Tag Archives: Massachusetts Institute of Technology

About 4735 days ago Telecom and Wireless

Sign of the Times: Culture Gets Benched

When college dropouts Andrew Perlman and Mark Land founded Cignal Global Communications, a fiber-optic data-communications company, five years ago, they ran it out of a low-rent apartment in Cambridge, Mass. In the fall of 1997, the then-five-person business received $23 million from venture-capital firm Spencer Trask & Co., in New York City. One of the first things that the twentysomething founders did was look for new office space. And when they found it, they indulged in one fantasy: they installed a small glass-enclosed basketball court just beyond the reception area. Price tag: about $2,000. “It had been a conference room, but we thought it was too big and cold, so we had the room insulated and put in a parquet floor and a backboard,” explains Perlman. “The building management almost kicked us out.” The “mini gym” was an instant hit. “It was a fun thing that attracted people,” says Perlman. “We used to shoot hoops during lunch or on Friday afternoons. Our bankers loved it.” But as Cignal grew to $25 million in sales — and a staff of 140 employees — the court went from sacred corporate cultural ground to badly needed office space. The company’s offices are located in a start-up hotbed near the Massachusetts Institute of Technology, where commercial vacancies are rare and good space is expensive. Plus, the cost of relocating a computer network as sophisticated as Cignal’s would have been prohibitive. So in came the cubes. Eight people now have offices below the still-present basketball hoop, and the parquet is covered with temporary carpet and crisscrossing wires. Cignal plans to remove the parquet floor and backboard shortly, when it moves its network operations center (and an operations staff of eight) into the room. “We’re still fun people, but our employees know we’re all here to build a successful company,” Perlman says. “And we can do other stuff to build camaraderie.”

