Paciolan: The First Five Years

Cary has generously invited me to contribute a post to his blog, recalling the time we worked together on a very challenging and exciting entrepreneurial venture through the 1980s. We started a company whose aim was to sell computers and computer applications, mainly to customers with large venues needing ticketing, accounting, and fund-raising capabilities, and to provide ongoing personal support and training to these customers. We worked very hard, we dealt with many difficulties, and we had fun and satisfaction doing it. I could not have asked for a better partner.

The following is a history of our company’s formative years, which was written to celebrate the fifth anniversary of its founding. It mentions all the people who were involved in those early years, all the products developed, and all the customers acquired, and at the end provides a short biography of Luca Paciolo, the 15th century intellectual after whom the company was named. We hope that, now, at the company’s fortieth anniversary, it makes interesting reading!

PACIOLAN: THE FIRST FIVE YEARS

Paci... Who? This was the title of the lead article of Paciolan's first newsletter published early in 1982, during the company’s second year of existence. People in athletics don’t ask that any more. What started out as a small regional software firm in 1980 has, by 1985, become the leader in the field of supplying and servicing computer systems for athletics data processing.

That first newsletter stated the company’s aims as being “to produce durable products of the highest possible quality, and to provide personal and complete service, because we believe that in the long run this is the most profitable path”. A goal such as this is nothing but hot air unless the need to approach it as closely as possible becomes a way of life for the people who make up the company, each to the limit of his own capabilities. By treating every program “bug” as an embarrassing flaw and every lapse of service as an affront to the customer, we improve our product, our service, and ourselves, and become not just able to provide what customers want but to raise their expectations of what can be provided.

The company has grown from its original two principals to now include 13 people. Our customer list is now 45 names long, 36 of which are major athletics installations, and it has grown in no small measure because of the willingness of current customers to recommend us to their colleagues – and to take the time to show off their systems personally. The accompanying graphs show the company's progress in sales revenue, installations, and financial strength, but do not adequately illustrate the good-will and mutual respect between our staff and our customers which has fueled that growth.




At no time in our five years of existence have we been without competition – indeed often the competition for this market has been intense. Our technique for outliving our competitors is very simple: we concentrate on product and service in just the way we talked about in our first newsletter and let the sales follow naturally, knowing that hype does not substitute for service and nothing of quality ever needs to be given away. And we could not do this unless the people associated with the company felt that they were part of something they could be proud of, a living and growing organization within which they were treated with respect, were compensated according to their contribution, and were secure in the knowledge that their achievements would be recognized.

1980-81: BORN ON THE FREEWAY

Interstate 5 between Los Angeles and San Diego, particularly the stretch past the San Onofre nuclear power station, is where Paciolan was born on Tuesday, July 1, 1980. Cary Thomas and Thomas McQuade were returning from a meeting at San Diego State in which they had been given the go-ahead to adapt their computer programs then in use at Southern Cal to fit SDSU's needs, and the euphoria of doubling their customer base (aided perhaps by a few stray neutrons from the power plant) made them decide to throw security to the wind and go into business full-time.

Since the initial assumption was that the company’s main product would be accounting systems (the ticketing and housing systems were developed originally as something of a sideline), it was quickly decided to name the company after the “father of accounting”. But who was that? It took a long visit by Donna McQuade to the local library to unearth the name Luca Paciolo, a remarkable mathematician and priest who in 1494 wrote the first book describing the double-entry method.

On July 11, 1980, Paciolan Systems was incorporated. Its first mailing address was Suite 4, 13 Country Meadow Road, Palos Verdes Estates – actually the fourth bedroom of Cary’s home! The actual center of operations, however, was a rented room in a building at 7668 Telegraph Road in Commerce, a rather grimy suburb not far from downtown LA. The room had no windows, which was just as well, because the building was encircled by a freeway exit ramp. Not long before Paciolan took up residence there, this particular room became locally famous as the one visited by a large truck which lost control on the exit ramp and ploughed into the building. Anyway, the rent was low, and who cared about the damaged wall and the large oil stain on the carpet?

