day 18

what makes the world go 'round 5: mr. fandango

I finished my Fandango soup and picked up the Fandango book. There was Alan Shugart on paper - the same Shugart who dropped out of IBM after 18 years to start Shugart Associates in the 1970s. Remember Shugart drives? Of course you don't, because nobody was in the computer biz when Alan Shugart started making 5.25" floppies for IBM systems. Besides, Shugart drives were not exactly a technical marvel. If they had been pancakes, a single flapjack would have been large enough to drip over the edges of your plate. Shugart and design engineer Finis Connor founded Seagate in 1979. In 1980 the company produced the now-museum piece called the ST506. It sold briskly, gaining 50% of the market by 1982. In 1984 sales reached $344 million but dropped to $215 million a year later. Obviously, this was going to be an interesting business. In each succeeding generation of drives, e.g., the 3.5" followed by the 2.5" and more recently the 1.8", Seagate revenues took a nose dive. Alan Shugart learned to use the New Lanchester Strategy to iron out the wrinkles. In 1993 he bought Sundisk, a leader in flash memories. In 1994 he signed a deal with Hitachi, and in 1995 he started manufacturing in China. Now in 1996 Shugart merged his company with arch-rival Conner, speeding past all competitors into the winners ring. Curiously, Finis Connor started with Seagate, spun out on his own, and is now back with Shugart. Before the merger, Shugart was a $4 billion company. After, the merger combined revenues will make Seagate a $7 billion powerhouse. Compare this revenue with small companies like Microsoft and Intel. Has Alan Shugart's 15 minutes of fame arrived? Can Alan cook? Next time you are in Pacific Grove, stop at Fandango's and find out.

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