At the time of the collapse of the dot-com bubble in 2000 and its aftermath through 2001, Internet and information technology companies were failing in droves. Many small Dot-Coms and tech firms that had benefited from huge influxes of cash from IPOs, despite showing no profits and, in some cases, no revenue whatsoever, were liquidated or sold for parts. Worldcom, an enormous telecommunications company that played a significant role in the rise of the bubble, was found practicing fraudulent accounting practices and filed one of the largest corporate bankruptcies in the US at that time. America Online, a pioneer of internet access, merged with Time Warner, a deal that was later described by financial reporters as one of the worst transactions in history.
In the tumult and chaos of large and small companies alike facing imminent failure stood one IT consulting and services firm, Guident.
“We were weeks away from shutting down the business,” Teddy Mattheu, co-founder and Executive VP of Guident, says today. “We were doing daily cash flow statements. We opened the books to all the staff—what was left of it—for them to know the circumstances we were in.”
The situation was dire. But at the brink of insolvency, Teddy and his partners refused to engineer a safe exit for themselves at the expense of their employees.
“We had already decided not to just walk away from leases and financial responsibilities,” Teddy explains. “We then decided we would have something stashed away for the people who had stayed with us, so they would have some time to find another job. That was an important thing for us to do.”
But what began as an honorable strategy to wind down the company soon began to play a supporting yet essential role in the firm’s survival. “Two weeks before we were forecasted to shut down,” Teddy says, “we got a call from a key customer.”
Suddenly, Guident was billing again. The employees who had stuck with the firm, and who were in turn treated with respect, would now play an instrumental role in turning the ship around. Within a few months, Guident was up to thirty consultants from fewer than ten.
“Several of those consultants are still with the business today,” Teddy notes, a decade later.
When faced with a crisis like the one Guident had confronted, a more coldblooded team of executives might have looked for the quickest path to a safe exit, instead of looking out for their employees. “I didn’t want to leave anyone on the street,” Teddy says. “I wanted to be honest and open with people, and give them the respect they deserved. They trusted us to join a small business without too much security, so why leave them on the street?”
Teddy didn’t make the decision alone. Although Guident originally sprang from his work as a consultant-for-hire, Teddy is quick to point out that the company was co-founded by him and his partners. “A major contributing factor to the success of our team,” Teddy says, “is that we all come from the same professional background. There is no clash in our values or ways of thinking. It’s just different skills.”
Along with Teddy’s professional background, his personal background contributed to the decision-making process that has preserved an integrity as strong as the success it undergirds. Born and raised in Puerto Rico, Teddy’s father was and still is the chancellor of the Inter American University of Puerto Rico. His mother, a high school English teacher, left her teaching career to raise Teddy, his sister, and his two brothers. Growing up on campus in the university town of San German on the west part of the island, Teddy spent his childhood exposed not only to faculty and campus resources like computers, but also to guest speakers who would occasionally meet with his father.
“I had the honor to meet many interesting people,” he recalls. “Politicians, writers, Nobel Prize winners. These individuals would come to visit the university, and many of them would end up sitting on my father’s porch, conversing with him.”
Strong family support, exposure to academia, and campus resources were not the only assets available to Teddy. He was also a prodigious math student. His natural ability, enabled by his family and environment, allowed Teddy to advance through high school math by the time he was in middle school, and very soon he was studying college math and computer science. He enrolled at the Inter American University of Puerto Rico by the time he was sixteen.
“My father never had money,” Teddy says, “but he had a PhD and a very strong cultural background. He was a very knowledgeable person all around, as was my mother. I grew up in a family where I had a chance to read an encyclopedia from the first to the last page, and I was exposed to so many things as a child.”
While still in middle school, Teddy began tutoring other students in math. “I was like a walking calculator,” he laughs. “My father challenged me to take advantage of my math ability. I had already finished almost the entire college level math curriculum by the time I was in tenth grade, and I tutored college students before I left high school.”
At the time, his work as a tutor was not necessarily about making money. “I would make about $100 a week,” Teddy continues. “When summer came I would go to a friend’s beach house. We would fish for food, and the money would go to gas for the boat. And probably beer as well.”
