SIOUX CITY | Ted Waitt, billionaire philanthropist and former CEO of Gateway Inc., kicked off the sixth annual Entrepalooza event Monday evening, telling the success story that led him from a farm office to leader of a publicly traded company that once called Siouxland home.
The event, held at Briar Cliff University, is a weeklong celebration of entrepreneurship in the area, bringing together businesses, entrepreneurs and those with ideas to meet and learn.
Waitt was joined onstage by Jim Wharton, director of marketing and fund development at Siouxland Community Health Center. Wharton worked with Waitt at Gateway in the 1990s as director of investor relations.
About 200 people turned up to hear the former CEO tell the story of what was once a multibillion-dollar company.
Gateway Inc. was founded on Sept. 5, 1995, at Waitt’s father’s farm outside Sioux City. It grew into a large firm with more than 6,000 employees by direct-delivering computers.
Waitt was 22 when he met co-founder Mike Hammond at a computer store in Des Moines. Hammond schooled Waitt in how computers worked, and the two began to bounce ideas off each other for a business model.
“I worked there for nine months, and then Mike and I went out on our own,” Waitt said. Hammond passed away Oct. 29.
Ironically, the pair didn’t have enough money to buy a computer to work with -- they had to rent one to draw up their business model. Banks rejected their loan applications several times, saying they didn’t have enough assets.
“The banks asked if we had any money. We said if we had money, we wouldn’t need a loan,” Waitt said with a laugh.
With help from his grandmother, Waitt and Hammond were able to secure a $10,000 loan to start Gateway 2000.
Waitt told students and others present at the Saint Francis Center that taking such a risky shot at business was best done while young.
“No risk involved. No kids, no mortgage to pay,” Waitt said. “Worst thing that could happen was I’d have to get a job.”
The first few years were very tough; each day was a possibility to go out of business. At times, Waitt handed out paychecks warning his employees that they may not be able to cash them yet.
But the company's popularity grew, in part because of the recognizability of Gateway’s infamous logo: the Holstein cow pattern of black and white spots on the computer boxes.
“The cow was a symbol of our Midwestern values. It worked great cost-wise, too. I approved the design because it cost next to nothing to print,” Waitt said.
The company grew out of the farm office with gravel parking and moved to a stockyard location. It then moved to North Sioux City.
The company went public in 1993. A cow was brought onto the floor of the New York Stock Exchange, Wharton said.
“Those were great days. We made a huge impact in this area, helping people out and donating to various causes,” Wharton said.
In hindsight, Waitt said he regretted moving the company to San Diego in 1998. He called it the biggest business mistake of his career.
Gateway would shrink from its former success, closing stores across the country and exiting various device markets, including televisions and digital cameras. In 2007, it was bought by Acer for $710 million.
Waitt said entrepreneurism runs in the blood of Sioux City.
“Sometimes failure is good. If you make a mistake, you admit it, but you refuse to fail,” he said. He reiterated that starting your own business is a young person’s game.
“That’s the best time. You can change the world,” he said. “You can make a difference."