Interview with Allan Kay

I interviewed Allan Kay in his home on August 14, 2025.

I was born in Ohio and so was my brother and oldest sister. My dad worked for Bill Jack and Ralph Heintz. They made test equipment for airplanes. Bill Jack sold out to Heintz in 1948. Bill Jack left for Solana Beach and told my dad that he wanted him to be vice president of his new company Bill Jack Scientific Instruments once he had time to build the company up.

We went to Pasadena, California and lived there for about a year waiting for Bill to grow his business. My dad got a job at Jet Propulsion Laboratories. Jet Propulsion Laboratories sent him to White Sands, New Mexico.

The family stayed in Pasadena. My mom took us out to White Sands to watch a rocket launch. We could see the whole rocket launch with your eyes. You see it go up and down. These were the early tests for speed and control. Once Bill Jack got going we moved down to Del Mar, California so dad could work for him.

In 1953 Bill’s company was struggling he asked my dad to take a pay cut and that encouraged my dad to leave the company and start his own business, Non-linear Systems making the first Digital Multimeters for the government.

Until 1953, all meters were analog, just like old-fashioned cars, a needle tells you how fast your car is going. He invented a digital display and put that in the instrument. The digital meter was a hundred times more accurate. So we made the first commercial versions with digital displays. We did that for a number of years.

I joined Non-linear Systems in 1964. Shortly after I joined we built our new buildings [at 533 Stevens, Solana Beach] to look pretty much like how the nearby junior high school buildings were arranged.

I bought a big three axle truck from the government. I also bought another truck from a fellow I knew. A friend of mine and I used those two trucks and spent ten days moving the company from the Del Mar airport to the new location.

Around this time some of us talked my father into switching from making digital voltmeters for the government to making them for commercial clients. The government was wanting a five percent discount right off the top. They would tell you how they wanted you to have a clean room for assembly. They made you have to run through a bunch of hoops. It was becoming a miserable way of doing business.

When he started out making digital voltmeters, there was no competition. Then one guy that was working for the company went into competition with Dad. Then other people got into it, Hewlett-Packard got into it, and that really messed it up. They were really huge. They would buy out companies that made a product and put their name on it.

I became the personnel manager in about 1967 or 1968, I was serving in that post until 1980. I taught myself Spanish because most of the assembly workers were Spanish-speaking. So I talked to them about how to get hired, get raises, get vacations and all of the paperwork.

Eventually I became the Vice President of Operations. One of my departments was the accounting department. I started reading the financial statements back in 1968 or 69 because I wondered why one month my dad would make money and the next month he wouldn't. Everything was kind of haphazard. He wouldn't do things the way I thought he should in a corporation.

In about 1982 we started out in computers. He saw what Osborne was doing with computers, so he made a better Osborne. That launched us in the computer business. It was like a skyrocket. We had about a hundred employees in 1981, and all of a sudden we had 750 employees, and the thing just mushroomed.

We became the fifth largest manufacturer of computers. It kept going up until about 1988. By then computers were getting more and more sophisticated. The assemblies became harder. Miniaturization made computers smaller. One little chip today could do far more than what a big calculator could once do. The chips got more and more complicated. It was hard to keep up.

Another challenge that we had was that IBM had also entered the computer market. We had to develop computers that worked like the IBM machine. That meant working with Microsoft. IBM and Microsoft were in cahoots. Bill Gates was a jerk. He completely ruined the industry. Everybody had to be IBM compatible. You have to look like an IBM computer and you have to run Microsoft software.

Microsoft asked us at the beginning of a year, ‘How many computers are you going to sell this year?’ Our response was ‘We're going to sell 100,000 computers.’ We were pretty big in the business at that time. By the end of that year we had only sold 50,000. Bill Gates and his company sued us for the other 50,000 computers we hadn’t made and he won. We had to pay all this money. That's one thing that hurt the company pretty badly.

In 1983, when the company was really going up, we decided to go public. When you do that you have to show what your company's like, what you're building, so that people know about you. Then you fill out this prospectus paperwork.

The advisors set a price for the IPO at $10 a share. We had considered coming out at $20 a share. That never worked out so we started at $10. Then there was another guy who was a lawyer. His thing was he had some 50 lawsuits, going on at any one time. He found an original investor to sue us. The investor stated, ‘I bought stock in your company, and now I've lost money. The value of the stock went down.’ If he had stayed with us long enough, the investor would have made his money back because the company would have bounced back. We could have saved our capital and built more computers. We were getting closer and closer and eventually we became IBM compatible. Between paying Microsoft and paying the lawyers it nearly bankrupted the company, in addition to the fact that our sales fell off.

We started renting out rooms [at our production facility] to other companies. It became like a shopping center with many companies in the same location.

By 1985 I tried to tell him that we needed to diversify. We needed to get out of this computer thing because you've got these lawsuits you're trying to deal with. You need revenue, and the computer business was not sustainable.

He wanted to stick with computers, that was his downfall. By 1988 it was clear that we won’t survive. Soon the company went bankrupt. I lost my shirt, and went from a rather wealthy guy to a rather poor guy overnight.

My dad did not want me involved in the bankruptcy. I sold my big house. The three older girls were married, and my son was on his mission in Japan. Another daughter started college then. We had the 2 youngest girls still left at home when we moved to Utah.

As part of the bankruptcy another company took the name Kaypro. All that they wanted was the name and the rights to make computers with that name.

My dad had met a guy named Johnson O’Connor. He had a system for vocabulary building and improving your life with a better vocabulary. He asked our company to put his system in a machine to help people improve their vocabulary. We built these machines and were trying to sell them. Well, it's a pretty hard sale. After the bankruptcy my brother continued the work on the vocabulary system.