t have to count your money and match it to paper receipts, you simply press a button and Walla! You have your sales for the day instantly. The cost of the software and new electronic cash register’s? TWO MILLION DOLLARS!
The first thing I said when John told me the story was, “Can you get that software?” It was so ironic because at that same time a lawsuit was being considered by the Federal Courts between Apple Computers and Microsoft. It was a major story in Seattle where Microsoft is based. Steve Jobs hired Bill Gates and Paul Allen to write the code for Apple’s operating system on its home based computers. Gates and Allen then sold that same operation system to IBM under the name Windows.
Bill Gates wrote in his book, “The Road Ahead” both Apple and IBM had no interest in his software at the time. Gates said he offered it to them but they said; no, they were only interested in selling computers not the software. Court documents show that Gates personally wrote to then Apple CEO John Sculley urging him to license the software and ROMs to outside manufacturers. It was Gates hope that Mac would become the world operating standard. The proposal was dated June 25th 1985 but was soundly rejected by Jean-Louis Gassee’ who was overseeing the MAC and their new personal computer named “Lisa” which was the first machine to use WYSIWYG(What You See Is What You Get) display along with the Apple pioneered “mouse”.
As it turned out Lisa was a major flop for Apple selling only 11,000 units at a cost of $10,000 to the consumer. IBM was also offered the chance to license what would come to be called Windows Operating System but also declined. Microsoft at that time had a meager $25 Million in total sales of its software while Microsoft and Apple had over a Billion dollars in sales of its PC’s.
It was only when Apple CEO Sculley felt the software and computer were one in the same and as such could not be “sold” or given to IBM that they showed any interest in it at all. The courts agreed with Gates. They ruled software was like a typewriter- what’s written on that typewriter can definitely be copyrighted but the type writer’s unique keyboard or Operating System cannot. On July 25th 1989 Federal Judge W. Schwarzer ruled that software is like an “idea” and therefore cannot be copyrighted, further stating; “There has to be significant similarities for a copyright claim to be made” ~Judge W. Schwarzer Apple appealed the ruling all the way to the Supreme Court but the Court declined to hear the case.
The ruling that software could not be copyrighted while never stated by the Court was the prevailing interpretation of the ruling. It made Microsoft a Fortune 500 Company and its Founder, Bill Gates the richest man in the world. It allowed John Arnold to create his own software that did the same thing as the young fellows who sold their system to Nordstrom’s. After sales to the Seattle Times and McCaw(later LA Cellular), Arnold had $30,000 to buy a server and go into business for himself.
Arnold was granted a Patent on his unique version of cash register software to track online sales used today by major companies like EBAY and Amazon dot com. John’s days at Nordstrom’s were behind him but the best was yet to come. Having a few extra dollars in your pocket, not having to slang shoes at Sears or stare at the printouts for Nordstrom’s all day and night means more time to indulge in our true passion, sports. John and I were regulars at every major sporting event in Seattle; Sonics, Mariners, Seahawks. I went to Franklin so I followed the Quakers then switched over to the Garfield Bulldogs- I felt like an honorary Bulldog since my mother used to teach there and it remains to this day the blackest school north of Los Aneles and West of Chicago we’d proudly proclaim. Garfield was so black the legendary school was used as the exterior for the film “Cooley High” a true story. Quincy Jones, Ernestine Anderson, Ray Charles, Bruce Lee are notable graduates from Garfield High School in Seattle.
After much thought-or maybe not so much-John and wife Edwina-now a Prosecutor working for King County- set up a company that sells black themed greeting cards. They had the Malcolm X “By Any Means Necessary”, the Muhammad Ali “The Greatest”, along with the Black King & Queen themes. It was blacker than 12:01 midnight in that camp. Gary Payton was leading the Sonics in what would turn out to be their last playoff run before the team would be sold to a group in Oklahoma City, which would move the team there, breaking all of our hearts. Holliday’s were the busiest time for greeting card sales and this winter was no different. John picks up the story; “I get up and run up to my sky box at the end of every quarter to check online to see how many sales we’ve received, so I can ship the cards. Nothing pisses the customers off more than ordering something for Christmas and having it show up just before Easter. So I called AT&T and asked them could they simply send the emails to my wireless device so I don’t have to get up-I can do my online business from my seat at the game. They said yea, we can do that but it’ll cost you $7 dollars a month more. I said perfect I’ll do it. Then I was wondering if I don’t’ wanna’ get up outta’ my seat I’m sure the other fat cats don’t want to either and called them back and asked them what if I want to offer this service to others who have wireless devices and want them connected to the internet? They said $7, even suggesting I charge $10 and make a meager profit.” In January of that year John’s company began offering internet connectivity to anyone who wanted it for $10 per month on top of their AT&T bill. That initial year, 33 million people signed up. Needless to say, they were no longer in the greeting card business. So the next time you access the internet on your smart, IPhone or tablet give a silent shout out to John Arnold.
John met a brother who was hired to work at Microsoft in the early days. Tech startups pioneered the practice of enticing top talent by offering competitive salaries with stock options that can make employees instant millionaires, if the companies are successful. This brother offered John two million dollars to buy thirty-percent of his company with the intent to take it public. John and Edwina accepted. The public offering on Infospace took in a whopping $633,000,000 (Wall Street Journal).
There are so many lessons you can learn from John Arnold’s journey. Was there an element of right place, right time? Maybe, but you never start a company hoping to be in the right place at the right time. What you do is start a company and keep your eyes and ears open looking to seize on opportunities, you see that others don’t. There was a confidence I noticed in John that I now know is due to his certainly he was on the right path- even if not sure where that path would take him.
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