About 4735 days ago E-Commerce

Book Value

Boys on the Brand OK, so your business is online. Now what? Recent books aim to make your Web efforts pay off The 11 Immutable Laws of Internet Branding, by Al Ries and Laura Ries (HarperBusiness, 2000) eBrands, by Phil Carpenter (Harvard Business School Press, 2000) Digital Capital, by Don Tapscott, David Ticoll, and Alex Lowy (Harvard Business School Press, 2000) There’s plenty of advice out there about doing business on the Web. The trouble is, when do you find time to stop and read if you’re supposed to be building an Internet business at breakneck speed? Some of the advice, however, is worth heeding. For example, in The 11 Immutable Laws of Internet Branding, Al and Laura Ries tell nascent Internet companies that they need to be “fast,” “first,” and “focused.” But even though they trot out examples of how some superior sites have suffered from being second, there’s not a lot of detail about what to do when you discover that your site isn’t first. What the authors do well is articulate how important they think branding is to success on the Internet. They also advise that wanna-bes who are poised on the brink of taking their companies online need to decide whether they plan to use the Internet as a distribution channel or as a place to operate a business. If you plan to use the Web for distributing your already established products, then it’s fine to retain your company’s current name, for instance. But if “the Internet is going to be a business,” they advise, “then you must start from scratch.” As for coming up with a new company name, you’ll have to go elsewhere for advice on that one. In eBrands, Phil Carpenter doesn’t tell us how to build a killer brand on the Internet either, but he does tell us how six successful Internet companies have done it. Of course, it’s impossible to say how long those companies — despite their high profiles — are going to remain healthy, let alone stay leaders in their respective markets. There is good case-study material here and specific examples of what the companies have done well — and, in some instances, not so well. But you’d be hard-pressed to take what you read here about some exemplary companies and go out and quickly construct your own Internet business. Such hands-on advice does come in Digital Capital, by Don Tapscott, David Ticoll, and Alex Lowy. Their book is based on three years of research on what they call “business webs,” which are partner networks of producers, service providers, suppliers, infrastructure companies, and customers — all linked by digital channels. Based on their research, the authors have concluded that there are five classes of business webs, and they give examples of each that most readers will recognize. What makes Digital Capital stand out is that while the authors join the Rieses and Carpenter in recognizing the importance of brand building, they actually take the time to study the market, analyze it, and draw some bold conclusions based on their findings. The reader comes away with valuable ideas for replicating the models that successful businesses are using. Now that things are moving so fast on the Internet, that take-away is a must. Good Stuff Cheap Free for All, by Peter Wayner (HarperBusiness, 2000) In January 1999, as a witness in the Microsoft antitrust trial, Richard Schmalensee, the dean of the Sloan School of Management at MIT, tried to debunk the notion that the computer giant was a monopoly by pointing out that it indeed had competitors. Among the few he named was a small operating system called Linux. That testimony, author Peter Wayner suggests, put Linux on the map. Linux is really a group of programs known as open-source software. The programmers who wrote the source code for Linux have shared it openly over the Internet since the early 1990s, enhancing the operating system and passing it on. By 1999 a growing number of computer experts were choosing free Linux programs over pricey Microsoft offerings for running some Web servers. Free for All: How Linux and the Free Software Movement Undercut the High-Tech Titans is a fascinating story of how a motley group of far-flung programmers built a better operating system by sharing everything with everyone. It’s also the story of how Linux began to see signs of triumph as it started taking business away from companies with more costly programs. As a result, Linux gave birth to a small industry of resellers like Red Hat, which repackages Linux with instructions to make it easier for novices to use and sells it for about $60. The programmers who pioneered Linux may never see a dime from Red Hat’s revenues or its August 1999 initial public offering. But they can still have the satisfaction of knowing that they collectively built an operating system — using nowhere near the money and resources their competitors had — that is now preferred by many over the ubiquitous Windows. May the Force Be with You The Monk and the Riddle, by Randy Komisar, with Kent Lineback (Harvard Business School Press, 2000) Let’s get this out of the way before we begin: Yes, there is a monk, and yes, there is a riddle. You see, it’s about an egg, and … oh, never mind. What this book is really about is the education of a fabled Silicon Valley entrepreneur. Author Randy Komisar is not that entrepreneur. He’s what he and his pals who hang at the Konditorei coffee shop like to call a “virtual CEO.” Venture capitalists, we’re told, bring in Komisar to meet with prospective company founders to get a sense of whether the prospects have the goods. The entrepreneur in this tale is a guy Komisar calls Lenny, a fellow who wants to start a business called Funerals.com. Komisar meets with Lenny and hears his business pitch, but he’s not sold that Lenny has the right stuff to make him worthy of a VC’s cash. Ultimately, Komisar does give Lenny and his partner, Allison, advice on the importance of turning their endeavor into something that not only has big financial potential but also is something about which they’re passionate. The rest of this parablelike tale unveils how our fledgling entrepreneurs get from Funerals.com and zippo capital to Circle-of-Life.com and “interested” money — plus what Komisar likes to call a “whole life plan” for themselves. Komisar clearly has experience and a levelheaded way of looking at the world of Internet start-ups and the capital that’s chasing them. He also draws a distinction between passion, which ” pulls you toward something you cannot resist,” and drive, which ” pushes you toward something you feel compelled or obligated to do.” To Komisar, passion is clearly the preferred motivator. If you know nothing about yourself, Komisar writes, you won’t be able to tell the difference between the two. It’s clear we’re meant to believe that Komisar holds answers and wisdom. (Why else would people with big bags of cash call on him for advice?) But since he is narrating Lenny’s story, it all comes off a bit too pat. Komisar sets himself up as the omniscient wise one, and he manipulates the device of coaching Lenny for his own purposes. When Lenny seems to miss the point at first and then appears to get much smarter as he comes around to Komisar’s way of thinking, the author can give himself a good pat on the back. And the transformation is not entirely believable. You begin to feel that at any point in the story, Komisar will pull out his laser sword and cant: “Lenny, the Force is strong within you.” In the hypercompetitive digital economy, you don’t need wizards and shamans. Sure, you might need a smack upside the head from time to time when you fail to see the obvious. But a sage who encourages passion but fails to stress the importance of cash flow ultimately may spell the end of your business plans. Of course, that would give you plenty of time to answer riddles…like the one involving the egg at the start of this book. If you’re not busy building a business, you could look it up. Executive Reader David Liu CEO of the Knot ( www.theknot.com), a wedding-planning Web-based company All-time fave The Brothers Karamazov, by Fyodor Dostoyevsky. “It gives you an appreciation of life on a moment-to-moment basis, which is often how you feel when you’re running a start-up,” Liu says. Recent fave The Tipping Point, by Malcolm Gladwell. “Gladwell articulates how viral marketing happens. It’s a counterpoint to most of what I’ve read about online branding. So much of what happens in the consumer world — and the Internet just accelerates this — is by word of mouth.” Best business book A Sense of Where You Are, by John McPhee. “This book held particular significance for me as a lifelong Knicks fan. In business and in sports, you have to recognize that you can’t do it all by yourself. You need to recognize the strengths and weaknesses of those around you and be able to leverage them. That’s how Bill Bradley threw those no-look passes.” Best book for newlyweds Tao Te Ching. “When my wife and I were newlyweds, we got a copy as a gift. If we had a question to work out, we’d open it up, point to a page, and read the passage. That was really very fascinating,” Liu says. –Jill Hecht Maxwell Please e-mail your comments to editors@inc.com.

