|In 1981 I was brokering oil & gas drilling equipment.
There was a huge demand for certain items and brands of equipment and a lot of
people all over North America purporting to have such equipment. After spending
large amounts of money chasing this "ghost" equipment, only to discover it was
bait by unscrupulous brokers looking for legitimate buyers, I concluded that there was a
need for a method to match legitimate buyers with legitimate sellers.
By that time I was already using a personal computer as a tool in my
business and a company named, "PRC" was providing a computerized Multiple
Listing Service (MLS) for real estate professionals in the Houston area. I decided
to build a multiple listing service for oil and gas equipment.
The next positive development was being introduced to a man
named, Dick Schrumm. He was an executive with the advertising agency "Young
& Rubican" of New York who had been assigned to oversee their absorption of
"Reeves, Smith, Baldwin & Carlberg", an ad agency in Houston which Y&R
had purchased. Dick recommended that we start with a market
study to determine whether this was a viable concept. He coached me on how to
develop the direct mail survey materials in a manner that guaranteed a good response.
It was a big success and a lesson that I have found extremely useful throughout my
Somehow I got introduced to a company called,
"Scientific Time Share Corporation" (STSC), which owned a mainframe computer
center in Rockville, Maryland and had an office in Houston. They agreed to develop
the software and provide the service on their mainframe, which had dial-up access via
Telenet and Tymenet. A Texas Instruments distributor agreed to provide us with the
data terminals which were thermal printers with a keyboard and an accoustic coupler modem
(a dumb terminal). Both companies agreed to provide a large portion of their
services in return for future profits, but, there was still a need for a significant
amount of venture capital.
With the help of an attorney friend named, Joe Pitner, I
incorporated and put together a Private Placement Memorandum to sell stock in the
corporation. Thanks to a very generous friend of my parents, Frank Thompson, who was
in the drilling buisiness in Midland, I received $25k in funding.
Dick got the staff at RSBC to create my logo and develop a tri-fold brochure. I enlisted the help of my good
friend, John Nipp, who was the consumate sales person. We rented booth space at the
1982 Offshore Technology Conference in Houston where we could demonstrate our service.
The service was well received, with over 90 companies (the who's-who of the drilling industry)
expressing their interest in using the service. We also received a great deal of
publicity in various industry publications including the Oil & Gas Journal, the American Oil & Gas Journal and a full page
story in the Houston Business Journal.
Article in American Oil & Gas Journal. Top Picture:
Sam Martin and John Nipp with a TI-787 Terminal
As a result of the story in the Houston Business Journal, I
was invited by the US Department of Commerce to go to Washington, D.C. and meet with Ken
George, Assistant Secretary of Commerce. He believed our system could solve the
United States trade deficit imbalance by expanding the system to include all SIC codes of
merchandise and offering the service in their 160 foreign service posts around the world.
Mobil Oil in New York wanted us to create an exclusive system for their use in
worldwide inventory control. While the responses were exciting, we lacked the
capital to pursue many of these opportunities.
By 1983 the oil and gas market was headed into a deep
recession and while we believed our service would save its subscribers money, companies
simply refused to take on any new expenses. We were unable to build a large enough
subscriber base to make the service viable.