Bidding for ‘Chips’ : Mindset Corp. Goes Under the High-Tech Gavel

In 1984, Mindset Corp. was the toast of Silicon Valley, boasting a fat bankroll and a product so stylish that it was selected for the Museum of Modern Art’s design collection in New York.

But now it is just another victim of the shakeout among makers of personal computers, and people came here in droves on Thursday to pick over the carcass.

“I got 200 for this beautiful PC with two floppy drives, color monitor and printer, can I hear two-and-a-half? Two-and-a-half, three, three-and-a-half, will anyone say four? Four hundred. OK, 400 going once, going twice, sold!” sang Kirk Dove, high-tech auctioneer, as he banged down his gavel and moved quickly to the next item.

There was no time to spare. The auction was billed a “complete facility liquidation.” Before the day was out, Dove and his partners peddled 1,500 lots of merchandise, including potted plants, plotters, printers, phones, furniture and personal computers by the hundred.

Dove has specialized in this sort of thing since 1984, when his firm, Ross-Dove Co. of San Mateo, sold off the remains of the defunct Osborne Computer Co. Since then, Ross-Dove has handled 110 high-tech auctions. Half were bankruptcies and other distress sales; the rest were commissioned by such companies as Apple Computer, Hewlett-Packard and BusinessLand to get rid of excess inventory.

“We can advertise the event and sell off the stuff in a day,” he said.

That certainly appeared to be the case Thursday. Nearly 400 bargain hunters--including scrap dealers, housewives, computer nerds and entrepreneurs--packed Mindset’s old headquarters and vied frantically for the goods.

“We’re expanding our own business and came here to pick up little bits and pieces,” said Mike Cleland of San Jose’s ICI Array Technology, who paid $900 for a used Apple Macintosh computer. “It’s an old model, but we can upgrade it.”

Sam Frisher, a Gardena scrap dealer and electronic components merchant, had his eye on Mindset’s old circuit boards. “You can either take out the gold or sell (the circuit boards) to other electronics companies,” he explained.

And Lois Gordon, a San Jose travel agent, bought two Mindset PCs with printers. “One is for my sister-in-law in Denver, who needs it for spare parts. And I bought one for myself for $500--the printer alone would cost $400 but I’m afraid my husband is going to kill me.”

Others, however, balked at the prices. David Lawlor dropped out of the bidding for a used IBM PC model AT at $800; the machine went for $1,450. “You can get a new clone, including a warranty, for $850,” he said, shaking his head.

“It looks like a lot of people have auction fever,” added Bill Coffy, vice president of Contract Video Services in Beford, Tex. “I don’t think there’s much chance I’ll buy anything--not at these prices. These guys really know how to get the prices up.”

That, of course, is why Ross-Dove’s services are in such demand. Thursday’s sale was commissioned by the Credit Managers Assn. of California, which is handling Mindset’s liquidation. Ross-Dove’s typical fee ranges from 5% to 25% of the proceeds.

Dove’s grandfather first got into the auction business 50 years ago, specializing in restaurant fixtures. But the firm went high-tech after Dove realized he could “bring in more money with a bucket of computer chips than with an entire restaurant.”

This isn’t a business for the sentimental, and Dove, in any case, said he knows little about Mindset. Founded in 1982 with $18 million in venture capital, Mindset was one of Silicon Valley’s most lavishly funded start-ups.

But the company plunged into bankruptcy proceedings in August, 1985, after its elegantly styled, enhanced-graphics computer was run over by IBM’s juggernaut. Though Mindset emerged from bankruptcy shortly thereafter, it never had much of an impact on the marketplace.

“There are times when it is important to say, ‘Hey, we’ve done all we know how to do and it is time to move on,”’ said former board member Burton J. McMurtry, a partner with Technology Venture Investors, which lost about $2 million on its Mindset investment.

Is he saddened by Thursday’s auction? “I think the people who were involved with this company have done their crying already.”