Beck Consulting: Let’s start at the beginning. Before we get to Beck Consulting, everyone wants to hear the romantic love story of you two.
Mary Beck: How it started was, I met Allen interviewing for Price Waterhouse. He was working as a manager in the consulting practice in the Fresno office and I had gone to Fresno State. I went to junior college first in Visalia, where I was born, and then took a break from school because my major was Microbiology with a Chemistry minor and I decided that unless I got like a doctorate’s degree or something, I would not do things like research. I was just going to work in hospitals drawing blood. That didn’t interest me, but I didn’t know what I wanted to do. I just decided to take a break from school and got a job working at JC Penney. I wound up being a manager with them and it was one day working with the internal auditors that I thought, “Well this audit thing sounds kind of interesting.” I decided that I’d look into that further and that getting a degree in accounting would maybe be my ticket. Because I just wanted something I could get a bachelor’s degree in and then go get work. I did not want to have to go through law school and all that. So, I went back; I decided the closest place to go was Fresno State. I went there, then wound up getting my degree, but before I graduated I decided to start interviewing. Because I was not 22, some of the people that I talked to in the profession said, “Well, you know you are probably not going to get hired by” what was then the one of the Big 8 firms. “You’re probably going to wind up at a regional or a local.” That was fine, but when the ones from the Big 8 came for on-campus interviews, I thought “Well I need practice, why not just go ahead and do it?” I went ahead and interviewed at Price Waterhouse at the on-campus interview, with the partner-in-charge of the office. That went well and he invited me to what was basically an all-day interview in the office. I thought it would just be good practice but I didn’t think I’d wind up getting a job there because of my age. I know, being old at 29! Allen was the last person I interviewed with for the day. He was on the consulting side, and it was funny because I wasn’t trying to get into consulting at that point. I really wanted to either be in tax or audit.
Allen Beck: The drill was always new candidates talk with every manager, audit, tax, and consulting, so that the candidate got a better idea of what all the disciplines were.
MB: When I came out of that interview, I thought “This guy is going to be a great friend in life.” We got along fabulously.
AB: Funny how that worked out.
MB: I wound up going to work for Price Waterhouse. Office romance started to come about.
BC: Allen, what did you think after the interview?
AB: Well it was interesting. Generally what would happen is they would go through this interview cycle and there were at that time three of us who were managers. The three of us after the interviews would immediately get together and say, “What do you think of that candidate?” Then we’d usually tell the partner-in-charge of the office what we thought about them. She interviewed really well, and after I interviewed her, I went down to my counterpart in tax and said, “We’ve got to hire her.” He said, “I absolutely agree.” (To Mary) I think they made you an offer.
MB: Right away.
AB: Literally the next day. I was impressed. I continue to be.
MB: It was a challenge because at that time dating someone in the office at some place like Price Waterhouse was a real no-no. It was a very conservative environment. [But] we decided at one point, “Okay we’re going to make this permanent, we’re going to ultimately get married.”
AB: No, we bought a house. We bought a house together before we were even married.
MB: Oh, that was it. We decided to buy a house. Allen had to go in and tell the partner.
AB: I go in and say, “I have to tell you something. Mary and I have bought a house and we’re thinking about getting married.” He goes, “Oh yeah, that’s pretty funny.” “No, absolutely serious.” “What?” Then, “Okay, I’ve got to call New York and find out what to do.” They said yes, as long as we don’t share the same clients.
MB: There were a couple of audit clients that Allen had done some consulting gigs on that didn’t really affect anything I was doing, but just for that sense of independence, confidentiality, whatever, they took me off those two audits. That was the worst thing that happened.
AB: Come to the other side of the story; my side of the story up to this point. I started out in city management, which was where I had my first exposure to computing. I had virtually no exposure to it at all in any college or any grad school. Zip. I mean everything was mainframe. I didn’t want to know how to do punch cards or that sort of crap. When I got out of city management I decided to go into consulting. I started working for what was Ernst and Ernst, which became Ernst and Whinney, and now of course is Ernst and Young. I was doing a lot of financial modeling. Financial modeling in the 70s was 100% done on mainframes and it was a very interesting concept. We don’t even think of it that way anymore, but basically you defined data points. You defined what the logic was and you defined what the outputs were supposed to look like. So your input, that is, your data points, and your logic, would equal your outputs. You literally had to think all this out beforehand, record it all in each of three general areas, and then you keyed this all into what was then a timesharing application, and then you’d tell it to process and go home. Then the next day you might have your print-outs. Then if there was a problem with that then you had to figure out where something was wrong.
BC: Redo the whole thing.
