It’s Only Business

A Thanksgiving dinner at my home in Detroit in 1971 changed the course of my life forever. My name is Jack Short and I am the founder and CEO of Atomic Logistics, a company with a market cap of about $100 million and with about 1,000 employees. That particular dinner at home with my family served as the launching pad for my subsequnet career as a tech entrepreneur. 

Remarkably, I was only sixteen at the time and my path to success was rocky, certainly in those early days. I look back on that particular night with mixed emotions. You need to also know that I was a bit of a wunderkind. Computers had become huge and I took some programming courses in town and spent all of my free time in the basement writing software. I had also won some prizes for computer programming. I just took to computers and software naturally.

My uncle Ernie had a wholesale grocery business and his truck drivers delivered merchandise to a bunch of small, neighborhood stores in town. Ernie was complaining at dinner that night about how his delivery costs were “killing him,” what with his driver salaries and the rising cost of gasoline. He said that he was “struggling to earn a living” but none of us around the table believed a single word of it.

Ernie was a Class-A bullshitter and an obsessive complainer who lived in a beautiful home and belonged to the most expensive country club in town. So, I had my Ernie-filter in place that night that served me very well later. That night I was focused on trying to separate the wheat from the chaff when he spoke. However and as luck would have it, it occurred to me that I might be able to help him with his delivery problem. A software solution for it beckoned in my mind.

I turned to him and said: “I think that I may be able to help you.” My idea was based on a paper published about ten years earlier by two mathematics professors, George Dantzig and John Ramser, about the so-called vehicle routing problem. They figured out how to create the best routes for delivery trucks serving geographically scattered customers. Their research provided to me the first and best idea in my life. 

“Help me? How, kid? You gonna walk my dog or something? Eat all my meals to reduce the size of my big belly.”

“No, Ernie, I think that I can write a computer program that will make your deliveries to customers more efficient and less expensive. This will save you lots of money. The idea is based on some research I know about.”

“Impossible, kid!” Ernie replied. “I know your dad thinks you’re a genus but there is no way too help improve the work of the clowns who drive my trucks. You’re going to have to ‘program’ all of their smoke breaks and also the visits to their lady friends in town on my dime, which they think I don’t know about, by the way.”

“I’ll tell you what,” I said. “I’m sure that I can help you. Give me a week to write a truck delivery program. No charge to you. When its ready, all you’ll need to do every morning at work is too enter the addresses of your customers who need deliveries that day and the names of your drivers. The program will print out the best delivery routes for the day for each of them.”

“No charge, huh,” Ernie replied. “Hmmm. I certainly like the sound of that. You convinced me, kid. Go with it. What have I got to loose other than you screwing up my office computer and having you bothering me at work.” 

We shook hands and he belted out: “My little nephew thinks he’s a frigging genius. Well, we’ll see about that.” My parents looked on approvingly but with a note of caution.

***

I worked on the truck delivery project for Ernie for about a week and then took it to his office after school. I installed it on his office computer and entered the data that the program required into a test system. I then entered a set of pretend orders and the printer spit out the pretend truck routes. 

I had to correct some minor bugs but I knew that was coming. Everything worked as expected. My software was actually working exactly as I had planned. I probably was a “frigging genius.” I knocked on Ernie’s office door. "I think that we are ready to go live this Monday morning with my program.” 

“Look, kid. You’re terrific but I ain’t going live, as you call it, without knowing whether your ‘thingy’ is going to work. This is my neck on the line here, you know. And I place a very high value on it, from an anatomical point of view.”

“No risk for you, Uncle Ernie. I will play hooky from school Monday and will be in charge of the computer at your office. I will enter all of the real data that the program needs and it will then generate the new, improved routes. You and the drivers will look at these new routes. If they think they are worse than what they normally come up with, throw them away. I will go back to school and we’ll deep-six the whole idea. If you and the drivers say they’re much better than the old way, we are in business.”

Ernie nodded his head but still seemed very nervous. He patted me on the back on the way out the front door, saying: “You’re a smart kid, I hope you, and I, succeed.”

***

The software go-live of my improved wholesale grocery delivery routes for Uncle Ernie was a big success. Each of the new routes for his drivers took about 30% less driving time and his gas costs dropped by more than that. Ernie did notice that some of the drivers now seemed to be hanging around the garage on smoke breaks more often so he immediately fired three of them, reducing his overall delivery costs for his company by about 50% at one stroke. He was a very happy man.

***

Ernie and my aunt came to dinner at my house about a week later. Sitting around the table after dinner, he said to everyone around the table including, of course, my folks: “It’s taken me a while to recognize what a genius my little nephew is. How could I, and the rest of you, have missed that? I am still headed for the poor house but not as quickly. My truck delivery problems at work have disappeared. Now I can spend more time on my golf game.”

I quickly responded to his little speech: “We’re not done yet, Uncle Ernie. If your company's problems have been solved, other businesses are probably in the same boat. I want to license the software to other businesses in town and in the state.”

“Sorry, kid,” Ernie responded. There's no way that this is going to happen. I am too busy and I don’t even understand how all of this computer stuff works anyway.”

“Don’t worry, Uncle Ernie," I responded. "I will totally handle this part of the new business after school. Dad said it’s OK for me to work on it as long as I keep my grades up. We can point to the success of the program for your business to recruit new customers. Selling it will be as easy as falling off a log.”

“As everyone in the family knows, I am a very generous person,” Ernie responded. Just ask your aunt. She just snaps her fingers and get her grocery money just like that. I’m going to offer you a salary of $50 a week for your work in the new company but the money needs to come out of the licensing fees we get from new customers minus the overhead that I’ll charge you for using my office space.

