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InterviewBITS with Darryl Peck, Part 1 of 2

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Welcome to the second installment of InterviewBITS. This interview is with Darryl Peck <dpeck@cybout.com> whose name is less familiar than that of our previous interviewee, Peter N Lewis. Nonetheless, Darryl has been a major participant in the world of the Macintosh for years, and most recently, has expanded his horizons to the Internet. Darryl was president of the New York Mac Users' Group (NYMUG) for a year after being the group's sysop. Darryl then started Inline Software, a small Macintosh publishing firm known for some innovative utilities and about a dozen games, including the relatively recent PopupFolder and the Eddy Award-winning 3 in Three. After running Inline Software for six years, Darryl sold the company to Focus Enhancements, which has done little with the Inline products. Next, in mid-1995, Darryl founded Cyberian Outpost, a retailer of hardware and software on the Web. Cyberian Outpost is unusual in the Internet retailing market for being run primarily on Macs and catering more to the Macintosh world than many other Internet retailers.

<http://www.cybout.com>

  • [Adam] Can you tell us about the history of Inline Software - who, why, what products, and so on...?

[Darryl] It's a funny story. Inline was started purely by accident. An old friend and I had started a company called Inline Design that was meant to be a furniture and yacht design firm. While we were trying to pull that together, I went to northern California for a few months to write articles for magazines, mostly automotive-related (when I am not in front of my computer I am probably watching a race with my three-year-old daughter), and finally bought myself a Mac instead of writing on legal pads. I bought a Mac Plus, a $750 20 MB hard disk, an ImageWriter II, and a 1200 baud modem.

However my writing productivity went directly into the toilet as I discovered the world of BBSs and CompuServe. I slept an average of two hours a night for the first six weeks I had the Mac and actually wrote a few freeware HyperCard stacks that found their way around the planet. I think I downloaded every file on every Mac BBS in northern California within a few weeks. I couldn't get enough of it. I was seriously hooked on my Mac and thought of pitching a tent in Cupertino just to hang around Apple.

In any case, I returned to my native New York City, got heavily involved with NYMUG, and found out that the friend I started Inline with had actually been accepted as an Apple Developer. He did it just so he could buy a Mac II for half price, but for me, it was a gold mine of information and tons of cool stuff with Apple logos. I loved it! However, Apple called one day to ask what we had developed since that was a requirement to stay in the program. The thought of losing my flow of Apple stuff was so horrifying that I decided to find a way to stay in the program.

It turned out that my friend had a friend who was heavily into gaming and was just finishing a HyperCard-based game called Bomber, which he intended to post as shareware. I convinced him to let me publish it by saying that if we sold 5,000 copies we would have about $100,000 in return. He bought the proposal and off we went. Rather than start another company, I used the Inline Design name we had already registered. Since I did not anticipate this being much more than a way to stay in the developer's program, I didn't want to spend an extra dime. I was still working in the film business as a gaffer so I had to run Inline on my days off and at nights.

  • [Adam] A gaffer? Hang on a second. You just said you had started a furniture and yacht design firm, but had gone off to California to write articles for automotive magazines. Where does being a gaffer fit in - and what the heck is a gaffer anyway?

[Darryl] A gaffer does the lighting for film and television, although I lit mostly television commercials. I had been working as a gaffer for about 10 years when we started the design firm. Since the design firm never really got going, I continued to earn a living making commercials for Federal Express (the funny ones), McDonalds, Nissan, Miller Lite, etc.

And, if you want a great piece of trivia, the term gaffer comes from the old days in England when a gentleman went around lighting the gas lights each day at dusk. The tool he used to reach up to light the torch was called a gaffe. Now your readers know a top trade secret.

  • [Adam] Sorry to interrupt. You were saying about Inline Design?

[Darryl] Meanwhile, back at Inline Design, in short time we had sold over 10,000 copies [of Bomber] and I made a decision to resign from the film craftsman union and devote myself to Inline. I didn't have much choice since I was running the company out of my studio apartment on the Upper West Side and manufacturing the product on the bed. I would shrink wrap boxes until four or five in the morning each night. Since we included a free pair of headphones in every box, and I had to buy them in bulk, I had cartons piled to the ceiling in every square inch of the tiny apartment. The neighbors thought something strange was going on, but then again, we had the police running through the building on a regular basis with their guns out looking for burglars, so it was easy to overlook the shrink wrap fumes.