AB: Redo the whole thing and crank it again, and because it was on the internal computers at that time, back at the national office, it was expensive to run them. We got charged for it, every minute of it. It was a very, very expensive proposition. As a result, you didn’t take on small engagements, they had to be big entities. And because I was also doing a lot of governmental consulting, we ended up with a client over in San Mateo County on the San Francisco peninsula. They were contemplating merging the city with a fire district. It was a big deal. I mean, it was a potential multi-million dollar merger, but they wanted to know what the financial aspects of it were going to be. Whether or not it made sense. They let out an RFP and we proposed on it and we thought, “Well okay, we’ve got to model this scenario for them.” We knew roughly how much time it was going to take and how much data processing cost that’s going to be, and I think it was about $20,000. They awarded the contract to us and we went over to sit down for a kick-off meeting. We said, “Okay, let’s talk about this scenario that we’re going to model for you and what are the parameters and all that good stuff.” They said, “No, there are actually three different scenarios that we’ve come up with.” The partner-in-charge of the office and I started to look at each other with this silent, “Oh sh*t,” because we’re in the toilet from a modeling standpoint. We thought, “Wait a minute, we didn’t agree to three,” and we kind of said, “We didn’t realize there were three.” They said, “Oh yeah, it says right here we can have you model other scenarios.” We really hadn’t paid attention. We just thought because they had only described one to start with, there would only be one, but of course in the intervening months they’d thought of more. So, we’re driving back to the office and the partner is going, “Oh God, we’re going to get screwed on this,” because there was about $12,000 of timesharing in this thing and $8,000 of professional services in the estimate. So three times 12, we’re at $36,000. Now we’re over $40k and we only bid $20K! He said, “The IT people in the office,” who were really mostly auditors, “bought that little computer. Do you think you can do anything with it?” Somehow or another they had talked the partners into buying an Apple II, which at the time was outrageously expensive.
MB: What would you guess that cost?
AB: I think at the time it probably cost close to $5,000. He said, “Do you think you can do anything with this?” I said, “I don’t know, I have never used a computer before.” We got back into the office. It sat in this room that was maybe 10 by 12 feet, if that. We always called it the “computer room” and it had data processing terminals and things like that and there was this desk with this Apple II on it with two floppy disk drives and a dot matrix printer. It had never been touched.
BC: Nobody knew what to do with it.
AB: Nobody knew what to do with it. The IT people would come and go, “Ha! That’s not a computer. Nothing that size, that’s a toy.” So, I sat down with it in the afternoon, started reading through what was there because I had no idea, and there was a database application. I didn’t know that much about databases, but I knew that wouldn’t work. Then there was this manual on this application called VisiCalc. It was kind of interesting, basically one of the very original spreadsheet programs. I said, “I need time away from the office. Can I take this all home with me tomorrow and figure out if I can use it?” He said, “Oh yeah, definitely do it. I want you to try to figure how to do this without going broke.” I came in the next day and loaded all this stuff up in my car. The manuals, the monitor, the printer and took it home and spent two full days, horsing around with it trying to figure out the paradigm. Of course today we just think nothing about a spreadsheet application, but it was a totally different paradigm at the time. I ended up building three modules in this program. I set it up in such a way that the parameters were in one place and if you changed a parameter, you could see the cells sort of ripple down and re-calculate, and you could re-print the thing out within five minutes, not 24 hours. I did these three models and got all the results together and wrote up the report. Of course the printouts were the main part of the report, and they was being reviewed by the consulting partner and he said, “Oh, this is really great. How’d you do this?” I said, “On that computer.” He said, “Really?” I said, “Yeah.” He said, “We need to change this one assumption from a logic standpoint.” It was basically a formulaic sort of thing. He said, “Can you change that?” I went in, changed the logic, re-printed it, and took the printouts back to him 10-15 minutes later. The printouts took longer than anything else because it was an old dot matrix printer. I said, “Okay, here is the updated report.” He kind of looked at me and said, “What, you just put it on the printouts?” I said, “No, everything is new with these assumptions.” He said, “What?! How could this happen?” I said, “I’ll show you. Let’s just go back and just change this one parameter, a simple one.” I changed it, hit Enter, and he’s watching the update, and he said, “Show me the results now.” I would scroll down. He said, “Unbelievable.” Then he said, “Come with me,” and he ran down to the partner-in-charge’s office. I mean, this a big office, we had close to 200 people. And he says, “Al, Al come down here. I want you to see something.” He said, “Allen, show him, change that.” [The partner-in-charge] looks at it and he went, “That’s amazing!” Then he said, “Wait a minute!” He went out and got a couple of other partners on the audit side and he dragged them down there and showed them. “Change it again, Allen.” That was the beginning of my career in computing because after that I became the guru in the office.
MB: In San Francisco. Roughly when was that? ’79?
