Now, I had never heard of these folks before Jim Donahue, my old boss at Knoware who became a top-notch technical recruiter, introduced me to them. I didn't do a lot of research into them at the time, figuring that anyone willing to hire a programmer who'd been off the market for five years probably had some serious problems anyway, and if nothing else I'd be back in the industry if it turned out badly. And they were willing to pay me over 50% more than I was making as a small-firm, small-experience lawyer. The only thing I knew about them from disinterested parties was a quick discussion with Alexis Rosen on a subway platform: "You're working for Fusion? Half of Panix used to work there." "Is that good or bad?" "Hard to say, but they're all good people."
When I went to work, I was told by Steve Siegel, the guy who hired me, to go teach myself this new language Java and to try to put together something interesting. "How long should I do this?" "Don't worry about it, I'll let you know." For a techie, this was heaven: a whole room full of new Sun workstations to play with, no deliverables, and a chance to learn and play.
This lasted for three months. A team of about five of us, mostly new hires, just learned CORBA and Java together and wrote sample programs. I spent a lot of time playing, and surfing the Web, and meeting the players in Java and in the New York consulting scene.
Around the beginning of 1996, Steve took me out to lunch at the Fraunces Tavern and told me that he was pleased with my progress, figured I was back up to speed, and wanted me to get back in the game. He was putting together a deal with Sun Education to have Fusion teach Java classes, which were in way too much demand at the time. He wanted me to work with him to close the deal, and then to run the training program, and even teach a bit. This worked out really well: within eight months the Sun training arrangement was bringing in ten percent of Fusion's revenue.
In the meantime, the rest of Fusion seemed to be shrinking. The small offices were being closed, and the system administration practice was shut down (so that explains the exodus to Panix) as unprofitable. Fusion's Tokyo office was sold to that office's management. I met two of Fusion's owners, Henry W. and Tim Hunt, who had been hidden from me during the interview process. Very interesting.
We spent the rest of 1996 building another relationship with Sun called the Object Reality Center program. Turns out that's what the five of us were doing in that room: becoming Sun's NY CORBA/Java experts. We did a lot of evangelizing, and some gigs came our way. I was pressed into service as project manager for a Sun-sponsored engagement at Chemical Bank, soon to become Chase. Gradually I became the manager of the ORC team in NY, working a lot with Henry Balen, Fusion's NY technical director. Things were looking good.
In the late summer, Steve Siegel approached Henry Balen and I with a plan that he'd been working on with some of the people in the Boston office: to get together a group of Fusion managers to buy-out the existing shareholders of Fusion. Fusion was not in great financial shape, and he figured that the current owners would be looking for a way out. He said there were some outstanding debts, to the IRS and Citibank and some other creditors, and that the current owners would end up having to pay them off as part of the deal. This sounded good to us, so we started to go forward.
In November, things started to go south in a hurry. The IRS had lost patience: Fusion owed them somewhere in the neighborhood of a million dollars for non-payment of taxes from previous years. Paychecks started to bounce when the IRS seized money out of the payroll accounts. Fusion filed for Chapter 11 protection, and we knew the buyout would be more complicated.
Negotiations rolled on, and by April a deal was on the table, in time for hearings in Bankruptcy Court. We were offering to buy Fusion's assets around $500,000 in cash raised from the managers, plus we would assume the receivables, for a total price of about $1.2 million for a company with $5 million annual revenue. The owners would keep Fusion's software products, which were generating about a half-million a year, and use that revenue stream to pay down the remaining debts. The judge and creditors insisted that things be put to bid.
Ironically, right around this time, the New York office was doing great. We were turning away Java and CORBA business, and the rates were on the way up.
The bidding process opened us to due diligence from potential acquirers. For those that have never been through this, I think it must be similar to being raped. It also felt like being in the middle of a flock of circling vultures. The management group was standing firm together: the chief tactic of the vultures was divide and conquer. It was a pretty nauseating spectacle to watch; if you've ever seen the movies Wall Street or Other People's Money you have a pretty good feel already.
What we couldn't figure out is why someone would even bid for us: our assets were basically ourselves, some partner and client relationships that were based on a rapport between individuals, our name (not without its drawbacks) and some old computer equipment. But since the people could not be bought (at will employment), we didn't think anyone would be stupid enough to outbid us.
