| BUSINESSWEEK ONLINE : NOVEMBER 6, 2000 ISSUE | ||||||||
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| INFORMATION TECHNOLOGY
Rules for Saving a Company Alec Gores, who has bought 36 troubled companies, is putting his wisdom to work on Learning Co., a maker of educational software. Here's his recipe for success: BUY COMPANIES FROM BIG CORPORATIONS. Entrepreneurs operate cheaply, while big corporations leave room for a lot of cost-cutting. FOCUS ON EXISTING CUSTOMERS. Computer Aided Design, a maker of clothing-design software, lost money on its new software for the auto and retailing markets. Gores reemphasized its original business and sold the business for a 400% profit. DEVELOP NICHE MARKETS. Farallon Communications was unprofitable as a maker of PC networking cards. So Gores targeted wireless networking devices for printers. He sold the company for a seven-figure profit. LISTEN TO EMPLOYEES. Previous owners of Artemis Management Systems were hesitant to move the company's software onto the Web. Employees said it was a good idea, and Gores listened. He sold the company for $60 million, six times what he paid. DON'T SHOOT FOR THE MOON. Texas Instruments sank $100 million into new software to control an entire chip plant. Gores bought the business and killed the project. The business, Adventa, is now profitable. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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RELATED ITEMS A Tough Taskmaster for Learning Co. TABLE: Rules for Saving a Company INTERACT E-Mail to Business Week Online | |||
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