Chapter 43: Competition

March 2, 1987, Chicago, Illinois

At our regular Monday morning staff meeting, Julia announced our plans for performance reviews.

"There's an important difference with these compared to what you might have experienced before. We're doing them in March, but normal raises go into effect on the first of each year. We don't want to tie performance reviews directly to salary, because doing so would make it more difficult to identify areas for improvement without having it affect your raises."

Barbara raised her hand, "Can I ask a question?"

"Yes," Julia said.

"So you could get a raise, and then a couple months later be told that you aren't doing a good job?"

"That could happen, I suppose, but it shouldn't. If there are serious performance concerns, they'll be dealt with as they occur. We've had two of those in the past, and we dealt with them right away. If your performance review contains any surprises, then Dave, Cindi, or I have failed to do our jobs."

"So what's the purpose of the reviews, then?"

"First of all, they will include any concerns that we've brought to your attention as areas for improvement. Second, they will set forth goals and performance standards so you know what's expected of you. Third, they'll provide you with a written assessment of your work, your interpersonal skills, your technical skills, and your contribution to the company.

"They'll be based in part on your job descriptions, so Kaitlin will be evaluated as a receptionist and Charlie as a programmer, though there are skills common to both jobs, such as your ability to communicate, your attitude, and so on. Given our size, the way it will work is that Dave and I will prepare the evaluations, with input from each of your coworkers. Steve will review all of them before we share them with you."

"Who does Steve's review?" Charlie asked with a smile.

"Dave and Julia," I said. "I work for Dave. I take that seriously. And they know they can be honest with me. They've done it before."

"And who does Julia's?"

"Joyce and I will do hers," I said. "I know it seems a bit odd, but until we get bigger and have a real, full-time CEO and CFO, that's how it will work. In the end, the board will do reviews for the C-level staff."

"Each of you will have your review sometime in March. Dave will do Tom's and Debbie's in Waukesha when he goes up for a meeting later this month. Any other questions?"

Nobody had any.

"We have a couple of candidates coming later this week for interviews," Dave said. "Charlie, Heather, and Tasha will do a group interview. Charlie and Heather, I'll talk to you about it tomorrow when Tasha is in the office. That's all I have for today."

"Mario will be heading to San Francisco next week with Julia to close that deal," Cindi said. "And Zeke will be doing an install in Milwaukee. I'm in the office most of the week because I have quite a few proposals to write. That's all for me."

"Mario, did you get the specs from your contact in Pittsburgh?" Julia asked.

"I did. I was planning to give them to you after the meeting. Kaitlin made copies for everyone. The short version is that we have a better product, at a slightly better price, with much better support terms. For now. I think that we'll win the Pittsburgh deal, but I'd guess as we move east we'll run into firms which already have the competing software."

"Well, if you need someone for a presentation in Pittsburgh before the end of the hockey season, I'm your man!" I declared.

Everyone laughed, and several of them glanced over at the large Mario Lemieux poster that adorned the wall in my office. There was nothing else, so the meeting broke up. Mario handed out copies of the spec sheets as he'd promised, and Dave, Julia, Cindi, and I met to go over them.

"Mario's analysis is spot on," Dave said. "But this is version 1.0 of their software. If we compare this to our original feature list, they're actually slightly ahead. I guess one thing we should find out is how long they've been in business and how many programmers and support staff they have."

"How do we get that information?" I asked. "It's not like I could simply call them and ask!"

"What about Jamie?" Julia asked. "He could call and get some information."

"He's not a partner, so I'm not sure that would work very well," I said. "But I bet Ben van Hoek would make the call if I asked him to."

"That would certainly give us an idea of the lengths that they're willing to go to win business away from us," Cindi said. "And give us some idea of what we'll need to do to defend against them stealing clients from us."

"Cindi, what if we ask Mario to stay in San Francisco an extra week and try to make some personal calls on firms there?" I asked. "I'd like to get a bigger foothold in California. I think I'll ask Ben van Hoek to find out what our competition's customer base looks like, so we have some idea where they're focused."

