Can the high-flying Michael Cowpland revive Corel?
The story of how and why Ottawa-based Corel Corp. scaled the ladder of the software industry, and then tumbled back to earth again, is ultimately the story of its flamboyant founder and CEO. At once one of the most audacious, admired and ridiculed entrepreneurs in Canada, Michael Cowpland helped to create not one but two of Canada’s bestknown technology companies—the other being Mitel Corp.,
a Kanata, Ont.-based producer of telephone equipment that soared to great heights in the 1970s before running into trouble in the early 1980s. The following report has been adapted by Maclean’s Senior Business Correspondent Ross Laver from his newly published book, Random Excess: The Wild Ride of Michael Cowpland and Corel (Viking Penguin, $32).
f, as U.S. technology writer RobertX. Cringely has suggested, Microsoft chairman Bill Gates is the Henry Ford of the personal computer in dustry, Mike Cowpland is its Lee Ia cocca-an engineer whose greatest talent is in marketing, a born sales man and inveterate hype-spinner whose failures are every bit as mem orable as his successes. -
More than that, Cowpland is an
extravagant hedonist in an industry heavily populated with inward-looking nerds. While his employees sit hunched over their keyboards, sometimes for 24 hours at a stretch, in hopes of overcoming some arcane programming problem, Cowpland can often be found scampering around a tennis court, jetting off to his Florida retreat or skiing in the Swiss Alps. His taste in cars runs to Porsches and Lamborghinis; his taste in women is embodied by his second wife, Marlen, a platinum-blond knockout who enjoys scandalizing the more sobre inhabitants of Canada’s capital by parading in public in outfits that leave remarkably little—certainly not her diamond-pierced navel—to the imagina-
tion. Their garish $ 10-million mansion in Ottawa’s staid Rockcliffe Park is a sensualists’ wonderland, with a 360-squaremetre master bedroom, twin squash courts, an outdoor hot tub and swimming pool ringed by white Roman columns, a fully equipped gym and a circular wine cellar stocked with Dom Perignon.
Cowpland’s ostentatious lifestyle has earned him the enmity of Ottawa’s selfappointed guardians of taste and morality, but their criticism is nothing compared with the abuse he has taken from Corel’s own shareholders. From a high of $26.25 a share in 1995, the stock slid to $2 in early 1998, taking with it more than a billion dollars of investors’ money. Rubbing salt in their wounds, Cowpland himself sold $20 million worth of stock, a third of his stake, in August, 1997, mere weeks before the company reported a huge thirdquarter loss.
By the spring of 1998, the once high-flying Corel had been abandoned by every major pension and mutual fund manager in the country. The dwindling band of investment analysts who continued to follow the company spent most of their time trying to
forecast how much money Corel would lose in the next quarter. Added to that was a growing list of legal difficulties, including an Ontario Securities Commission investigation into Cowpland’s stock sales and a U.S. class-action suit that accused the company of deliberately misleading shareholders about its financial position. There was even a lawsuit from former Hollywood screen star Hedy Lamarr, who was incensed that Corel had used her image as the centrepiece of a marketing campaign for the newest version of CorelDRAW, Corel’s groundbreaking graphics software package.
As one problem piled on top of another, Cowpland kept up a brave front. Whenever a reporter or investor got within hearing range, he’d launch into a frenetic song and dance about the fabulous new products Corel supposedly had in the pipeline, the whiz-bang applications that were sure to revolutionize the industry. “Watch this space,” he’d say, his eyes sparkling with the promise of technological breakthroughs still to come. At the company’s annual meeting in April, 1998, he brushed aside calls for his resignation, brashly telling shareholders that within a year they would be cheering his performance.
Yet the truth was that Cowpland had no idea how he would, or even if he could, turn Corel around. The industry was evolving so rapidly that it was impossible for anyone to know where things were heading next. From as far back as the early days of Mitel, Cowpland’s style has always been to ride as many new technology waves as possible, on the theory that one of them will surely turn out to be the Big Kahuna—the one that breaks though the technological clutter and becomes a mainstream hit. CorelDRAW emerged from that process, and the hun-
Cowpland’s insecurities make him an easy man to like
dreds of millions of dollars it generated eventually gave Cowpland the resources to buy the world’s number 2 word-processing application, WordPerfect. But now, both of those markets are saturated, which means that Cowpland is under increasing pressure to find some new wave to keep his company afloat.
