← Cautionary Tales with Tim Harford
Cautionary Tales with Tim Harford
The Refugee Who Led a Software Revolution - with Ben Walter
00:27:45
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- [00:06]
Tim Harford
Pushkin. Hello, Tim Harford here with a bonus episode of Cautionary Tales. Today I've got a story about someone I think everyone should know about. A trailblazing entrepreneur who changed the way we think about tech, redefined roles for working women, made many members of staff millionaires, and founded the first autism research charity in the uk. This episode is sponsored by Chase for Business. And joining me again is their CEO, Ben Walter, who also hosts the very excellent podcast, the Unshakables. Ben, welcome back to Cautionary Tales. How are you doing?
- [00:50]
Ben Walter
I'm great, thanks for having me, Tim. Although I'm very cold. I'm in New York city, it's about 9 degrees Fahrenheit, or for those of you across the pond, about minus 12. So it's a bit chilly out outside. There's ice on the Hudson.
- [01:00]
Tim Harford
9 Fahrenheit. You know, Ben, I discovered just today that the, you know, the Celsius scale begins with the freezing point of water. I did not know that The Fahrenheit Scale 0 is the freezing point of brine. You maybe knew that.
- [01:15]
Ben Walter
I did not know that either. So it is at least based on something, as opposed to haphazard, which is what it seems like for everything else in the imperial system.
- [01:22]
Tim Harford
It is based on something. But anyway, look, we're digressing already and we shouldn't. Last time we, we spoke, I told you about a 19th century champagne baroness. This time we're going to leap forward in history. This is a 20th century story. It's a very 20th century story, I have to say. How tech savvy are you, Ben?
- [01:45]
Ben Walter
In absolute terms or relative to my kids?
- [01:49]
Tim Harford
We're all well behind the curve relative to our kids. But do you know which way up is in a computer?
- [01:56]
Ben Walter
For a 50 something gentleman, I think I do okay. I mean we certainly. I work in a tech forward business, so I keep up with the latest on most things.
- [02:03]
Tim Harford
I mean, I feel reasonably tech savvy, actually. You compared yourself to your kids? I compare myself to my parents. My mother was a computer hacker and my dad worked in information technology his entire life.
- [02:16]
Ben Walter
Wait, Tim, your mom was a hacker? You gotta say a little more. You can't just let that hang there.
- [02:20]
Tim Harford
Well, I mean, I make it sound very dramatic. I mean, she was just one of these great computer enthusiasts. In the 1980s. We had, we had lots of these kind of classic 1980s computers around the house. And she would take them apart and put them back together and I think I could probably say this. I mean, she's long dead. No one's going to come for her. She would just strip off the. The copy protection on these computer games. She would say, well, I'm not paying all this money to buy you a computer game. If I get the computer game, take off the copy protection, make a copy of the computer game, and then send the computer game back to the library or give it back to your friend or whoever you borrowed it from. So, yeah, she would. I mean, it's, you know, she wasn't like cracking into the Pentagon or anything like that. But even, even they, I think, pale into insignificance with the tech savviness of the entrepreneur that I want to tell you about today, Steve Shirley. She really saw two huge gaps in the way people thought about the computer industry. And she. And you may be wondering, Steve, as she. We'll get to that. She faced absolutely astonishing challenges during her life, right from the beginning of her life. And I think her story can teach us a lot about success and about resilience in the face of failure. So you ready to go?
- [03:43]
Ben Walter
Yeah. Can't wait to hear about it before
- [03:45]
Tim Harford
we get to her incredible story and your take on her experience. Here is the theme music. I'm Tim Harford, and you're listening to Cautionary Tales. Steve Shirley was born in 1933, and she wasn't called Steve Shirley. She was called Vera Buchtal. She was born in Germany in 1933, which, okay, instantly a problem.
- [04:36]
Ben Walter
Tough time.
- [04:37]
Tim Harford
Yeah. And she was Jewish, so her father was a judge in Dortmund. So first the Buchthal family moved to Vienna. And then shortly before the Second World War broke out, Vera's father decided they had to get their two daughters out of the Nazi sphere of influence. So they were put on this train. This is one of the Kindertransport trains. So you've got a couple of thousand children on this train which. Which went all the way from Vienna to Britain. So this was Vera. So Steve Shirley, age 5, her older sister, who was 9. And they were fostered in Shropshire in the northwest of England. Her parents actually survived the war, but the family didn't survive the trauma of this experience. So Steve later said that she felt she had been completely rejected and abandoned by her parents. And of course, it was only later that she realized quite what they'd gone through and what a difficult decision they had made. The most loving thing any parent could have done. But, you know, that is the first few years of Steve Shirley's life. I mean, what. What a start. Yeah.
