By Mike Hart
This year marks the 20th anniversary of my company, DBA Software, and so I find myself in a reflective mood. 20 years is a long time in the manufacturing software business and I’ve seen many competitors come and go. But how did I get in this business in the first place?
To answer that question, I need to take you back to 1986, which was the year our family business, Hart Manufacturing, was sold. The company was started by my grandfather, Harold Hart, in 1927. We made watering and feeding systems for the poultry industry and expanded greatly in the late 1970’s, only to crash and burn when new poultry house construction collapsed as Paul Volker broke the back of inflation with 20+% interest rates.
I worked briefly for the new owners, but found I was not temperamentally suited to work for other people, especially people who buy companies primarily to milk their assets and let them die. I shared my disillusionment with my best friend, Brady Lincoln, whom I’ve known since junior high school. To my surprise, Brady invited me to partner with him in a programming services business. Why me, I thought? What did I know about programming other than the Fortran class I took in college and the water cooler talks I had with our IT guy at Hart Manufacturing?
In spite of my lack of qualifications, I nervously accepted the offer. I was at a crossroads in my life and had to try something different. I was 34 years old and had never worked outside the comfortable confines of the family business. What did I have to lose?
We named our new company “Solution Services” and set out to furnish contract programmers for the IBM System 36 mini-computer. Fortunately, Brady was a former partner in this type of business and knew the ropes. Typically, we charged $75 an hour and paid about half of it to the programmer. Brady took care of the technical side and my job was to find work for our programmers.
I never was comfortable with the contract programming business. The money was good when you were busy, but in between contracts you had to keep paying your programmers and you could get killed if the work wasn’t there.
Feeling like a fish out of water with custom programming, I looked for a way to contribute more to the company and learned that IBM had a value added reseller program for their proprietary software packages at the time – MAPICS for manufacturing, DMAS for distribution, and CMAS for construction. We signed up, feeling that occasional software sales would balance out our business and provide some custom programming work for our technical staff.
Our local IBM branch was in Woodland Hills in the San Fernando Valley area of Los Angeles. IBM promised to furnish us leads, and they did. But the leads were garbage. All the good leads went to the VARS with proven track records, whereas we got the crumbs.
In spite of the lousy leads, we dutifully did whatever IBM asked, figuring we’d rise in the VAR ranks over time. IBM was big on seminars in those days, so when they asked us to do one, we readily accepted. Unfortunately, they wanted the seminar to be on CMAS, by far their weakest software package.
.
The night before the seminar, I read the manual from cover to cover and thought I could fake my way through the presentation. It turned out that only five people showed up, which was good, because soon after it began, I realized that I didn’t know the construction industry or the software package much at all, and had to admit as such to my meager audience.
We finally got handed a MAPICS account that needed some additional modules. This was my first exposure to an ERP system other than the Pick-based software package we used at Hart Manufacturing. ERP systems were called “MRP” systems in those days and most of them ran on mini-computers from IBM, DEC, HP, Burroughs, Wang, and others.
I was fascinated by MAPICS and read all its technical manuals. Even though I had been in a manufacturing environment for most of my life at Hart, I was primarily involved with sales and marketing rather than production. When I actually got into the nuts and bolts of MAPICS, it all clicked. MRP, work centers, routings, costing – it all made complete sense to me. I discovered a knack for articulating manufacturing concepts well and could connect the software with real life examples drawn from my years at Hart to convey my points.
I augmented my study of MAPICS with some academic material on manufacturing, most notably several books written by the manufacturing guru of the time, Oliver Wight. Wight taught me that efficient manufacturing is all about planning, flexibly responding to constant change, and to minimize expediting.
What shocked me about this first sale, which was only three or four additional modules, was how much paperwork was involved. We had to bring the customer to the IBM office and sign reams of paper – almost like signing a mortgage. It was ridiculously excessive in view of the relatively small size of the transaction, the fact that these were additional modules and not a first time purchase. All this time and effort tor a lousy 25% commission.
We then got involved with one DMAS installation, but the pattern was becoming clear. We were chasing a lot of leads with little to show for our efforts. The IBM products were high priced and hard to sell to the small companies I was calling on. The IBM VAR program was obviously a dud.
Then in one of the System 36 trade journals, I ran across a software package named Software PM where you could buy source code to an MRP system and private label it under your own name and make it your own product. This appealed to my inner entrepreneur. The cost was around $30,000, which was a lot of money, but back then you could recoup that amount with one or two sales. Software PM offered a payment plan, so we signed up.
I recruited my father, Warren, who was trying to start his own business sourcing components from Asia for local manufacturers, to help me with lead generation, and he plunged into it with his customary enthusiasm and eternal optimism. Solution Services was now in the software business with a product we named “MCS” (for Manufacturing Computer Systems). We quickly sold our first system to an aviation company in North Hollywood.
Then a bizarre set of events ensued that enabled us to use our own software. In early 1989, I was contacted by Bank of America to help them look for a buyer for the assets of Hart Manufacturing. The new owners had literally walked away from the company after unplugging the computer system and taking it to their factory to run their business, which was making fiberglass tool handles.
In January 1990, my wife and I went to the big poultry industry show in Atlanta where I found a buyer for the assets, Bill Edstrom from Edstrom Industries. Bill came out to California and asked my father and I if we could help him get Hart Manufacturing back in operation until he could move it back to his factory in Wisconsin.
Besides our knowledge of the company, we had one other thing he needed, which was a manufacturing software package, considering that the former owners took Hart’s old computer system. So Edstrom hired us and we embarked on a rapid implementation.
