Oregon Public Broadcasting

When times are tough and people lose their jobs, we usually focus on those who’ve been laid off.  But there’s another side to the story -- those who actually have to make the cuts.

For OPB’s series ‘Hard Times’ Kristian Foden-Vencil visited a small Portland start-up that recently cut 80 percent of its staff.

CrossCurrent is a tiny company based in a big, old Portland warehouse.

It designs software that allows surgeons and doctors to track their work and correctly bill insurance companies.

Co-founder, Chris Baker, gives a tour of the nerve center.

Chris Baker: “This is where we do our software engineering here. It’s four coffee tables joined together with some black vinyl. The place is wrapped in white board so two feet in any direction from the tables so you can walk and scrawl something on a whiteboard so we have probably hundreds of whiteboard space here.”

The scene is what you might imagine a typical start-up to be.

The engineers have rigged up a series of sounds and lights to their testing equipment. So if there’s a problem with their software they get a warning.

And then, if the software is working fine, they get another cue.

Last summer, the company was going great guns with 18 employees and a bright future. But like many start-ups, it was dependant on angel capital. Then in October, when markets across the nation crashed, that capital dried up.

Chris Baker: “So we called a board meeting and said we don’t have any money. Essentially on Friday we told everyone, no one’s coming into work on Monday and nobody’s going to get a pay check. I mean we don’t want people to work and not get paid.”

Baker says it was very difficult.

Chris Baker: “The first thing that comes is that it’s hard to believe you’re really at that point after working so hard trying to build something for years that a) the thing may have entirely failed on you, b) that you don’t personally know if you’re going to have a paycheck the next week and take care of your own family. And c) having to lay off friends and colleges that you’ve with for years, it’s a pretty overwhelming experience.”

The good news was that they’d just finished their software program -- so they actually had a product to sell.
So rather than give up, Baker says they kept a core of four people -- reduced wages and started selling.

Baker even got his 69-year-old mum, Sandy, to do the books.

Sandy Baker: “I mean they want to pay me now and I say no, I don’t want to be paid. I don’t need the money at this point in time and the company does and it frees them up to hire someone else.”

Sandy does get stock in the company, but says she’d do it for nothing.

Six months after the market crash, sales are slowly picking up and the company is up to eight staff -- albeit still on reduced pay.

But the future looks better -- especially as computerizing the healthcare industry is high on the Obama administration’s agenda.

Still, says Dennis McNanny, the other co-founder of CrossCurrent, they’re not about to do any large scale rehiring.

Dennis McNanny: “I think that’s hardest about this period is watching all the good people -- and I get the e-mails everyday -- to have lunch. You know people networking. I’ve just never had that sort of volume of people wanting to reconnect. All very competent, qualified professionals.”

CrossCurrent did hire back some of the people who were originally let go. But as Chris Baker says, working for a start-up is not for “sissies” -- nobody knows whether the company will explode or suddenly implode.

OPB used its Public Insight Network of knowledgeable individuals to help assemble this report.