On Spreadsheets and How They Changed The World

Recently, an old Steven Levy article from November 1984 re-surfaced on the web. Its topic: the origins of the now-omnipresent spreadsheet. Levy recounts that a Harvard MBA named Dan Bricklin was inspired while doing a project for one of his finance classes. The project required modeling the financial implications of one company’s acquisition of another; in 1978, this required the use of physical spreadsheets that were filled out by hand and summed up. If any number in these sheets changed, one would need to recalculate everything, a tedious, labor-intensive process.

Dan Bricklin, creator of VisiCalc
Dan Bricklin, creator of VisiCalc.

Bricklin and a friend named Bob Frankston got together and devised VisiCalc, a software that would put spreadsheets on microcomputers. In doing so, they shifted the way business was done. Levy did not understate this impact, even 30 years ago, when digital spreadsheets had just come out:

“For the first time, businessmen have at their fingertips sophisticated and flexible means to chart all the variables – from interest rates to warehouse space – that make (and break) businesses. The biggest firms, the most diversified corporations, can be neatly translated into spreadsheet ‘models’ – each box of the grid a window on to once-overlooked facts or relationships.”

Arguably, this ability to model relationships between various numbers has been one of the defining factors enabling the growth of business. With the ability to draw insight from numbers, decision-making went from arbitrary to concrete. By figuring out “what-ifs,” analysts could definitely show the impacts of business decisions in various scenarios. Where firms before the 1980s might be constrained by the inability to make decisions at scale, spreadsheets enable firms to track details objectively. This quantitative bent to business management has certainly enabled firms to grow beyond their old limits. Indeed, Bob Frankston noted that spreadsheets started changing how people thought about things:

“There’s an increasing demand for quantitative rather than qualitative justification for decisions. In the past, before spreadsheets, people would have taken a guess. Now they feel obligated to run the numbers.”

However, there is a balance between quantitative and qualitative decision making. Some businesspeople, pejoratively called ‘Excel monkeys,’ spend endless hours adjusting minuscule details in their models. As Levy puts it:

“Some will lose themselves in the rows of columns, the grids becoming their windows on the world. They will spend their evenings in front of their computers, the dark dimly lit by the glow of green phosphorescent numbers, fiddling with scenarios, trying to make the profit line perfect … Fortunately, few would argue that all relations between people can be quantified and manipulated by formulas. Of human behavior, no faultless assumptions—and so no perfect model—can be made.”

It is this conclusion of Levy’s that I ultimately disagree with. While prescient, Levy believed that people would not seek to try to quantify all human relationships. Of course, today, the major tech companies have used spreadsheets (and their more powerful cousin, machine learning) in order to manipulate people into joining platforms, buying products, and even getting into relationships. Ultimately, the spreadsheet laid the foundation for a world in which we really do try to quantify everything, even those things that we might not want to.

Leave a Reply

Your email address will not be published. Required fields are marked *