AB: ’79, ’80. When Price Waterhouse came recruiting, that’s what they wanted; they wanted somebody with computer experience, as well as my other consulting experience, and so they dangled money and opportunity in front me. Price Waterhouse had just started to establish what they called their “microcomputer consulting group.” It was actually based out in Sacramento, but when I ended up joining, I became one of them because I had more experience than virtually any of them. Then the Fresno office wouldn’t spring for an IBM PC, which had just been out maybe 10 months, if that. So, I bought that first Compaq. That became the founder of Beck Consulting later. That cost $2,500 dollars. The office never paid for that, any of that. That was all our money. That’s how it got started.
MB: When did you move to Fresno? That was ’81 or ’82?
AB: ’81. ’81, ’82 somewhere there.
MB: I joined the firm in ’83.
BC: You started the company three years later in 1986. What led to that?
AB: When I joined the Fresno office, I was being interviewed by the partner-in-charge. One of the things he very pointedly asked me was, “How long do you think is it going to be before you can make the consulting services profitable in this office?” I said, “At least two years.” He said, “Why is it going to take that long?” I said, “Because we’re in Fresno. This is a good old boy town. I grew up in the Central Valley; that’s how it works. You’re not going to be accepted from Day 1, you’re not going to be accepted from Day 2, or Month 2 and you probably won’t be accepted till a year or two. In fact I’d be surprised if you broke even in three years.” The second year I was there, we had the deputy managing partner for Price Waterhouse come visit the office. I had been promoted to senior manager and was privy to the financials because of my position in the firm; I knew the office wasn’t making any money. He came out to see what was going on and to talk to people and he was out for about I think three or four nights. And the second night he was there he asked my counterpart in tax to go to dinner with him. My counterpart in tax came to me before that and said, “I know what’s going to happen. He is going to ask me what I think is going on here in this office.” The next day [the deputy managing partner] said, “I want you to go to dinner with me.” That’s exactly what it was. “What’s your honest opinion of this office?” I told him what I told the partner-in-charge of the office right from the beginning. I said, “I don’t think this office is going to be profitable for probably four years.” He looked me and he said, “I completely agree with you.” I thought, “Oh boy, I think I probably put the final nail in the coffin there,” but he heard pretty close the same thing from the tax manager also. That fall I was told, “We’re going to close the office.” I had to do something different. I actually got recruited to be the business manager for a big farming company, and I took that job starting at like the end of March of 1985 and I had two weeks off before I started the job. Or was it a week? I can’t remember.
MB: I think you only had a week.
AB: I got a week, so we decided, “Okay, we’re getting married.” I got a week off. (Laughs) I took that job, but the guy who was the managing partner and I had very different ideas about financial ethics. He got freaked out because I had gotten my hands on the partnership agreement and found out some things he didn’t want me to know. To make a long story short, he started freaking out and said, “I don’t want you here anymore.” I had a contract and he said, “I’ll just pay you for the rest of the contract.” Okay, that was fine. It was $10,000. That money became the seed money for Beck Consulting.
MB: In the meantime, I was still at Price Waterhouse. I was a lowly senior at that point, so I had no idea that they were thinking of closing the office. He knew, I didn’t. He starts telling me, “I think it’s time for you to find another job.” I’m like, “I don’t want to do that, I just got promoted, it’s going really well.” He’s like, “No, I think you need to get another job.” He just kept this nagging up and it was like, “Okay, fine.” I had got my two years in. I knew that I could get my CPA license once I passed the CPA exam and I was well on my way to doing that. I went ahead and went to work for one of my audit clients, which is pretty typical of what would happen with people who wanted to leave the firm, as a controller. I knew that the client was having some financial trouble, but I didn’t realize how bad it was. I decided, “I do not like this. This is not fun. I don’t like this stress of being the controller when there are all kinds of money issues.” I was just like, “I don’t want to deal with this.” By the way, Allen and I had worked on a couple of projects together at Price Waterhouse and I really enjoyed doing the computer work and thought the consulting side was kind of interesting. One day he said, “You know maybe I should do my own thing. Maybe we should do our own thing.” (To Allen) I think that literally that same day you got a call from Diane Cocola.
AB: This had been a client at Price Waterhouse.
MB: She said, “I’m thinking of buying a franchise at Fat Burger and I would like your and Mary’s advice on that.” It was like, wait, we just decided we’re going to do our own thing and all of a sudden that day we get a call from a former Price Waterhouse client that says they want us to help? This is meant to be! We went down and talked to the owner of the franchise organization and ultimately helped them get their franchise set up. I helped set up a little computer system using DacEasy as the software.
AB: It was a predecessor to Peachtree.
MB: So, we did that. Meanwhile, though, the company that I had been working for said, “I realize you don’t want to be here because of what we’re going through, but maybe you could come and just work as a consultant for us. Do this until we really decide what we’re going to do.” I did that almost full-time, when I wasn’t working with Diane on her computer system. Then [Allen] got also a call from St. Agnes Hospital, and started doing a project for them.
