Gateway
Gateway was founded as the TIPC Network by Ted Waitt and Mike Hammond in September 1985. Ted Waitt was the company's principal founder; he was later joined by his older brother Norman Waitt, Jr.[3]: 38 Before founding the company, Ted Waitt lived on his family's cattle farm in Sioux City, Iowa. He had dropped out of two different colleges to work on the farm before landing a job at a computer store in Des Moines, Iowa. After nine months of experience gained on the job, Ted had the idea to start his own computer reselling company that would allow him to sell to niche customers who needed systems in between the lower- and upper-ends of the personal computer market, whose systems were either too limited in terms of speed and memory or too expensive with seldom-used higher-end features.[3]: 39 [4]: 153 Ted also found that educated salespeople could successfully sell computers to customers completely over the telephone, impressing on him the idea that he could eliminate overhead by having a robust remote salesforce and impressive catalog.[3]: 40 Strapped for cash, however, Ted Waitt took out a $10,000 loan from his grandmother Mildred Smith and occupied the empty upper floor of his father's dilapidated cattle brokerage.[3]: 40 [5] He was joined by Mike Hammond, Ted's coworker who trained the latter to become a computer salesman at their previous job. The duo's first products were software and peripherals for Texas Instruments' Professional Computer home computer, advertised in various computer magazines. The TIPC had been discontinued in the previous year and was largely considered obsolete by 1985. TIPC Network charged their first customers with a membership fee of US$20, in order to flush the company with more start-up capital.[3]: 40 Owing to their products' very low costs, TIPC earned up to $100,000 in sales within the first four months, beating out many of their competitors in the TIPC aftermarket segment. In early 1986, Ted's brother Norman Waitt was hired as TIPC's financial advisor in exchange for owning half of the company.[3]: 40 That year, the company began selling their own hand-assembled computers locally on an experimental basis. By the end of 1986, TIPC changed their name to Gateway 2000, Inc., and earned $1 million in revenues—the experimental complete computer systems contributing only a small amount to this figure.[3]: 36 [4]: 154
