By in Personal

Millionaire - Missed it by 2 days

Many of us have an entrepreneurial spirit. That could be the motivation for some of us to write.

In the late 90's and early 2000's I contracted with Fortune 500 companies providing network management system configuration. After my first contract was over I noticed that I had developed quite a few scripts and program snippets to assist when managing a network.

My next contract was with a global manufacturer of electrical equipment. Thye had locations around the world and the sun never set on their company. I installed the system and had it working well except the response time to our European facilities was a bit slow. Rather than spending the $300k for the complimentary "mid level manager" product to manage the local devices we developed our own solution. A friend and I used a Linux server (old PC with Linux) for the host. He wrote a web front end and I wrote the backend data extract from the main system. It was updated every minute and provided the same information in HTTP format. By using web format we reduced the amount of data that needed to be pushed by 70% therefore speeding up the system.

After completing the project, I started wondering why did all the systems cost so much? The starting price tag was $100,000 plus hardware and it could easily go higher.

I had learned to code a bit using C++, Java and Shell Scripting and though I would layout a simple system. After two years of coding I had the first proof of concept system running on a small Linux server. Unlike most (almost all) of the systems on the market I had developed a management system that would custom write a network management system for you. It was a program that created a custom set of applications.

No need for a contractor like myself which saved thousands of dollars and months of configuration time. If you could plug in a cable, answer 3 simple questions, it would come back with recommendations or you could take the "accept all" option and let it build itself.

After 2 years development and almost a year of debugging it was ready to show to some perspective venture capitalist. I had the programmers lined up for "making a final version", manufactures for our hardware and a distributor. The complete system to run a 5,000 node network was $10,000. a fraction of the normal management system with hardware and software.

I met with three different venture capital groups and pitched the proof of concept. Two declined and the third wanted to move forward. My part of the deal was to go to work for a research institution and be available for consultation. I would get 20% of gross and a board seat. After spending every available minute on the system, I was burned out. My family had suffered and I needed some relief.

Three months of night and weekend meetings went by with the various parties and all was going well. We had development space leased by the distributor. He wanted to be near for our technical support.

We made an agreement for $850,000 first year and $350,000 the second year for the company. The VC got 51%, Distributor 20%, me 20%, programmers 19%. All involved were happy and moving forward.

I had spent many late nights (1-2 am) in the phone with the CFO that the VC put in place so it was not surprise when he called at 11:30 pm. He asked "Have you walked to Mike? (main VC guy)" and I had not in a few days. His voice turned from normal to concerned. He told me to stay awake he would call later. At 1:00 am he called, his voice trembling. "I have bad news, Mike backed out". As you would think I asked what happened and we spent the next hour or two discussing the details.

Bottom line, Mike had lost too much money on the dot.com bust and was getting nervous at spending so much on an unproven product. Notified early Wednesday morning that the meeting with the lawyers on Friday was cancelled.

Missed it by 2 days!

I look back and don't get mad, I remember I got closer than most and it was an educational experience. I still have the original server with code installed. Just can't bring myself to throw away something where so much effort and time was focused.

Fortunately I still love this business and I did get closer than most.


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Comments

LoudMan wrote on December 11, 2014, 10:50 AM

yes, you got closer than most. Remember, though, it's not your only opportunity. You didn't marry the first woman you dated, did you? so, try again. (I'm good at giving this advice but, I sure stink at taking it. hold on. Who is this voice in my head?)

sward wrote on December 11, 2014, 10:55 AM

Loudman, you are correct. I've had a couple of investors ask me to resurrect the project. After 14 years, there is nothing on the market that competes. I may in the near future. Have learned mush more and could do a better job.

scheng1 wrote on December 11, 2014, 9:21 PM

I think you can continue to develop the platform, and ultimately supply to all the small businesses which are expanding.

luisga814 wrote on December 11, 2014, 9:24 PM

Wow nice achievements and I am hoping that you continue what you are doing to gain more. Anyway, good morning and stay safe. God bless