Article

Requiem for a software company

First Wave Inc., one of the pioneers of the kiosk software industry, has closed its doors, a victim of the Sept. 11 terrorist attacks and other factors.

February 20, 2002

Even as it became clear during the early part of 2001 that the United States economy was lurching into a recession, kiosk software pioneer John Glitsos was happily telling people about the success of his company, software developer First Wave Inc.

"There were people doing stories about us during the first half of 2001," Glitsos said. "We were one of the few profitable kiosk companies. I was doing interviews and explaining how to make money in the industry and how to help your clients make money through interactivity and good ROI."

But for Glitsos and First Wave, the clear path to success in the kiosk industry ran smack dab into a minefield. Saddled by internal problems and devastated by the Sept. 11 terrorist attacks, First Wave suspended all operations on Jan. 21.

All that is left of the company, beyond the inevitable legal sorting-out, is the company's Web site, whose home page offered a poignant farewell that has become frighteningly common in the technology sector.

"In (our time in business) we met some wonderful people - both clients and vendors - and to all of you, thank you for your support throughout the years," the site reads. "We will miss you."

For experienced kiosk industry observers, First Wave's shuttering was a reminder of the current economic fragility and the business world's struggle to return to normal following Sept. 11.

"You could point to Sept. 11 and say that did him in," Summit Research Associates president Francie Mendelsohn said of Glitsos. "Others are using it as an excuse, but in John's case it was true."

In the door early

Founded 11 years ago, First Wave marketed a software development project called Kiosk Communicator. The company's flagship line underwent modifications over the year; last March, First Wave released Kiosk Communicator 2.5, which offered more than 60 enhancements, including credit card encryption capability and more multimedia functionality.

One of the company's strengths was its focus on Macintosh computers, making it a niche product. Glitsos said he enjoys working with Macs, citing their efficiency and quality standards.

"I think Macs are an excellent platform for delivering interactive solutions," he said.

As far as Mac-based kiosk software is concerned, First Wave's closing will create something a short-term vacuum according to Kiosks.org Association executive director Craig Keefner.

"Their closing eliminates the major software kiosk application that runs on Macs," Keefner said.

Powerful reasons

First Wave's clients included such noted retail and government organizations as Disney, Whirpool, the National Aeronautics and Space Administration, and Motorola. But it was the actions, or inactions, or those clients that crippled First Wave's prospects following Sept. 11.

"We were expecting some very good orders coming in during the last quarter of 2001," Glitsos said. "After 9-11, it all got cancelled.

"Our clients were either retailers or manufacturers of consumer products and they both got hit kind of hard," he added.

Keefner, like Mendelsohn, agreed that Sept. 11 proved an overwhelming barrier for First Wave.

"His downfall I think would be directly attributed to 9-11," he said. "I think he had a significant relationship with Disney and that had pulled them in pretty deep. When 9-11 hit and Disney drastically eliminated budgets, they were too far in."

But while Glitsos cited Sept. 11 as the source for some of the company's problems, he did not completely blame the terrifying impact of the terrorist attacks for First Wave's shuttering.

"That was on top of some other activities that were going on," he said. "We had what you could call some creative accounting going on, or in the worst case it could be described as illegal activities, by an ex-employee."

Glitsos, citing an on-going legal process, would not describe the activities any further. But he said the internal and external factors combined to fatally cripple the company.

"We probably could have survived one thing or the other," he said. "But we couldn't survive them both."

Moving on

Glitsos will remember First Wave with pride as a company that stepped into a young industry and found a way to have an impact.

"First Wave didn't crash because of bad products," he said. "It was a good company doing a lot of good things for good clients."

Keefner concurred, noting that Glitsos established a reputation for quality service when the kiosk industry was young and establishing its credibility.

"John Glitsos is extremely admired in the industry for his acumen and (First Wave's) approach to self-service projects," he said. "He's a very intelligent guy with a very rich history."

That intelligence and practical experience will not be lost to the industry, Glitsos said. He plans to remain an active part of the kiosk world, writing, consulting while considering his future options.

"I did a lot of public speaking in the industry and play to continue doing that," he said. "I did some consulting for some firms and I hope to continue doing that. I think I saved them a lot of money and helped some them how to be profitable."