Guido D'Elia watched from his Downtown office window as fans streamed across Roberto Clemente Bridge to PNC Park for the new ballpark's inaugural game April 9, 2001.

	Robin Rombach/Post-Gazette
	Mind Over Media, headed by founder Guido D’Elia, saw its dreams of expansion implode but still made the move to renovated digs in a former Westinghouse factory.

He had observed construction of the new stadium closely for months, comparing its progression to a booming expansion his company was going through at the same time and which included moving to a new site in the Strip District.

But for all the celebration surrounding the Pittsburgh Pirates and their new home on the North Shore that April afternoon, D'Elia, a longtime season ticket holder at Three Rivers Stadium, was preoccupied by things other than baseball. He was considering selling his company's season tickets at the new park as a way to raise desperately needed cash for Mind Over Media, his foundering video and Web site production firm that had started the year with such promise.

In January, D'Elia had proudly unveiled plans to transform an old Westinghouse factory on Liberty Avenue in the Strip into new office digs that would be a dot.com worker's paradise, with amenities such as a cappuccino bar, indoor basketball hoops and climbing wall, and laundry and car wash services. West Coast venture capitalists had even wooed D'Elia and his partners with proposals to replicate his cutting-edge business in other cities.

But in just a few short months, the bottom had fallen out of the technology market and, D'Elia recalled, "Business had screeched to a halt." Longtime clients had suddenly put projects on hold. "We went from having lunch in Santa Monica with venture capitalists ... to figuring out how to design our lifeboat and what occupants to take."

After a dizzying expansion spree, Mind Over Media was about to undergo an excruciating downsizing -- a move numerous entrepreneurs faced at the decade's start as the tech market went bust and the economy entered recession.

What happened to Mind Over Media -- investing in too much too quickly -- happened to tens of thousands of smaller companies and start-ups during the go-go tech boom of the late 1990s. Many didn't make it. But those that did, including Mind Over Media, were forced to make hard decisions that eviscerated the get-rich-quick dreams of workers, their bosses and the firms' financial backers.

Today, the Post-Gazette looks at how three former high-tech hot shots survived the crash.

After nearly two decades in business, D'Elia was in a situation he never expected to be in.

His firm had been in a growth mode since its founding in 1982 as D'Elia-Wittkofski, a production boutique whose business ranged from corporate videos for US Airways and Bayer to weekly Penn State football broadcasts. In 1999 it had reached record sales of $5.6 million, aided by the acquisition of an upstart Internet design firm.

But by that April in 2001, D'Elia realized it was time to make drastic changes. So he and key members of his management team spent a weekend huddled in their Downtown offices attempting to salvage their business and as many of their 56 employees as possible.

"The accountants were screaming and begging us to start cutting ... so we locked ourselves up to figure out what to do," he said. What they emerged with was a plan to slash half their staff and drastically scale back the amount of space they would occupy in their Strip District building.

"First we cut services like magazine subscriptions and drinking water, then we got to the basic level of need: space and people."

Eliminating jobs was "the most difficult thing we've ever done," said D'Elia, who along with his original partner, Joe Wittkofski, and five other top creative people, signed commitment letters to stay with the business for at least three more years.

"I never felt like we wouldn't get through it, though there were months that I didn't sleep well," D'Elia said.

As for its new space, Mind Over Media moved into the second floor of the old Westinghouse Air Brake factory and leased the rest to an engineering firm and a small advertising agency. The space is bright and hip like the people who work there, but devoid of extras like the much-hyped basketball court.

"It sounds crazy now but it wasn't then ... lots of companies were doing that to attract workers," D'Elia said of the tech boom years.

Mind Over Media moved to the Strip just a few days before 9/11, which sent even deeper shock waves through the company and made its reorganization efforts "completely uphill," D'Elia said.

Two years later, with 28 employees and sales in line to hit $3.9 million, D'Elia attributes his company's survival to refocusing on its core strength: video production services for colleges and corporate clients. Web production comprises only about 35 percent of sales.