About 4827 days ago Telecom and Wireless

Meet Glenn Weadock

Glenn Weadock is president of Independent Software, Inc. (ISI), a Denver-area computer consulting firm he cofounded in 1982. As an office automation specialist, he works with personal computers, networks, and minicomputers and has designed, installed and supported hundreds of systems across the United States. Weadock has written 13 commercial books to date. His titles include Creating Cool PowerPoint 97 Presentations with Emily Weadock (IDG, 1997), Bulletproofing Windows 98 with Gerald R. Routledge (McGraw-Hill, 1998), Small Business Networking For Dummies (IDG, 1998), and Windows 2000 Registry For Dummies (IDG 1999). Through ISI, Weadock also designs and presents technical seminars on Windows and help desk topics. He has conducted more than 160 intensive, two-day public and on-site seminars since 1988. As course director, Glenn wrote seminars, created instructor slide shows, wrote marketing materials, and served as main instructor on such topics as: supporting and troubleshooting Windows 95; troubleshooting and fine-tuning the networked PC; and customer service excellence for the help desk professional. In January 1998, Weadock testified as the Department of Justice’s technical expert in a contempt hearing regarding Windows 95 and Internet Explorer. In November 1998, he testified as one of three technical expert witnesses, along with computer science professors from Princeton and MIT, in the landmark U.S. vs. Microsoft antitrust trial, on issues of corporate computing practices and Web browser integration. Weadock graduated with distinction from Stanford University in 1980 with a B.S. in General Engineering.

