I was the founder of a company in Billings, Mt called Rocky Mountain Technology Group (RMTG). We were doing contracting work with companies in the San Francisco Bay area from 1997 – 1999. We saw the writing on the wall with the Dot Com era so decided to build our own software product.
We chose a pharmacy management system because the family of Derek Jurovich, one of the other founders, owned a pharmacy and we knew the industry was built on old green screen DOS and Unix applications. Many of those apps weren’t Y2K compliant and the industry was ripe for a Windows based application. We partnered with a pharmacy co-op, got an investor and started development. As things go with software development we ended up being way behind schedule and we ran out of money.
The only other project we were working on was building a Keno game platform and development on that was behind schedule as well. That client was pissed and ended up raiding our company for our employees. That included offering me a job, which I declined. In the end he managed to get the graphic design team and one developer, but the rest stayed with us even though none of us knew how we would keep the doors open and keep everyone paid.
We did what we had to do and shelved the product. I had to lay off most of the company which included my Dad and my Sister 4 weeks before she was getting married. Which ironically was easier than most of the other dozen people I had to let go.
We managed to find a couple of projects to keep the last couple of employees. I didn’t take a paycheck for months and paid myself less than $6,000 a year for two years. I was months behind on my rent, but thankfully my roommate carried me.
That was a really dark time for me, my entire identity was built around the company and I didn’t know what to do except keep coming in to work and keep trying to find more work for our team. Lots of people thought I was nuts, but I was driven top make it work.
While we were limping along we found out that Albertsons needed to replace their current Pharmacy management system and was looking for a solution. We reached out to talk to them. They were somewhat interested, but wanted us in their offices for a demo 5 days later. To be honest II think they thought we were complete vaporware. We found out years later that they had asked some of our clients about us before they even met with us.
The bad thing was we were broke, really broke. We didn’t know where our rent money was coming from and all three of us founders were broke. Heck on one of our last sales trips one of our developers had put the plane tickets on his credit card because the rest of us were completely tapped out.
Luckily our investor was willing to front us $5k. That wasn’t enough for last minute tickets from Billings, MT to Chicago, IL. I managed to find tickets from Denver to Chicago for $1,700 each. So we bought them.
The day before our presentation my business partner, Lincoln and I loaded our computers, our touchscreen and our clothes into his Suburban and drove the 9 hours to Denver. I had my laptop plugged into his cigarette lighter and worked on our PowerPoint presentation on the way.
We got into Denver late that evening, ate some food before checking into our motel. Then we worked well past midnight. I worked on our PowerPoint and Lincoln made some updates to our demo and tested to make sure everything was working correctly. Then we tried to sleep until 3:30am when we ahd to get to the airport and fly to Chicago.
As luck would have it, the tickets I bought were for Midway airport, when we got to Chicago we realized that the meeting was clear across town and ½ a mile from O’Hare…oh well off we went.
We got there 2 hours before our presentation. When the receptionist called back to let someone know her first words were, “wow you guys are early.” We just smiled and said something about our flight arrived early and just wanted to make sure everything was set up.
We got everything set up and made sure the demo was working correctly and then paced for over an hour. We were glad to see that we were the only two people in the building wearing a suit and tie so we ditched our jackets before the presentation.
Then they slowly started to filter in there were quite a few of them. Chris Dimos, who was the head of their Pharmacy Technology was the one I remember the most. Then we went into the presentation. Ironically they could care less about the PowerPoint and ended up crowding around our demo and Chris even sat on the floor playing with it.
Needless to say Lincoln and I left that meeting feeling pretty good. Then it was back the airport and back to Billings. We were elated and exhausted.
After we were back in Billings we had a conference call with Albertsons. They were impressed with what they had seen, but expressed some concern about a company of young guys being able to deliver something as mission critical as their pharmacy app. We introduced them to Harvey Stewart a business consultant we were working with who we said would become our CEO if the project went forward.
That made them feel better and they wanted to come see our office…which made us a bit nervous because it wasn’t….shall we say…that professional. So we said “of course” and got it scheduled. Because we had a meeting scheduled our investor fronted us enough cash to pay rent and our employees their salaries. Then we went to work getting the place presentable.
We borrowed art from a gallery in our building with the promise we would buy some of it if we received the contract. We had friends come in and help us clean everything up and we moved every computer we could find into our server room. Which they never entered lol.
We made all of our developers clean up their offices and we made sure everyone was presentable. For the developers that meant a shower, a shirt with a collar and clean jeans. For us that menat dress slacks, dress shirts and ties. We did everything, but ask our friends to sit at desks to make us look bigger…not that we didn’t discuss about it.
They came out with additional people and reviewed our software again. They had reviewed dozens of options and they had come down to three options: doing it in house; which they really knew wasn’t feasible, going with IBM Global Services or going with us.
The thing in our favor was we were close to a shipping product and IBM would be starting from scratch. They decided to go with us contingent on a code review by Microsoft. Microsoft’s team came out and gave us raving reviews. It probably helped that we had had our lead developer contracting with Microsoft on their Active Directory team and we were using Active Directory extensively in the application. Plus Lincoln had been on the SQL Server team at Microsoft.
Then negotiations started and I’ll skip those details, but the short version is an 11 person company that had no idea where their next month’s rent was coming from negotiated a $35 million deal with Albertsons, the 3rd largest pharmacy chain the United States. The first $25 million was guaranteed the additional $10 million was for version 2 and 3.
Needless to say a lot of people didn’t think we could do it and it was a crazy, insane time getting there. We ended up having the usual craziness of business lawsuits amongst the founders and we ended up writing a 6 figure check to our Keno client because he had threatened to sue us.
We were eventually screwed out of the second $10 million, but ARx, the pharmacy system, is in use today at 1,300 Super Value and Albertsons across the United States.
When it was shipped it was the largest implementation of Active Directory in the world and one of the larger SQL server databases as well. Not to mention dozens of other industry leading items like touch screen, Active Directory rights based on fingerprint scan, script digitalization among many others.
That’s the end of the story today, but next time I’ll tell you about our journey to winning and then losing a $16.6 million deal in Uganda and President’s Bush’s phone call. That’s quite a story too. But that combined with a number of other things caused the eventual demise of RMTG, the little company that landed a whale.