Be Inc.

What did it do?

Be Inc. was a computer company founded in 1990 by former Apple executive Jean-Louis Gassée, which developed the BeOS and BeIA operating systems and the BeBox personal computer. BeOS first ran only on the BeBox, then was ported to the Power Macintosh and the Intel x86 architecture. In its final years the company turned to internet appliances.

Why did it shut down?

Although BeOS was largely well received, it never achieved commercial success. At the end of 1996 Apple, in search of a new operating system, chose between Be and NeXT, and bought NeXT. Hardware and financial problems led to the BeBox being discontinued in early 1997. After its 1999 IPO, the company was unable to spread BeOS because of the agreements most computer manufacturers had with Microsoft, and the hoped-for deal with a major manufacturer never materialised. In 2001, amid reports that it was about to run out of cash, the company sold its assets to Palm for $11 million.

The story

The story goes that work on a prototype computer began the day after Jean-Louis Gassée left Apple on 1 October 1990. Having parted ways with Apple CEO John Sculley, Gassée founded Be with Steve Sakoman; supercomputer pioneer Seymour Cray also put up capital. Even the company's name came out of a conversation: when Sakoman said that, tired of leafing through the dictionary, he had stopped at the letter B, Gassée liked the name Be.

The team worked behind closed doors for more than four years. When AT&T dropped its Hobbit processor, they switched to PowerPC, and in October 1995 the BeBox came out, with light strips on its front panel showing processor load. Its powerful multimedia capabilities attracted a great deal of interest, but years of development had strained the coffers; in April 1996 new investment was secured from Silicon Valley funds.

At the end of 1996 a big opportunity arose: the last two candidates in Apple's search for a new operating system were BeOS and NeXTSTEP. Apple chose NeXT, swayed by Steve Jobs's powers of persuasion and by the unfinished state of BeOS, which lacked features such as printing, and bought it for $400 million. Gassée denied rumours that Be had asked for $500 million. In early 1997 the BeBox was discontinued and the company focused on software; in 1998 Intel took a 10 per cent stake and BeOS was ported to x86.

Be went public on Nasdaq in July 1999 but could not get BeOS pre-installed on machines because of the agreements most computer manufacturers had with Microsoft; when the hoped-for deal with a major manufacturer failed to materialise, the shares fell. In February 2000 the company turned to internet appliances with BeIA, gave BeOS 5 away for free and formed partnerships such as Sony's eVilla device. But cash was draining fast. On 16 August 2001 it was announced that Palm would buy Be's assets for $11 million; once shareholders approved the deal in November, the company went into liquidation. The antitrust lawsuit that Be, by then in liquidation, had brought against Microsoft ended in a $23.25 million settlement in September 2003.

The Register interpreted Be's survival for a decade without a meaningful revenue stream as proof of its engineering prowess. The legacy of BeOS lives on today in the open-source Haiku project. Be's lesson is that technical superiority does not turn into a market without access to distribution channels.

Lessons for founders

• In a platform business, weigh up from the outset the risk of conflict with whoever controls distribution (computer manufacturers, app stores); a good product alone will not get you onto the shelf.
• Before sitting down to negotiate with a big buyer, close the gaps in your product's core features (printing, in Be's case); missing pieces weaken your hand at the table.
• Changing strategy often redistributes limited resources every time; do not move into a new area before proving revenue in the current one.

Sources

1. Be Inc. (Wikipedia)
2. Ex-Apple brains to lead Palm software revival (The Register, 2001-08-28)
3. BeIA Here Now (Wired, 2000-02)

This section is compiled from public sources (Wikidata, news archives and company announcements). Figures are given as they appear in those sources; unknown fields are left blank. If you spot a mistake in an entry, you can send us a correction.

Is something in this entry wrong? Request a correction → Method