About 4827 days ago E-Commerce

Entrepreneur Profile: InfoCharms

What will be the hot fashion accessories of the next millennium? Something inspired by Gucci? Created by Calvin? InfoCharms, a Southern California-based tech company, predicts wearable computers will become de rigueur among the hipster set. At Internet trade shows around the world, fashion models have been strutting down runways with tech devices around their arms, clipped to shirts, and dangling from their ears. InfoCharms, an MIT Media Lab spin-off that develops wearable computers, has set out to popularize Internet-enabled jewelry through its series of fashion shows, called “Brave New Unwired World,” at Internet World conferences. This necklace blinks or plays sounds when e-mail messages or pages are received. The company’s first product, Smart Badge, worn on shirts, lets individuals swap electronic business cards through infrared beams by simply standing in front of each other. Sound like something James Bond’s trusty Q developed? That shouldn’t come as a surprise since InfoCharms cofounder Katrina Barillova has a background that reads like spy thriller. Barillova, a former fashion model, was trained in Communist Czechoslovakia to be an intelligence agent and became an executive protection specialist in the U.S. after the Velvet Revolution. She’d often pose as a model at parties, wearing listening devices sewn into specially designed clothes. Or do InfoCharms devices suggest Trekkie wear? “I was inspired by Star Trek communicators,” admits Alex Lightman, CEO and cofounder of InfoCharms. Lightman, an MIT graduate, previously developed virtual reality entertainment and 3-D for science fiction and action movie Web sites. A built-in vocoder allows the wearer to dictate e-mail messages. Smart Badges make their debut at the Internet Everywhere CEO Summit in late February. InfoCharms plans to lease the devices to conferences — starting with the company’s partner, Internet World — for less than $10 each for a three-day event. Attendees would receive a Smart Badge when they register and turn them in at the end of the conference after they’ve downloaded all the information they’ve collected. InfoCharms also has plans for a wearable 600-megahertz personal digital assistant, called the StrongCharm, as well as an array of microperipherals that could be connected wirelessly. By 2003, there will be more than 1 billion wireless devices, 15% of which will connect to the Internet, according to estimates from Ericsson Cyberlabs. But few companies have yet delved into wearables. Equipped with infrared transceivers, this pin can store, transmit, and receive voice mail messages, business card data, and reminders. Xybernaut Corp. makes wearable computer systems, but primarily for automotive, shipping, and aerospace workers and at considerably higher prices than InfoCharms’ devices. Motorola, Philips, Nokia, Sony, and Ericsson are also expected to announce wearable computers soon. Lightman isn’t just interested in futuristic couture. He sees inexpensive, ultrasmall Internet appliances helping to create a better society. “The year 2000 will be very important in the battle between the inward Internet and the outward Internet,” Lightman says. “Companies involved in patents and monopolies want the inward Internet to prevail; companies like us want an outward Internet — free bandwidth, open source [code], access for everyone. "We want to make the Internet affordable, safe, and fun," he says. "Technology starts to pay off when everyone is connected. That's the revolution that InfoCharms is leading." Conceptual prototypes designed by Michael De Medine for InfoCharms. Photos from the Brave New Unwired World fashion show. Copyright © 1999, 2000 Venture Capital Online LLC

