Long Journey Over 20 Years: Paula Tompkins, CEO of ChannelNet (Part 2)

Sramana Mitra: What was the startup in 1981 and what was the environment in which that startup was coming together?

Paula Tompkins: It was a very interesting time, around the birth of the personal computer. Adam Osborne had introduced his luggable computer. It was a CPM machine. The man that I went to work for made the circuit boards for Adam Osborne who was very wealthy and was very jealous. He hired an engineer and he decided he was going to one-up Adam Osborne. He was going to make a luggable computer that was all inclusive.

The computer was called the Access Matrix. It had a dot matrix printer and came with a full package of software. It was called Perfect Software in those days, which included your spreadsheet, word processing, etc. It had two different types of modem. It had a handle, a 7-inch screen, and a keyboard. The company went from, literally, one employee to 400 employees, and back down to one employee in about a year. I consider my first experience at a startup as my MBA. How often do you get to see one skyrocket with lots of money?

The demise of the company was due to a couple of things. Primarily that CPM, which was the operating system, fell away to MS-DOS. The compact computer was the luggable device of choice for corporations. As an outgrowth of that, the CPM market dried up. That was number one. More importantly, the quality of the computer was a disaster. Proper development and testing were not done. Corners were cut. There were lots of ergonomic problems with the computer. It was a case of just poor management and poor execution.

Sramana Mitra: You were not a founder of this company?

Paula Tompkins: No, I wasn’t. I was one of the first five or six employees. My job was to sign up computer retailers across the United States. We signed up 1,800 retailers in less than a year.

Sramana Mitra: It didn’t work out. You went through this first startup experience. What was your next move?

Paula Tompkins: I took another job in the 1982 to 1983 timeframe with a company that had a patent on putting games and information systems into airline tray tables. I know that sounds crazy but they were a military contractor. They had a lithium chloride battery which was used by the military to shoot the missiles if the lights went out. These batteries were $50,000 each and the company was desperate to commercialize their battery.

They obtained a patent on putting these batteries in tray tables for use by airline passengers primarily for entertainment purposes. This was around 1984. There was no technology in the airplane. There might be a video, but that was it. Long story short, we went to the airline industry. We advanced the product. One of the secrets to it was how to pay for the extra weight that’s going to go on the airplane because each one of these tray tables is now going to contain a flat screen computer.

We came up with the idea of going to major corporations like Ford Motors or General Electric that are trying to reach the people in the airplanes. 80% of the flyers were flying business and are frequent flyers. The idea of providing information, education, and entertainment in that computer was extremely novel. That was my concept. That was my first invention, if you will. Long story short, we had a very successful pilot with United Airlines. We ran a pilot for about 30 days.

Unfortunately, we were coming to market with our idea about the same time the airlines were testing something called AirPhone. AirPhone was a gigantic expensive phone that had very poor service but would allow you to make phone calls from the airplane. There was so much dissatisfaction in the market and the Vice President of Marketing at United Airlines basically said, “I don’t want anymore electronics causing customer dissatisfaction on my plane.” Airlines are very much like sheep. Where one goes, the rest go.

When United Airlines decided not to go with it, that pretty much killed the concept. It was very disappointing but was a very great lesson in life. I then said, “Maybe what I should do is take the concept of the education, information, and entertainment, just make the program, and direct mail it to consumers in their homes or offices.” As a result, SoftAd was born, which became ChannelNet in 2004.

This segment is part 2 in the series : Long Journey Over 20 Years: Paula Tompkins, CEO of ChannelNet
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