How I Got Started in the Manufacturing Software Business - Part 3 of 4

By Mike Hart

As Hal Holbrooke said to Charley Sheen at the end of Wall Street, “Man looks in the abyss, there's nothing staring back at him. At that moment man finds his character. And that is what keeps him out of the abyss."

My father and I were staring into the abyss.  The product we were representing turned out to be a technical failure and our inability to keep up with our computer payments and other obligations forced us into personal bankruptcy. 

Yet we didn’t want to give up because we felt we were getting pretty good at what we were doing.  Warren would actually walk through the manufacturing districts of Southern California, dropping off brochures and chatting with receptionists, often making immediate contact with decision makers.  He kept me busy with leads and I was getting good at making presentations.  I read several books on selling and learned to listen to prospects and respond to their hot button issues.  We were consistently selling two to three systems a month.  All we needed was a good product to sell. 

I then remembered once losing a sale to a company in Burbank where they told me they liked my MCS product, but were blown away by a South African product named Syspro that seemingly had an endless array of features. 

I contacted Syspro’s USA headquarters in Santa Ana and applied to be a VAR.  They accepted and I immediately took a self-taught crash course on the product, reading the manuals cover to cover like I did with MAPICS.  Within one week, I was out in the field, demonstrating the product to prospects. 

I thought selling Syspro would be a piece of cake.  The product was feature rich, to be sure.  But it didn’t work out that way.  I learned that no matter how many features are in your arsenal, someone always wants something you don’t have. 

Price makes a big difference too.  I was selling Microware for around $3000 a system, but a comparable Syspro system was in the neighborhood of $25,000 and required a 15% or 20% annual fee (I can’t remember the exact amount), including year one.  Syspro was a true mid-market ERP system, a much different animal than I had been selling. 

I ended up selling only three systems, one to replace a Microware installation.  Not only did I sell the system, but I provided implementation services as well.  And that’s how I learned how difficult it is to implement a full-blown ERP system. 

There were a slew of configuration options, many of which I remained fuzzy on , no matter how many times I read the documentation.  Forms had to be laid out from scratch.  The accounting system had lots of procedural steps that were appropriate for large companies, but overkill for the small companies I dealt with. 

I would walk into some sales presentations and instantly knew that there was no way the company would put shell out the kind of money that was involved. 

From time to time I had leads with bigger companies, but would show up all by myself and would compete against sales teams from bigger VARS.  I learned that big companies are ore comfortable dealing with other big companies, but also that small companies are comfortable working with other small companies. 

Disappointed with our Syspro sales, we looked for a low end solution to balance out our product portfolio.  At a trade show ran across an inexpensive job shop package named Data Access.  I signed up as a VAR and quickly sold half a dozen systems.  These sales, however, were only $1000 or so and were not enough to support our overhead.

As I got involved in these presentations and implementations, my head swirled with product ideas.  I began pestering Syspro and Date Access with memos suggestion various improvements, without any response.  They must have thought I was a real pain in the neck. 

I remember meeting the owner of Syspro at the Santa Ana office and he was impressed with my product knowledge – especially since I had only been involved with the product for a couple of months. 

We were scraping by with these two products, but it was a tough go.  Syspro was a good product, but it was way too much system for our target market.  Data Access was too simplistic and was priced too low to make money on it with active selling. 

And then I ran across a classified ad in PC Magazine touting an accounting package that could be purchased for $100, including source code.  Out of curiosity, I dialed the phone number, not knowing that my business life would take another sharp turn. 

End Part 3

Mike Hart is the co-founder and President of DBA Software Inc., a leading provider of manufacturing software for small businesses.      

Comments

[in house training]

In the fall of 1991, I ran across a classified ad in PC Magazine touting an accounting package that could be purchased for $100, including source code. Out of curiosity, I dialed the phone number. A jovial sounding fellow answered the phone and said his name was Rick Atkeson and he assured me that the accounting package with source code for $100 was no joke, and that he had a license to prove it.