The activity in that room was intense. A whole suite of accounting programs was designed. A new set of software tools was developed and used to implement the accounting system. As soon as the accounting programs were ready, they were taken down the freeway to SDSU and installed. At the same time, a housing system was developed and installed for USC Auxiliary Services, programs to manage a special fund accounting subsidiary ledger were developed and installed in the Financial Services Department at USC, and a support group system was created for the Aztec Athletic Foundation at SDSU. Finally, and most importantly, the ticketing software, which started life as a small suite of programs designed by Cary in conjunction with Pat Tyner (now Oliver) of the USC Ticket Office, was redesigned and reimplemented using the new software tools and installed at both USC and SDSU.




Figuring out job responsibilities was not a high priority, but it happened quite naturally that Thomas designed, programmed, installed, and took out the trash, and Cary designed, installed, marketed, did the books, and made the coffee. Donna McQuade and Paula Thomas helped out greatly with secretarial tasks, and Nancy Sherwood was hired to do some part-time office work. Brian Gladish was the first person rash enough to come on board full-time, and he immediately took responsibility for the continuing development and maintenance of the housing system. Jane Couch (now Kleinberger), later to rise to fame as Paciolan’s first professional account manager, was hired on a contract basis to do some data conversion for SDSU.

With their brave decision to trust their athletic department’s computer needs to a pair of unknowns, Bill Erickson, Marge Peet, and Gabe Ortiz of SDSU gave the company its initial push. A second and crucial break for Paciolan came when the University of Illinois, in the person of Vance Redfern, started looking for a computer system, and chanced to hear about a small company with a weird name out in California. Cary was very successful in communicating to the Illinois delegation the excitement of what Paciolan was doing, and all of a sudden the company went national!

This first out-of-state installation was a very important one, and great care was taken to ensure that everything would go perfectly. Everything did, right up until the time that someone from Illinois called to say that the computer had arrived, they had opened up the boxes, and little bits and pieces were falling out – was that to be expected? The shippers must have dropped the computer off a truck, for it was a total write-off. It only took a quick trip to Security Pacific Bank and a phone call to Ultimate Corp., our minicomputer supplier, to ensure that the next computer off the assembly line was on its way to Illinois (by a different shipper), but financing an extra computer for the six months that the insurance company took to settle was quite a strain for a new company.

All in all, it was not a boring year. Although no one could yet pronounce the company’s name, some people had heard that a company out in California somewhere had some good athletics software, and PSI was on its way.

1981-82: PACIOLAN IN PAC-10 LAND

Paciolan’s second year was one of consolidation, rather than growth. People in college athletics were still, sensibly enough, suspicious of computers, and it was a difficult task to convince anyone that a small, one-year-old company, especially one from a wacky place like California, was here to stay. But success at USC, SDSU, and Illinois was good advertising, especially in the west and midwest, and Washington, Nebraska, Fresno State, and Stanford joined the Paciolan family.

With three schools in the Pac-10 Conference, Paciolan was now a major force in the west, but this did not lead to immediate national recognition. In fact, several people from the east said that they had heard of a company at that time called “Pac-10 Land” or something, but hadn’t taken a lot of notice because anything to do with the Pac-10 couldn’t amount to much!



The center of operations during this year was still the Commerce office, where another room (still without windows) and access to a demonstration area was required. Software development continued apace. Brian, and later Thomas, worked on the development of a summer camp system which was installed at Illinois. Thomas adapted a payroll system he had written previously for another Californian software company, Datafaction, and this also was installed at Illinois. A conference, attended by representatives of most Paciolan users, was held to firm up the design of packages for sports information, academic eligibility, and strength training. An employee benefits system was designed and installed at USC Financial Services, and Cary and Brian started the design and programming work which would lead to the installation of a complete financial system serving the whole campus of USC, and to the creation of a new company, Paciolan Financial Systems.