With corporate clients still facing tight budgets for marketing and communications projects, Mind Over Media has made a solid push for more higher education jobs such as a recent fund-raising campaign kickoff at Texas A&M University and admissions projects for schools including Penn State and Old Dominion. Because they're not bogged down with constant expansion plans, D'Elia and other managers can devote more hands-on time to projects.

"We're happy to be a boutique again," said D'Elia who expects future growth to be "very slow and moderate."

Of the downturn that almost knocked his business flat, D'Elia said, "Before that we were on top of the wave. They were heady times. When [bad times] hit, everyone is exposed for who they really are. Some can be rescued, some fold and some flee. Looking back, I think we actually did a much better job than it felt like when we were going through it."

Kent Heyman knew the situation was grim at ServiceWare Technologies when he took the helm of the Oakmont-based company. That was on Sept. 5, 2001, less than a week before the technology market would be delivered its crowning blow with the 9/11 disaster. Heyman had been named chief executive to try and turn around the struggling company that, after a decade in business, was still not generating profits or positive cash flow.

	Bill Wade/Post-Gazette
	President Kent Heyman is encouraged that the much-smaller ServiceWare Technologies eked out an operating profit in its most recent quarter.

Following a $14.5 million loss in 2000 and a $12.6 million loss in the first quarter of 2001, "We had to stop the silly spending," said Heyman. "The company spent far more than it earned. It didn't take a Phi Beta Kappa key to know that couldn't go on forever."

ServiceWare, which is headquartered here but maintains offices in New Jersey, makes software that helps companies solve customer service questions over the Internet or at call centers. Its biggest customers include Cingular Wireless, AT&T Wireless and H&R Block.

During its peak in the late 1990s, the company employed more than 200 and was ranked among the fastest-growing tech start-ups in the region. Even after the market began its downturn, ServiceWare was confident enough to go public in August 2000 at $7 a share, well below initial plans for a share price of $10.50 to $12.50.

But after reaching a high of $7.50, its stock couldn't sustain the excitement Internet companies had generated a couple years earlier. Nasdaq delisted it and it now trades for less than a dollar on the OTC Bulletin Board.

Even before Heyman came on board, managers had started to slash the payroll, halving the number of employees to 100 in less than a year.

Heyman knew more was needed and was prepared to convey that message at his inaugural meeting with the remaining managers, scheduled for Sept. 11, 2001. Events, obviously, superseded any immediate action.

"We watched with horror as planes were crashing, abandoned the meeting and sent everyone home," he said.

Heyman drove back to his home in Pittsford, N.Y., advised employees through a company-wide e-mail to "take a day off to sort through your thoughts" and reconvened the management team the following week at a Marriott Courtyard hotel in Binghamton, N.Y., a destination everyone could reach by car.

Heyman's strategy was to "gently guide rather than turnaround" the troubled business.

"The financial performance was grim ... but we had some very, very talented people and products with enormous potential."

While it pared such budget items as travel, reduced the number of costly meetings by asking people to use Web-based conferences and cut "every expense we could," Heyman said, more employees had to go. The payroll now stands at 58 full-timers, including about 27 in Oakmont.

After disclosing in a securities filing last November that it faced liquidation, the company may be operating on less shaky ground.

For the quarter that ended June 30, ServiceWare reached what Heyman considers to be a major milestone: it eked out its first operating profit of $78,000. The net loss for the quarter shrank 56 percent to $369,000 from $842,000 in the year-ago quarter.

"Now we're in a position to deliver actual earnings. I can't say how long it will take but we've hit every management target to get the business to be no longer a consumer of cash."

ServiceWare's massive layoffs were unavoidable, Heyman said. "Doing more with less is something the company had to do to survive. I'm not inherently proud of it because it affects people's lives. There were some painful decisions that were necessitated by the basic lack of cash. But we did what we had to do. We have a strong team that's doing the work of many more than 58 people."