AB: We ended up having to buy a second computer because Mary was dragging the one computer to her client. I had to have one for myself, too.
MB: So, we had two computers and all of sudden we had all this business, and meanwhile Allen was on the board of directors at the Chamber of Commerce in Fresno. One of the guys that was also on the board said, “Allen, I think I really need a computer system.” Because at that point, personal computers were a real new thing. I mean most small businesses had actual physical books, ledgers they kept.
AB: Of course at the time it was much more hardware-oriented than software because there wasn’t a lot of software.
MB: Right, so it was really just your basic accounting and order entry.
AB: General Ledger, AP, AR, payroll, and invoicing, but it didn’t even do inventory control to any degree, anything like that. Then, there had been another person that I had talked to when I was at Price Waterhouse who was a dairyman. He was trying to find something computerized for his herd management. Nobody had anything like that because it was keeping track of lineage and breeding and all that sort of thing, and a bunch of various statistics.
MB: Calf registrations.
AB: Calf registrations. I ended up building a program in some database application. I can’t remember what it was; I learned it on his dime, so to speak, but he was thrilled with this. At the time he was on the board of what was then Danish Creamery. Then all of a sudden, one day we had a call from this guy who says, “I’m the CEO of Danish Creamery and you did something for one of our board members and I would like to talk to you about helping us. He highly recommends you.” He wanted some help finding a new CFO. Basically a recruiting gig. They weren’t happy with their computer provider. It was a timeshare system and their existing CFO had gotten them into a contract for this stuff. It was outrageously expensive. The results were basically crap and at least a month behind all the time. The CEO basically canned the CFO and then came to me and said, “Can you help me find a new one?” We did and then the new CFO, Joe Heffington, came in and said, “We need a new system.”
MB: We had started to look at potential software systems for other clients.
AB: We had done a number of just pure accounting implementations but none of them had got any further than basically just accounting.
MB: They were very small.
AB: Most of them were standalone, not networked, anything like that. We thought, “Okay, we’re going to find an application that is networked and that’s got some manufacturing potential.” At the time, probably PC Magazine was the most influential portal at that time. Every year they had this collaboration with Price Waterhouse where they’d have their accounting system reviews.
MB: “PC Mag Editor’s Choice.”
AB: Editor’s Choice, that was it. We looked at all this software that were Editor’s Choice. Well some of them of course didn’t do any manufacturing but here was this one called “Macola.” We thought, “Okay they like it,” and it was a decent write up, and we called up this company in scenic Marion, Ohio, which is northwest of Columbus out in the corn fields. They said, “We’ll send you some information and we’ve got a dealer close to you too.” “Really, that’s great. Because we’re consultants and we don’t want to-”
MB: We just wanted to implement it; we didn’t want to sell that.
AB: We asked, “Where is this dealer?” “They’re close to you.” “Where?” “Well they’re in Glendale.”
MB: Southern California.
AB: Southern California. Four and half, five hours away. I said, “They’re not close to us.” They said, “Well it looks close to you.” I said, “What are you looking at?” They said, “Well, this map.”
MB: He was like, “It just looks really close.”
AB: I said, “That’s not going to be acceptable.”
MB: Anyway, we just said, “Send us the software.”
AB: They said, “We’ll send you the demo software.” One day the UPS guy shows up and he’s got boxes and boxes and of course it’s all hard manuals.
MB: Big manuals.
AB: Big manuals. We load up this software. The manufacturing pieces weren’t 100% there but they had full MRP.
MB: It had bills of material, you could do production orders, you could report your production, it had MRP. I studied it. Allen did, too, and we decided, “Well, this is pretty good stuff.” We decided we’re going to do it, and I started down the path of implementing software. We got going on that and then we decided that because we wanted to get [our] clients direct tech support, and the software company would only do direct support with you if you were a dealer…I said, “Allen, let’s just bite the bullet and become a dealer. It’s not what we wanted but it’s the only way to get the appropriate technical support to support the client.” That’s how we became software resellers. We implemented those two. That went really well and at that point Macola as a company was doing really well because of these big write ups. They’d won PC Magazine Editor’s Choice at least a couple of times in a row.
AB: We were the only Macola people in central California.
MB: There were people here in the Bay Area. There were down in southern California. I think there was somebody maybe in Sacramento. Everything was going gangbusters with Macola and we were one of the top 10 dealers right away. We became part of what they called their “President’s Council” where we would go back to Marion and talk about things that should be done and improved. I mean this was a brand new industry. People weren’t doing software implementations, so we were figuring out methodologies.
AB: Yeah we basically as a group we made up rules as we went along.
In Part 2, Allen and Mary continue to recount the history of Beck Consulting, including their move from Fresno to the Bay Area, their first exposure to a software product called “Navision,” and their initial trepidation when Microsoft entered the picture.