Mike Hammond
Mike Hammond was a cofounder of Gateway, a prominent computer company that rose to prominence during the 1990s. Born on November 28, 1961, in Des Moines, Iowa, Hammond initially pursued various jobs, including that of a diesel mechanic, before entering the computer industry. Alongside his business partner Ted Waitt, he established Gateway in 1987 after securing a $10,000 loan, quickly gaining traction through competitive pricing and a direct sales model. Gateway's distinctive branding, featuring cow-spotted packaging, contributed to its rapid growth, with revenues skyrocketing from $1.5 million in 1988 to $5 billion by 1996.
While Waitt often received public recognition as CEO, Hammond played a crucial behind-the-scenes role, focusing on manufacturing systems and customer satisfaction. Despite challenges at the turn of the millennium, including significant financial losses, Hammond remained involved in the company's operations until his departure in 2005. After his time at Gateway, he pursued his passion for cars by opening Dakota Muscle Cars. Hammond's personal life included a marriage to Lisa Hunt, who passed away in 2015, shortly before his own death later that year at the age of fifty-three, leaving behind two children and four grandchildren.
Subject Terms
Mike Hammond
Cofounder of Gateway
- Born: November 28, 1961
- Birthplace: Des Moines, Iowa
- Died: October 29, 2015
- Place of death: Sioux City, Iowa
Primary Company/Organization: Gateway
Introduction
As the original cofounder of computer company Gateway, Mike Hammond experienced business success at an early age. His expertise in manufacturing and distribution operations allowed the company to rise rapidly among the competition and become one of the dominant computer manufacturers during the 1990s.
Early Life
Mike Hammond was born in Des Moines, Iowa, on November 28, 1961. After dropping out of a Missouri College, he worked as a diesel mechanic, joined a band, and eventually became employed in a local Century Systems computer store. During this time, he befriended Ted Waitt from Sioux City, who eventually joined Century Systems as a retail associate. After nine months of intense exposure to sales work and the burgeoning computer industry, Hammond and Waitt left their positions and set out to begin their own computer business.
Life's Work
Upon securing a $10,000 loan, Waitt and Hammond founded the Texas Instruments Personal Computers (TIPC) Network. From a small office in Sioux City, Iowa, originally owned by Waitt's father, the two young entrepreneurs sold Texas Instruments computer parts over the phone. As their business venture moved forward, Hammond and Waitt began to build their own computers. By 1985, they had sold fifty computers and made $100,000 in revenue. Slowly, their small business venture gained momentum as customers were attracted to the economical prices they offered. The company's initial success allowed Hammond and Waitt to move their base of operations into the Sioux City Livestock Exchange Building.
In 1987, Hammond, Waitt, and Waitt's brother Norm officially founded Gateway 2000. One year later, an advertisement featuring the company was published in Computer Shopper, a popular monthly magazine that provided consumers with reviews and updates on computers. Gateway's advertisement offered a message asking, “Computers from Iowa?” Complementing the question was a picture of a herd of cows. This simple yet revealing advertisement focused on Gateway's friendly midwestern company dynamics. By the end of 1988, sales had risen dramatically: from $1.5 million to $12 million.
Gateway thrived on its direct sales approach, effective customer service, and youthful work culture. By 1989, sales had reached $70 million and the company moved into neighboring North Sioux City, South Dakota. In 1990, Gateway had more than fifteen hundred employees and had increased its revenue to $275 million. The company's distinctive midwestern brand was evident on each black-and-white cow-spotted box that it shipped to customers.
As the company continued to make incredible strides throughout the 1990s, Waitt, who became the company's chairman and chief executive officer (CEO), received the majority of publicity. However, behind the scenes, Hammond was just as important: He developed the company's highly organized manufacturing system and devoted attention and energy to the developing the company's commitment to customer satisfaction. By the end of the 1990s, Gateway was selling computers over the phone, online, and in company stores. Thirty-nine hundred telephone sales agents were in the company, along with sixty-six hundred service representatives. The company's commitment to its customers became one of its most important features.
As Gateway began to branch out and establish both domestic and foreign plants, Hammond was named the vice president of the Asia-Pacific organization. He assisted in the company's distribution network in Asia and the development of new plants in Malaysia, including centers of manufacturing in Malacca and Kuala Lumpur. By 1996, sales of Gateway computers had reached an astounding $5 billion. Three years later, sales topped $8.6 billion. Furthermore, by 1999, Gateway was composed of twenty-one thousand employees.