Eventually I got married and moved to the woods in Sharon, Connecticut. My wife helped me run the company out of a spare room, and we got a company to manufacture the product. We came out with Darwin's Dilemma in 1990 and in 1991 released Swamp Gas Visits the USA, 3 in Three, and Mutant Beach. 3 in Three won the Eddy Award that year for best game. Swamp Gas was nominated as well, but lost out to Kid Pix. And, we finally hired our first employee.

As sales grew we decided to leave the house for a real office. So, we packed everything up and moved to a gorgeous 7,700 square foot, 150-year-old Victorian house that had been converted into corporate offices. We added more employees and released several more titles, including the Microseeds line of utilities that added considerably to our product line. New titles and re-released titles included Firefall Arcade, Swamp Gas Europe, INITPicker, Redux Deluxe, HAM, Icon 7, and PopupFolder.

  • [Adam] Why did you decide to sell out to Focus? Was it a good idea, in retrospect?

[Darryl] There was no question that the rapid consolidation in the software industry was beginning to hurt us. It was difficult to compete with companies that could afford to lose $50 million in one year (Spectrum Holobyte). Then Microsoft entered the consumer market and hired a small crew of 500 people to make it happen. The writing was on the wall. It was time to get out.

We looked at many alternatives and felt pressure to move quickly. In hindsight, we made the wrong choice in a big way. It's no secret Focus has done nothing with the line and has lost a few of the titles completely due to lack of effort. As much as I would love to say more on this issue, I am contractually bound not to tell the real story. Too bad too, it's a good one...

  • [Adam] OK, enough about Inline then. What gave you the idea of starting Cyberian Outpost?

[Darryl] Frankly, I needed a job. When I returned from my seven months of exile in Woburn, Massachusetts trying to run Inline for a company that didn't have a clue about software, I spent my first unemployed time in 23 years thinking about what to do. I had a few offers from software companies to run them, but I felt strongly that the time had passed for small, ill-funded software companies. So, I went to San Francisco for Macworld Expo, which I hadn't missed in nine years, and did some consulting there. The other thing I did there was buy your book, Internet Starter Kit for Macintosh.

  • [Adam] Thank you.

[Darryl] Although I had been an online junkie since I bought a Mac, I had never explored the Internet. I had spent thousands of hours on CompuServe, a few hours on AOL (never my favorite place), used CONNECT (how many of you remember that dismal affair?), tried Prodigy (for about 10 minutes), and ran a BBS for NYMUG. But on the plane home from San Francisco, I read Internet Starter Kit for Macintosh cover to cover and decided to become an Internet junkie.

I got home at around 2 AM, did some research on Internet service providers (ISPs), and was happily surfing the net by noon. The guys at Connix (my ISP) still think I'm a bit nuts. I told them I had to have an account right away and could not wait. Basically, I told them it was a matter of life or death. Dramatic, eh?

So, I fired up MacWeb (thanks for the disk in the book!) and saw the Web for the first time. Within a few minutes I knew I had found my place in life. I saw instantly that the Web would change everything. Global boundaries disintegrated. Computer platforms would become irrelevant. Retail would never be the same. OK, so maybe some of these ideas took a few weeks to put together, but I spent 12 to 16 hours a day on the Web and visited thousands of sites during that time.

Eventually, the idea of conducting computer retail on the Web began to form. I felt the Web provided huge benefits over paper-based catalogs and retail stores, and that by using the technology to its fullest, a virtual store could grab market share from the established players. Hundreds of hours went into the business plan and research. And since most of the research took place on the Web itself, it was a real pleasure putting in the time.

  • [Adam] So you started Cyberian Outpost. The media talks a lot about how no one's making any money on the Web. Are you?

[Darryl] Yes. We are probably one of the very few making money. We are not making much, as we prefer to re-invest nearly all our earnings in growing the company, but there is no question that we have done extremely well.

[Tune in next week for the second part of this interview, in which Darryl talks about his experiences with Cyberian Outpost. -Adam]

 

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