TED WAITT TO STUDENTS: AIM HIGH, WORK HARD
Ted Waitt, the original founder of Gateway computers, spent an hour with 30 Country Day Upper School students Thursday. This class could have been called “Entrepreneurship 101.’’
Waitt, 48, who revolutionized computer retailing from a barn in Sioux City, Iowa, spoke as part of Head of School Chris Schuck’s new Entrepreneurial Leadership Lecture Series, which will bring a series of speakers to school to trace their remarkable careers.
Waitt, true to his energetic and casual style throughout his business, arrived dressed in denim and told his story to students who hung on every word.
Waitt acknowledged being a less than stellar student, but one who could focus intently when he needed to and tested well.
He told of growing up in Sioux City, Iowa, in the shadows of the family’s cattle business. He assumed he would eventually enter that business, but learned otherwise when he tried to tell his father he wanted to drop out of college.
His father informed him that the family business wasn’t available to him and went further, telling him that his faith in his son’s abilities also kept him from arranging for any future financial support for the boy.
“I got the message,’’ Waitt said, returning to college and eventually taking a job in a poorly run local computer store. There he learned a lot about computers and even more about how not to run a business.
“I learned the three things that became my approach to business: Treat your employees right, treat your vendors right, pay your bills and treat your customers right.’’
Waitt then sketched the sometimes harrowing route through the early years of building and selling computers over the phone. He told of times he worried whether or not his bank account was empty. He talked of the importance of partnerships and having employees who grow to fully represent the company culture.
He rattled off the rapid growth in yearly revenue — $1 million the first year, $1.5 million the next, then $12 million, $70 million, $275 million, $600 million and then more than $1 billion.
But he also talked of the sacrifice. Early years, in which he was paying his employees more than his own salary, banking on the eventual value of the company as his pay off.
Waitt acknowledged making mistakes along the way and said successful entrepreneurs and successful companies depend on the ability to acknowledge making wrong turns and correcting them.
Waitt said, in retrospect, the biggest mistake he made was when he moved the company from Sioux City to San Diego. Moving the company from its Mid-Western roots challenged the company culture that had been a big part of its appeal to customers.
The move, he explained, was made for rational reasons – the need to hire more talent in an increasingly competitive computer market and his plans to position the company for his own looming retirement. But it was a wrong move, he acknowledges now, saying he should have stuck to Sioux City the way Wal-Mart has stayed in Bentonville, Arkansas.
During a lively question and answer period that followed, senior David Flicker noted that Waitt, like several famous entrepreneurs of the Internet boom era, left college before graduating. Flicker asked whether he thought there was a cost to entrepreneurs who stay in school.
Waitt smiled but quickly explained that all the ideas that fueled his success and the ideas that fueled those other entrepreneurs’ success were generated in the college environment.
“When they dropped out, they had the idea, and at that point there may be an opportunity cost to consider,’’ Waitt explained. “But the genesis of their idea happened in college.’’
Waitt said there are still opportunities for smart, younger entrepreneurs. He mentioned composite materials, nano-technology, bio-sciences and wireless communications as fertile targets.
“What is the next internet?’’ he told the students. “I don’t know. It is up to you to figure it out.’’
The lecture series continues next month and will include visits from:
— Robert Noble, founder and CEO of Envision Solar.
— Fernando Aguerre, co-founder, with his brother Santiago, of REEF surf and sportswear and current president of the International Surfing Association.
— Dr. Ivor Royston co-founder of San Diego’s first biotech company.
— Robert Wilder, CEO and founder of Wildershares LLC, and manager of Wilderhill Clean Energy Index.