We moved our System 36 computer to the Hart office, hired two women to enter inventory items and bills of material, and within a week we were up and running and shipping product. Warren was back in charge, just like the old days, with a small workforce of ex-employees.
Our software did what it was supposed to do. There was only one catch – the platform that it ran on was totally obsolete.
End Part 1
Mike Hart is the co-founder and President of DBA Software Inc., a leading provider of manufacturing software for small businesses.
In spite of my lack of qualifications, I nervously accepted the offer. I was at a crossroads in my life and had to try something different. I was 34 years old and had never worked outside the comfortable confines of the family business. What did I have to lose?
We named our new company “Solution Services” and set out to furnish contract programmers for the IBM System 36 mini-computer. Fortunately, Brady was a former partner in this type of business and knew the ropes. Typically, we charged $75 an hour and paid about half of it to the programmer. Brady took care of the technical side and my job was to find work for our programmers.
I never was comfortable with the contract programming business. The money was good when you were busy, but in between contracts you had to keep paying your programmers and you could get killed if the work wasn’t there.
Feeling like a fish out of water with custom programming, I looked for a way to contribute more to the company and learned that IBM had a value added reseller program for their proprietary software packages at the time – MAPICS for manufacturing, DMAS for distribution, and CMAS for construction. We signed up, feeling that occasional software sales would balance out our business and provide some custom programming work for our technical staff.
Our local IBM branch was in Woodland Hills in the San Fernando Valley area of Los Angeles. IBM promised to furnish us leads, and they did. But the leads were garbage. All the good leads went to the VARS with proven track records, whereas we got the crumbs.
In spite of the lousy leads, we dutifully did whatever IBM asked, figuring we’d rise in the VAR ranks over time. IBM was big on seminars in those days, so when they asked us to do one, we readily accepted. Unfortunately, they wanted the seminar to be on CMAS, by far their weakest software package.
.
The night before the seminar, I read the manual from cover to cover and thought I could fake my way through the presentation. It turned out that only five people showed up, which was good, because soon after it began, I realized that I didn’t know the construction industry or the software package much at all, and had to admit as such to my meager audience.
We finally got handed a MAPICS account that needed some additional modules. This was my first exposure to an ERP system other than the Pick-based software package we used at Hart Manufacturing. ERP systems were called “MRP” systems in those days and most of them ran on mini-computers from IBM, DEC, HP, Burroughs, Wang, and others.
I was fascinated by MAPICS and read all its technical manuals. Even though I had been in a manufacturing environment for most of my life at Hart, I was primarily involved with sales and marketing rather than production. When I actually got into the nuts and bolts of MAPICS, it all clicked. MRP, work centers, routings, costing – it all made complete sense to me. I discovered a knack for articulating manufacturing concepts well and could connect the software with real life examples drawn from my years at Hart to convey my points.
I augmented my study of MAPICS with some academic material on manufacturing, most notably several books written by the manufacturing guru of the time, Oliver Wight. Wight taught me that efficient manufacturing is all about planning, flexibly responding to constant change, and to minimize expediting.
What shocked me about this first sale, which was only three or four additional modules, was how much paperwork was involved. We had to bring the customer to the IBM office and sign reams of paper – almost like signing a mortgage. It was ridiculously excessive in view of the relatively small size of the transaction, the fact that these were additional modules and not a first time purchase. All this time and effort tor a lousy 25% commission.
We then got involved with one DMAS installation, but the pattern was becoming clear. We were chasing a lot of leads with little to show for our efforts. The IBM products were high priced and hard to sell to the small companies I was calling on. The IBM VAR program was obviously a dud.
Then in one of the System 36 trade journals, I ran across a software package named Software PM where you could buy source code to an MRP system and private label it under your own name and make it your own product. This appealed to my inner entrepreneur. The cost was around $30,000, which was a lot of money, but back then you could recoup that amount with one or two sales. Software PM offered a payment plan, so we signed up.
I recruited my father, Warren, who was trying to start his own business sourcing components from Asia for local manufacturers, to help me with lead generation, and he plunged into it with his customary enthusiasm and eternal optimism. Solution Services was now in the software business with a product we named “MCS” (for Manufacturing Computer Systems). We quickly sold our first system to an aviation company in North Hollywood.
Then a bizarre set of events ensued that enabled us to use our own software. In early 1989, I was contacted by Bank of America to help them look for a buyer for the assets of Hart Manufacturing. The new owners had literally walked away from the company after unplugging the computer system and taking it to their factory to run their business, which was making fiberglass tool handles.
In January 1990, my wife and I went to the big poultry industry show in Atlanta where I found a buyer for the assets, Bill Edstrom from Edstrom Industries. Bill came out to California and asked my father and I if we could help him get Hart Manufacturing back in operation until he could move it back to his factory in Wisconsin.
Besides our knowledge of the company, we had one other thing he needed, which was a manufacturing software package, considering that the former owners took Hart’s old computer system. So Edstrom hired us and we embarked on a rapid implementation.
We moved our System 36 computer to the Hart office, hired two women to enter inventory items and bills of material, and within a week we were up and running and shipping product. Warren was back in charge, just like the old days, with a small workforce of ex-employees.
Our software did what it was supposed to do. There was only one catch – the platform that it ran on was totally obsolete.
End Part 1
Mike Hart is the co-founder and President of DBA Software Inc., a leading provider of manufacturing software for small businesses.
Comments