We’re doing it folks. We’re diving into one of the most infamous computer advertising rabbit holes of all time: Gateway 2000. 

It will take a few issues (I plan to intersperse regular, non-Gateway issues between them) and will include a bunch of not-bad ads, like the one above, to show how much respect and goodwill Gateway 2000 managed to set fire to in a relatively short timeframe.

“Computers from Iowa?” is a legendary advertisement. It is mentioned in nearly every account of Gateway 2000’s absolutely bananas rise to 90s dominance and I have nothing negative to say about it (the poor contrast on the text seems to be a scan issue rather than a design one). 

The question in the heading and the visuals behind it are intriguing without being inscrutable. And, in the span of a glance, you know exactly what’s for sale and how Gateway 2000 is different from the competition. Heck, only a few pages before this one another advertiser was selling the same 286 for $400 more. 

To understand their subsequent misfires, you need the full context of just how phenomenal these freshmen outings were. This ad’s copywriting and cattle, for example, is not the product of some agency or stock photography. The words and the animals came directly from the farm of Gateway 2000’s CEO, the ponytailed long-term billionaire boyfriend of Ghislane Maxwell, Ted Waitt.

When his grandmother, “Momo,” pledged a $15k CD for Ted to start the company in 1985, “We were so uncreditworthy that the bank would only lend us $10k,” according to one interview. Waitt and co-founder Mike Hammond had to literally rent a computer to write the business plan they presented to the bank. Not owning a computer and asking for a loan to sell computers is hysterical, like trying to sell cars as a bicycle tour guide.

Years down the road, Andy Grove, the chairman of Intel Corp., would tell the New York Times that "If anybody had walked into my office and described his business plan – location-wise, look-and-feel wise – I would have thrown him out." And Gateway seemed to agree with that sentiment as years went on, trading their scrappy on-location and DIY marketing for outside agencies and try-hard trash, which we’ll get to in later issues. First, we have to examine how far Gateway had to fall.

In 10 years of copywriting I don’t think I’ve written a headline as wonderful as the one above. That’s really their father’s farmhouse, where they actually worked, making $100,000 in the first four months of business!

By the time this campaign appeared in print, they were bringing in $12 million per year, with the entire operation running out of “Sioux City’s 100-year-old Livestock Exchange building, paying $350 a month in rent. The cow manure was cleaned from the building, and Gateway’s new offices were furnished with used furniture.”

A year after the Outstanding In Their Field spread, Gateway 2000 had sold another $70 million worth of computer hardware over phone and fax (and the occasional BBS enquiry), spending a paltry 2.5% of revenue on marketing and paying employees $5.50 an hour. Ted reinvested every penny into growing the company and went as far as spray painting their logo on computer boxes instead of ordering them custom made.

The whole time, Waitt was intimately involved in the company’s ads. In 1990, he hired a couple of local creatives and an advertising manager who recalled how, “Once, so jet-lagged he was practically hallucinating, Waitt blurted out a fully formed idea for the "PC Saloon" ad.” 

What a perfect counterargument to my complaints that elaborately costumed and staged ads almost always do more harm than good! In deliciously few words, this ad communicates everything a buyer needs to (literally) make the call. And, for those who are willing to give it more than a few seconds of attention, there are plenty of subtle gems.

Obviously, that’s Ted Waitt front and center. I believe that’s Mike Hammond in the blue suit on the left, and Norm Waitt, in all black on the right. “The others at the table, including a frustrated young man and an older, stodgy businessman, were meant to represent various Gateway competitors. ‘It was a bit of an in-joke,’” advertising manager Barb Gross told Inc. magazine in 1991.

There were other, more traditional ads from Gateway 2000 in the 1990. But Waitt only seemed interested in silly, topical ideas. After a buffalo-themed shoot to coincide with the release of Dances with Wolves, for example, someone said they should follow it up with another based on whatever Kevin Costner was doing next. “You absolutely cannot do Robin Hood. He was a thief, for goodness' sake,” Gross begged the group.

Waitt as Robin Hood, smiling and flanked by his “merry men and women,” fit flawlessly into the tale of “swift, lean woodsmen” (from Iowa) fighting the Mighty PC Titans.

“Perhaps due to our South Dakota location, Gateway was a do-it-yourself type of company,” the company’s Director of Marketing reminisced in 2018. “We wrote and conceived the ads. We produced the ads. Our employees were the talent in the ads. We bought the media.” 

If this company timeline infographic is to be believed, they even mocked up a Robin Hood ad that staged and photographed Waitt in a way that was indistinguishable from Costner’s Robin Hood movie poster (I couldn’t find it in any magazines, though). And they did it just for kicks…I guess? I’ve never seen ads that looked like the subjects had as much fun as Gateway 2000 employees did.

Later in the year, Gateway 2000 kept the servant CEO theme going with an ad depicting Waitt as a janitor. The idea was that he was cleaning up after the company became the first to win all of Computer Shopper’s desktop PC awards. It wasn’t as silly or ridiculous as previous campaigns but retained most of the charm. It was also the last great ad before the company’s marketing downfall, inversely correlated to their exponential growth.

In 1992, the company soared past $1 billion in revenue and Inc. magazine named Gateway 2000 the fastest-growing private company in America. The team started pitching to corporate buyers and Waitt doubled the pace of its advertising schedule, leading to dozens of overlong, convoluted, and soulless ads over the next five years.

Ancient civilizations, aliens, conspiracies…why would any of these things increase someone’s interest in a Nomad laptop? Nothing about this ad plays on Gateway 2000’s hard-earned reputation as a down-to-earth midwestern company. And it couldn’t have come at a worse time.

“Gateway found itself deluged by a wide variety of customer complaints, alleging problems ranging from delays in delivery to improperly constructed computers,” according to one record. “Gateway buyers complained that the company’s quality control had fallen apart, and that its efforts to address complaints were inadequate. The company blamed the shortcomings on extremely high demand for its products.” It turns out it’s a wee bit difficult to hire and recruit in a town that didn’t get its first traffic light until four years after its top employer made a billion dollars.

Instead of pumping the brakes to catch up and reevaluate, Waitt doubled down. Gateway 2000 ran half a dozen different ads in 1993 that took up four or more pages, relied on complex fictions, and strayed from their image of friendly industry outsiders. 

But like Dakota and Lexa’s spelunking story above, what happened next with Gateway 2000 is To Be Continued in another issue.

Cited References:

• Byte Nov 1988 Special Edition - PDF Page 45  (Vintageapple.org)

• PC World Nov 1989 - PDF Page 52 (Vintageapple.org)

• What's luck got to do with it? by Gregory K. Ericksen (Archive.org)

• Ted Waitt Isn't Walking Away From Gateway (New York Times)

• International Directory of Company Histories 2004: Vol 63 (Archive.org)

• Gateway into the real world - Release 1.0 (Archive.org)

• A brief history of how it all came together and then fell apart… (The Spotty Box)

• Betting the Farm - Inc. Magazine (Archive.org)

• PC World Jul 1990 - PDF Page 26 (Vintageapple.org)

• Byte Feb 1991 (Archive.org)

• Byte Aug 1991 - PDF Page 31 (Vintageapple.org)

• What I talk about when I talk about bad ads (Buttondown)

• Gateway co-founder detailed his romantic relationship with Ghislaine Maxwell (The Guardian)

Uncited References and Ads:

• Gateway 2000 Homepage - 1996 (Archive.org)

• Gateway 2000 Annual Report to SEC - 1996 (SEC.gov) 

• Gateway, Inc. (Wikipedia)

• How Outsourcing Led Gateway 2000 Astray (Tedium.co)