Jane joined the company as a full-time employee, and produced the first ticketing manual. She installed the Nebraska, Fresno, and Stanford systems, and set the standard for Paciolan service. Bill Dodson also arrived, commuting regularly all the way from Santa Barbara (a three-hour drive). Initially hired as a programmer, Bill helped out in marketing, sponsored some in-house educational programs, and occasionally tried some psychological counseling! Bob Longobardi was hired as a sales representative, and Donna increased her involvement with the company, editing the first newsletter which appeared in early 1982.



Paciolan made its first convention appearance at the NACDA meeting in Hollywood, Florida in June, 1982. At this convention, Cary delivered the first talk on the subject of computers and their application to athletics ever presented at NACDA. His talk emphasized the use of the computer as a management tool, showing how different activities of an athletic department (for example ticketing and fund-raising) can be linked by a computer system to the advantage of both, and how the athletic director can use the computer’s ability to present comparative information to give him a better overall picture of his operation.



1982-83: PACIOLAN IN BIG-10 LAND

If the second year was for Paciolan the year of the Pac 10, then the third year was the year of the Big 10, for Purdue, Indiana, and Iowa joined Illinois as customers. Activity did not stop in the west, however, as California became the fourth Pac 10 school to buy a Paciolan computer. The accounting software designed for athletic departments began to show its worth outside that area – Fresno State's Associated Students and Aqua Services, a Los Angeles water purifier company, both found the accounting systems to their liking.

The first products which resulted directly from the previous year’s user-assisted design meeting were completed: software for recording results of strength training programs (written by Bill) and for academic eligibility tracking (written by Brian) were installed at Washington, and a sports information package (written by Bill) went live at SDSU. Thomas continued the enhancement of the ticketing system, adding the capacity to handle multiple stadiums and big-game moves. Word-processing, spreadsheet, and graph-printing software became available, and these were integrated into the system. Paciolan’s education program was started with the first general ledger class given by Cary.

Kathleen Brownell, another Santa Barbara resident, was persuaded to move to the LA area to become Paciolan’s second account manager. She started by writing new manuals for the accounting systems, and took on Cal as her first installation. Ann Delaney joined the staff as office manager.

The old Commerce office was finally outgrown, and in December 1982 the company moved into what were then spacious new premises in Los Alamitos, a suburb just east of Long Beach. There was enough room in this new office to think about accommodating meetings, and the first Paciolan users meeting was held there in January 1983. Twenty-three people representing nine schools attended, and a very good time was had by all – some of the local restaurants still remember the occasion!



The first ticketing class, held in conjunction with the users meeting, was taught by Jane, and that famous teaching university, the School of Hard Knocks, its familiar black and blue colors, and its irrepressible mascot, Howard Knockwurst (conceived and drawn by Donna), were introduced for the first time.


Also in January 1983 Paciolan made its first appearance at a CABMA convention, and in June at NACDA another speaker was provided by Paciolan – this time Bill spoke on the application of computers to athletics, emphasizing the care that should be taken to ensure that the computer fits the department's needs.



1983-84: PACIOLAN USA

This was the year that Paciolan really took off, and orders came in from all over the USA: Arkansas, West Virginia, Texas Tech, Oklahoma, Memphis State, Virginia, BYU, and national champions Miami became members of the Paciolan community. Back west, the University of Washington Student Union and Student Activities Offices bought a computer to run the same accounting software they had seen working in the athletic department.

The older users of the system were extending their applications also, and this year saw the first transfer on an electronic medium of tickets between two schools, when Stanford sent Cal 33,764 tickets for the 1983 “Big Game”. Bette Robertson of Stanford generated the magnetic tape and the necessary balancing reports in just three hours, and Melva Wilder of Cal loaded the tape onto her computer and proceeded with allocation as if the seats were in her own stadium. The process was a great success, and has been used for every Big Game since.

