In Hunt Valley, the System Source Comptuer Museum offers a look at how technology has pushed forward through the ages. It’s fitting that it was created by a pair of technologists who have shown a willingness to keep forging ahead.
Maury Weinstein and Bob Roswell founded the tech company System Source in 1981. Over 40 years, the cofounders have seen companies like IBM give way to Apple and Microsoft, dot coms bubble up and burst and computers go from filling a room to fitting in a pocket.
As technology has evolved, so has the company. It went from a computer supply store to computer rental store, to an IT services company managing other companies’ servers, networks and computer systems. Through work with clients and public classes at sites in Hunt Valley and Columbia, the company also offers training to to use these new systems and advances in tech as they happen. That training used to ecompasses training folks to use word processers. Now it’s more specialized, training employees in areas like avoid phishing scams.
The ethos of these founders that has kept a tech business running through changes that turned their contemporaries into fossils: Adaptation.
Survival isn’t guaranteed. According to data from the U.S. Bureau of Labor Statistics, 20% of businesses fail in the first year. By the fifth year generally 50% of businesses have shut their doors, and by the end of a decade only 33% businesses are still here. And these numbers hold true whether a company was founded in 1994, 2004 or 2014. That number gets lower and lower as the years go on by year 25, 15% of companies are still running. Between year 20 and 25 the number of companies still solvent drops a percentage every year. If every year one percent of companies dissolve, follow that trend 15 years from 25, less than 1% of companies get to 40 years. That’s rarified air.
Given how consistent the trend line is, the lessons learned to stick around that long are universal.
“All the basics are still the same as they were 40 years ago. Doing the right thing by customers,” Roswell, who is VP at System Source, told Technical.ly. “We all know what that is. We all know what it isn’t.”
What’s kept them in Maryland is simple, as Weinstein describes it.
“We made the decision to sleep in our beds at night,” the company president said.
As he explained it, there are regional businesses and national businesses. In the 1980s, the System Source cofounders chose to be regional.
Yet the more pragmatic truth that separates founding a business in the early 80s as opposed to the 2020s, according to Weinstein, is that, “decades ago, there was no model for us to go national. It wasn’t easy to handle personnel utilization, keep people busy…and the systems of centralized inventory weren’t as good as they are today with Amazon.”
The BLS data also shows that over the year, the six smallest classes of companies (those with 249 employees or smaller) have seen shares of private sector employment decrease since the early 1990s, while the three largest size classes (250 or more employees) have seen shares of total employment increase. The decision to be a small company or large, regional or national has major ramifications in the 2020s. System Source has 70 employees, putting it firmly on the smaller side.
A willingness to change has also been key to System Source’s longetivity.
Roswell remembers when company was in the computer supply business at the beginning. Then, the Office Depots and Staples came to the York Roads and Reisterstown Roads. The major arteries now had stores with bigger supplies and better hours, beating them out the business. So they exited that line business and refocused.
“It’s been a constant, ‘Where’s the market, what are the current needs?'” said Roswell, adding that there was a recognition that, “People need computer supplies, but they’re not buying them from us.”
The same was true for sister company PC’s in a Pinch, in which the team rented laptops. In the late 80s, a laptop was 39 pounds, the size of briefcase and carrying one could dislocate a shoulder. There was also a market to rent PCs cost, as they cost upwards of $2000 to own.
But exiting one side of the business isn’t a complete loss. As a CEO and entrepreneur, it’s important to take the insights from one version of the business to another.
The equpment itself also became the start of a new venture. As the business changed from moving hardware to providing services to managing other company’s software, the leftover inventory helped to seed the museum. It displays over 1000 pieces of historic technology. It’s one of the few places in the country you can see an original Apple I which can auction as high as $905,000.
“We drag the mystique that we built in certain parts of business to create new businesses,” said Weinstein. “PC’s in a Pinch was a great business. It put our kids through school all by itself. We took the mystique that we built from all those years, delivering all those systems [PCs], picking them up, servicing them, answering questions into the presentation systems business. We dragged customer relationships into a new field.”
The lessons of the 40-year vets that have seen PSINet Stadium become M&T Bank Stadium are many and varied but here are a few key takeaways:
- Tenure matters:“We try to be good employers and we’ve been rewarded by employees that know how to do what they do and train others,” said Rowswell.
- No variable compensation or commissions: “1 in every 2000 businesses do this,” said Weinstein. “That alone adds to our longevity because some of the torture that commissions put organizations through, we just don’t have.”
- Metrics and accountability: “Staff gets feedback each month in an assessment review process where they know where they stand and the goals they are asked to handle are written down and agreed to,” said Weinstein. “Those are the kind of principles we’ve used for decades.”
Donte Kirby is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Robert W. Deutsch Foundation. -30-