I looked over to my dad and he was nodding his head in approval. I shook Ernie’s hand to seal the deal.

***

Working after school in Ernie’s offices, I started to phone the owners of businesses in town that I knew made daily truck deliveries. I offered to use my program in test mode to convince them that it worked as expected and produced better truck routes for them. The owners of the businesses could look at the proposed routes and agree that they were better than their current system. If they agreed that they were better and would save them money, I hoped they would consider licensing my software. 

We signed 75 new businesses in about two months. We were charging $50 a week for the use of the program and immediately grossing about $15,000 per month. I was personally capable of doing all this math and so I knocked on Ernie’s door at the end of one work day. He gestured for me to enter his office.

“Ernie, I want a raise from my current $50 a week salary,” I said. “You’re coining money using the software that I wrote.”

“You have done a fair job, kid, but most of the success has been due to my own business savvy,” he blurted out. I am going to raise your weekly salary to the very generous amount of $100 a week and I’ll also give you your own little office in the back. And you also need to work harder to sell licenses to new businesses.”

“I don’t think that's a fair offer, Uncle Ernie. I had a larger amount in my mind for my salary. Say, $1,000 a week to start.”

“Crazy, crazy, crazy,” he shouted, now in a foul mood because money was being discussed. "I got to deal with some uppity teenager like you who I hired only as a favor to my brother. You’re out, kid. Fired! Right now! Immediately! My apologies to your mom and dad but I don’t have time for your crap." 

"My brother-in-law tells me that he knows everything about software. I have decided to take him on as your replacement. Go back to school, forget that this little thing ever happened, and everything will be copasetic with us. Let’s stay friends.”

I was staggered by Ernie's little speech. “You can’t do this. I was the one who did all the work,” I mumbled.

“You’ve got to learn to take the hard knocks like I did. It’s only business. Consider yourself schooled on my dime but it’s time for me to go in a new direction,” he said.

As I was about to leave his office and go home, I looked straight at Ernie, worked up my courage, and said to him: “This is a very big mistake. I am sure that your will regret what you have done.” He was not paying attention, gazing out the window. I walked out the door without a backward glance.

***

I went home to nurse my injured pride for a few days. I was having breakfast one morning when the telephone rang and I picked up the receiver. It was Uncle Ernie on the phone and he was breathing heavily.

“Kid, we've got a very big problem. One of our first and most important clients is on the phone right now and screaming at me. He says that our program is not working for him. It's asking for some kind of code that he doesn’t have. He is mucho pissed off. What’s going on?”

“Ernie, it’s time to put your new software maven, your brother-in-law, on the case. I’ve got to leave for school right away.”

“I asked him to figure out what’s going and he says he has no idea,” he responded.

“Oh, I think that I remember now what’s going on now,” I said. “I inserted a kill switch into the software that was installed. The program was designed to query for a special code from each customer one month after installation. It was a hedge against them not paying their licensing fee.”

“Whew, kid, now I feel a hundred times better,” Ernie responded enthusiastically. “Stay where you are at home. I will send someone over to pick up the list of the customer codes. You just made my day.”

“Oh, I’m very sorry, Ernie. When you fired me, I was depressed for a couple of days. I did some crazy shit. I can’t remember exactly where I stored my list of customer codes. You're going to have to deal with this problem on your own."

"And one more thing. Our software contracts stipulated punitive damages for customers if the software did not perform as described. Like you, many of the companies may have laid off some of their drivers and may not be able to deliver their products at all without our program. Some of these businesses will surely go out of business. These damages will amount to thousands of dollars per week and quickly. ”

I then hung up the phone on Ernie.

***

Remarkably enough and a mere two days later, I was meeting with Ernie in his office with the legal advisors who I had just hired. He was sitting by himself. He looked a little lonely and lacked his usual air of self-confidence and breeziness.

“OK, kid,” Ernie blurted out to me, “you’ve got me by the short hairs. I have customers threatening to kill me. A number of lawsuits have already been filed. The damages will be huge. What will it take to get them back in business and cover my ass?” Ernie asked. “I need that list of codes to get them off my back.”

“No problem, Ernie. I can get all of them to the customers quickly. However, and first of all, I want you to turn over the entire software business to me. You exit the firm completely. I have also decided to leave high school and will be the president of the company. All customers will be back in business as soon as we sign the papers for the swap of ownership and I supply them with their necessary codes."

“There is a second thing I want from you. The deed to your office building. If I’m going to grow this company, I’ll certainly need office space.”

“No way, kid. Crazy idea! Do you know how much this building cost? You can take a leap.”

“Have you calculated how much the new weekly damages from customers will account to? Much more than your lousy building.”

“Why don’t you just rent some office space?”

“Ernie, as you well know, I’m only a kid. I have no money. You also know that you were only paying me peanuts.”

“OK, you get the business and the building and that’s it,” Ernie shouted. “End of story.”

 “One more small thing,” I continued. “I have been a admirer of your sixteen-year-old daughter for years. She is pretty and has matured a lot lately. I would like to get to know her much, much better.”

“No, no, no! I know what you’re thinking, you little rat. Even I have limits. Say one more word about her and the deal is totally off.”

“I am beginning to understand the idea of limits,” I responded. “However, I do want you to give her something for me.”

“What’s that?”

“I want you to give her my best regards.” 

“This day has been the worst nightmare of my life and all because of you, a sixteen year old brat,” Ernie shouted bitterly.

“Ernie, as you well know and have told me many times, it's only business.”