We were tragically wrong. It turned out that Context Integration was stupid enough. Flush with cash from their first round of venture capital, they saw us as a way to get into the distributed objects space. I guess their cash out of pocket was about what they would pay in recruiting fees to get half of us. The management group never did line up another source of funds in time, and when Context outbid us, that was it.
Steve Siegel, the Boston management team, and Henry Balen quit either immediately or within a couple months. Boston was effectively finished. I stayed with Context, with two selfish reasons leading the decision: my wife was pregnant with our first (and only!) child and I didn't want to start a new job being so distracted, and the book I was working on now belonged to Context, and I wanted to finish with no hassles. Heather Walden and I rebuilt the New York team, but we lost the Sun ORC relationship due to fallout from the bankruptcy (some Boston projects had been cancelled) and because Context's president Michael Dunn didn't really treat the Sun people the way they wanted to be treated. Also, Context was PC-centric, and Sun could smell that from a long way off. I took over the New York office, but never could figure out how to get our job pipeline back together without Sun, and Context's sales model and technical focus made it so that there were never enough business development resources to help us out, either. Admittedly, I distracted by my wife's difficult pregnancy, the joy of my new son, and the need to understand how to work with Context to get anything done.
So, Context declared failure in February 1998, and decreed that we'd be merged with the NY Context office. They were going to make me "Regional Technology Director," a fun position to be sure, but it also one that got me out of the way. I knew it was over when Michael Dunn stated at a manager's meeting that he didn't think the distributed objects business was viable; I decided to quit that night. Other companies were making it work, so whether it was Context or me, it just wasn't working this way. So, on May 8, I left. No one tried to stop me, but then again the way I presented it didn't leave a lot of room for discussion.
Ironically, Michael Dunn was asked by the Context board to resign in early April. Context was losing money for the first time. Context's acting president, Norm Smith, shut down the southeast operations and terminated the training program. Of the 30 or so Fusion people there at the time of the acquistion, there are now are now 11. Of the 12 managers that attempted to by Fusion, three are still at Context. On May 1st, Context officially stopped using the Fusion name. It only took 10 months to completely dismantle the business, in a market that was otherwise booming. What a waste.
Fusion, however, lives on in a lot of ways. Fusion Systems Japan is
going strong in Tokyo and recently opened an office in Boston, FSJ Inc.
N.A., headed by Steve Siegel. Henry Balen and Jeff Hertzberg founded their
own company, Xenotrope, to pursue a lot of the goals that the Fusion of
1995 and 1996 was committed to. The three owners of Fusion have been spotted
hanging out with each other at tradeshows: Henry W. hooked up with one
of the vultures and is now involved with a company called Intranet Express.
And finally, an ex-Fusion employee named Joel Scotkin co-founded a consulting
company called Random Walk Computing in 1995 that is focused on providing
Java and CORBA solutions to Wall Street, with a strong relationship with
Sun. I join Random Walk on June 1.
--May 20, 1998
Let's see, what's happening? Xenotrope now has five of the old Fusion
NY folks, so if Fusion NY lives on anywhere, it's there.
It also lives on to some extent at Random Walk, which to quote Joel
is "Fusion done the right way." Random Walk is a good place to be. We're
growing fast, so we'll see what happens.
The old Fusion Florida office was shutdown by Context, but on friendly enough terms that they have formed an independent company called META that does architecture consulting, and are doing find at last report.
Fusion Japan, including the core of the old Fusion Boston office, was recently purchased by another much larger consulting company.
I got a call today from a Context recruiter, who was new and doesn't know the saga. He said Context was doing fine, and still doing the same kind of things they were a year ago. It was pretty funny.
When I read the above saga, I can see that there's a bit of anger in
the words. I guess that's natural enough when leaving a job; to do that
I find that I need to work up enough energy to achieve escape velocity.
This was true at Context, since I probably could have stayed around indefinitely
if I could only have bought into their vision. I'm not angry anymore, though
I definitely did right by leaving. So mostly now I'm just sad that we,
collectively, the old Fusion and Context couldn't find a way to make it
work. I'm sad that the old Fusion owners decided not to pay the IRS when
what they really should have done was to lay off a whole bunch of people
many years ago. And I'm sad that I hired a bunch of folks at Context to
try to make it work just a few months before I figured out that we could
never do a distributed objects-focused practice at Context they way we
ex-Fusion folks thought it should be done. Everyone landed on their feet,
and a few are still at Context and reportedly doing fine there, but I'm
still sorry that I sold the new hires a vision that never came to pass.
--June 30, 1999