But Life Systems balked, and when Schmidt continued pressing his case, Wynveen advised him to find another job. "I was a thorn in their side," says Schmidt. "I was trying to push the organization in a direction they didn't want to go."
Wynveen, for his part, insists he didn't relish losing Schmidt, who excelled at generating new business. "He's one of the three best proposal writers in the country," says Wynveen. But Life Systems was content doing what it was doing. "Our plate was full with regards to R&D work," says Wynveen, and he believed Schmidt wouldn't be happy unless the company branched out. "It was the right decision for him," says Wynveen, "and the right decision for me."
Schmidt didn't waste time brooding over being fired. In January 1991 he tapped into $20,000 in personal savings and set out to prove his point -- that basic R&D could yield a wide variety of commercially viable products. The result? Two Cleveland-based start-ups, both incorporated early that year. One, Cleveland Medical Devices, recently unveiled a portable wireless brain-wave monitor. The other, Orbital Research , is a military and government contractor, which, among other projects, is developing robotics software and hardware for the U.S. Navy. (The navy contract permits Orbital to spin off that work into commercial ventures as well.) Both companies have had to win research contracts and develop ideas from scratch, since all of Schmidt's earlier product plans stayed behind at Life Systems.
The CEO received early support for both ventures from Cleveland's Edison Technology Incubator, a state-funded center that provides low-cost office and lab space. He's done the program proud. Last year the 23-employee Cleveland Medical Devices was #336 on the Inc 500 list, with revenues of $2 million and a sales increase from 1995 through 1999 of 812%. This year Orbital Research secured the #482 place on the list with a 600% sales increase from 1996 through 2000 and $1.8 million in revenues in 2000.
The Extender
Jeff Weber doesn't miss the high drama of his last two years at Educational Resources. The backbiting politics. The constant turnover. "It was almost like a soap opera," Weber recalls. "There were all these strange things going on."
Given those distractions, it's hard to imagine how Weber could concentrate on something so mundane as moving the company, a reseller of educational software to K-12 schools, into a new market from its base in Elgin, Ill. But throughout 1994 the company's former marketing and merchandising manager quietly plotted strategy.
Weber wanted Educational Resources to extend its reach to colleges and universities, which he believed could be a $100-million market. He says that educational institutions were really starting to use their technology resources for marketing. "In terms of total technology spending, colleges were at the bottom of the bell curve going up," he says.
Weber's idea was to create a new college sales division, which he would head. "My first thought was that this could be a good career move in the company," he says. He pitched it to the vice-president of marketing, who shared it with other Educational Resources higher-ups. The proposal fell flat. "They said, 'We looked at it and we don't want to do it," recalls Weber.
Bob Dumke, the company's chief financial officer at the time, says he remembers thinking that Weber's idea was great, but the company was preoccupied with more immediate challenges, like high turnover and a new competitive threat from retailers. "We were basically telling him, 'We want to pursue new strategies, but we need to stabilize the ship," says Dumke, who is now president of Technology Literacy Network, a company in Elmhurst, Ill., that specializes in technology training for teachers.
But waiting for some indefinite period of smooth sailing didn't appeal to Weber. All along he had been mulling the prospect of launching his own business. In mid-1995, unbeknownst to his bosses, he quietly incorporated Technology Resource Center (#210), cashing in stock options in Educational Resources' parent company to help get the venture rolling. Nine months later he exited Educational Resources for good. (Since then, Educational Resources has been bought and sold twice and is now owned by French conglomerate Vivendi Universal.) Meanwhile, Technology Resource Center, based in West Dundee, Ill., has established relationships with key vendors and sells products from Adobe, Microsoft, and other marquee-name companies to universities at an academic discount. That has enabled Weber to land big contracts with state-university systems in Michigan, Nebraska, Iowa, Massachusetts, and California, and has fueled a sales increase from 1996 through 2000 of 1,356%.
Technology Resource Center has 22 employees, including 5 hires from Educational Resources, and revenues that topped $8.5 million last year. Looking ahead, Weber sees even more room for growth. "We estimate that 90% of college students aren't aware of academic discounts," says Weber, who is never one to miss an opportunity.
Susan Hansen is a senior editor at Inc.
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