RD: 1994 was largely cited as the year Commodore (and the Amiga) died. History records that you got close to a buyout agreement/deal that would have seen you have a continued direct influence over the future of the Amiga as it still had a strong UK user base. That didn’t come to pass, but if it had, what would have been the next evolution of the Amiga machine to stay current in an increasingly competitive home computer market?
David: Colin Proudfoot is a financial genius, and he and I were not only joint Managing Directors of CBM UK Ltd but were also good friends. I have the absolute utmost respect for him, in every commercial and personal sense. When CIL declared bankruptcy very quickly each of the subsidiary companies followed suit. CBM UK was a very solid and financially viable business, proven by the fact that it took 18 months from our parent company folding before we eventually had to declare bankruptcy ourselves. Colin and I decided to investigate what it would take, to not only buy the assets but to be able to run the business on a “cash payment basis” for as long as it would take to be self sufficient and eventually gain “credit terms” (remember when CIL declared bankruptcy they owed lots of money to the suppliers, and it was obvious to us that nobody would give us credit terms initially) Colin and I prepared a very comprehensive and detailed business plan, which even if I say so myself, was absolutely accurate, realistic and more importantly achievable.
We calculated that we needed US $ 50 Million in funds, based on an estimate that we could buy the assets from the Liquidator for the region of US $8 Million, and the balance of the funds would allow us to manufacture our selected (at first limited) range of products, paying suppliers up front for the components. Being ordinary mortals and not having $50 million in our pockets, we approached the well known Venture Capital division of Coopers & Lybrand, and after several meetings, pouring over our business plan (which they could not fault by the way) they agreed to act on our behalf, and set about sourcing Venture Capitalist investors with whom we formed a consortium. There were a few private high wealth individuals and coming in with $25 million of the needed $50 million was a Chinese electronics manufacturing company called New Star Electronics (who up until then had been ripping off SEGA and Nintendo games consoles) The advantage to us, apart from the obvious financial investment, was having our own manufacturing facility, made excellent commercial sense.
To cut a long story short, 2 days before the Auction of CIL assets, (which was held in New York) New Star Electronics pulled out of our consortium, having been “got at” by Escom (who eventually bought the CIL assets) We knew, that not having sufficient funds to run the business without credit terms, would fail, and the investors would all lose all their money. We very painfully made the decision to not bid. We were there in New York of course, because we were Managing Directors of CBM UK which was not part of the CIL assets, and we tried to find a buyer, in order to protect the UK company. The people at Escom, were in my opinion complete morons, and from the very start they showed utter ignorance in decision making. One example is they chose not to buy CBM UK Ltd, even though it was a profitable business, and more importantly we had several million £ of Tax Credits (which meant that Escom could trade the CIL assets through CBM UK Ltd and not have to pay any Tax for a serious amount of time)
They let all the Amiga engineers go, and did nothing to preserve the amazing new technology under development within that department. Clearly Escom had not done their research properly and of course, as predicted they ran out of funds and themselves went bankrupt. Now in relation to what we have done (and of course nobody can predict what would have happened) but we did have a solid business plan to move forward. Firstly we would separate the two “faces” of the Company, to give them each a clear identity. We would have CBM (probably Inc.) which would be all PC related products, but none of those products would be manufactured by us, but OEM sourced to our specific (mostly cosmetic) specifications. (Why reinvent the wheel?) Those products could be marketed and distributed by any suitable existing channel, who would pay us a Royalty. The Amiga range we had decided it was time to change the bad legacy we had left behind us, where every time we introduced a new product, we usually alienated the existing users, by not having an “upgrade-able” path for their machines.
We would initially have to manufacture A1200 and A4000 products, simply to fill the void that was out there already. However there was (albeit not fully developed) new technology which was based around a RISC Core, with built in 3D rendering, built in chunky pixel mode, and built in 5.1 surround sound (which was in 1995 the state of the art) I am not capable technically to explain how all this worked together, but what I had demonstrated to me was truly mind blowing. It would have taken quite a lot of effort to finish the development of this “super chip” but we were intent on doing so. In the shorter term we had devised a program which would encourage all Amiga owners to buy any model, with the confidence that they would be able to upgrade, as and when they could afford to. Our plan was to introduce the “Infinity” program, where every Amiga in the range was pre designed to have upward compatibility.
Imagine the basic model of Amiga, coming in a “Tower” type case, which you could take into your Amiga dealer, and he would remove the mother board, and replace it with a higher spec model, at a price of course, and the dealer would then recycle the basic board he had just taken in part exchange, to someone coming in at the entry level. This concept would be pre designed to allow upgrades of peripherals etc. etc. Hence the name Infinity. Also we had a plan for the Commodore name, which of course was then extremely well known and sold throughout the Consumer Electronic distribution channels. We would license the brand name, to 3rd party manufacturers of more or less any product with a 3 pin plug on it. Items such as Kettles, Toasters, Radio’s Televisions, Hi fi etc. etc. We would have a quality control department to ensure any product manufactured with our logo on it, met our strict criteria. This licensing activity would also be extended to the Amiga name for such things as “designer clothing” (which I am certain would have been very well received by the loyal Amiga fraternity) The incredible benefit of licensing deals is, that revenue from Royalty payments continue to flow, without any expenditure for manufacturing. There would also be no reason why our organisation (Whatever name we called the holding Company) could not also use all it’s distribution channels to sell products manufactured by 3rd parties, and licensed by us, therefore earning additional revenues by way of sales commission. I could go on and on, but I believe I have given you plenty of the ideas we had, which we genuinely believed would have turned around the fortunes of this once majestic brand.