Like any good salesman, Cowpland understands the importance of keeping up appearances. He’ll turn 56 next April, and nothing worries him more than the fear that others might suspect he is slowing down. Tennis and squash are part of his regular regimen, not simply because he relishes the competition but because, out there on the court, he can wage daily war against the aging process. At the office, in his desk drawer, Cowpland keeps dozens of small pill bottles: vitamins, health supplements and every manner of herbal concoction that might help combat the ravages of time. He cultivates the lean and hungry look, in part because it epitomizes his preferred way of doing business.
In a way, Cowpland’s whole life is an act of self-promotion. When he talks to reporters, he never fails to mention his recent athletic exploits: the celebrity tennis matches in Florida, the daredevil bobsledding in St. Moritz, Switzerland, the karate and kick-boxing
lessons with Marlen. Is there another man in Canada—or anywhere else for that matter— who would dare distribute photographs of his wife posing seductively in a form-fitting Santa suit, complete with red stiletto heels?
The irony is that Cowpland is fundamentally a shy, insecure man, a man who craves approval and is determined to convince others that he knows what he’s doing, even when he doesn’t. “He comes across as flashy and loud, but he really isn’t,” says Aili Kurtis, a graphic artist who worked at Corel for seven years and designed CorelDRAW’s ubiquitous hot-air balloon logo. “He’s actually a very quiet, sensitive guy. It’s as though he’s consciously taken on this persona, this image of the millionaire with his fancy wife and these fancy cars and the fancy house. And it’s all just a coverup by somebody who’s really very sensitive and very private.” Merri Lemmex, another former employee, calls Cowpland “a painfully shy person. In the four years I spent at Corel, I think I talked to him every day and yet you never actually had a conversation with him. He tends not to look you in the eye, and he always looks like he’s just about to walk out the door, like his mind is racing ahead to another meeting.”
In person, those insecurities make Cowpland an easy man to like. Even when you suspect he isn’t telling the whole truth—about his negotiations with a potential business partner, for example, or the reason why he sold a third of his stake in Corel in advance of disastrous financial results—he comes across not as a liar or a con man but as someone who is simply afraid that others will think less of him. Picture an embarrassed schoolboy who wants to avoid being sent to the principal’s office. The high-tech world is full of people who consider Cowpland reckless and unpredictable, yet in a quarter century of tumultuous business dealings he has acquired
remarkably few enemies. The breakup of his first marriage was prolonged and extremely messy, according to friends, but, in public at least, even Darlene Cowpland has nothing but good things to say about her former husband.
Cowpland spends so much time trying to please and impress people that it’s easy to forgive his impulsive behavior and his tendency to exaggerate his own accomplishments. Even many of the people who have been fired from Corel over the years find it hard to bear a grudge. Robert Lendvai, a former sales manager who lost his job in 1993 after seven years with the company, is a good example.
Looking back on the episode, his main complaint is not that he was terminated without warning, but that afterwards Cowpland de-
clined to take his calls or meet him face-to-face. “I tried to speak to him a couple of times, but Mike wasn’t comfortable dealing with that shit. The funny thing is, I just wanted to tell him it was a good ride, I did well with the stock options, and no hard feelings.”
The doorbell rings and Mike Cowpland, his slender frame visible through a frosted glass panel beside the entranceway, bounds over to answer it. As he ushers a visitor into the house with a handshake and a hurried “How ya doing?” four impeccably groomed dogs erupt in a canine frenzy, tails wagging furiously, wet noses burrowing into pant legs. The dogs belong more to Marlen than to Mike, a fact deduced from their cutesy names. The largest, an Afghan hound, is Chanel; there is also a golden retriever called Blondie and a furry little Maltese that answers to Bunny. The only exception to the naming convention is Java, a three-year-old white German shepherd mix that is quite possibly the only dog in Ottawa named for a computer programming language. Being part wolf, Java “tends to be a bit unstable,” Cowpland jokes. “Just like the language.”
