Learning from AWID’s Problems

By Mark Roberti

The founder failed to delegate enough to enable the company to grow, and that led to its recent problems.

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One of the strange things about being a journalist is that you are often living the experiences that you are writing about. When I was at the Industry Standard, our publishing company was imploding along with the dot-coms we were covering. We had $500 Aeron chairs and wasted a lot of money in the vain belief that there really was a “new economy,” and we’d continue to grow forever. We were finding out how wrong we were, even as we wrote about companies finding out how wrong they were.

Now, as CEO and editor of a rapidly expanding company, I’m struggling with the same issues that other rapidly expanding companies are dealing with, including delegating to a team. It’s not always easy to let go of the reins of some parts of the company, but it is necessary.

Case in point: Insiders tell me that Applied Wireless Identification Group (AWID) ran into trouble because founder Donny Lee couldn’t let go. Donny is an engineer, and he started AWID as an access control technology provider. When UHF looked like it was going to take off in the supply chain, AWID developed UHF readers. Donny brought in Jeff Jacobsen, an executive with experience in the RFID industry and in growing young companies. Jeff brought in Roger Stewart, a talented chief technology officer, and Louis Sirico, a well-known RFID evangelist.

But Donny apparently kept tight control over new product development (he hasn’t told me his side of the story). The strains of trying to grow rapidly and develop new products quickly were too much, and the company cut corners. It didn’t get products certified by the FCC, as required by law. When customers discovered this, Donny was ousted and the company halted sales of its products. Since April, when all this happened, the company has been working to put everything right.

AWID is now putting the issue behind them. It has a healthy business in access control, and that pillar might be what helps the company get through this difficult period. It’s also resuming sales of its UHF equipment, according to CEO Larry Kellam (see AWID Seeks to Move Beyond FCC Problems). All companies go through growing pains, and sometimes founders can hinder growth if they are unable to adapt as the company scales. It’s something I remind myself of every single day.