Wednesday, June 15, 2011
Thirty Years Of Jobbers - Chapter 1.2
In the late 70's, there were three kinds of ‘business’ computers on the market: Mainframes, minicomputers, and microcomputers. Mainframe computers started in the $500,000 area, minicomputers began around $45,000, while microcomputers could literally be built in your garage with a micro-processor purchased from Intel or Zilog and a handful of electronic parts acquired in a kit or from digging though boxes of discarded parts at a local computer store.
After writing a book entitled ‘The Great Small Business Computer Ripoff’, co-authored with my good friend Steve Leibson, who was designing computer circuits for Hewlett Packard at the time, in 1980, I accepted a sales position for a small computer company in Louisiana.
The owner had written software for minicomputers sold by Texas Instruments and NCR. He had two basic programs. One program was for doctors and medical clinics and the other was for oil jobbers. After the computer company delivered and set up the hardware, they would recommend him to write the programs, and he simply waited until he got a call from the customer and install his software.
Discovering he could make more money by selling the computer and the software himself, he assigned me to the task of calling on customers and selling both. My first assignment was to choose the software we would initially market. I immediately selected the medical package because, while oil jobbers were still a mystery to me, there was an abundance of doctors to call on.
Unfortunately, selling to doctors was a lot more complicated than I had expected. Secretaries in the doctors’ offices refused to give me an appointment to make my pitch. Once, I feigned an illness to get past a secretary and paid for an examination only to be sent back to the secretary who politely showed me the way out.
Medical clinics required months of sales calls and presentations to boards made up of ten or twelve physicians, who together, never seemed to be able to make up their minds about anything. After months of frustration, I picked up the phone book and called the first of the two jobbers on the list. “Yeah, I’ve been wanting one of those,” the jobber said, and after getting another positive response from the second jobber, I became excited and made a few more calls outside of the area. I didn’t take me long to forget all about doctors and concentrate on oil jobbers instead.
Over the next few months I called on hundreds of oil jobbers from Georgia to Texas and sold thirteen computer systems. A five-percent closing rate wasn’t bad, but I wanted to do better. All of the jobbers were open to the idea of putting computers in their businesses, but with an entry costs of around $65,000, a great many of them ultimately turned me down. I decided the proper price most would pay was around $35,000. I did the calculations and decided we could put the programs on the microcomputer I was familiar with and triple or quadruple our sales and still make around $18,000 on each sale.
The only problem was the programs were written for minicomputers and the cost to convert them to a language microcomputers could use had to be factored into the cost. Still, I reasoned it was an excellent opportunity and I suggested to my boss he assist me in rewriting the programs in a language I understood and we could make a killing. After some thought, he refused.