It is late June, 1998, a few days after Corel’s latest bombshell. Slipped in almost as an afterthought in a news release announcing yet another money-losing fiscal quarter was the revelation that the company—after repeated denials that it was planning to cut staff—is shutting down its Utah engineering centre, a facility it acquired in 1996 with the takeover of WordPerfect. Five hundred and thirty employees, a third of Corel’s payroll, are being let go, along with two high-ranking executives, who have been with the company for years. A few weeks earlier, Cowpland had been full of praise for the two executives. Now, suddenly, he portrays them as “empire-builders” who talk a good game but rarely deliver.
If Cowpland is feeling any more sorry for the 530 Utah engineers and customer service employees who have just lost their jobs, he isn’t letting on. “The fact of the matter is, it’s a heck of lot more efficient to run the whole thing out of Ottawa,” he says, sipping champagne and puffing on a Cuban cigar. Curled up next to him on one of several S-shaped modular white leather sofas in the
living room, Marlen is attired in a spandex body suit, a Harlequinesque number with rectangular patches of red, white and gold set against a black background. Donna Karan’s name is printed in large letters across her chest. When she gets up to answer the phone, the letters do not jiggle.
Cowpland is keen to talk about Corel’s latest comeback plan, but first he pulls out a cartoon from PC Week magazine. It accurately depicts Marlen at a recent computer industry gathering in New York City, dressed in a slinky black cat-suit and preening next to Michael Dell, the billionaire founder of Dell Computer. She hadn’t
planned to attend the dinner, but one of Corel’s top salesmen talked her into it in hopes of generating some much-needed publicity for Corel. It worked.
“It’s kind of neat because Michael Dell was there and they didn’t pay him any attention,” Cowpland says. “She was pushing the envelope, but what’s great about it is she pulls it off.” “Michael always says we have so much fun, the government is going to start taxing it,” Marlen says, laughing.
But surely they aren’t having much fun now, with Corel having lost money for six straight quarters?
‘That’s the interesting thing,” Cowpland says. “The way I look at it, business is like a sport, and you don’t win all the time. But if you
keep on playing hard, you’re going to do well eventually. The neat thing is, everybody’s super-pumped and this is the highest morale we’ve had in ages.”
It sounds convincing, but then Cowpland is known for his unrelenting optimism. For more than a year, the news out of Corel has been disastrous, yet Cowpland has never stopped promising that the company is on the brink of a major breakthrough. He has done it so many times that most people who follow the company just roll their eyes and smirk when they hear it. And yet, in some ways, all that bravado is more than just an act. Cowpland himself seems genuinely to believe what he is saying, as though all that is required to restore Corel to the pantheon of high-tech greatness is to keep trusting in his own ability to make it happen.
Doesn’t he ever have moments of self-doubt?
“Oh yes, but he doesn’t show it,” Marlen says. She launches into an anecdote about the most recent CorelDRAW gala, an annual black-tie extravaganza designed to boost company morale and generate publicity for the company’s stable of consumer software products. “Michael gives speeches all the time but he was very, very stressed about the gala. You know, the shares had gone down so far.”
Cowpland looks uneasy at the direction of the conversation. ‘Trying to organize a celebration with all that going on, that was hard work. But, you know, there’s always the challenges ahead. And as long as you’re continuously pushing forward it’s going to happen.”
Marlen is nodding vigorously in agreement.
“When we met in 1986, Corel was just starting out, and it was really not going well,” she says. “At one point, Michael was so sick for three days. It was stress—gastroenteritis. At that point, he almost did not believe in Corel, but he kept on going and kept on pushing, and five years later Corel was a tremendous success. Now he believes in Corel, and the shares are down, and he knows how much he can bring them back up. He did it before and he can do it again, only better.”
Next to her, Cowpland is beaming. He and Marlen have many things in common, but the most important is this: they both believe in Mike Cowpland. □
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