TORONTO – Despite shrinking margins, cutthroat competition and a limping economy, Danny Schneeweiss continues to succeed in the computer business.
Danny Schneeweiss is an entrepreneur who, at age 18, put his dream of becoming an airline pilot on hold to start one of Canada’s largest independent computer stores.
In an age where computer margins have fallen to five per cent, it’s a wonder how Schneeweiss, now 38, has survived the amazing history of the PC business. It’s a story of business smarts, entrepreneurship and perseverance.
PCs had barely been invented when he graduated from high school in 1982 and opened the Computer Systems Centre (CSC) with money borrowed from his father.
A vacant retail spot became available at the corner of Toronto’s College Street and Spadina Avenue in a building his father owned. It was there he opened CSC, and laboured as the company’s only employee for a year.
In 1984, the Macintosh was introduced in a famous commercial during the SuperBowl. The little machine reinvented PCs, introducing a mouse and a graphical user interface.
It changed Schneeweiss’ business too, which grew to seven employees that year. In 1985, the company prospered and became a Compaq dealer.
“In the 1980s, we had good growth and huge margins,” recalls the CSC CEO, who hails from the Toronto suburb of Willowdale. “Margins were 40 per cent.”
With his business booming in the mid-1980s, the entrepreneur decided to chase his other dream. He entrusted the company to his employees and got his commercial pilot licence. He landed a job flying with NorOntair, an airline that serviced Northern Ontario.
Later on, Schneeweiss flew mail overnight from Toronto to New York City. In the morning, he would fly European mail to Montreal, return to Toronto to work at the store until 6:30 p.m., sleep and do it all over again.
But the lure of the computer business was too strong. In 1989, he grounded himself to focus on the business.
In the 1990s, Microsoft Windows hit the market and the IBM-compatible computer business came on strong. While CSC stayed faithful to Apple and continued to carry its products, the company also jumped on the PC bandwagon. It rode the PC’s phenomenal growth as it moved from a business machine into the homes of private citizens.
In two decades, CSC weathered several recessions, including the most recent economic downturn. Schneeweiss toughed out these downturns by cutting back staff and trimming operations. He also focused CSC on a new sector of business: service and support.
“Half our staff is employed in services today,” he says. His company does warranty service for Apple, IBM, Compaq, Toshiba, Lexmark and Hewlett Packard.
The entrepreneur believes that customer satisfaction and early hours are part of that service success because people can drop off gear at the service centre before work.
Schneeweiss sees a couple of interesting trends for the future of his business. First, he is concerned about software piracy in Canada.
“One of the problems in this business is software piracy. I see it on a daily basis. An average customer will buy a PC, but no software. They say, I can get a copy of that.’ They are blunt. They tell you right to your face.”
The Canadian Alliance Against Software Theft estimated that the software industry lost $457 million in 2000 because of software piracy, according to its recent Canadian Provincial Software Piracy Study.
Another trend is convergence, which is pushing computer stores like CSC to become consumer electronics outlets.
“What we’re seeing is new gadgets coming into the digital arena in a big way. Companies are building software around digital cameras and PDA devices,” he says.
Clearly, 20 years in the technology reseller business has made Schneeweiss a wise man.
He offers this advice to young entrepreneurs: “When starting a new business, you have to approach everything from a logical perspective. Develop a good business plan and make sure that for everything you sell, you have a way to service it.”