- [05:52]
Ben Walter
What a difficult way to start your life. The trauma that it must cause at that age to not understand what it's all about and to be starting your life over.
- [06:00]
Tim Harford
I can't imagine it does defy imagination. She did reflect on this later and one of the things she said was that she had this survivor's guilt and she felt that her life had been saved in this spectacular way and that she then wanted to live a life that had been worth saving. So she. She really felt this need to justify her existence and her survival. And as we'll see, I think she really did.
- [06:28]
Ben Walter
She sounds like a fascinating woman already, and she hasn't done anything yet.
- [06:31]
Tim Harford
It's. I mean, buckle up, because there's. There's a lot to this story. So Steve, she was still Vera at the time. Steve grew up in Shropshire. She loved Shropshire. She found the town very welcoming of these immigrant children, refugee children. She did well at school. She learned fluent English and she was really passionate about maths. And the problem was they didn't teach maths to girls. And so she had to fight for special permission to go to learn maths at the nearby boys school. And the reaction of the boys was, I think, a preparation for the rest of her life. In fact, what did they do? Catcalling, whistling, heckling. The boys were not kind, but she wanted to learn maths. She powered through it. You'll see. She powers through a lot of things. She became a British citizen at the age of 18 and she took the name Stephanie Brook and she decided not to go to university, even though she was clearly very bright. And do you want to guess why she didn't go to university?
- [07:39]
Ben Walter
She couldn't afford it. I mean, sorry, I know that's a very American answer, but that's a very American answer.
- [07:44]
Tim Harford
I think she probably would have. Would have been fine on that count. The issue was she wanted to study science, and there may have been some science courses available to women, but she could only find one. And do you want to guess what. What was the science that they let young women study? Any guesses?
- [08:02]
Ben Walter
Nursing.
- [08:03]
Tim Harford
It was botany, so the girls could study the pretty flowers. Anyway, she didn't want to study botany. She wanted to study maths or physics or something. Engineering. She didn't see any opportunity to do that and so she just went straight to get a job. And she got a job at the post office research station in Dollis Hill.
- [08:21]
Ben Walter
Where is Dollis Hill?
- [08:23]
Tim Harford
Good question. It's just part of Northwest London, but the post office research station, this is the mail, but they' plugged into telecommunications, so they're doing this Cutting edge research in computing. And she is operating basically as an assistant. She's doing math, she's doing calculations. She also took a math degree in evening classes and she got a promotion and she started working on electronic computers.
- [08:52]
Ben Walter
This is in the 50s, Tim.
- [08:53]
Tim Harford
This is in the late 50s. Computers are these huge mechanical, very expensive constructions, but they are moving rapidly. They're clearly going to be very important.
- [09:06]
Ben Walter
This is in the days of ENIAC in Univac and all the big mainframes.
- [09:09]
Tim Harford
Yeah, absolutely. And indeed, some of the people at Dollis Hill were involved with Colossus, one of the very first computers.
- [09:17]
Ben Walter
Yeah, sure.
- [09:18]
Tim Harford
Unfortunately, the computers were great. Her colleagues were not great. She recorded being bullied, being harassed, being groped as a matter of course, obviously being paid less than the men to do the same job. On the plus side, not only did she like the computers, she found love there. So she met a physicist called Derek Shirley. So this is 1959, she is now Stephanie Shirley. And so she, she leaves the, the post office research center, she gets a job at a company called cdl.
- [09:50]
Ben Walter
I've never heard of cdl. If you Google it, I don't think. I don't think you'd find anything relevant.
- [09:54]
Tim Harford
Computer Developments limited. As you can imagine, an awful lot of computer companies that existed in the 1950s no longer exist. Yeah, it's a fairly small place. She was the chief programmer there. She loved the work, she loved the colleagues, but she realised that there was a glass ceiling there, so she quit after two years because she said it was quite clear to me that I couldn't progress far.
- [10:19]
Ben Walter
Yeah. So she was frustrated.
- [10:21]
Tim Harford
She realizes she's basically not going to win playing the game by their rules, so she's going to have to make up her own rules. And she's now 29 years old and she decides to start her own business.
- [10:34]
Ben Walter
Probably also unusual for a woman at
- [10:36]
Tim Harford
the time, especially a business in computing, which is what she wanted to do. So, I mean, you've worked with lots of entrepreneurs, support lots of businesses. What are the key ingredients for starting a business, would you say?
