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You might call it the curious case of Make It Work.
The South Coast-based company was a pioneer in the business of at-home computer repair and networking installation. But after more than 10 years in business, it shut down abruptly on June 25, leaving employees out of jobs and customers wondering what was going to happen to their prepaid customer service contracts.
Several dozen comments posted on the Pacific Coast Business Times’ website in the days after Senior Editor Stephen Nellis broke the story are a testament to the chaos that ensued after Make It Work closed its doors and apparently left customers who had recently signed up for service contracts high and dry.
Make It Work was always trying to be different. Whereas its arch-rival, Geek Squad, used the ubiquitous Volkswagen New Beetle as its vehicle of choice, Make It Work opted for the flashier Mini Cooper.
Make It Work boasted an energetic and boldly confident CEO, Eric David Greenspan. Make It Work sponsored a high-profile radio show on KNX 1070, the all-news station in Los Angeles that’s a magnet for business types. It had ambitions to go nationwide. It recently cut a deal with Costco.
But reading between the lines, it looks a bit like Make It Work was always, well, trying to make it work. Only a few months ago in April, the company launched a brand-new service, a prepaid model where customers were encouraged to sign up for extended contracts for an up-front fee. According to our reporting, Greenspan said the final blow came when he couldn’t renegotiate an insurance deal on the Mini Coopers that were the company’s signature vehicle and, for a while, a clever marketing tool.
But it’s not at all clear whether customers will ever see a penny of the money they paid up-front. And it really raises a troubling question about whether Make It Work’s move to the service contracts was a strategic move that didn’t work out, or a desperate play for cash. To put it another way: What did Eric know and when did he know it?
Two lessons come out of the Make It Work meltdown.
First, while prepaid phone cards and prepaid gift cards are highly popular, consumers are usually warned to be cautious about deals that require payment up front. You are spending hard-earned cash today on the promise of a service tomorrow, but a promise of service is not itself service. Also, when companies ask for cash up front, it can be a sign of financial weakness. As it turned out, signing up for Make It Work’s prepaid contract was not at all like buying an extended service deal from Dell or GE.
Second is the question of confidence. CEOs and small-business owners alike are paid to be optimists. We’ve got to be resourceful, future-focused and ready to adapt to fast-moving changes in the way business gets done. But we also have to be realistic and careful about how we present our business to customers and the employees who rely on us.
In the case of Make It Work, there was really no sign the company was having problems. Its abrupt shutdown has customers, employees and merely curious onlookers like me scratching their heads.
Like many other industries, the business of at-home and small-business computer repair and networking has undergone a fundamental change.
As Greenspan told us and several other media outlets, the cloud made it less urgent for people to invest in data storage or in computer repairs. Tablets and new, cheaper PCs need less repair and make it more likely people will throw away their old PCs and simply upgrade.
Meanwhile, programs such as Citrix Online’s GoToAssist have made it easier for companies to service and repair computers from remote datacenters, driving down the cost and creating tons of new competitors.
Nellis and the Business Times staff will be tracking what happens to Make It Work’s customers, its vendors and its employees. It seems to me that the final chapter in the rise and demise of Make It Work has not yet been written.
• Contact Editor Henry Dubroff at hdubroff@pacbiztimes.com.
GREENSPAN VOWED TO REPAY HIS INVESTORS IN FULL. AREN’T WE AS PREPAID CUSTOMERS AN INVESTORS. SHOULDN’T US SMALL FISH BE PAID FIRST? HIS PLAN TO REPAY HIS INVESTORS IS A PLOY SO HIS NEXT VENTURE (AND WE ALL KNOW THERE IS ANOTHER) WILL BE FUNDED.
So what will happen to the people who have unused pre-paid hours? Will there be a class action law suit and has any crime been committed either intentionally or unintentionally?
As a long time MIW customer it is unfortunate that I am out $500 in a pre-paid contract. It is with much disrespect that MIW did not bother to contact their customers that made them a success for so very long. MIW worked very hard to sell their services but not as hard to be responsible business owners that owned up to their issues. I regret that the service group are now without jobs but also regret that as a small business owner I have been harmed.
I worked for MIW several years ago, during its infancy and just before the windfall of investments by the Angel Network. It was a great company to work for and I’m very sad to hear this news.
Eric, my sincerest condolences on your loss. I am going to be in the area Wednesday 7/11/2012.
Please review the support@makeitwork.com inbox. I would like to meet with you over lunch.
Henry
At Anchor Point IT Solutions, we have been serving a growing list of customers since 2005 with a flat monthly rate. While it may not work for everyone, it is a wonderful solution for the businesses and non-profits we serve.
I’m not familiar with the MIW story, but I know of too many successful flat rate based companies to believe that a flat rate model would be the cause.
I wish Eric and the MIW the best.
I used MIW several times as a home pc user when I could not fix the bugs myself. I always was impressed on their timeliness, courtesy, and ability to correct the issues. I was persuaded by a tech rep to enroll in prepay 2 years ago but got cold feet; they promptly issued a refund. The mini coopers were smart marketing. I’m surprised after 10+ years they were not in a positive cash flow. I believe there is still a need for pc repair especially with less technical older folks.
Make It Work has pushed hard for its customers to pre-pay for services. Since Greenspan admits that Make It Work has been financial trouble for a long period of time, it was either negligent or intentional for him to seek pre-payment for future services knowing that Make It Work probably would not be around to provide any future services. I am one of those customers that recently bought pre-paid services and will not get a refund or the promised services. Where did the money go that I paid? I am not going to get the services and Greenspan did not pay his employees. I would not be surprised if this is a “phoenix” ploy and a variant of Make It Work opens up with the same management in the near future, after its customers have been duped. If that is not the case, all pre-paid contracts should be refunded immediately.
Henry,
Here’s some clarification for you.
1. Make It Work began selling prepaid service hours back in 2003. We did so to create a “club-like” feel for our customers. We never expected it to sell nearly as well as it did, so it wasn’t originally a cash generating focus. It became the core of how we did business and it worked for nearly 9 years.
2. We believed we could make it through this period to our next Costco launch in a month or so. We thought we had financing to help us get there. It fell through in the 11th hour and were unable to operate come Monday.
3. We also believed the leasing company for our fleet would work with us another month. They rashly chose to take our vehicles immediately on that same Monday.
From my understanding, many businesses struggle (much like yours per a conversation we once had) in hard times and during their startup period. Make It Work was always fighting to find innovative ways to increase revenue and acquire new customers. We never gave up. From the Verizon deal in 07 to the radio shows in 09-11 and then Costco, we kept looking for ways to bring our shareholders a return. We hung in there until the bitter end, trying everything legally possible to save the business. The economy, timing and the shift in the industry proved to be too powerful.
We didn’t choose to close, the decision was made for us. We had no money left and time was running out. The weekend was coming to an end and on Monday we to let our employees and customers know that we had been forced to halt operations. This is why it seemed so abrupt. Ironically, we’ve been teetering on disaster before but have always managed to pull ourselves out of it. Not this time.
As for me, I personally guaranteed most of MIW’s loans, lines of credit and credit cards. I have nothing left other than a house that is worth half of what I paid for it that will be foreclosed shortly. To make this decision knowing I would be forced into financial ruin and be required to start my career again, was hardly in my best interest. I lost everything.