SM: What was your solution for European companies?
GR: It is very difficult for European companies to get established in the United States. The United States is such a large market, and European companies can spend such a large amount of money trying to get established without much success.
My idea was really a simple one. Instead of a European company having to invest a lot of money recruiting people and establishing an infrastructure and then hoping to get a return on that, I offered them representation. They did not have to make any investment. We would take a high percentage of what we sold, and we would do that for a couple of years until they were successful in the United States and they wanted to open their own operation. We would then sell the rights of that operation back to them.
SM: You would essentially be the representative firm for these European companies.
GR: Essentially that was it. It was born out of personal observation. Even when companies came over, there were cultural differences as well as the way things are packaged, priced, and talked about. In many cases European companies just do not understand. I felt I could run operations for a couple of years to get them started and then hand them their operations back.
SM: Did you find a company to start with?
GR: I did not go into it with a company in mind, but once I started then I started looking for some companies. I knew of a tiny company in Norway, and I had worked with the principles of that company previously in my career. I called them up and told them what I was doing and asked if they would be interested. Within 24 hours of the phone call we had a written agreement in place. For them it was as close to a no-brainer as you could get.
Their company made monitoring software. It could monitor IT environments, and it was similar to what I had done in the past. I had direct experience in what they did. They did not have to pay me anything. All they had to do was give me the distribution rights to their software in the United States with a margin rate that would allow me to build my business.
The harder part was trying to get someone to do this with me. This was at the time when companies were failing every day. As I went out to my network of contacts, most people thought I was mad. They felt it was the worst possible time to start a company. I thought it was the best time because people were available. You could get good people who did not demand high salaries like they would have in the good times. Office space was cheaper. I just had to ride the cycle and wait for the upturn.
SM: Who were you able to persuade to join you?
GR: One of my technical directors who I had worked with before was out of work. I persuaded him to come join me on the provision that he would still go interview for jobs and if he got a job he would leave. We did not have any money, so it was going to be commission only. He used to leave the office to go for interviews and I would be crossing my fingers hoping he would not get the job. Fortunately, he did not take any other positions.
A few months later we had some customers and some commissions. He then started to realize how real the company could be. I still remember one quote over lunch. He said, “Gary, how can this company ever be successful? Nobody wants to buy monitoring software anymore. Anybody who wanted to buy it has already bought it.” Eight years later he is still with us, and I still remind him of this every day.