Chapter 73: Work and Home

Friday morning, I met with John and Missy in our offices. “I gather it went well,” commented John.

I nodded and smiled. “I thought it went very well. I’ll let you know after we sign the papers. Until then, nothing is definite.”

“You have learned wisely, Grasshopper,” he said, imitating the television series, Kung Fu.

“Thank you, Master,” I replied, bowing towards him.

“Great, now we have you two doing bad television,” said Missy. “So, tell us, how did it actually go?”

“Good. I think what did the trick was my math background. I told them that no matter how many different bankers and investors they saw, I was going to be the only one who actually understood whatever the hell they were talking about. Paul Allen, one of the cofounders, knew about my work with Professor Rhineburg up at RPI.”

She nodded in understanding. “So, you’ll be our board member and the main contact.”

“Sounds like. I mean, we can talk about it if anybody has a problem with it, but in this case, I think it’s a necessity. As we go forward though, that will probably change.”

“I think it should either be the person who brings in the deal, or somebody we all agree on,” said John.

I nodded, and Missy asked, “May I assume you will be getting directors and officers liability insurance through them?”

I had my mouth open to answer, but I realized I wasn’t even sure what she was talking about. I motioned for her to continue. “What are you talking about?”

“Liability insurance, in case Microsoft, or any company, does something that causes a lawsuit. It protects you from expenses involved in any litigation,” she answered.

I looked over at my old-time lawyer. “Really?”

“Really. I’ll call Jake and make sure it’s included in the deal. Usually, it’s a package deal for all the directors and officers in a company.”

“Do we have it? Speaking of which, do we have any insurance on us? You know, in case old geezers, not to mention any names, fall down?”

John smiled. “It’s a good thing Missy is here, otherwise I’d tell you about old geezers and young whippersnappers. Yes, I made sure we had insurance before we ever moved in here.”

I looked over at Missy. “See why I keep old geezers around?”

“You have any smart comments to make about women?”

“God forbid! You’d tell Marilyn and I’d never hear the end of it!”

That earned me a laugh, and they left. I made a phone call to Taylor Hannity, the exotic vacation broker. She agreed to meet me for lunch.

We met at a place off York Road, a nice steakhouse in Hereford. Once seated, I asked her, “Have you ever done any corporate work?” I thought she told me she had, but I wanted to be sure.

She nodded. “To be fair, most of my jobs have a corporate billing. Even if it’s a personal vacation, most of it goes through a company. You’re a perfect case in point. It’s a founder or officer, and even if it’s a personal vacation, I bill the company. If they pay the company back, it’s none of my business.”

I shrugged and nodded in understanding. We were interrupted by the waiter taking our orders. When we were able to talk again, I asked, “What about more routine stuff? You know, regular flights, business trips, that sort of thing.”

It was her turn to shrug. “I can. It’s not exactly my specialty. A lot of companies will have a secretary or department that specializes in that.”

“Well, we’ve actually gone and created a company.” I slid across one of my non-nerd business cards. “We’re not very big, and I just can’t see us hiring somebody to handle travel arrangements. I’d much rather sub it out to somebody who knows what they’re doing.”

Taylor was studying my card. “So, what do you do? What is... private equity and capital?”

“We invest in companies, preferably smaller companies, new companies, provide seed capital, that sort of thing.”

“Such as?”

“Well, for instance...” I thought for a second. “Let’s say you wanted to start a travel agency, but you don’t have enough money to do it. Maybe I give you the money, but I take a piece of the company for the Buckman Group. Then, if you ever sell the agency, we get our piece of the pie. Hopefully it’s worth more than what we put in originally.”

She nodded thoughtfully. “You think I should start a travel agency?”

I shook my head. “That was just an example. We’d probably never invest in something that small. Besides, I wouldn’t actually suggest you do that. I think that would be an excellent way to lose your shirt.”

Taylor bristled a bit at that. “Are you saying I couldn’t run a travel agency?”

I smiled and held up my hands plaintively. “No but let me explain. It’s more complicated than you can imagine.” She nodded and let me go on. “There are two different things going on here. First, there is the commodity end of the business. Joe Schmoe calls up and wants a couple of tickets to Miami, a cheap hotel room, and a car for the family. Money is very important. If he can do it cheaper, he will. He and the family are flying in the back of the plane, booking the cheap room facing the parking lot, and getting the special from Avis. Right?”

“Right, but that’s not what I do!”

“Exactly. You do exotic imports; this guy wants a Chevy and cheap. What is going to die in your business is that commodity end.”

“How so?”

“Do you have a computer, or at least a terminal?” I asked.

“I use a terminal. A lot of what I do is on a phone.”

“Okay. That terminal is hooked up to a computer system on the other end. Now, you’ve seen these new computers right, the little ones you can put on your desk. Well, right now, they are pretty anemic, but they are getting more powerful by the day. What is going to happen is that in a few years they will be powerful enough that you won’t need a special terminal, you’ll be able to use a cheap computer. How does that affect the travel agency business?”

Taylor thought about it for a second, and then longer, as our meals were served. “Well, it makes it cheaper to run the business. That’d be a good thing, I would think.”

“Initially, it is. But then what happens? Computers keep getting cheaper. A few years later, they are so cheap that everyone has one on their desk, either at work or at home, and any Tom, Dick, or Harry can make those reservations, without going to you and paying your commission. What happens to the business then?”

Taylor’s eyes widened as she contemplated this. “That will never happen! The airlines don’t want to have to deal with everybody who calls! They’ll want to deal with somebody who knows what they’re doing!”

“They couldn’t care less. They pay you a commission. They won’t pay somebody else. With the money they save, they’ll figure out how to do it!”

What I was describing was simply the coming history of the travel agent business after the invention of the Internet. And, like most other travel agents, Taylor had a hard time believing it. It was like I was telling a buggy whip maker that those new-fangled automobile contraptions were going to kill his business off. Some learned, more than a few didn’t.

“Now, you won’t be hurt very much,” I assured her. “You run a very specialized business catering to a high-end client. They, like me, want personal service and the price isn’t as important as the result. But don’t ask me to invest if you start a new low-end business.”

“Huh!” Taylor looked a little struck by all this. “I am going to have to give this some thought.”

“Also, think about the outsourcing I described. Earlier this week I had to go out to the West Coast, flying commercial, getting a crappy room and a crappy car. I flew back and now I have two other people out there. There is some more travel coming up. I’d prefer using somebody who knows us and who I knew, and who can offer us something better than the Holiday Inn and the economy Chevy Cavalier.”

“Can I call you Monday?” she asked.

“Call me in the morning, and if the answer is positive, you can come out and see the operation. At the minimum, I have two guys stranded on the West Coast right now, and Marilyn and I are planning on a trip to Hawaii in a few weeks. That just came up a few days ago, by the way, but we are going to want to spend a couple of weeks out there. We don’t need a fancy villa, but we’ll want something nice. I can talk to you about it on Monday.”

Taylor was quiet the rest of the meal, trying to digest what I told her would happen. It was the truth, though. The airlines hated the travel agents, who cost them millions of dollars a year in commissions. Once the Internet came around, and customers with computers could book flights directly, most airlines stopped paying commissions entirely, killing the industry. The few travel agents left became niche players, much like Taylor already was.