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Y2K Survival Strategies

Mark Hebenstreit is a toy maker, not a tech guy. But he knows he hasn't done enough thinking about the millennium bug. "I'm almost embarrassed because I'm so ignorant about this year 2000 stuff," he says, shrugging.

Hebenstreit is founder and CEO of a small but growing toy company called Hog Wild. Since his products -- self-tying shoelaces, forehead propellers, giraffe-shaped chopsticks -- are made in Asia, his operation is small: a staff of three and three PCs. Like most entrepreneurs, he has read about the Y2K problem. He just hasn't spent much time on it. "I guess I'm naïve," he says. "I haven't paid attention to the details of this. Maybe I should."

Time is running short, even for business owners who have begun grappling with the problem. Of the dozens of CEOs Inc. contacted for this story, the majority said they were either "all done" with necessary Y2K upgrades or at least on schedule. Yet nearly all of them are still worried about the potential for disaster.

A lot of CEOs are coming up with solutions of their own. Their plans may not be perfect; not even the most tech-savvy entrepreneur can offer a solution guaranteed to squash the millennium bug. But their stories do offer tools and techniques that you can use to help ensure a glitch-free ride into the year 2000.

Zero tolerance
Company: Thoits Insurance Service Inc.; Palo Alto, Calif.
Stats: 109 years old, 51 employees, $6.2 million in revenues
System: A local area network (LAN) that links 70 PCs to six servers
Strategy: Leave no chip unconverted to Y2K compliance
Estimated cost of Y2K remedy: $240,000

Turn Mark Hebenstreit inside out and you might get Don Way -- at least when it comes to attacking the millennium bug. Way, CEO of Thoits Insurance Service, in Palo Alto, Calif., has thought about Y2K comprehensively. He is spending buckets of cash to ensure that his 109-year-old business will survive its second fin de siècle. His approach: replace everything. Only Way really means everything.

Thoits is already a full year into a $240,000 systemwide upgrade. Its aging hardware, including six servers and about 70 individual workstations, is being replaced with new machines. By New Year's Eve 1999, all its computers will be Y2K compliant.

"We're replacing a half dozen PCs at a time," Way says. "We wanted to give people laptops, or notebooks, or whatever you call them. We're just doing it sooner now." That's just the beginning. Thoits has also invested in a new telephone switch and new fax machines, out of fear that embedded chips might hiccup when the millennium turns.

Way's company is based right in the heart of Silicon Valley. That's where he gets that extra dose of paranoia. Thoits is surrounded by dozens of chip makers and code writers. And that valley culture -- which first discerned the Y2K bug and then panicked about it -- informs every move Way makes.

He worries that the bug will infiltrate his systems from the outside, despite all his filters and firewalls. There's not much he can do, though, beyond trusting the companies he does business with. "Most of the other networks we interact with belong to big insurance companies, like the Hartford," Way says, adding that he's confident they will handle the problem.

He's less sure of smaller fry. "I've turned down several offers to link up with smaller businesses," he says. After all, he's in insurance. He's averse to risk by nature.

A measured response
Company: Bregman & Co.; Bethesda, Md.
Stats: 14 years old, 47 employees, $3.6 million in revenues
System: A LAN linking 15 networked PCs to one server; employees use 20 more unnetworked PCs in the field
Strategy: Disasters are easier the second time around
Estimated cost of Y2K remedy: $5,000 to $7,000 so far

Last July, Mona Bregman's environmental consulting firm suffered a major tech disaster. She had to shut down her entire network and hire a consultant to rebuild it. "We had to redo everything," she says with a sigh.

It was a nightmare, but it had a silver lining: it made Y2K compliance easier. While the consultant fixed the short-term problem, he also worked to make the company's system millennium-bug-proof.

Bregman has been interested in the Y2K bug for a long time, but she is no alarmist. "I pick everybody's brain that I can," she says, "and from what I've been able to gather, the places that will be affected the most are the ones that issue checks or other materials that are dated month after month."

That would not be Bregman & Co. Its network handles basic word processing, research over the Internet, and some database management. It's not even directly linked to her clients -- the largest of which is the federal government -- so she doesn't worry about exterior threats.

But Bregman can afford to be relaxed. She has steady access to free expert advice, since her daughter has worked on Y2K projects for IBM. "Even though she lives a thousand miles away, I can still call her," says Bregman. "She said to me, 'Hold off, Mom. Software programs are going to come through to make the adjustments you'll need. You're OK if you have newer equipment.' "

With advice like that, who needs to panic? "I get faxes like crazy," Bregman says. "They say, 'We're going to fix you,' but I just toss them." She has her own prevention plans. The few old workstations she still uses will be replaced next year at a cost of $5,000 to $7,000. And there could be more expenses. "Maybe in November 1999, I'll ask for bank-account certification -- just something that tells us how much we have in case our funds disappear or that sort of thing," she says. "I'll let you know in the year 2000."

Think different
Company: Christidis Lauster Radu Architects, New York City
Stats: 15 years old, 12 employees, $1.1 million in revenues
System: A LAN that links 12 PowerPCs to three servers
Strategy: Thank you, Steve Jobs!
Estimated cost of Y2K remedy: Zero