Layoff Victims Create Niche Reselling Software : Two ex-employees of MAI Systems started a mail-order business specializing in seven Unix products for computer users.
While the recession has contributed to a staggering unemployment rate, it has also spawned new businesses for many of the unemployed who are enterprising.
Bernard Jubb and Michael Silton--both ex-employees of MAI Systems Corp. in Tustin--were among them.
Jubb, who had been at MAI for 13 years, was its director of communication services. He was also responsible for major sales accounts at the struggling software reseller. At one time, he was in charge of the company’s customer support department.
He knew layoffs were coming when MAI’s business slowed as the recession deepened. Yet, he grimaced when asked to draw up a list of candidates to be laid off. He had hired most of the 40 people on his staff--Silton among them. He made the list anyway, included his name and left MAI in October, 1990.
Since 1988, Jubb, 45, had contemplated becoming a software reseller for Unix computer users. He saw a demand among MAI customers for software that would allow Unix computers--such as those made by International Business Machines Corp. and Digital Equipment Corp.--to communicate with each other.
Unix software helps run larger computers as well as personal computers, while DOS--another software program, which stands for disk operating system--provides operating instructions for PCs.
How big is this market? Who are the players? Was it worth risking his savings? Jubb had no answers, but the fall Comdex computer trade show might provide some. Jubb invited Silton and the pair drove to Las Vegas.
Silton, 27, survived the initial layoff at MAI, but feared he may not make it through the next round. With a mid-career MBA from UCLA, Silton had considered starting his own business. After all, he ran his father’s Los Angeles computer marketing firm before joining MAI, selling computer systems to major clothing manufacturers in Southern California.
Many Unix software publishers did not see the potential commercial market for their products, so they concentrated on writing programs for personal computers, Jubb said. Meanwhile, “thousands of PC users were moving up to Unix software to increase the capacity of their computers, but they had no idea where to find the software,” he said.
Frost and Sullivan Inc., a New York market research firm, reported last summer that the global market for Unix computers, at $12 billion in 1990, is projected to grow to $25 billion by 1995.
To keep his business overhead low, Jubb decided to operate a mail-order business specializing in certain commercial Unix software products. Key to the success of a mail-order business, he learned, is product simplicity and how quickly end-users can learn to operate it.
“You wouldn’t sell a Boeing 707 by mail, but you can certainly sell gardening tools,” Jubb said.
Of about 100 manufacturers that market Unix software, Jubb and Silton found seven products at the trade show they considered appropriate to be sold through the mail--products that customers could easily install and operate without a programmer’s help. Silton said most of the other Unix-based software was too complicated for end-users.
They also found that the programs--Word Perfect for Unix, Lotus for Unix, XVision, BRU, Microsoft Word for Unix, VSI*FAX and Norton Utilities for Unix.--are not available in the retail market.
Jubb worked on starting his mail-order business, while Silton continued to work at MAI. Four months later, Silton lost his job. Three days after his dismissal, he and Jubb started UniDirect Corp. in the Laguna Hills office of a mutual friend. Jubb hawked the software and kept the operations efficient, while Silton balanced the company books and worked with suppliers.
UniDirect clients include General Motors Corp., AT&T;, Britain’s House of Commons, Yale University and the U.S. Justice Department. Locally, Dinamation International Corp. in Irvine, a maker of robotic dinosaurs, uses the Unix software to allow employees using Macintosh computers to communicate with users of IBM clones. In addition, the software allows the staff to work together on spread sheets and budget forecasts, said Andrew J. Gillespie, Dinamation’s administrative director.
As orders have increased, so have the number of UniDirect employees, which now total seven. Revenue in the first year was $350,000 and is expected to reach about $2 million by year-end.
