What Made Gateway Great, and How It Fell Apart

It’s been close to 10 years since I left Gateway, and I often reflect back on those times. I started as the Director of Marketing in 1991. When I began, I would flip through the Computer Shopper and be amazed at how many competitors we had. As I recall, we were competing against close to 200 different computer companies. As time went on, I watched virtually each and every one of them fall or go under until it was just us and Dell standing. Many of these companies were much larger and successful than us, including CompuAdd, Zeos and Northgate.

So what made us different than the other 199 competitors that failed? What made Gateway so special so that we thrived while others perished? Here’s my look.

First off, I honestly do not think that we were special people, or that we had some special insight into the market that no one else had. I wish success could be defined so simply, but I believe it was something else all together.

TEAMWORK. I am now the CEO of a new company, and my biggest challenge is getting people to work together as a team. Let me backup. The word teamwork is oft used as a cliché, and this is not a cliché. One definition of teamwork is the sum of pieces is greater than the whole. Another is that we win as a team and we fail as a team. It is hard to explain, but we had a special teamwork at Gateway that is very difficult to reproduce in life or in business.

In any business, things go wrong, the key question is how did the team respond? Did they respond well to the advertisty or not? Quite often during adverse times, one member tries to place the blame on another team member. This is anti teamwork and this did not happen much at Gateway.

As the company expanded through the mid 90’s, Gateway actually did a good job of assimilating outsiders into the team. Up to the Weitzen era, when Jeff decided to dismiss or demote every member of the core initial team. (This was my exit point.) That special teamwork was forever lost, and so was Gateway.

FUN. Perhaps this is what made the teamwork possible, but each of us in our own way, loved what we did. It was not about money, it was not about prestige, nor about the next raise. Our motivation was an “us against the world” attitude that we thoroughly enjoyed. At any point during this incredible ride, they could have cut all of our salaries in half, and we would have all stayed.

Again, as the new people entered the company, particularly Weitzen, their motivations were very different. Salary, prestige, company jets and the all mighty stock price became the driving force underlying upper management’s behavior.

I am not criticizing people for being driven by money. It is a capitalist world we live in. This is what made Gateway special and made the teamwork so different. We had a common bond that went beyond our paychecks, and we had a lot of fun.

ATTITUDE TOWARD RISK. Perhaps the most important element was the team’s attitude toward risk. All team members had a high risk tolerance. As long as their was a commensurate reward, any risk no matter how large was worth taking. This translated into an incredible and exhilarating environment. Decisions were made very quickly, and quite often in an impromptu informal setting. Now here’s the kicker. Because less time was spent harping on the decision, the focus was almost always on execution. Making it happen.

Having now seen a lot of other companies from the outside in, this was one of the key differences between Gateway and the rest. One’s attitude toward risk is not something that one learns, nor can it be taught. It is what it is. At Gateway, the core group of decision makers all viewed risk the same way, and it was a stellar time.

What happens when there is a divergence in attitude toward risk in the team? It is indeed a subtle difference. The propensity is for the company to move slower. There are more meetings to weigh the pros and cons. A lot more PowerPoint presentations, and important decisions happen later, if they happen at all.

Conclusion. This analysis is not meant to diminish the relationship between vision, focus and leadership to success. They are almost a given for a company to be successful. The question is how does a company become really really successful. What is the magic ingredient? I would chalk up our secret sauce to a special blend of teamwork, fun and attitude toward risk.

5 thoughts on “What Made Gateway Great, and How It Fell Apart

  1. As a 4-year veteran of Gateway I agree entirely, especially in your “us against the world” observations. A big part of the magic came from the unlikely company in an unlikely place with unlikely people (including the CEO) kicking the big guy’s butts. It started when Ted and Mike started kicking IBM in the crotch. Then we went at the Crooked E like a raging Holstein bull. We were bringing it for all the little underdogs out there. Then Gateway lost all the fire for the reasons you so excellently mention. Well done. This post is, well … striking.

  2. I agree Rob. The Gateway back in the late 80’s and early 90’s was about people working toward a common goal. Once certain people came into Gateway, they had their own agenda, which ate away at the company and the people within it.

    Thousands and thousands of people came and went and more are leaving. The company imploded.

  3. Hi Rob
    I guess you don’t remember but we worked together in GTW Dublin. I were this tech guy working on the Access DB for the marketing dept.
    Your comment is probably accurate but, from the old part of the world, we felt that decline of spirit when Todd Bradley joined in or even when Ted was living to California.
    At those time, the fighting spirit was definitely replaced by Money.
    Anyway, it was great fun, great time and great craic.

  4. Hi Rob,

    I don’t know whether or not we met during my stint as a supplier to Gateway in the 1991-1993 timeframe. Our Taiwan-based company, Friendtech Computer Co., made 386SX motherboards for Gateway. We started out when Gateway was still in a warehouse over by the airport.

    I have many fond memories of those years!

    There was the time Ted and Dave Russell visited our factory in Taipei- what a non-stop blast! On the day they left, Ted wanted to drive my colleague’s turbocharged car from Taipei to the airport, and I think he broke the land-speed record that day. Dave and I were in the back seat, trying to hold on.

    Ted’s a very kind fellow, and I remember when the end of the 386SX product came and he had to tell me that we might not be chosen to supply boards for the successor (which happened – Gateway eventually decided to make their own motherboards for a while), he took me out to lunch to break the news. He was very busy and could have just had someone else do it for him, but that wasn’t his style. I never saw him again after that, but I’m not surprised to read what you wrote about him being just as nice after he got rich.

    I also have happy memories of Dave Russell. Nice guy, funny, and sincerely, “real”, at least in those days.

    As you say, “The Hammer” is an acquired taste! One time, he he and I had pizza at Dave’s house and only the two of us went back to the office. On the way he said he wanted to stop at a jewlery store really quick. We both went in and he showed me a Rolex watch, saying, “See this watch? I really like it a lot. I’d really like to have this.” It dawned on me that I was quite probably being solicited for a bribe, because he at the time was the decision maker on suppliers. I didn’t take the bait, and the next time I had an appointment to see him, he let me wait in the lobby all day long, morning to night and left for the day through another door without telling the receptionist, so I sat there until it got dark out and finally noticed his car (Mustang) was gone from the lot. I promised myself on my flight home that I’d never do business with such a person again, no matter how much we needed the business.

    But, I have to say, overall I’m very grateful to Gateway. For years afterward, being able to say that we had been a supplier to Gateway opened up a lot of (otherwise closed) doors for our little company.

    Someone ought to write a book about how they managed growth so well during those years. They never seemed to hit a wall, either cash-flow, credit, or in the supply-chain. Amazing!

    Best regards,

    Nate Dahl
    (formerly of FTK America, Inc.)

  5. I’d like to add that Dave Russell is definitely still “Real”. I’ve been back in touch with him lately, and he remains the friendly and “supercharged” guy he was back in the Sioux City days!

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