He describes the atmosphere around the radically downsized company as "a more informal culture where the entire management team tries to nurture ideas." As it restructures, the company continues to try and enhance its software packages and has released several new products in the last year that have earned industry endorsements.

"We're very optimistic about the balance of 2003," Heyman said. "Our product is well received. Customers like it. We're positioned to survive even if technology spending doesn't pick up. If it does pick up, we could do very, very well."

Harbinder Khera left a secure management consulting job in Pittsburgh in 1998 because he couldn't shake his desire to start his own business. His idea was a Web site that helped customers select and purchase the hardware and software they need to run companies. Khera's company, MindMatrix Inc., would earn revenue from the suppliers who appeared on the site.

	John Beale/Post-Gazette
	Harbinder Khera, chief executive officer of MindMatrix, a company that was forced to downsize after the downturn in technology.

The India native, who had come to Pittsburgh to earn a master's degree at Carnegie Mellon University, dipped into his savings and racked up debt on his credit card for six months before a Boston investor saw his business plan and invited him to meet.

At the time, Khera was so strapped he couldn't afford a full-fare ticket to fly to Boston, so he drove all night to make the appointment. The investor was Shaun McConnon, a former tech company executive who once worked for Sun Microsystems. He was so impressed with Khera's determination to get to their meeting that he wrote a check for $100,000 on the spot and later put in $500,000 to help fund Khera's dot.com dream.

Khera eventually raised $2.8 million for the company and added staff at a furious pace, with employment peaking at 35 in the United States and nearly 100 software developers in India.

But the tech collapse caught up with MindMatrix and in 2001, Khera laid off about half his U.S. employees and most of the off-shore developers.

With barely any revenue or investor backing left, "I thought we might have to close," said Khera, who in five years has moved his offices several times in the same Shadyside building to accommodate the company's rapid growth and its subsequent decline.

"My mistake was hiring people before I had the revenues to support them," he admitted.

After spending much of 2001 trying to tweak his software to create more interest in it, Khera and his small staff came up with the idea of targeting it for commercial real estate brokers who could use it to organize photos, maps and floor plans of their properties on the Internet. Several local brokers bought the idea, including Beynon & Co., CB Richard Ellis, Elmhurst Group and Grubb & Ellis. Once they signed on, MindMatrix quickly turned cash-positive, Khera said.

But the company got its biggest break early this year when Pittsburgh's dominant residential broker, Howard Hanna Real Estate, decided to use MindMatrix to help market its new housing communities.

Khera knew Vince Carson, the son of Hanna's president, Helen Hanna Casey, from working out in the same East End gym. Carson, who figured the software might work for home sites as well as office buildings, now works for MindMatrix.

The company's software allows users viewing Hanna's residential Web listings to click onto specific communities, such as Treesdale in southern Butler County, and get detailed data on available lots at the site, homes that are for sale and floor plans and room details of houses. The MindMatrix software also tracks how many people have visited the site so sales agents can track interest in specific properties.

Despite the upturn in his business in recent months -- he doesn't disclose revenue at the privately held firm -- Khera employs only eight and isn't looking to add many more. He recently added two salespeople to market the product in Philadelphia and Washington, D.C. "If I don't have to hire, I can keep my overhead low."

He also wants to avoid the painful exercise of handing out pink slips if the business cycle reverses. Last time around, the layoffs coincided with the Christmas holidays. "It was hard; it became very emotional and is a very difficult choice as an entrepreneur."

Khera's not planning to hit the streets for more venture investment, either.

"At this point, the valuation of software companies is so low that it would be very difficult and would take a lot of my time to try and raise it. If the economy improves, I'll go after more money." When the tech market collapsed as he was building his business the first time, Khera said, he derived support from his wife, who has a full-time career at PPG Industries, and from his religion. He still does. On a business trip to India earlier this month, he planned to visit a holy shrine in the Himalayas to seek personal and professional inspiration.

And though his business has been through highs and lows, Khera does not regret launching it.

"I've always seen a lot more respect for entrepreneurs in the U.S. [than in India] ... even if they're not making a lot of money."