Up to this point, the emphasis in Paciolan software had been mostly on the business side of athletics, and less on the coaching side. In order to redress this imbalance, recruiting and football game analysis systems were added to the repertoire. Paciolan agreed to market a game analysis program from Sports Data Inc., whose owner, Joe Guardino, was the developer of one of the first major applications of computers in athletics, having installed a game analysis system at USC in 1968. Thomas designed and programmed the recruiting system, which saw its first installation at Arkansas. A side-effect of the recruiting project was Paciolan’s “Request” report generator and library system, which was integrated into all Paciolan software. Facilities for supporting an electronic mailbox were also added. By now, the suite of programs that comprised the Paciolan product had become large enough to need a name, and “The Athletics System” was adopted.

More staff was needed to support the growing business. Page Singletary came aboard as a sales representative, Tom Johnson moved from Illinois to become an account manager, and Lynn Haley was hired as office manager to allow Ann Delaney to move on to account management full-time. Ann’s first account was West Virginia.



The 1984 CABMA convention in Dallas used for the first time a Paciolan computer to assist with registration. CABMA continued this practice and, since many CABMA officers were at schools with a Paciolan computer, they were able to access their database during the year to update their records and produce mailings.



1984-85: PACIOLAN INTERNATIONAL

The rapid growth of Paciolan’s fourth year continued at an even greater pace in the fifth, with Hawaii, Missouri, Ohio State, Minnesota, Oregon, Clemson, Boston, and the Holiday Bowl of San Diego joining the list of ticketing users. The Washington Student Loan Guarantee Association became a major accounting client.

The most significant change this year was the advent of the personal computer. Brian worked hard to convert our software to run our accounting applications on an IBM PC. Steve Green of Boston University was the first user of any Paciolan software on a PC – he started with the general ledger system and was so satisfied with this experience that he later purchased more software and a larger computer. Georgia Tech became the first user of the recruiting software on a PC, and University of Washington Financial Services, Lehigh, USC School of Business, and the U.S. International University’s San Diego campus all purchased the general ledger system for PCs. The PC was also the vehicle that took Paciolan international, with the purchase by Dean Hengel of the University of Alberta in Edmonton, Canada, of summer camp and general ledger software.


There was no slowdown in the release of new products. Thomas adapted the inventory software which, like the payroll system, he had previously written for Datafaction. It was first installed in a varsity store environment at Oklahoma, then the ability to handle athlete equipment tracking was added and a second installation was made at Clemson. Joe Guardino and Jim Bullock (who came to us from Cal) collaborated on the development of new game analysis software, and this saw its first use at Cal, Clemson, and Ohio State. Thomas , greatly helped by suggestions from Herb Schmidt of Penn State and Larry Fudge of Boston, developed a facility scheduling package which had its first installations at Hawaii and Boston. Medical record and injury tracking software was first installed at Purdue, and Bill enhanced his sports information system to enable schools to communicate directly with the press, a facility which SDSU and Arkansas were soon using.

Julie Douglas came to PSI from Minnesota to be an account manager, and soon found herself in the midst of an installation at Oregon. Rosemary Deal was hired to provide secretarial assistance, and Don Whitebirch was a much-needed addition to an overworked programming staff.



Paciolan again displayed its products at the CABMA and NACDA conventions, and Jane and Page presented a short course on athletics data processing at the NACDA Management Institute Graduate Seminar.

1985- ... : INTO THE FUTURE ...

Paciolan entered its sixth year with interest in its products and services never higher. Florida State, Colorado, UCLA, and Arizona purchased large systems, and Old Dominion, San Jose State, University of Washington Health Services, and the Chicago office of the Jewish United Fund became PC users.



An interesting new product was introduced this year – a basketball analysis system designed by Roger Newell of Newell Sports Enterprises. This system offered a radically new way of analyzing both player and team performance. Roger’s method had already shown its worth in the NBA, and Clemson became the first college team to put it to use.
Ginny Dir, formerly a secretary in the Notre Dame football office, joined PSI first as a secretary and quickly took on the duties of office manager. Robin Stanley added depth to the programming staff, and Bruce Hunt and Linda Zinn were sorely-needed additions to a customer service department charged with looking after a fast-growing slate of accounts.


