Making the Break

Gene and a colleague, Jack Wegst, proposed to start their own company, Online Data Systems. They would not create their own softwarethey would contract with another company, which had already produced an apparel-industry software package for the mainframe, and turn its RPG code into COBOL.

On the strength of one account they picked up at an IBM Bobbin Show, Gene and Jack left to set up their own firm in 1984. The account paid us $15,000 to $17,000 a month, Gene says. We had five people, and we were able to get by on that money barely because we got a great break on office space. A company that had been established to incubate small businesses leased us office spaceincluding telephones, heat, and copying machinesfor $3 a square foot annually. The rule was that after three years wed have to get out to make room for another fledgling company, but that break on office space gave us our start.

Then came the unanticipated pitfalls. You dont know, when you step off that edge, what to expect, Gene says. I didnt understand the ramifications of cash flow, of what it meant to put together a business plan, of having responsibility for people. Many times over the next few years I got into trouble financially . Not only did Gene and his group work grueling hours that first year8 a.m. to midnightbut the companys cash-flow problem was so acute that he couldnt sleep at night.

But I persevered, Gene says. My accountant told me along the way, ˜Youre in bad shape; you should close up, and I said, ˜I dont need that kind of advice, and kept on going.

Three years after we started, Online Data Systems had twentyfive employees . In 1986, we rewrote everything for the midrange computer. And around 1991, the company started to turn around.