Sleeping with CMS

Just before we got into the adapter business with Seagate I decided to explore other options. After all, it was a high risk venture and we could fail. No one was going to fund us until we had proven that SCSI Host Adapter business would deliver both growth and profits. I would be funding the initial phase of the business myself from company profits which I could just as well put in my pocket.

One of our consulting customers was CMS Enhancements, a system integrator run by Jim Farooki and his Pakistani brothers. Jim had said he wanted to buy our company and have it develop products exclusively for CMS. He invited me to the company booth at Comdex in 1986. It was impressive, they knew how to market. In fact, he did a good job of marketing to me.

My reservation for Las Vegas was last minute; most of the town was booked for Comdex. When I got to the motel that my secretary booked for me I found it was a flea bag. When I turned on the lights I saw cockroaches scurrying off of the bed. I did not check in. I went right to my meeting with Jim, and told him what happened. He said no problem, he had a suite at Caesars and I could stay with him the night. Now I thought that meant I would have a bedroom at the suite, but it turned out about six guys were staying there. I had the round bed with the mirror above, along with Jim on the bed! I kept my clothes on and went to bed.

I discussed CMS with Patty, and she agreed we should meet with Jim. He offered us $1 million dollars, which was a lot of money in 1986. Our experience with CMS on the financial side was not good, they were hard to collect from, and even from the outset there business practices seem suspect to me. Patty and I discussed the offer, and decided to ask them to put it in writing in an offer letter. What we got back had so many loopholes it was like Swiss cheese. The $1 million cash offer became a $100,000 down payment with future payments based on nebulous performance benchmarks. We decided to decline Jim’s offer. CMS did go on to become a public company through a reverse merger a year later, but the company had many problems and within a couple of years Jim and his partners were forced out of the company.