Teddy obtained his undergraduate degree from the Inter American University of Puerto Rico, followed by a masters in math from Lehigh. He returned to Puerto Rico and began doing what he knew best: teaching. But Teddy was not destined to remain in academia.
“I didn’t really know what I wanted to do, ultimately,” he remembers. “I stayed in school, got my masters, then went back to Puerto Rico to teach, which I could do basically with my eyes closed. I had been doing it since I was a teenager. I’ve never been one to take the easy way out, however, so I knew I wouldn’t be happy in that capacity for long. That’s why I decided to do even more school, returning to the states to attend William and Mary to get a PhD. It was there that everything changed.”
A year into the program at William and Mary, Teddy noticed in a posting that the international professional services firm, Price Waterhouse, would be sending interviewers to the college. Teddy seized the opportunity, and took the first step on a road that would ultimately lead him to where he is today.
“I remember being in a room with 400 other students,” Teddy says. “We all turned in our resumes, and I was picked for an interview. I made it through several rounds of interviews and was eventually offered a position. My dad told me I would be crazy not to take the job. I wasn’t finished with the PhD program, but I saw the potential at Price Waterhouse, and I seized it. I still didn’t know exactly what it was, but I knew it was the right thing to do.”
Teddy began as a programmer and was also involved in consulting engagements with Vitro, First Union Bank, and Manor Care, but it wasn’t long before he was selected for a training program in Tampa, Florida. Following the pattern he had set in high school and college, he began teaching elements of the training program before completing it. Once finished with his training, he stayed on to teach three more classes. Eventually Price Waterhouse asked him to stay in Tampa and teach, but Teddy hesitated.
“I’m a teacher by nature,” Teddy says. “But I came to understand pretty quickly that a teaching career at Price Waterhouse was not the best that I could do. The pay-scale for being a teacher at their training program did not come close to comparing to the value they placed on actual billable work. Even as I received all “Excellent”s on my evaluations, my salary increase was dismal. So I got out of there.”
It was the first time Teddy recalls being motivated by money and by his vision for his own earning potential. As a result, he left Price Waterhouse and decided that he could really set out on his own. But looking back, he realizes that his confidence at the time was somewhat illusory.
“I guess it was partly ignorance that led me to starting Guident,” Teddy says. “I had learned a lot at Price Waterhouse. I met very interesting people. After participating in the PSINet and Nextel consulting gigs in that capacity, I felt I knew more than everyone else. Which, of course, I later learned that I didn’t.”
As Teddy and his partners grew Guident, his teaching and learning ability proved integral to their success.
“We really figured out this business on our own,” Teddy says. “Between us, we figured it out. We needed an accounting system, policies and procedures, and documented systems. We had the background and experience, but there was a lot we had to learn, and we passed that learning along to our employees. And there was plenty of luck, too, of course.”
Teddy’s ability to rapidly absorb new information featured prominently as Guident road the bubble through its collapse. Narrowly avoiding disaster at the beginning of the millennium, the redefined tech industry demanded a fundamental change in the Guident’s business strategy, and Teddy was just the man to meet that challenge.
“We had to reinvent ourselves in the federal space after the dot-com crash,” he explains. “We were in survival mode in an entirely new landscape, and we had to adapt. It was entirely reactive, and there was a lot of luck that came at the right time. But we made it.”
Today, Guident has over 200 employees and another 60 contractors. “I see a very bright future for the company,” Teddy says. As the enterprise continues to prosper, Teddy continues to teach, having recently joined the board of NFTE, the Network for Teaching Entrepreneurship. He hopes to carry the same teaching skills that have proved so successful at Guident into the classroom, and in advising young entrepreneurs entering the business world today, his tried-and-true sequence of operation is learning, adapting, and teaching. “That’s the pattern of perseverance, and passing it along to others and helping them figure it out is just part of the equation,” he avows. “We’re in the business of people. Mentorship programs and career models trickle down to have real impact in more lives than just the individual being taught. It’s my philosophy that knowledge is meant to be share.” Always learning, always teaching, it’s a business model and life model that brings success and soundness of mind.