The run of success experienced by Gateway for nearly fifteen years, however, began to slow down by the end of the 1990s. In order to assist the company through a pending transformative period, Waitt decided in 1998 to add Jeffrey Weitzen, the former executive vice president of the business markets division at AT&T, to the upper management team. For two years, Weitzen served as the president and chief operating officer of Gateway. He brought a greater financial ethos to Gateway and helped guide the company into the new Internet age.
Under Weitzen's influence, Gateway also moved its headquarters to San Diego, California. The decision, made in order to attract talent to its leadership roles, rankled many within the company, including Hammond, who preferred the comfortable confines of South Dakota. Hammond, for his part, did not leave for California.
In 2000, Waitt stepped down as CEO of Gateway and assumed the role of chairman. He was replaced by Weitzen, who immediately faced struggles. His quiet and rigid philosophy contrasted greatly with that of Waitt. He also demoted many of the senior members, including Hammond, who was named the head of the Business Process Simplification Team. Hammond was expectedly not enamored of Weitzen's management skills. In an interview conducted one year later, he would publicly voice his displeasure.
By this time, Gateway was severely hindered by the troubles facing the entire information technology industry. At the end of the fiscal fourth quarter in 2000, the company suffered massive losses, upwards of $94.3 million. Its stock price also plummeted, by nearly 75 percent. The company appeared to be on the verge of collapse. Seeing his company decline, Waitt reassumed the role of CEO, and Weitzen resigned.
Waitt hoped to resurrect the failing company and immediately reinstated many of his previous staff. He named Hammond the senior vice president of operations. At this time, Hammond also agreed to move to the company's base in San Diego. The revitalization project was painfully slow, and Gateway was forced to close a number of its overseas operations. Many of the company's workers were laid off, and the company's plant in South Dakota was forced to shut down.
Amid the turmoil, Gateway attempted to regroup rapidly. At a time when the computer industry as a whole was at a crossroads, Gateway, under Waitt's leadership, began to place emphasis on consumer electronics, including digital televisions. In 2004, the company bought eMachines, a maker of low-cost computers. Once again, Waitt resigned from the CEO position and remained as chairman of the company. Wayne Inouye, CEO of eMachines, assumed the role of Gateway CEO. One year later, Waitt officially retired from Gateway. Hammond also left the company in order to pursue other interests. In 2007, Gateway was acquired by Taiwanese computer hardware company Acer.
Personal Life
Since working as a diesel mechanic as a young man, Hammond always had a deep fascination with cars. During his years at Gateway, he built drag-racing cars. After retiring from Gateway in 2005, he returned to North Sioux City and opened Dakota Muscle Cars, which restores, customizes, and repairs classic cars. In 2011 Hammond married Lisa Hunt. Lisa Hammond died of cancer in June 2015 and Hammond died a few months later; he was survived by two children and four grandchildren.
Bibliography
Allan, Roy A. A History of the Personal Computer: The People and the Technology. London: Allan, 2001. Print.
Brooker, Katrina. “I Built This Company, I Can Save It.” Fortune 30 Apr. 2001. Web. 20 Aug. 2012.
Dedrick, Jason, Kenneth L. Kraemer, and Bryan MacQuarrie. “Gateway Computer: Using E-commerce to Move Beyond the Box and to Move More Boxes.” 1 Feb. 2001. eScholarship, University of California. Web. 20 Aug. 2012.
Dreeszen, Dave. “Meet the Graduates of ‘Gateway University.’” Sioux City Journal 17 Dec. 2007. Web. 20 Aug. 2012.
Goldstein, Matthew. "Michael D. Hammond, Co-Founder of Gateway Computers, Is Dead at 53." The New York Times, 3 Nov. 2015, www.nytimes.com/2015/11/04/technology/michael-d-hammond-co-founder-of-gateway-is-dead-at-53.html. Accessed 30 Oct. 2019.
Hyatt, J. “Betting the Farm.” Inc. 13.36 (1991). Business Source Complete. Web. 20 Aug. 2012.
Linck, Michelle. “Classic Cars Rev Their Way Back.” Sioux City Journal 5 Mar. 2007. Web. 20 Aug. 2012.
Morgan, Adam. Eating the Big Fish: How Challenger Brands Can Compete against Brand Leaders. New York: Wiley, 1999. Print.
Walter, Russ. The Secret Guide to Computers and Tricky Living. 31st ed. Manchester: Russell Walter, 2012. Print.