Entering its sixth year, the company was now a strong one, with a customer base in college athletics that no other company could even approach, a tradition of solid product and exceptional service, and employees and contractual associates in whom these traditions were deeply ingrained. In the 35 years that have followed, there have been many more dynamic, dedicated, and productive people without whom Paciolan would not have survived. They have built on the foundation laid in the first five years, adapting the company’s offerings to not only satisfy customer needs but to expand the perception of what can be done, keeping up with the astonishing developments in computing technology.

LUCA PACIOLO

The idea of naming a company “Paciolan Systems” came from the obvious notion that all accounting tools (or “systems” in computer jargon) are Paciolan tools in that they depend on the double-entry method first fully described by Luca Paciolo – much for the same reason that a certain method of teaching is called the Socratic method after Socrates who first practiced it, and the modern experimental approach to science is described as Galilean after its first great exponent, Galileo.

Luca Paciolo (or Pacioli) lived at the height of the Italian Renaissance, and was a Renaissance man in every sense. He was born in 1445 in a small town about 80 miles south-east of Florence into a poor family, studied at a Franciscan school, and at 16 was apprenticed to a prominent businessman. Then the opportunity arose for him to study under Piero della Francesca, a famous artist and mathematician. Through Francesca, Paciolo met and became friends with the Duke of Urbino and the Duke's son, Guidobaldo. He also met the great architect, Alberti, with whom he went to Venice to continue his studies. While in Venice, he lived and tutored in the house of a wealthy merchant, Rompiasi, and it was there that he studied the Venetian method of double-entry bookkeeping. After the death of Alberti, Paciolo, now about 30, secured his future by joining the Franciscan Order, took a teaching job at the University of Perugia, and became the first university professor to fill a chair in mathematics. During his life, Paciolo taught at many universities in Italy, and was at one time threatened with excommunication by the Franciscans for not teaching in religious schools. His last known post was an appointment by Pope Leo X to the faculty of the University of Rome in 1514, when he was 69.



Paciolo wrote many books, and was justly famous during his lifetime. His major contribution was to translate theory into practice in a manner in which people other than academic scholars could understand. Although most authors then wrote in Latin, Paciolo published in the common language of the time, and his books on arithmetic, algebra, geometry, proportion, accounting, and mathematical games were widely used and greatly respected. His most famous work is the “Summa”, published in 1494, which contains a treatise on bookkeeping – the first textbook to describe the Venetian double-entry method. His second major work was the “Divina Proportione”, which discussed mathematics, architecture, and defense, and was a joint effort with his friend, Leonardo da Vinci.

Paciolo’s exposition of accounting has been republished many times, and the principles and rules which it contains have become the basic accounting framework which has remained essentially unchanged for nearly 500 years. The book not only contains a clearly illustrated description of the double-entry method, but is sprinkled with suggestions about how to succeed in business which are still applicable today. He stated that the only sound basis for credit is character, warned of the pitfalls of dealing with governmental agencies, emphasized the importance of internal control, advocated auditing, and made many pithy observations such as “Frequent accounting makes for lasting friendship”, “He who does business without knowing all about it sees his money go like flies”, “Transactions can never be too clear to a businessman”, “It is said that a businessman’s head has a hundred eyes, yet these are not enough for all he has to say or do”, “The objective of every businessman is to make a satisfactory profit, so that he may remain in business”, and “The businessman must understand things better than the butcher!”.

The naming of a company after such a great man was not an attempt to ride on his reputation, but, just the opposite, to pay him credit for his accomplishment by acknowledging that some of the knowledge we use daily and take for granted was first expounded by him.

For a very good short biographical film about Paciolo, see
"Luca Pacioli: Father of Accounting"

Thomas McQuade
Honolulu, Hawai’i 
July 2020