Making Your Own Success

According to Michael J. Muhney he had his "15 minutes of fame" early in life. He was the second baby born in the United States in 1951, 30 seconds after midnight, and his birth was announced on national radio by Kate Smith.

The oldest of six children, Mike grew up in Chicago's Hyde Park where he attended Catholic grade school. An outstanding athlete, Mike was given a full basketball scholarship to Brother Rice High School. This was welcome news to his parents, but not to Mike who wanted to attend the public high school with his friends. Arguments were in vain; Brother Rice it was. During his first basketball game, Mike broke his ankle. He sat out the rest of the season. Because he had already lettered in cross-country in the fall (the first freshman ever to letter in any sport at Brother Rice) the school was willing to transfer his scholarship to cross-country, and Mike never returned to the basketball team.

Mike Muhney's life has been punctuated by similar stories potential disasters that he turned into successes.

From the time he entered high school, Mike knew he wanted to be a lawyer. So college was definitely in his plans. Although he took advanced courses and a college prep program, he was not a diligent student. He was more interested in sports than studies, and he was rebellious. For his three years at Brother Rice, he was an indifferent student, but in his senior year, after transferring to the public high school, his attitude and grades improved dramatically. Improvement came too late, however, for acceptance to the University of Illinois where he had always dreamed of going. Undaunted, he applied to Southern Illinois University, where he went for two years. After getting straight "A"s for six quarters, he transferred to the University of Illinois and received a bachelor of science degree in finance, with honors, in 1974.

Mike was the first and only member of his family to receive a college degree. His dad, who started out as a carpenter/apprentice for a general contractor, moved into managerial positions over the years and retired as vice president of a general contracting firm. Through his dad, Mike was able to earn money throughout high school and college by working on construction jobs in the summer and during school holidays. This work, and a job at the University Library during the academic year, financed his entire college education.

Mike intended to work in construction the summer after graduation to pay for his first semester of law school. Unfortunately, concrete drivers in Chicago were on strike all that summer. No concrete, no construction. No construction, no money for law school. So, instead of attending law school in the fall, Mike became a full-time construction worker. He also applied for all types of finance-related jobs with no luck. A friend at IBM urged him to apply for a position there.

After six interviews and an IQ test, IBM hired Mike as a regional salesman. "The training program at IBM was superb," he told InSight. "The equivalent of an advanced degree." There were 66 people in his year-long training class. Mike ranked 6th at the end of the program. The highly competitive atmosphere at IBM suited Mike. He found the highly pressurized environment stimulating, pushing him to outdo competitors, colleagues, and his own performance. At Illinois he learned to stand up to intense academic pressure. At IBM he honed the skill to an art. The experience at IBM was truly life-changing for Mike. It was there that he learned to be sensitive to the customer's needs, to understand business, and to navigate tough situations successfully. He remained at IBM for five years and turned out to be a super salesman making the 100 Percent Club several times.

At the age of 27, Mike was recruited by 3M. After only a year, he and a friend started their own business. This first entrepreneurial venture failed after one year. Although he liked taking risks, and loved being his own boss, Mike was now a family man with wife, kids, and a mortgage. He opted for security and went to work for Digital Systems, Inc., a small company that sold hardware and software to the CPA industry. After a year with the company, Mike was ranked number one in sales and new accounts. In 1983 he was recruited by Computer Associates. He stayed there, happily, for two years, but then he and a friend decided to start their own company. Contact Software was launched.

Contact Software's first product, based on Lotus Symphony, was a flop. But the two friends so enjoyed working together and being their own boss, that they decided not to give up. Before settling on a new direction, they tried to determine what they really knew best. For each the answer was "selling." As salesmen, they knew what customers needed. The product they envisioned would be useful to anyone who sells, and for them that included anyone who worked with people. In fact, their code name for the product that became ACT! was YES! (Yes, Everyone Sells).

On the morning of July 4, 1986 (Mike was never one to pay much attention to holidays), he and his partner had a 4 hour breakfast and the seed for ACT! was planted. In April of 1987, ACT! was released. This software was designed for people who deal with people in business and who didn't do that? Based on an ever-changing "profile," or contact record of an individual, it included infinite notes and a history file, logging every transaction done with or for that person, an integrated calculator, a query system, report writer, word processor, phone dialer, and communication features. In short, this software, combined with a lap-top computer, created a portable office for any professional who has clients to track and serve. He and his partner were the architects of the product. They hired two programmers to translate the design into software.

In 1987, when this product was launched, there were only three kinds of software: spreadsheets, word processing, and data base. ACT! didn't really belong to any of these three. What Mike and his partner had done was create a new category of software, dubbed "Contact Managers" software designed to help people who deal with other people be more productive in their job. This innovative, useful product also received some very innovative marketing. The software world hailed the new product. It won over 50 awards, the most prestigious being PC Magazine's Editor's Choice Award, which it won 3 times (including the French version of the program). The product was successful beyond expectations. At it's height the

company, headquartered in Dallas with offices in San Francisco, Boston, London, and Munich, employed 150 people. It was poised to open a Paris office when Symantec Corp., the makers of Norton software, bought the company for $47 million. Four months earlier the principals had refused an offer of $20 million, which they thought undervalued the company. In June 1993 both Muhney and his partner were given 2-year contracts with Symantec to run Contact Management, the division established to market ACT! After a few months they both left Symantec as a result of disagreements. ACT! continues to be the number one software product in its category, although today some competing products have been developed.

"Selling the company was a great business move," Mike says. And he has no regrets on that score. "But I miss the special business environment we had created at Contact Software. Those were exciting, heady days."

Success has its consequences. At the age of 43 Mike Muhney was "retired." Now a private investor, he looks for high-risk, high-reward opportunities. Recent activities included being chairman of the board of a start-up software company in Dallas that was sold after one-and-a-half years for $3 million. Mike doesn't just develop good products, he is also a tough businessman who has the confidence to know his own worth and hold out for a fair deal. The acquiring company's first offer was for only $1.7 million.

He also invested in a company that has just discovered the world's largest soda ash deposit. Another high profile venture is his investment in the Michael Jordan Golf Co. An avid golfer himself, Mike finds multiple appeal in this project. The first franchise opened in Aurora this fall. A second is planned for North Carolina. His most recent investment is in a start-up sports entertainment/multimedia company. Corey Pavin, winner of the US Open, has been signed to do spots for the company, and Mike is trying to secure Michael Jordan for another of his software ideas. Jordan's initial response has been positive.

Success for Commerce alumni takes varied paths. What many alumni share is a great affection for the university and a sense of obligation for the knowledge and values acquired, here. Mike Muhney takes great pride in his degree because Illinois is one of the finest educational institutions in the country. In recent years he has returned to the campus for frequent visits. In March he will spend a week on campus as an Executive-in-Residence, as he did in the fall. When he was last here, a student asked if his UI degree had been helpful in his work. "I never used the degree in finance," he told her, "but what I have learned at the University of Illinois is invaluable. It was here that I learned how to compete with the best and the brightest, to take pride in my institution and myself. Because I was doing well at a school like Illinois, I was able to see myself as capable and competent. I'm proud to be an alumnus of a university that has such high stature in the educational community. But I never used my finance degree!"

Mike Muhney (left) with new business partner Michael Jordan (center) and sons Michael David (right) and Derek (front).

At Illinois he learned to stand up to intense academic pressure. At IBM he honed the skill to an art.


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