It’s the Principle, Plus the Interest
How MediaBank Navigated the New Economy
In times of upheaval it has become a cliché to refer to an ancient Chinese curse that entreats, “May you live in interesting times.” It suggests that we’d all be better off in a simpler, less stressful world. But the irony implicit in the statement is not its most compelling aspect - as usual, there is much more of interest beneath the surface. In fact, “May you live in interesting times” is not ancient, and it’s not Chinese. What’s more, it’s not a curse.
Times of transition are always the wellspring of opportunity. When the phenomenon of the great internet bubble is a distant memory and the history of the business practices of the late 20th century is written, the period of resolution in the years following the decline will be at least as interesting as the causal years that led up to it. Our business and social climates are revolving back to priorities that were once inherent. We are collectively “rediscovering” ideas like the requirement that companies sell useful products and understand what they are - that a business thrives when it brings in more money than it sends out - that it’s more important to be honest than spectacular.
Companies respond to the changing environment in whatever way their culture demands, but corporate cultures emerge out of their environment. This circular relationship, which ties the values of an historical era tightly to its business practices, virtually guarantees that during times of rapid change the boundaries of acceptable behavior change as well. In the post-New Economy, companies find themselves in one of a few situations.
Many companies, unable to climb out of immense wells of debt and incapable of generating positive cash flow, continue with their flawed business models until a dwindling cash balance forces fundamental change, be it liquidation or some other event. Others frantically restructure and look forward to successfully exceeding reduced expectations. Some continue to apply the sound business practices that have served for years, and scour the horizon for the opportunities that float up from sinking corporate ships.
Many of the billions of dollars that were raised by IPO’s in the late 1990’s are gone forever – wasted on stadium names, corporate jet fuel, Super Bowl ads, and executive bonuses. A fair percentage, though, was invested in products - products that have incredible engineering and technology content, an active customer base, and fill a valid market need. Some of these products have been, or are about to be, orphaned by the restructuring of their parent companies. How those products emerge in their adoptive corporate entities is an important part of the story. One of those products is MediaBank.
MediaBank was conceived and created in the early 1990’s by Paul Trevithik, whose company Archetype was one of the early innovators among PostScript-based digital prepress product developers. Archetype had a large base of customers using their Intersep OPI solution, and saw the opportunity to define the standard for asset management systems directed at organizing digital production data. At the time, digital asset management was a phrase rarely heard and little understood. Despite its many permutations (content management, document management, rights management, media asset management, and the like), asset management is simply the organization of files, information about the files, and their relationships using a searchable database. It seeks to avoid the limitations of file systems for maintaining relationships between important files and storing detailed information about them.
When MediaBank was released, digital imaging environments were ripe for automation. The Mac OS (the preferred platform for digital production) had a 2 GByte limitation on mounted volumes. Typical production jobs exceeded this amount, requiring the manual tracking of file locations among many unrelated local and remote volumes to maintain job integrity. Existing asset management systems were single user image libraries with little relevance to production environments. MediaBank defined a necessary new product category and began to dominate it.
In the late summer of 1997, MediaBank began a three-year odyssey of corporate ownership that illustrates the frenetic business environment of the time. Archetype and its assets were purchased by Bitstream, the font company, which turned around and sold it to Inso Corporation a year later. Inso was a leader in enterprise document technologies, and installed MediaBank in its Inso Providence subsidiary, which later became known as e-Business Technologies (eBT). In two years MediaBank had been marketed under three-and-a-half different marques as owners sought to liquidate their technology investments and upwardly spiraling stock prices financed quick acquisitions. It’s not surprising that MediaBank was increasingly treated more as an investment and less as a product.
By the spring of 2000, eBT had decided to divest itself of MediaBank, as a plunging stock market and poor overall corporate performance forced a restructuring. MediaBank’s development had languished. Concentrating on marketing and sales, eBT had been unable to produce stable releases of new features. Some customers, jaded by poor engineering and a lack of support response, began to consider alternative solutions. The overarching emphasis on quarterly sales performance created an international reseller channel characterized by one-off relationships and markets with many competing pricing structures. In June 2002 the SEC filed suit against two former executives of eBT for fabricating software sales in an attempt to boost profit figures for the third quarter of 1998. It was into this hostile environment that WAVE Corporation waded in July of 2000.
As the potential vendor of a software product incubated in the dot com era, WAVE was an unlikely candidate. A small engineering services company with extensive MediaBank expertise, WAVE had become an important integration partner for eBT. The private firm had no debt and had been profitable each year since its founding in 1987. The company’s entrenched engineering culture bespoke an intrinsically conservative nature, characterized by steady incremental growth and cross-discipline staffing. WAVE was suspicious of bold projections and had almost no sales and marketing effort, relying on word-of-mouth referrals from its customers. When eBT announced that WAVE would purchase all of its MediaBank assets in the summer of 2000, virtually no one knew who they were.
As WAVE management confronted the challenge of absorbing the MediaBank organization, glaring differences in corporate culture underscored the rift between “traditional” business values and those entrenched in the New Economy. Many of the sixty-person staff at eBT, emboldened by the alternatives available in a fully-employed labor market, were unconcerned with issues relating to the operational impacts of the business transition, but concentrated on compensation packages and corporate amenities. In the end, WAVE tendered offers to only eight eBT employees.
The reception that awaited WAVE from the MediaBank customer base was equally intimidating. The theory that the macro business environment has a real effect on customer satisfaction was proven in practice. Many of the 200 corporate customers were frustrated by the tortuous path the product had taken, had become cynical about promises relating to new releases, and had been conditioned to send support requests into an unresponsive void. When WAVE introduced itself at the first user group meeting shortly after the acquisition, a number of the MediaBank users not already familiar with the company were openly hostile. When WAVE detailed plans for overlaying its cultural values on MediaBank, the proposal was met with hopeful skepticism.
Over the next eighteen months, WAVE worked tirelessly to stabilize the product and instill value in their support offering. Much of the server-side code was rewritten, and all engineering changes were held to the rigid standard of either increasing performance or stability, or both. Customers began to increase the scope of their MediaBank deployments, and an active, productive user community re-emerged. Support calls dwindled from 220 incidents per quarter to fewer than 50 despite a growing customer base and regular version releases. In an event that marked a milestone in the transition, customer Reader’s Digest hosted the user group meeting at their own facility in February 2002, where the universally positive tone was markedly different from the first meeting.
MediaBank’s journey has been a metaphor for the challenges facing our larger economy. The insights extracted from it are relevant to most of today’s negative business news. The opportunities available to MediaBank today are a product of its interesting times - which returns us to our Chinese curse. The phrase was popularized as an authentic proverb when Robert F. Kennedy used it in a speech he made in 1966. It actually first appeared in the April 1950 issue of Astounding Science Fiction, in a story by Erik Frank Russell titled “U-Turn”. The story’s hero, frustrated with a world sterilized by a lack of opportunity, disagrees with the premise of the curse as he yearns for difficult challenges to overcome.