- [10:47]
Ben Walter
Obviously, number one, is an idea. So you have to have an idea of what you want to do and why you think there'll be product market fit for it. You need access to capital, for sure.
- [10:56]
Tim Harford
Yeah, she's got six pounds of capital.
- [10:58]
Ben Walter
Okay. So, you know, short, short on that front. And then, you know, the third thing, connections, you know, leads to initial clients, initial employees, a network that can support the ecosystem you're trying to build.
- [11:09]
Tim Harford
Well, she's got a New baby and a kitchen table. I don't know if that works as a substitute. You said you need an idea. She's got a very good idea. So actually she's got two very good ideas. So idea number one, and this is really radical. So at the time, this is now about 1960, computers are big, but software is not really an industry. So software is a thing that you just get packaged along with your hardware.
- [11:39]
Ben Walter
Sure, the hardware runs the software and that's all it is.
- [11:42]
Tim Harford
Yeah, and it's, and it's a, it's a sort of a joint deal. But she realizes, well, hang on, there's a lot more that you can do with these computers if you write your own programs. And so she realizes that standalone software to run on these huge computers, that's going to be a thing. And so she, she basically sets up a software company and think about it, this is now, it's about 20 years, roughly 20 years before Bill Gates sets up Microsoft and becomes for a time the richest man in the world. So she is well ahead of that particular curve.
- [12:19]
Ben Walter
I mean, it sounds like she's one of the mothers of the software industry, really.
- [12:23]
Tim Harford
Absolutely, she is. She has a second realisation, which is that there are a lot of people like her. Well, there's nobody really like her, but there are a lot of smart women. A lot of those women are involved in the computer industry. It later became very male dominated, but there are lots and lots of women who are kind of around who can code, but are basically being pushed into intellectually demanding but organizationally subservient roles. So they're smart and they're being underpaid and they're being undervalued. And if her experience is anything to go by, they're also being harassed and groped in the office. And so why doesn't she, for this new company? Why doesn't she tap into this underappreciated workforce of women programmers? So that's what she did. She said, I had a gut feeling there was a programming industry of some kind waiting to be born. And I liked the idea of being in at its birth.
- [13:21]
Ben Walter
Wow. I mean, that is, that is something else. I mean, that's quite an intellectual leap. It's easy to look back now and say it's obvious, but at the time I can imagine it wasn't at all to most people.
- [13:31]
Tim Harford
No, absolutely. So she's got this, she's got this great idea for, for a product which is software. She's got a great idea for how to make this product, which is to hire lots of frustrated women programmers. So there's a third leap that she takes, which is. Ben, you ever heard of working from home?
- [13:53]
Ben Walter
Yes, I confess I'm not much of a fan. I get nothing done at home. It's not for me. I know it's great for some people, but it's just. It's not my bag.
- [14:00]
Tim Harford
Well, Steve Shirley was a fan. Again, this is like 1959, 1960, so this is so far ahead of the curve. But she realizes that a lot of these women have. Have the domestic responsibilities. So a lot of them are mothers like her, a lot of them are housewives, so they've got these domestic duties. But actually, to be a programmer at the time, you don't actually need the computer. You need a pencil and paper, because code is not that big. So a lot of these women are writing code on their kitchen table. So, yeah, you just need a telephone, pen, and paper, and away you go. So she calls her company Freelance Programmers. And how do you reckon it goes in the first few months?
- [14:45]
Ben Walter
I mean, first of all, it sounds like it was the world's first gig job. Yeah, first software company, almost first gig job. She really was ahead of her time. I mean, my guess is the hardest thing was probably selling, but maybe I'm wrong.
- [15:00]
Tim Harford
No, you are not wrong. Selling was a huge problem. And you. You want to know why selling was a huge problem? Because all of the customers were getting these letters from this woman called Stephanie trying to sell them software. And they were like, okay, first of all, software is not a thing. And second, we don't buy product from girls. Sure. And this is why we are calling her Steve Shirley, because her husband rather brilliantly said, why don't you just sign your letters Steve instead of Stephanie? And that's what she did. And the way she recalls, she said, it seemed to me that things really picked up once I stopped signing myself Stephanie, and started signing the letters Steve.
- [15:45]
Ben Walter
Yeah, I can look. Looking back, it seems, you know, horrific. But even today, you see when people look at names, when they look at resumes, when they look at pitches, everybody has their own unconscious or conscious bias. And back then, the very conscious bias was this was for the world of men.
