How The Electronic Spreadsheet Revolutionized Business
ROBERT SIEGEL, HOST:
Here's a question that's been around for a while and isn't going anywhere. What happens when a machine can suddenly do something that people did? We're going to hear the story of a $99 computer program that transformed the nature of work for millions of people. Here's Jacob Goldstein of our Planet Money team.
JACOB GOLDSTEIN, BYLINE: When you say spreadsheet today, most people think of Microsoft Excel. But a spreadsheet used to be an actual sheet, a sheet of paper. If you ran a business, your accountant would put in all your expenses, all your revenues, and you'd get this really detailed picture of how the business worked. But even making a tiny tweak was a huge hassle.
ALLEN SNEIDER: You'd take out that large eraser and start erasing.
GOLDSTEIN: Allen Sneider worked as an accountant in Boston in the 1970s.
SNEIDER: Then you'd have to re-add and then cross-add. Every column had to be changed.
GOLDSTEIN: Sneider says it could take a day - a really boring day - just to make one tweak. So it's the late '70s and not far from where Sneider worked, a guy named Dan Bricklin was sitting in class at Harvard Business School, bored out of his mind. He was watching a professor doing all this arithmetic on the blackboard and had this daydream.
DAN BRICKLIN: I thought, if only we had a blackboard where I could erase a number and write a new number in, and everything would recalculate.
GOLDSTEIN: The Apple II personal computer had just come out, and Bricklin thought that could be his magic blackboard. So he wrote a little computer program, and it worked.
BRICKLIN: You would put a number in and hit return and everything would recalculate. And you could watch it. You could watch the numbers change - bump, bump, bump. I had a real prototype.
GOLDSTEIN: One day, Allen Sneider, the accountant, walked into his local computer store and saw that prototype. It blew his mind.
SNEIDER: I was flabbergasted. I said, this is amazing, this is amazing. And it was.
GOLDSTEIN: When the software hit the market under the name VisiCalc, Sneider became the first registered owner, spreadsheet user number one. The program could do in seconds what it used to take a person an entire day to do. This of course, poses a certain risk if your job is doing those calculations. And in fact, lots of bookkeepers and accounting clerks were replaced by spreadsheet software. But the number of jobs for accountants? Surprisingly, that actually increased. Here's why - people started asking accountants like Sneider to do more.
SNEIDER: You could play the what-if game, you know, what if I did this instead of that?
GOLDSTEIN: What if I hired more employees? What if I charged a little less for my product? What if I borrowed more money? Software made answering questions like these cheap and easy. Accountants became more valuable. They weren't just adding up numbers, they were thinking creatively about business. And it went way beyond accountants. Doctors started using spreadsheets to do calculations for anesthesia. A casino used a spreadsheet to figure out where to put which slot machines. Dan Bricklin's mom was a principal at a middle school. She used a spreadsheet to track students.
BRICKLIN: And it wasn't till a couple years later she said, Daniel, do know that it can do calculations? (Laughter). I said, Mom, I gave you demos.
GOLDSTEIN: Wall Street in particular became obsessed with using spreadsheets. What if these two companies merge? What if we structured the deal this way instead of that way? Spreadsheets became the language of finance. Today, there's even an annual contest where people compete to build the best spreadsheets.
UNIDENTIFIED ANNOUNCER: This year's winner of the 2014 Financial Modeling World Championships - Diarmuid Early.
GOLDSTEIN: Did people make fun of you for winning?
DIARMUID EARLY: Not actually as much as I expected they would. I was like, at least you're the best at it.
GOLDSTEIN: You're the king of the nerds?
EARLY: (Laughter). You could say that.
GOLDSTEIN: I say that as a nerd who is not the king of the nerds, to be clear.
Spreadsheets do come with their own problems. A few years ago, a trader at J.P. Morgan lost $6 billion partly because of a simple error in a spreadsheet formula. And even when you get all the formulas right, it's easy to forget that your beautiful spreadsheet is just a model of the world, it's not reality. Still, today we live in a universe where we all play the what-if game. What if I refinance my mortgage? What if I fly Wednesday instead of Thursday? What if I jog little farther? Asking what if has become so easy that we manically do it all day long. Jacob Goldstein, NPR News. Transcript provided by NPR, Copyright NPR.