Gateway Inc.: Class of 1990
While an ambitious young man with a ponytail has served as the public face of Gateway, his brother, who cofounded the PC maker, has quietly enjoyed 10-digit net worth
Even though entrepreneurs are celebrated today as never before, one of America's most successful company builders remains relatively unknown. His name is Norman Waitt Jr., and he helped his younger brother, Ted, grow Gateway Inc. into one of the largest personal-computer manufacturers in the world. But though he served as the company's first finance czar, Norm Waitt has vanished from Gateway's official history as completely as Trotsky disappeared from the official Soviet story under Stalin. "He likes to keep a low profile, and he's very modest," says Steve Seline, vice-chairman of Waitt Media Inc., a company the PC mogul started two years ago. "If Norm was in a room full of people and you had to pick the billionaire out of the crowd, you'd never pick him."
Be that as it may, Waitt does have a 10-digit net worth. Started on a legendary Iowa farm, Gateway held the #2 spot on the 1990 and 1992 Inc. 500 lists and topped the ranking in 1991 -- the very year that Norm Waitt retired from the company. In 1998, Waitt's Gateway holdings were worth $1.1 billion, though he has since sold a lot of that stock.
Seline says anonymity suits Waitt. While it's likely that he avoids the limelight for personal-privacy reasons, his invisibility is also a consequence of modern-day marketing. In an era in which customers and investors want to know a lot about the companies they deal with, every business needs a great story: one with interesting characters, a cool setting, and a luck-and-pluck plot. In Gateway's case, the tale focuses on the farmhouse where the company was born, the black-and-white cow-print boxes, and that ambitious young man with the ponytail: Ted Waitt. Brother Norm and fellow cofounder Mike Hammond have never received equal public acclaim for the company's spectacular success.
This simplifying of history is typical of fast-growth companies, particularly tech companies. "Organizations don't think about their history when they're young. They think about it only after they're big and not every employee gets to know the founder," says Bruce Weindruch, founder and CEO of the History Factory. Weindruch's company, based in Chantilly, Va., helps customers like the Home Depot start and add to their corporate archives. "When they work backwards to re-create their history, organizations tend to look to see if they can use a person as a symbol for something that's relevant to them at that particular time," Weindruch explains. "But if they don't need the person and can't use him, he'll become a footnote -- even if he's a brother of the person they rally around."
That scenario has been played out in many other classic Inc. 500 companies. Sure, Paul Allen is a glamorous guy, reportedly chumming around with the likes of Jerry Hall and building things with Frank Gehry. But Bill Gates remains the brand-name star of the Microsoft saga. At the Timberland Co., Sidney Swartz remains chairman, while his brother, Herman, who once owned 50% of the outdoor outfitter, has been gone from the scene since the 1980s. And Scott Cook still stands astride Intuit Inc., but lesser-known partner Tom Proulx joined a San Francisco start-up in 1997.
Of course, there are benefits to being the forgotten cofounder of a monster company like Gateway, which reported sales of $8.6 billion in 1999. Seline, a lawyer who has served as Waitt's consigliere for a decade, reports that his advisee leads a charmed life. Unlike his 37-year-old brother, Norm Waitt doesn't have Wall Street monitoring his every move or parsing his every comment, even though the elder Waitt -- who sees investing as a wonderful avocation -- has plenty of money to play with. And play with it he does. One year he orchestrated a startling 77% return from his personal multimillion-dollar investment pool. "Norm still has a huge chunk in Gateway, but he also thinks there are more interesting things to do with his money," Seline says. "He has a bunch of different investment portfolios, but for five out of the last six years the portfolio he manages himself has outperformed all of the professionals'." (Not surprisingly, Norm Waitt could not be reached for comment for this article.)
Like Paul Allen, Waitt has pumped a great deal of his money into a variety of media properties. His five operating companies have amassed a portfolio of more than 500 billboards, five television and 56 radio stations, four record labels, and now a feature-film company. Waitt's first movie, Double Whammy -- which was shot this past summer -- stars Elizabeth Hurley, Denis Leary, and Steve Buscemi. And those aren't the only celebrities on Waitt's payroll. He also works closely with fuzzy-haired rocker David Crosby, who helps him discover new talent for his music businesses.
Though Waitt has clearly found a home for himself in Hollywood, Seline reports that he hasn't abandoned his cornfield roots completely. He dabbles in private-equity deals arranged by representatives at his Omaha headquarters. One of the companies Waitt backed recently was Fremont Machine & Tool Inc., a $2-million manufacturer that operates out of a former poultry farm in Fremont, Nebr. Dave and Kelly Benes -- the owners of the nine-year-old industrial-machine business -- have never met Norm Waitt; they've never even spoken to him. "We deal with a gentleman who does a lot of investing for Norm," says Kelly Benes, referring to Seline. "He says our company reminds Norm of Gateway in the early days."
Unlike many billionaires, Norm Waitt seems to enjoy a great deal of privacy and freedom of movement. But the History Factory's Weindruch warns that Waitt can't count on staying anonymous forever. Some ambitious marketing person could come across a story about him 10 years from now and decide to leverage it. "I've actually seen founders resurrected as part of a company's history because something about them suddenly becomes relevant to where the company is," says Weindruch. "I promise you right now that if Gateway decided they needed Norm, his contribution would be not only codified but celebrated."
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