- [16:03]
Tim Harford
I mean, there are experiments run by economists and other social scientists where they. They send out resumes and they just. They swap the name on the top of the resume. So it's a. It's a distinctively male name or a distinctively female name, or maybe a distinctively white name or a name that's most commonly associated with people from, from an ethnic minority, an immigrant name. And, you know, depressingly enough, it makes a huge difference. People are more likely to invite job applicants in for interviews if they appear to be white guys. So she, she saw all that and she, she worked around it.
- [16:42]
Ben Walter
I find myself a bit torn because, you know, in today's world we would say, you know, oh, that's a shame. She had to hide who she really was to be successful. And isn't that tragic? But back then there was no other way. And so I actually, you know, deep down have a lot of respect for it.
- [16:57]
Tim Harford
Yeah. Also, she didn't hide who she was for that long because, of course they'd invite her in for meetings and then she'd show up wearing a fur coat. She thought the fur coat was important to kind of maintain this idea that the company was doing well. And she said, once you're through the door, there's a moment of surprise. But then she very often would make the sale. There was one other little piece of deception she adopted, which is that she would play, she had a tape recording of office sounds, like typing and things like that, phones ringing. And so if she was on the phone to a potential client, she'd just be playing this tape recorder so that it drowned out the washing machine, the baby crying and you had the typing and the telephone instead.
- [17:41]
Ben Walter
That is clever. That's the modern version of that. Is the blurred out zoom background.
- [17:46]
Tim Harford
Absolutely, yes. So, yeah, she gets some clients and things go well. They work for the company that designs the supersonic airplane Concorde. Shola's company programmed their black box flight recorder. They provided software for Rolls Royce, for British Rail, for NATO.
- [18:04]
Ben Walter
So she's got big institutional clients.
- [18:06]
Tim Harford
She's got great clients. And that idea, you said, Ben, that having the idea is important. She has proved that the idea works. There are difficult moments. So in the 1970s, the UK was hit by a pretty bad recession and really squeezed the company. And Steve was being squeezed on the home front as well. So her son had been born and it quickly became apparent that he was autistic and he needed an enormous amount of support. He has very complex needs and yeah, he'd sometimes be violent. And meanwhile, Steve is trying to run this business with which is running into a cash flow crisis. Things got very, you know, very tough. Steve had a bit of a breakdown. She needed a lot of support, but then she bounced back from that. And one of the things that she did was to set up a home for young people with autism with lots of support needs that not only her Son Giles could live there, but other young people who had similar needs could also live there. So she's starting to take steps into the world of philanthropy as well. The other thing that's working is this plan to recruit women. So of the first 300 employees, 297 are women. And she only has to change that. In 1975, the UK government introduces the Sex Discrimination act, generally designed to prevent hiring men in favor of women, but of course, it applies equally. So at that point, she has to let the men in. But by then, the company's a huge success. The business model, this kind of hybrid working, the supplying of software, it's all going great. And, yeah, so she takes that in her stride.
- [19:58]
Ben Walter
Wow. I mean, she's resilient, if nothing else, but to be able to do all that, get through that tough time at home, that tough time at work, keep the company growing, keep it going, change the business model fundamentally because of the law, that's quite a journey.
- [20:12]
Tim Harford
It's an incredible journey.
- [20:13]
Ben Walter
Can I ask, I'm just curious, did she go by Steve socially as well, or did she go by Stephanie socially?
- [20:18]
Tim Harford
She went by Steve. So my wife met her a few years ago. In fact, I came to hear of her because my wife met her and was hugely impressed by her. So this is why we're having this conversation at all, Ben. So my wife's a portrait photographer. She makes these beautiful photographic portraits of the great and the good. And she heard about Steve Shirley at some photographic launch, and she contacted Steve and said, I would love to come and meet you and make a portrait of you and hear your story. So this was about six or seven years ago at this time. Steve was, I think, you know, in her mid-80s. And. And she just said this. This woman is an incredible, incredible. She was at the time, Dame Stephanie Shirley. And, yeah, pretty much the first thing she said to my wife was, call me Steve.
- [21:14]
Ben Walter
Wow. So what became of the company?
- [21:16]
Tim Harford
So the company went public in 1993.
- [21:19]
Ben Walter
Oh, wow.
- [21:20]
Tim Harford
Yeah. So at that point, Steve was worth a couple of hundred million dollars. 70 of her workers became millionaires. So the. All these. All these early programmers who had been given equity, they all became millionaires. So this is all. This is the kind of story you hear a lot about, you know, after the. The, you know, in Silicon Valley. But this is not Silicon Valley. This is all happening in. In rural England. Wow. In the 1960s, 1970s. So she creates all these female millionaires, and it is eventually bought by a larger software company. And she is left in the 1990s with a fortune and also with a lot of grief because her son Giles dies at the age of 35, leaving her and her husband absolutely bereft. She's got this loss and she's got a lot of money, and that's then the next three decades of her life, which is trying to figure out how to give it away. So, yeah, she spends 35 years making the money and then almost as much time giving it away. And she said she was determined not to leave some big foundation or trust fund. She wanted to give the money away while she could.
