The Gateway Blues

Hi Everyone,

I’ve been working hard at PC Pitstop trying to get out our new products. I love this challenge, but my work flow has suffered a major interruption. Acer is buying Gateway, and I received 10, count ’em, 10, emails, asking for my thoughts. Rather than respond to all 10 emails, it is a far more efficient use of my time to write a blog.

How does this make me feel? Two basic and extremely visceral feelings, mad and sad.

Let it be known that I am a PROUD ex-employee of Gateway. I started as the Director of Marketing in 1991, and I left in 1998 as the SVP of Gateway’s Consumer Group. During those 7.5 years, I learned more lessons about life, technology, and business than any MBA could buy. Plus at the time, we were the leaders of the PC industry. Intel called us the rabbit that the other vendors chased. It might seem mundane now, but Gateway was the first company to make standard the CD-ROM, the FAX modem, the 17″ monitor, the sound card, and internet service. The list goes on. Let’s be clear, during that era, we were second to none.

It is this pride that makes me MAD. And not just a little bit, a lot. Psychological theory suggests it is unhealthy to hold inside this type of anger. So let me direct it at a few choice CEO’s. The first on my list is Jeff Weitzen. Straight up, he is the reason that I no longer work at Gateway. In some ways, I should thank him because he got rid of me before he destroyed the company and its stock price. Ted Waitt said shortly after we went public in 1993, “Take care of our customers, employees, and suppliers, and the stock price will take care of itself.” Weitzen in the short period of time managed to turn this simple philosophy on its ear.

Customers, employees and suppliers all took a back seat to Weitzen’s drive to run the stock price up. Anyone standing in the way of this tidal wave shift was summarily dismissed. I am proud to say that I was one of the first in line. It should not come as a surprise to anyone that SEC investigated Weitzen for fiscal improprieties. Too bad, that they didn’t come to talk to me. I know a LOT of people that have bullets for that gun.

Next up to the plate in the Gateway CEO Hall of Shame is Wayne Inouye, ex CEO of eMachines. In fairness to Wayne, he’s not a bad guy, but his judgement was catastrophic. Gateway’s route to market in the 90’s was direct marketing . Instead of breathing life into the most profitable segment of its business, Inouye chose to focus on retail partners such as Best Buy, virtually suffocating the direct business. Under Inouye’s rule, direct marketing became the ugly stepchild of Gateway. On top of that, Inouye made perhaps an even larger gaffe. When Inouye took the helm in early 2003, Gateway had created a very large and profitable television business. I personally am the proud owner of 2 X 42″ Gateway plasma televisions. In order to suck up to the retail channel, Inouye chopped the entire television business, robbing Gateway of one of its largest hopes for long term survival.

And the last entry for the shortest midget is Ed Coleman who began at Gateway a little over a year ago. Let’s see, you got Steve Jobs hammering Vista in TV advertising, and introducing the iPhone. Next up, you got Michael Dell, entering the Linux market, and establishing a beachhead in retail with Walmart. What’s Easy Ed accomplished at Gateway? Best I can tell, his two major accomplishments are changing the company’s dress code, and six sigma training. Somehow they pale in comparison.

It is obvious that each of these CEO’s played a hand in Gateway’s demise. It is interesting barroom talk to discuss which had the most profound impact. My money is on Weitzen. His arrogance had no limits, and it was his house of cards that the other CEO’s inherited.

But now I am feeling sad. Unlike any of these CEO’s, I still have constant contact with many Gateway employees. It makes me sad to see the hope that each of these CEO imposters have dashed. It makes me sad to think of my remaining friends future in light of an acquisition from a company 12 times zones away. But it makes me the most sad, because I helped build that company. My baby boy is now 2 months, and when he buys his first computer, I wanted to say “Your daddy helped put that company on the map.” That really makes me sad.

Enough sadness and enough madness. Unlike Gateway, PC Pitstop has new products around the corner. Back to work, and best wishes to all of my friends and associates still at Gateway.

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