Hensdaughter / Dreamsoft

Gibson and Opcode

Hensdaughter/Dreamsoft, a fictional account that also seems relevant to Gibson/Opcode. Detailed and entertaining.

Letters

Gibson's Statements

GMICS

Further Reading

I have prepared a "case study" or "scenario" between two theoretical companies. Hensdaughter, and Dreamsoft that I think will amuse most of you and could shed light onto our dilemna. I have listed some theoretical facts regarding Hensdaughter, and Dreamsoft, and the likely conclusions one can reach on the basis of public information that would be available, or what is considered today to be standard and acceptable business practice...

A WHILE BACK DREAMSOFT ACCEPTS TO SELL ITSELF TO Hensdaughter: Hensdaughter purchased Dreamsoft on the basis of a contract, the terms of which are not public. Given the situation Dreamsoft is in today, one can imagine that Hensdaughter was in fact offering some form of bail out to Dreamsoft. Dreamsoft must have been going through some financial difficulties at the time or they wouldn't have decided to let someone take them over. Such bail outs are standard in business. Generally, the company that offers a bail out believes there are technologies of value in the company it is offering to invest in. We cannot be sure what these were for Dreamsoft. But Hensdaughter, if not George himself (the CEO of Hensdaughter), must have been convinced that if he or his company controlled Dreamsoft, they could do something with the products, and make money where Dreamsoft's previous owners failed.

BAIL OUTS ARE GENERALLY ONE SIDED AND MOTIVATED BY A COMPANY'S CONVICTION THAT THEY CAN MAKE MONEY ON PRODUCTS WHERE OTHERS HAVE FAILED: Hensdaughter certainly negotiated an initial bail out to keep Dreamsoft alive at a sufficiently attractive price to motivate Dreamsoft's founders to accept the deal provided more would come in the future. Lets imagine the fancy figure of USD 8 million. For Dreamsoft's previous owners, it was: take it or die, and taking USD 8 million now could save the company. Simultaneously, Hensdaughter, has a demonstration of good faith, offered more money to Dreamsoft's founders, that would be paid in say one or two years, and only if at that time the company survived, and thrived. Let imagine the second payment is for an additional USD 8 million. THIS IS TYPICAL, especially in software companies, that are founded by engineer geniuses who do not understand what drives business. The offer of a second "payment" to the founders of Dreamsoft lured Dreamsoft's management into believing that Hensdaughter was truly a White Night, ready to pay those brilliant geniuses for their ingenuosity at creating all of Dreamsoft's products. It brought confidence to the transaction. Dreamsoft's previous owners probably thought they were getting a good deal from someone who was prepared to love them and help them grow. An illusion. The TRUTH is obviously entirely elsewhere. Hensdaughter's only motivation was to takeover the technology and make money out of it, where Dreamsoft had failed. Please do not get me wrong, I am not condemning Hensdaughter AT THIS POINT, this is normal in business. Hensdaughter should not be considered a social institution. They are a business entity out to make money.

STANDARD METHOD OF PAYMENT BY THE BUYER DURING A TAKEOVER OF A FINANCIALLY DEFUNCT COMPANY: Dreamsoft's founders didn't see much of the first USD 8 million. Most of it went into paying off accounts payables that were overdue with suppliers, vendors and banks. In fact, Hensdaughter didn't even really have to pay out cash to the suppliers and vendors, since Hensdaughter maintained accounts with many of these suppliers and vendors, and simply asked them to transfer the money owed by Dreamsoft, to the acounts that Hensdaughter owed these suppliers and vendors. The suppliers and vendors were happy enough to transform debt owed by Dreamsoft, a small company with financial difficulties, to debt owed by the well known and financialy stable Hensdaughter. They were not overjoyed however, because they did not receive what they wanted most: CASH. Although Dreamsoft's accounts payable were cleaned up as a result of this injection of capital, the problem is that Dreamsoft's suppliers and vendors, were not really prepared to resume normal business with Dreamsoft, because they hadn't actually received cash for their outstanding debt. The suppliers and vendors were now in a better risk position, but they were not ready to resume normal business with Dreamsoft. Was this intentional on behalf of Hensdaughter?

NOTES:

1. Hensdaughter has a history of strange and rather blotched takeovers. The products of all the companies taken over by Hensdaughter have gradually disappeared from the market...

2. George, the CEO of Hensdaughter, is a charismatic, charming but strange figure. Hensdaughter top executives have a high turnover rate. George himself tookover Hensdaughter many years ago from Korean investors, when Hensdaughter was virtually bankrupt. He turned Hensdaughter around quite successfully. But Hensdaughter's new ventures in other side or parallel business since then, have been motivated by George, and have not been successful.

THE RULES OF TAKEOVERS: Hensdaughter obtained a few seats on the small board of Directors of Dreamsoft in exchange for its money. Hensdaughter just wanted to keep an eye, no control yet... Lets assume a Board of five people. Furthemore, Dreamsoft founders were not about to relinquish control of the company. The board became Two Hensdaughter, three Dreamsoft. Also, Hensdaughter tried to get Dreamsoft to look into some new technology that could further enhance the "partnership": Some products were announced publicly, other products that are locked away inside the labs of Dreamsoft... Is this where Hensdaughter wanted to make money with Dreamsoft? New products? Was the old product line of Dreamsoft truly compatible with Hensdaughter products?

NOTES:

3. Users of Dreamsoft products were astounded with the takeover of a software company, by a company who's business was only just remotely connected.

4. Lets not forget that Hensdaughter still owes a second tranche of payments to Dreamsoft's previous owners, if Dreamsoft thrives within a year or two after the takeover.

