I recently interviewed Dave Brereton, Founder and Executive Chairman of the Board of TECSYS, a TSE-listed hi-tech company based in Montreal. What does the company do? “TECSYS is a visionary and technology leader in warehouse management software. TECSYS has an unrivaled staff of warehouse experts who serve the Government, Healthcare Supply Chain and High-Volume Distribution industries with game-changing supply chain management solutions.” (Source: www.tecsys.com).

Dave has had his share of entrepreneurial ups and downs. I asked him, “What was your most disappointing situation or event?” Here’s Dave’s response in his own words:

Probably the hardest time for us would have been right after “Y2K”, (this was when the year 2000 occurred and some people were predicting that computers could not make the transition to the year 2000) when the whole market crashed. We had to go from 450 people to 175 people; I had to lay off 275 people in six months. Lots of companies launched huge IT projects fearing that their software wasn't going to survive the date change and that they would die with it. Another factor was that the internet was coming and they felt their existing technology wouldn't handle the internet. Everything was going to be on the internet and there was talk of the new economy. This was the perfect storm. And then the bubble burst.

All the software survived, but none of the IT projects really got done before Y2K because there were too many. It was like gold-rush time. You were hiring anyone that could chew gum and talk about a computer, and saying, okay, you are a programmer, go start! So the projects were a disaster and then most of them didn't get implemented in time. Y2K came and went and everyone's software worked perfectly fine, so tons of people refused to pay their bills. Of course, we were billing for all this stuff. People canceled projects and some even sued. This ended up being a huge mess.

What helped me was that during the summer of 2000, my wife and I went on an Alaskan cruise. I followed the trail of the gold rush just by chance! While on this cruise I called back to my board and told them we are in a gold rush. I explained that this is what has happened 100 years ago. It was the same thing in 2000—everyone has gone crazy! Everyone is highly emotional. So we actually exited. For example, we had signed a huge office lease in California. We got out of that lease while other people were still going in and signing leases. We started to down-scale. We got down to 175 people very fast—and that saved us.

Because of my trip to Alaska, I saw what was going to happen. We reacted way faster than most of our competitors. We were able to survive it, but many people failed. Most of the guys in the Montreal area that I knew, many that were my friends, didn't survive the Y2K crash. They couldn't cut fast enough. Cash-flow dried up because people weren't paying their bills. That was probably my toughest disappointment—people weren’t paying their bills.

In the meantime, our publicly-traded stock went from $50.00/share to $0.60/share! When the stock was soaring we didn't worry about making money. It didn't matter. Profits were totally irrelevant. We were just growing as fast as we could. We were raising money on the stock market to fund our growth. It was a crazy, crazy time—and then all of a sudden it crashed.

It was hard to feel motivated to keep going. Our focus was on trying to rebuild. Our revenue had gotten up to $35 million and then it dropped down to $22 million. So we were recliaming ground that we had already covered. It’s hard to be motivated because I felt like I had already been there. But, the fun part is that we re-built a healthy business. We had learned valuable lessons. We were far more careful in terms of people growth. Today we generate about $42 million with 300 people; we are far more carefully built.