481 - The Computer Store That Wouldn't Die - Part #1

In January of 1995 Vision Technologies, a PC manufacturer located in Vista, offered us a contract to come in  and clean up Vision with an eye toward optimizing the company’s market value as an acquisition for a larger company. Since 1975 I had specialized in managing companies in start-up and turn-around environments. First as Director of Manufacturing for NCR Canada leading a team to build and operate a new one thousand employee facility in Waterloo Ontario. Next as Director of Operations in a turn-around environment for an NCR acquisition in the Silicon Valley. Then to San Diego as VP of Operations for a new United Telecommunications acquisition (Megatek) managing a fivefold growth in four years and finally as start-up VP of Operations for Packard Bell going from start-up to a billion dollar a year PC maker in just two years. Over the years Nome also worked for several high tech companies (Belden Corp, Westinghouse, Control Data, FMC, Volker-Craig and BEI.) Her specialties were process controls and project management. In several companies we worked together.

Vision Technologies made PCs for electronics distributors and catalogue stores. I went to work as VP of Operations and Nome started cleaning up materials handling and distribution. In July the company accepted a buyout offer from BTC, an Asian conglomerate. BTC wanted the Vision name and distribution channels but not the inventory. We had already worked up a plan to establish a Vision Technologies Factory Outlet Store so we did a handshake partnership with Vision’s owner and moved all the Vision inventories into the six thousand square foot site vacated by the San Marcos Library when they moved to their new location in the present San Marcos City Government complex. The plan was for Nome and I to manage a wholesale/retail operation aimed at turning the inventory into cash. We would build PCs and sell components until the inventory was gone and then we would close the store. We estimated this would take about one year.

Neither Nome nor I had any experience dealing with retail computer sales, in fact, neither of us had ever been inside a computer store. Since we had absolutely no preconceived notions about how a computer store was supposed to be managed, we really had no choice but to let our customers tell us how they thought a computer store should work. Our business model became what is known in industry as “user defined.” It seemed to work for us and our customers. 

 As we continued to build PCs we began to run out of some components so we had to reestablish old vendor contacts and start buying new components. After six months we were mostly selling new components and building new PCs with newly purchased components. The business had begun to take on a life of its own and it was difficult to see an end point. Nome and I were enjoying the challenge and it was fun working with people and solving problems. Our employees had become family and we didn’t want to let them down. We didn’t have any better plans so we made the decision to just keep on doing what we were doing.  We bought our partner out.

Our industry savvy friends told us that PCs were becoming a commodity product like calculators. They told us there was no way we could build PCs and compete with the major American PC manufacturers like Gateway. Compaq, Packard Bell and Dell. Conventional wisdom said that mega stores like Comp USA, Good Guys, Office Depot, Radio Shack, Incredible Universe, Circuit City and Best Buy would run us out of business with lower cost parts and service. Tune in next week for the further adventures of “the computer store that wouldn’t die”