- [22:42]
Ben Walter
It was sort of like Act Three of her life. I mean, Act One was the resettlement to the uk. Act Two was her building this company and raising a son despite the adversity. And then Act 3 was finding a way to take all that success and give back to the. To the society that had supported her.
- [23:00]
Tim Harford
Absolutely. She founded Oxford University's Internet Institute, for example. She gave the founding grant to that. But a lot of the money was given to autism charities, or rather was used to set up autism charities that just didn't exist and needed to exist. So a school, Priors Court School, this residential home that I mentioned. She also set up Autistica, which was a national autism research charity in the uk, and she also gave money to refugee charities, reflecting her experience as a refugee, and became the UK's ambassador for philanthropy. And she wrote several books. So it's really an astonishing life. She'd always said she wanted to live a life that had been worth saving and wow. I mean, wow. And she died in August last year at the age of 91.
- [23:54]
Ben Walter
Wow.
- [23:55]
Tim Harford
So, I don't know, looking back at all of those achievements and all those obstacles overcome, I mean, what are your thoughts?
- [24:03]
Ben Walter
I would say, first of all, the amount of grit when we meet with entrepreneurs who have gotten through this type of adversity. And although this is potentially at a different level, Tim, than what we see typically, but still, we see a few common traits, and one is they are rarely driven, fundamentally by money.
- [24:23]
Tim Harford
Yeah. And she was never interested in money.
- [24:25]
Ben Walter
I think that doesn't surprise me. The second is they have incredible passion for the underlying business that they're creating, whatever it is. And then third, they have a mental resilience that just exceeds the norm. And I think it takes all three of those to be one of these stories of someone who. Who is able to overcome this much hardship, this much adversity, and build something of real scale and value.
- [24:53]
Tim Harford
I think that's absolutely right. And on the subject of money, she said the money I have let go has brought me infinitely more joy than the money I've hung onto. There was another point that she made in interviews. She lived to the age of 91. We've just been talking about her for a few minutes and you telescope everything into this short period of time and it seems as though everything's happening at once. And of course at the time, it's not necessarily like that. This overnight success that she had in fact took 30 years. And she said, I've learned that progress generally comes from making a series of small steps rather than a giant leap. I've also learned it's fine to make mistakes. The trick is to make them only once and learn from them, which is a very Cautionary Tales lesson.
- [25:46]
Ben Walter
What a fascinating woman and a fascinating story.
- [25:49]
Tim Harford
There's more we could say, but I think we're out of time. So Ben Walter, it's been great talking to you. Thank you so much for joining me on Cautionary Tales.
- [25:57]
Ben Walter
Thanks for having me, Tim, and thanks for sharing such a terrific story.
- [26:01]
Tim Harford
This episode was sponsored by Chase for Business. I was joined by Ben Walter, the CEO of Chase for Business. His podcast is the Unshakeables. Season three has just gone live and you can find it, of course, wherever you get your podcasts.
- [26:18]
Cautionary Tales Production Announcer
Cautionary Tales is written by me, Tim Harford, with Andrew Wright, Alice Fiennes and Ryan Dilley. It's produced by Georgia Mills and Marilyn Rust. The sound design and original music are the work of Pascal Wise. Ben Nadaff Haffrey edited the scripts. It features the voice talents of Melanie Gutteridge, Genevieve Gaunt, Stella Harford, Macea Monroe, Jamal Westman and Rufus Wright. The show also wouldn't have been possible
- [26:49]
Tim Harford
without the work of Jacob Weisberg, Greta
- [26:51]
Cautionary Tales Production Announcer
Cohn, Eric Sandler, Carrie Brodie, Christina Sullivan, Keira Posey, and Owen Miller. Cautionary Tales is a production of Pushkin Industries. If you like the show, please remember
- [27:05]
Tim Harford
to share, rate and review. It really does make a difference to us.
- [27:10]
Cautionary Tales Production Announcer
And if you want to hear it ad free and receive a bonus audio episode, video episode and members only newsletter every month, why not join the Cautionary Club? To sign up, head to patreon.com cautionaryclub that's Patreon P-A-T-R-E-O-N.com cautionaryclub.