Entrenpreneur Bio: Charles Roth

15 March 2012

This biography started out as a response to teachers at the Ann Arbor Learning Community, who were looking for stories about entrepreneurs in the community.  It's still intended for young people and their teachers (especially the final section, "Lessons Learned") -- but it grew a little in the telling!  Questions are welcome, send them to roth@thedance.net.

I. Aule-Tek
I never intended to be an entrepreneur; it really just "sort of happened".  And, like most labels, it's just one part of the story.

It all started in college, in the late 1970's, at RPI.  I'd been tinkering with computers since I was 14, and we're talking back in the "Dark Ages": keypunches, mainframes that filled a room, with stupendous amounts of memory, like, oh, 256K (thousand) bytes.  Your standard smartphone today has upwards of 4 giga (billion) bytes.  But I loved them, and by the time I got to college, I was already teaching other people how to write programs.

So in my senior year at college, I was taking advanced graduate courses in "Artificial Intelligence", and even wrote a complete program that played chess.  (It could beat me, but only at 3am when I was really tired...)  My professor also worked full-time at the General Electric Research & Development Center, and hired me right out of college to help program the robots he was building to inspect aircraft engine parts.

I started bringing in some of my friends, and he hired a few of them and was interested in hiring some more... but he was only allowed to hire a limited number of regular employees.  So one afternoon, we cooked up the idea that I could start a company, hire students from RPI as part-time contractors.  He would pay me, I would pay them, and they would be my employees, not his.

It was crazy... and wonderful.  I quit GE, and became my first own employee.  2 years later, I had 14 employees, most of them part-time, working at GE. 

I named the company "Aule-Tek", a play on words combining "all technical" with "Aule", one of the mythological characters from the Lord of the Rings.  (Aule is the demi-god who created the dwarves, and we engineers identified with the dwarves who worked deep underground, and made intricate devices and weapons.)  The logo was "Durin's Hammer", that appears on the magical doors to the home of the Dwarves in the movie.

I was incredibly naive -- it didn't occur to me to try and make any money off of my employees -- I just charged my boss for their time, and whatever time I took to do the paperwork.  (I learned a lot about how much paperwork it takes to have a real employee.  One time the IRS computers made an error and wanted to charge me a fine -- I wrote back with the detailed calculations of where they went wrong, and then asked if they wanted any computer consultants.  They cancelled the fine and I never heard from them again.)

II. Camber-Roth: Caucus phase I
In the early 1980's I went off to graduate school at Wayne State in Detroit.  I also wanted to try teaching, and got a part-time instructorship only because Wayne lost a teacher in the middle of the semester, and they desparately needed someone, anyone, who could teach what was then the main mathematical computer language, called FORTRAN.  So I was studying... and teaching... and doing a little consulting for GE... and still partly running Aule-Tek from afar.  Crazy!

So I split up the ownership of Aule-Tek with several friends that were working for it day-to-day, and hired an old friend who had gotten her CPA (certified public accountant), and transferred more and more responsibility to her.  She actually knew something about running a company: for one thing, she started making a profit off of each employee.

And then at Wayne I saw a primitive "bulletin board" or "forum" or "chat room" kind of program, called Confer.  And as soon as I saw the power of this, I wanted to write one that everybody could use.  (More of this story at caucus.com/Interview.)

3 years later, I'd left Detroit for the much more pleasant communities in Ann Arbor, and I'd convinced the other owners of Aule-Tek to front some of our profits to pay for me developing a "portable" (meaning it would run on lots of different kinds of computers) "forum" program.  We named it "Caucus", and created a new division of Aule-Tek, named "Camber-Roth".  (No, there was nobody named Camber.  Another mythological figure from a fantasy novel.  In those days, all new computer companies were named something-hyphen-something-else.  It sounded respectable, I guess, like a law firm.  Who knew?)  I worked half-time writing software at the University of Michigan to pay my bills, and then the other half (for much less pay) for Camber-Roth.  But it was my creation!  My brainchild!

We sold our first copy in 1986... by 1990 we were selling enough, that with some of the other profits from Aule-Tek, we could pay two full-time developers (myself and one other).  A company in Japan flew me out to spend 2 weeks modifying it to work with Japanese... we even had our own mini-conventions, the "Caucus Caucuses", for several years.

III. The Break, the Web, and ScreenPorch: Caucus phase 2
But like so many new companies, we had our growing pains, and our power struggles.  The dream of becoming a software company had faded, even though Caucus was doing "OK"... and Aule-Tek (renamed "Unified Technologies" as the company became more serious) was headed more and more down the general software consulting track.

Unfortunately, the differences in desire and opinion became perceived as a power struggle... we should have just split in two instead of wrestling with each other.  By 1994 I did just that -- I bought out the rights to Caucus in exchange for most of my (large) block of Aule-Tek stock, and struck out totally on my own.  (I even wrote an original country & western song to express my disgust and frustration.)

So, poor but happy, I struggled along for another year... when (in February 1995) I discovered the (just becoming visible) World-Wide-Web.  This was the answer to my prayers -- one common interface that bolstered my "writing a tool so everyone could use it" dream.  In a month I wrote a completely new language ("CML", the Caucus Markup Language) and built a web interface for Caucus.