"I like the idea of Mario staying in California longer," Cindi said. "Maybe we should have him go to LA as well. It'll cost us some money, but a couple of sales would make it worthwhile. As for your comment about finding out where they're focused, are you looking to head them off or to avoid direct conflict?"

"I'm not sure yet," I replied. "Julia? What do you think?"

"I'm not sure, either. I do think it's a good plan for Mario to stay in California," she said. "Let me check with Elyse about it this afternoon. I think we're going to need to get corporate credit cards if we are going to travel as much as it appears we will. Let me figure out what's involved."

The meeting broke up, and I went to my office and dialed Ben van Hoek's office. He wasn't available, but his secretary promised that he'd call back in the next two hours, which he did. I explained the situation to him and gave him the number for the firm in Boston. He promised to call them and get as much information as he could. He also invited me to visit and have dinner at his house. I told him that I would let him know what my schedule looked like when he called back.

That evening, after karate class, some time in the sauna, and Kara doing homework, she and I were in bed, cuddling.

"Jess wasn't at all happy to have to go back to Indianapolis," Kara said.

"I know, but she's down to three months until she moves here, and one of those months will be spent here. Everything will be fine if she Matches at UofC. If she doesn't, she's going to be pretty upset, at least for a time."

"Doctor Barton seems confident. The hospital listed her first, and she listed them first, right?"

"That's what they both said, though Doctor Barton told that to me privately, and I haven't told Jess because he's not allowed to share that information. You can't say anything to her."

"So it's guaranteed?" Kara asked.

"Doctor Barton said that if both Northwestern and Loyola rank her first, then it's remotely possible that she could match with one of them because of the way the system works. It's more or less biased towards the hospitals. If they don't rank her first, then yes, it's a done deal. If they do, then there's a small risk."

"How does that work?" she asked.

"It's called the 'stable marriage' problem. We had to write a program to do that when I was at IIT. This is more complicated than the usual solution because it has to take into account married couples. The basic idea is that each man matches with their highest ranking woman and each woman with their highest ranking man, such that there is no better match available which wouldn't displace a better match.

"So applying that system in Jessica's case, it should be that she matches with UofC, because that's the best possible match — first choice with first choice. The problem arises when you need to match couples, because it might be the case to get a match for the married couple, Jessica has to take her second choice if the only solution for the married couple is to displace her from her first choice. Doctor Barton tried to explain how that could happen, but it's super complicated. It's something we didn't address in my CS class — matching two people with one hospital, or hospitals in the same city if they can't match in the same hospital.

"There are ways to try to game the system, too. You don't have to list multiple matches, but then you run the risk of not matching. The same goes for hospitals as well, who could end up with no matches, or fewer than they need. I don't think Jessica is running any risks by listing three hospitals, even without the inside knowledge I have. From everything I can tell, she's good. Because it's biased towards the hospitals' choices, Loyola and Northwestern don't really lose out if they rank Jessica first. If they don't get her, then a candidate who ranks them first will fill the slot that would have gone to her, even if they are ranked second. Does that make sense?"

"It does. What happens if you don't Match?"

"It's called the 'Scramble' and it's pretty much anarchy and chaos. Every unmatched candidate applies for any unmatched Resident slot, often having to change specialties. And it's a pure free-for-all. According to Doctor Barton, he advises all but the top students to list as many hospitals and programs as possible, in rank order, to avoid having to 'Scramble'."

"That's just crazy! So you could go to school for eight years and not be a doctor? Because you couldn't enter a Residency program?"

"Yes," I said. "Of course you could try again the next year. But at some point I suspect that hospitals wouldn't be interested. In a way, it's not unlike PhD programs. You're pretty much guaranteed to get into a Master's program, but PhD program slots are seriously limited. One of the things Bethany did before she decided to go to Loyola was make sure that they would accept her into the PhD program when she finishes her Master's level classes. They gave her a letter of intent, which means so long as she completes everything she agreed to do, and earns appropriate grades, they'll accept her as a PhD candidate."

"Sorry to change the subject, but what are you planning for your sister's birthday?"

"It's on a Friday, and normally I'd take her out to dinner, but I think Jorge wants to do something for her that evening. Because of that, I'll probably take her out on Saturday, if that's OK with you."

