From Gangbusters to Crisis in a Year

The problem with Mike should have been a warning; he wanted to sell his stock because he was concerned about the company. He did not say that, and I was getting glowing reports from Tom Miller and Al Pease in the summer and fall of 1989.

I chose to promote people I knew to run the company, not based on their qualifications, but on my comfort level. In addition it did not dawn on me that I might be “out of the saddle” for an extended period, but that is what happened. The right thing to do at that time was to go out and hire an experienced CEO, but I did not accept that reality. If you look at my Day-Timer the month before my hospitalization you saw every day packed with meetings and calls with customers, and discussions with engineering. After I became sick my day was filled with working on raising the VC money, and visits to the doctor. I had passed off 100% of the company management to Al and Tom.

Before I got sick we had decided what our 16 bit product was going to look like, and the engineers were most of the way done with the design. I dictated what we were going to do based on the input I got from customers, the market, technology, and our limitations as a company, and time to market. As soon as I was out of the picture Tom went to our most demanding customers with our design and came back with a laundry list of complaints. Al reacted as if he were insulted, and stopped design work right away. For the next six months Tom and Al fought over our 16 bit adapter design and no progress was made. In the meantime, Adaptec began shipping the AHA-1520 sixteen bit AT bus adapter by mid-1989, exactly when we were supposed to be delivering our sixteen bit product. The only saving grace was once again, software. The AHA-1520 had a very weak software package when introduced which made it unattractive in distribution for system integrators.

Patty saw the problems, and began letting me know that things were going wrong. Even though I was very sick from the treatments and did not feel well, I came in to meet with Al and Tom. Right away they began fighting and jockeying for position. The first calendar quarter of 1989 was our highest sales quarter ever. But trouble was brewing. Sales were beginning to slow. Al blamed the new product rollout problems on Tom. Tom blamed the design losses on Al not getting the products out. I was upset, I told them they better work together and get products out and make sales or I would fire them both. It did not work. I found out later that Tom had infused a very negative attitude in our sales force, instead of telling customers a great product was only a few weeks away, they would complain about what dummies we had for engineers. Of course the customers picked up on this and switched to our competitors.