IV. Caucus Systems: phase 3
This excited a lot of people, and I gained a free office at Eastern Michigan University in exchange for supporting their installation of Caucus.  By 1997 I had formed a new company, ScreenPorch.com (another dumb name, alas) with 2 other partners who were excited by Caucus. 

In 1999 I took a giant leap of faith, and joined with a small Washington-D.C. organizational development consulting firm (the "MetaNetwork") to form a new, venture-capital based, "dot-com" company -- "Caucus Systems, Inc".  (Another dumb name, in my opinion.)  In less than a year, we hired 20 people, burned through $2 million in venture capital...

...and then I got laid off in the summer of 2000, with a wife and a 6-month-old baby (Emma).  About 60% of the company got dropped the same day.  This was the "dot-bomb" in the "dot-com": the bursting of the "Internet bubble".  I was devastated and angry.  A nationally-known Internet speaker and author ('Doc' Searls) called it "throwing the sailors overboard and letting the passengers run the ship".  Now I knew how Steve Jobs felt when he got thrown out of Apple.

So, I "got a job" as a software architect.  Good pay, good respect, lousy tools, not much vision.  Then the bubble burst even more (if that makes any sense), and I had to get a different job.  Fixing software at a company that made auto loans to people with bad credit.  Who were happy to send customers' private data, unencrypted, over the public Internet.  (I objected and, against my boss's orders, made sure the data got encrypted first.)  A job where the wall was painted (I kid you not) with a huge logo of the scales of justice, with the words "Collections Center -- where Justice = Profits".

V. CaucusCare: phase 4
By late 2001, the remnants of Caucus Systems had finally imploded and gone bankrupt.  Through the incredible kindness and foresight of one of the board of directors, their last act (before turning off the lights, so to speak) was to grant me (back) the rights to Caucus, in exchange for 15% of any money I made off of it.  I immediately started CaucusCare, to both sell new licenses to Caucus, and support (hence the "Care" part) the existing customers who were left in the lurch. 

Ironically, even the court-appointed bankruptcy agent dropped the "estate", so to speak, of the former Caucus Systems, so there was no-one left for me to pay the 15% to.

Over the next 5 years, I ran CaucusCare as a "side" business working occasional nights, then as a half-time business while I got a half-time job, and finally back to a side, almost a hobby, business.  It was a time of great excitement for me, but also of great stress on both me and my family.

VI. Caucus open source: phase 5
But, alas, it was not sustainable as a "main" job.  The Internet was moving along, and while parts of Caucus were still innovative, other parts were getting old and creaky.  License sales dried up, and my passion was technology and communication -- not marketing.

Before I transitioned Caucus back to a "side" business, I made a few major technology improvements -- notably rewriting it to use the most popular "open source" database, called MySQL.  And I "open source-d" Caucus, so that anyone could download it, run it, and even modify it -- for free.

The trick with an open-source business is simple: you give the product away -- but charge for everything else.  Support, custom modifications, consulting, hosting.  (I have several Caucus customers who pay me to host their Caucus sites on computer servers that I maintain.  They don't have to worry about maintaining a server and software, I get money for almost zero work, and everybody wins!)

VII. The Future?
Caucus embodies several ideas that, to my (both) hope and disappointment, much of the online world has still not adopted:

I see many places where Caucus' strengths could be useful.  But it's also seriously cramped by some ancient technology. 

So I have dropped most of my consulting "side" business, and I am concentrating on hosting (because it takes almost zero time), and on rewriting Caucus from the ground-up in a modern "web framework" tool based on the Java programming language.  My hope is that I'll be able to rebuild the strengths of Caucus, on top of tools that already exist, in a way that will let me create a new version, quickly.  We'll see what happens!

VIII. Lessons Learned
A few thoughts for budding entrepreneurs, and things I wish I'd known earlier!

  1. First and foremost: follow your passion.  If you don't love your project, if you don't have to make yourself go to sleep at night (instead of working on your ideas)... get a regular job.  Or keep coming up with ideas until you find one you truly love.
  2. Don't hide your ideas.  Keeping them close to your chest won't help you succeed.  Build your ideas, and publish them!  Make it clear that you are the expert on your idea.  It will protect you legally, and if a big company wants your idea, it's far cheaper for them to hire you to work on it, than to "steal" it.
  3. Don't aim to make money.  Aim to make delighted customers.  One passionate customer, who can't help tell everyone they see, is worth more than 10 customers who bought your product once, and yawned.
  4. You will learn more, building a product and a business, than any 2 years of college.
  5. Give as much of your business away as you can.  Keep only the most central part.  I firmly believe that if I had adopted the "open source" model in 1995, I would be happily working full-time in my own business now.  But instead I followed the siren song of "one software idea becomes a big company"... and I got chewed up by big people who were only interested in big money.
  6. Finally: don't be afraid to fail.  Pour your heart into something.  If it fails, it fails.  But you will have learned more, grown more, and be more valuable to anyone, any company, for the experience.  I am extremely successful and highly praised in my current job in a big company, precisely because I know the entire business and technology cycle of a small company.

Good luck!