AFTER THE TAKEOVER DREAMSOFT APPARENTLY DOES NOT THRIVE: Dreamsoft is not able to recover its goodwill with suppliers and vendors. Some layoffs occur at Dreamsoft in order to reduce costs. Hensdaughter does nothing to assist Dreamsoft to keep it's suppliers and vendors happy. In fact, even Hensdaughter gets into some trouble with a big chain of vendors of its own line of products, and their products are no longer sold through that chain. The situation at Dreamsoft further deteriorates as Hensdaughter announces to Dreamsoft overnight, that they have become the sole distributor in the country of a line of washing machines produced in the UK! The washing machines fill the wharehouses of Dreamsoft, and the staff are not qualified to sell or support this line of products for which they have no experience. Hensdaughter offers some training, but software engineers, salesmen, and support staff cannot be converted into washing machine salesman overnight. As Dreamsoft continues to face financial difficulties, disatisfaction with suppliers and vendors, more layoffs occur, and some disgruntled staff leave the company. Dreamsoft requests further help from Hensdaughter to devellop a new generation of software products along the line of "Dream", one of their key products. Hensdaughter holds back its support...

ATTEMPTED AMICABLE DIVORCE: The President of Dreamsoft, Harry proposes to George that he, Harry, could leave Dreamsoft and launch a new company: "Null Barring". Harry suggests to take a certain amount of code with him so that he can launch Null Barring, and in exchange, Hensdaughter would get full control of Dreamsoft. Both parties agree and a letter of intent is signed...

PRE-DIVORCE SEPARATION: As Harry moves off to launch Null Barring, one of the remaining Dreamsoft board members takes over. He suggest that one of Dreamsoft's key programs be sold at about half price, to boost sales and market share. Hensdaughter is consulted for this decision, and recommends the price be cut by about 8! Hensdaughter also recommends the software be sold through the Internet to cut intermediary costs. This kills any chance for Dreamsoft to recover its goodwill with vendors. Vendors virtually abandon any form of promotion of Dreamsoft's software products.

DIVORCE IS CANCELLED: Harry resigns as President of Dreamsoft. Hensdaughter subsequently refuses to transform the Letter of Intent into a full fledged contract. Furthermore, Hensdaughter sues Harry and those who left with him to return the code he has gone with! This first suit is settled out of court. Obviously by now, Null Barring is deadborn... Harry attempts to resume his position as President and member of the board of Dreamsoft. His return is contested by the board now consisting of two Hensdaughter people and two Dreamsoft people (ARE YOU ALL BEGINNING TO UNDERSTAND THE PROBLEM). Hensdaughter asks the board of Dreamsoft to vote on the return of Harry as President. THE VOTE IS A DEADLOCK; 2-2; no clear majority, no decision... Another suit... arbitration... Dreamsoft is condemned to pay for Harry's legal costs. Dreamsoft is already without cash!

More NOTES:

5. George is convinced that one software engineer can be easily replaced by another. He's just a businessman and probably uses a PC at home and in the office. (I just couldn't resist to throw that in ; - ) )

6. The last original founder of Dreamsoft, Mr. Rosenberg, who is still on the board of the company, is a programming genius. The public has been begged to leave him alone. George is convinced that Mr. Rosenberg is enough to keep Dream going just on his own.

6. George is apparently unmoved by the fact that Dreamsoft has been forced to lay off almost all of its staff over the last six months just to be able to pay its bills.

7. George is convinced he can make money with Dreamsoft's products if he controls them himself.

8. George believes that the former programers of Dreamsoft can and will be replaced. And if not, Dream is good enough as it is, and external consultants can be called upon to make sure the program stays compatible with futur hardware and systems software.

Now for my questions:

DO YOU THINK THERE IS A CHANCE THAT Hensdaughter WILL NOW HAVE TO HONOR ITS COMMITMENT TO PAY THE SECOND PAYMENT TO DREAMSOFT?

DOES Hensdaughter NEED TO PAY THIS AMOUNT IN ORDER TO ACHIEVE TOTAL CONTROL OF DREAMSOFT?

DOES DREAM REALLY STAND A CHANCE OF CONTINUING TO STAY ON TOP OF THE COMPETITION IN THE HANDS OF Hensdaughter?

Now for the epilogue of part I:

Some little guy called Islam comes along. He motivates a bunch of Dream users through the internet, to make a public fuss and write to Hensdaughter, Dreamsoft, and George. George realises that Islam and his little army are on a crusade. This could be a public relations nightmare. George just needs a few more months to consolidate his control over Dreamworld. At this point, he can probably do this without even making the second payment. Then, quite frankly, he'll do what he can to get Dream going again with the bear minimum. But George doesn't want a public relations nightmare. Not now! So he tries to quiet the public, he writes to Islam and to some of the officers in his army...

BACK TO THE REAL WORLD:

Thankyou for reading this far. What should the users of Opcode do now?

I am going to continue to stir the biggest fuss I can. I don't believe Vision will be able to continue to grow the way it has in the past, and the way I want it to in the future. Henry has not given me any reason to think that this is not the case.

LETS KEEP WRITING. Lets give Henry the public relations nightmare he deserves. He wants Vision? We cannot and probably should not stop that now. But lets make sure he knows the rules of the game that comes with full control of Vision: A great product, always nec plus ultra, top notch music production technology.

That's what we expect dear Henry, and you better make sure you deliver. Cause if Vision is forgotten, the Vision users will make sure Gibson and Henry are forgotten also...

If there is one thing that just doesn't deserve to become the victim of money and greed, its the art of creating music...

Please, little army, lets continue the fight... lets write part II...