The TidePoint Debacle

In the fall of 2000, Ray L. Steele, Director of the Ball State University Center for Information and Communication Sciences (CICS) invited me to attend their annual alumni awards banquet. Ray had, over the prior decade, built CICS into the graduate degree program most valued by the booming telecommunications industry. The program’s graduates were accepting six figure starting salaries at companies such as MCI, AT&T, and Anderson Consulting. My company had entered into a joint marketing agreement to sell our workshops to CICS’ community, building on a colleague’s use of our material in her Art and Science of Project Management class, a popular part of CICS’ curriculum. Our new relationship was to be introduced to the alumni at the awards banquet.

Sitting next to me at the banquet table was Joel, President of TidePoint, a start-up telecommunications company and a recent graduate of CICS. Joel was present, I learned, to receive the Alumni Of The Year Award. When he heard that I was a project management expert, he offered his card. He asked me to call the following week to chat about a project management difficulty his company was experiencing.

TidePoint was like many start-ups in the nineties. Riding the crest of unprecedented telecommunications industry growth, a group of software engineers attracted several rounds of venture capital from an Atlanta-based bank. Before they had even brought a product to market, the company remodeled a derelict complex on the edge of the Chesapeake Bay near Baltimore, participating in the renewal of the former rusting, brick and mortar infrastructure, and hired dozens of eager engineers.

Among them was Rob, who was responsible for managing the Service Planning Department at TidePoint. In my call to Joel, he asked me to speak with Rob and assess his strategy for ramping up their service organization. I called Rob, who had left a career at Ford Motor Company to join the high tech revolution at TidePoint. Rob explained how he was facilitating a long series of discussions with the other executives at TidePoint to define the methodology that would insure consistency when implementing their revolutionary network management software. He was struggling to gain consensus, as the chief architect didn’t agree with many of his suggestions and he couldn’t buy into the chief architect’s perspective, either. Rob complained about the architect having some key engineers reassigned to complete the software development effort, but Rob felt confident that if only they could agree on a method, once the product shipped, the consistent installation process would become a profit center for TidePoint.

I was impressed at how much energy TidePoint was expending on creating a mature support structure for an uncompleted product, for which no paying clients had been recruited. Both Joel and Rob assured me that once the product shipped, demand would explode, but I was skeptical. They wanted some advice on how to rein in the incorrigible architect. I was dissatisfied with Rob’s strategy, which seemed to build on his long experience within a very different context. I doubted that service infrastructure would very quickly become a critical factor at TidePoint, and suggested that some experience with real, paying customers would quickly resolve the speculation that their endless meetings to decide the proper methodology had failed to provide.

I left a message for Joel after speaking with Rob, but Joel didn’t return my call. He was a busy man, I explained to myself, and we were just starting the conversation that might become a paying assignment for me. I left several more messages over the following weeks and, as Thanksgiving and Christmas turned into New Year, I focused my attention elsewhere. In February of 2001, I called again, only to receive a message that the number I called was no longer in service. Thinking I had dialed incorrectly, I redialed more carefully, only to hear the same message again. An Internet search yielded a string of broken links. TidePoint’s flashy Internet site, which had explained their revolutionary product in excruciating detail, wasn’t there.

I found in an Internet copy of a Baltimore business journal a brief description of TidePoint’s demise. A round of venture financing failed, which prompted a significant layoff. Shortly thereafter, the remaining employees arrived to find the door padlocked and the phones disconnected. A bankruptcy hearing was scheduled for a few months into the future. Joel, I later learned, joined a Washington DC consulting firm. I don’t know where Rob or his antagonistic chief architect ended up.

TidePoint was a tiny tide pool in a massive, industry-wide vaporization. The industry TidePoint expected to service had over built. Their financing had become increasingly speculative until it emerged as a virtual Ponzi scheme, where no rational cash flow projection could illustrate a future means for servicing operations, let alone repaying accumulated liabilities. Demand evaporated before the company’s asset value, but both disappeared overnight without a trace.

Two hundred miles north, along New Jersey’s Route 10, Aplion Networks was busy building a remarkably similar system to TidePoint’s. Engineering was located in India, where the venture dollar stretched further, but progress was painfully slow. Complaints from the founder to speed development were met with the humbling acknowledgment that a competitor had three times the engineering staff working on the same problem and were only half as far along. Walt, the VP of Engineering and Operations, was a veteran of Hewlett Packard and a later Intel acquisition, Dialogic, and he was spending more and more time on airplanes to India without a completion in sight. He had assembled a remarkable team, more capable than any he’d ever led, but progress was elusive. In late summer 2001, he was called back to headquarters from a family vacation at the Shore to help decommission some of the operation. A few weeks later he was handed his own papers. Aplion stayed in business only to hold their patents, hoping some other company would find them valuable enough to finally make the millions the company was originally started to create.

No strategy could have forestalled either TidePoint’s or Aplion’s demise. Their process maturity could not have saved them, neither could the delivery of the most successful software imaginable. They were aiming at a disappearing target. By the time they reached it, it would no longer even be there.

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