"Of course it is. He's planned a party for her, right?"

"I know that he talked with Elyse about it, but not the details. And we'll do one on your birthday, too. We just need to know who to invite from IIT."

"I'll give Elyse the list of names; she's the party planner for the house!"

"That she is. I'm not sure what we're doing for Bethany yet. I need to talk to Nick first so that we don't interfere with any plans he makes. Speaking of birthdays, Jessica's is on a Sunday, so we'll do it here. We'll invite our friends, plus Doctor Barton and his family."

"What are we doing for your birthday, Snuggle Bear?"

"I'll leave that to you, Jessica, Elyse, and the rest of the girls. You make the plans and let me know."

"Penny turns eighteen that day, too, so I guess you'll want her involved."

"Yes, but I'm not sure what her mom and Bart are planning. I would guess that her party with her friends will be on the weekend, so you might want to coordinate with Alice about that."

"Your birthday is on a Wednesday this year, so I'm glad Jess will be here for the month of April. I think we'll do something, just the three of us, that night, and save the party for the weekend. I'll coordinate it with Elyse and Alice."

"Sounds like we have a plan," I said.

"Good. Now shut up and make love to me, Snuggle Bear!" she giggled.

March 4, 1987, Chicago, Illinois

Ben van Hoek called just after lunch to let me know the results of his phone call to Boston Legal Systems. They were relatively new, having started in August of the previous year. Everything else he said matched up, though the last thing he had to say concerned me.

"They offered us their software at half-price if we converted away from your system. Their annual maintenance is a bit cheaper, so over the course of several years, it would pay for itself, so to speak."

"What's your overall impression?"

"They don't have many customers outside of Boston and Philadelphia. Their overall client base is much smaller than yours and their software was literally just officially released in the last couple of weeks. The clients they had were using what I think you called beta software."

"We did the same thing. That information is very helpful. Would you be willing to arrange a demo of the software so you can give me an idea of how it compares?"

"I think we can manage that," he said. "I could even probably invite you to the meeting if you wanted."

"No, I don't want to lie, and if you told them who I was, I suspect that they would walk out. My only concern is that they would spend money to fly out to see you with no prospect of making the sale. Did they offer to send you a demo version of their software?"

"They did. I think that would be a better option, because I agree it wouldn't be right to make them spend money to come to Cincinnati with no real chance of getting our business. Let me call them and arrange it. I assume you'd like to see it once we get it?"

"Yes. Dave, Julia, Cindi, and I would probably come to Cincinnati to see it."

"I'll call them right now and call you back when I've made the arrangements."

"Thanks!"

We hung up, and I went to talk to Cindi, Dave, and Julia. They quickly agreed to the trip to Cincinnati to see the software from Boston Legal Systems.

"I have a few concerns," Cindi said. "First, that offer to sell at half price to replace our software, combined with the lower maintenance, might make it attractive to some of our customers. I'm not quite sure how we combat that. Also, if they're willing to discount like that to replace us, they might be willing to discount like that if we're going head-to-head for the same clients. That's going to be tough to deal with. And finally, they have a better name in terms of making it clear what they do."

"Let's take that last one first," I said. "What would you propose?"

"I'm not quite sure, but we need to name our software packages. I'm not suggesting it's the right answer, but something like 'LawSoft' or 'MedSoft' and then we say it's 'LawSoft from NIKA Consulting'. Or we could form divisions, you know, something like NIKA Legal Systems or NIKA Medical Systems. We're already using the Four Dimensional Software name on the project we're doing for Ashe Construction."

"I like the division names. Julia, talk to Jamie about what we need to do, if anything, to use those names. What about the other issues, Cindi?"

"Well, with their willingness to cut their price, we don't know if that's something that they're doing to try to build their business or if it's a long-term strategy. And we don't know if it's only to replace software or if they end up in competition. If this is their long-term strategy in every case, it presents a potential problem. They'll be able to underbid us in every instance unless we play the same game. And that's a losing strategy in the long run. If they're well-funded, they could potentially do this long enough to drain our resources and steal all of our customers."