About 4887 days ago E-Commerce

The Start-Up Diaries: The Player

A college student ditches the sport he’s worked his whole life to master for the dream of an Internet start-up Richie Powell is getting impatient. He’s just heard from one of his nine full-time employees that a key recruit has yet to accept what he regards as a generous offer. “He’s getting a nice equity stake in this place,” Powell proclaims. Let’s get the deal signed today, he tells Kofi Kankam, vice-president of business development. By this afternoon, if possible. Before 4, actually. “I want to leave early,” explains the cofounder, president, and CEO of FÚxito Worldwide Inc. “I have a lot of homework.” In that regard, at least, the 20-year-old Powell resembles any other college student. But Powell, a junior economics major at Harvard, recently ditched his spot on the varsity soccer team — his playing skill earned the native Jamaican a scholarship to Phillips Academy, in Andover, Mass., and helped him get accepted by Harvard — thereby disappointing both his coach and his father. “I have priorities,” he says. “I have a company to run.” That’s a fact anyone around him can’t easily forget. Every few minutes Powell’s cell phone beeps out Beethoven’s “Ode to Joy,” kicking him into high-pitch mode. The year-old company’s new headquarters consists of three freshly painted rooms in Cambridge, Mass., sandwiched between Harvard and MIT, institutions from which FÚxito draws not only employees but also its many interns. Powell wants to have his desk in a corner so that he can gaze out the window, fueling his fantasy of occupying “a big corporate office in New York.” For now he’s standing there, yakking on his cell phone. “I’m not worried about a couple of extra points in here,” Powell announces. “I want to see this thing go public by 2001 or be acquired in nine months.” In a less speculative era — the Roaring ’20s, say — FÚxito’s tender-aged team might have been dismissed as pretenders, merely playing at business until they get called in for a reality supper. But, then, isn’t this how a modern windfall-in-the-making is supposed to look? A gang of smart, focused, and energetic young folks (in this case, guys) who have taken an oath to rule whatever Internet “space” they’ve marked as their own. Sure, they’re in a hurry, but they’re not rushed. Powell knows, for instance, that it took another recent Cambridge-based entrepreneur, Warren Adams, almost two full years before he could sell his Internet start-up, PlanetAll, for $100 million. Powell has studied the get-rich-click set perhaps as diligently as he’s studied anything. “I really should study more,” he admits, suffocating a yawn. But, hey, Powell didn’t choose Harvard for its curriculum. A stock trader since the age of 12 who started an export and investment-management company after high school, he spied a more precious, and lasting, commodity on campus: contacts. “Harvard, to me, was all about the networking,” says Powell, who spent his freshman year crashing entrepreneur-related events. The plan for FÚxito is as much the product of Powell’s grandiose ambitions for himself as it is of anything he absorbed at those outings. Still, it was a nugget he picked up during a class led by an accomplished entrepreneur — “know your market,” the guru advised — that got the idea of a soccer-related start-up, appropriately enough, “running around in my head,” Powell recalls. Powell knew firsthand that in soccer “a lot of recruiting right now is by chance.” His venture, he decided in October 1998, would “drastically improve” that process, using the Internet to enable coaches to view demographic profiles and video clips of players. Two months later, Powell says, “everyone was excited” when he presented his five-page plan to 30 attendees of the Harvard Startups group. Oh, they did suggest that his pricing structure, which called for coaches to pay as much as $10,000 a year for access to an international database, might benefit from further market research. Powell had no trouble accepting their criticism because he hadn’t finished his market research. Nor had he really started it. “Richie understood the soccer market from the point of view of being a very good athlete, but he didn’t have a good foundation in business,” recalls John A. Clendenin, a senior lecturer at Harvard Business School who attended that presentation. But Powell rightly believes that “the passion I exude is an asset.” And one highly valued by Clendenin, who is also a sports psychologist. “There’s no substitute for enthusiasm, drive, desire, and determination,” Clendenin says. “Richie’s idea didn’t have any structure, but it was a good dream.” The dream of being part of an Internet start-up, any Internet start-up, has captivated the members of FÚxito’s management team nearly as much as its ever-evolving mission has. Sanjeeb Bhuyan, the company’s 22-year-old chief systems administrator, joined FÚxito in late June. A month later he was having dreams in which “we had sold the company for a lot of money, and we were all sitting around and talking about how we did it,” recounts Bhuyan, who is also earning a master’s degree in computer science at MIT. Powell says he’ll feel satisfied if FÚxito “gets sold for only $20 million.” Granted, it’s hard for anyone involved in such a breed of business to ignore the possibility of what Powell calls a “financial hit,” given the stories that are all around: Netscape, PointCast, Yahoo. Last summer those very companies were literally right around FÚxito, near the Sunnyvale, Calif., office that nine of the start-up’s staffers occupied — and more than half of them lived in — for two months. Once, at 5 a.m., Bhuyan suggested that Powell get some shut-eye. No, Powell replied, I’ll go to sleep when we do an IPO. “It felt like we had been taken away from everything and we were living in a FÚxito world,” says Bhuyan. It may have felt that way because FÚxito’s mission had expanded so grandly. Three months after Powell’s presentation, he contacted Daniel M. Hoffer, a Harvard senior who operated his own technology consulting firm. Hoffer heard the idea — and the magnitude of the technological challenges — and “within five minutes I was sold,” he says. “He had a great idea.” Powell believes that the idea was only part of the allure. “Once again I infected somebody with my passion and vision,” says Powell, who gained in Hoffer a cofounder and a chief operating officer. The two founders’ market research made Powell feel even more strongly that the site needed to have broad appeal, since an on-line soccer-recruiting tool was “not something you sell in 15 months for $150 million,” he says. What FÚxito needed to be was a venture aimed not at 3 million soccer coaches but at 3 billion soccer fans. (The company’s name combines the Spanish words for soccer and success and offers the added bonus of “sounding obscene, if you pronounce it wrong,” Hoffer says.) Given the scope of its aim, FÚxito also needed to be in “the heart of the start-up community,” as Powell says. So he and his team moved to Silicon Valley — briefly, anyway. But after consulting a lawyer, Powell learned that his visa required him to return to Harvard this past fall. Hoffer, who dropped out a semester shy of earning a B.A. in philosophy, theorizes that “it’s not bad from a publicity perspective to have this wonder boy in school who is running the company.” But from a money-raising perspective, it hasn’t helped. “No matter how good the idea is, it’s still an idea with a 20-year-old CEO who is a college student,” notes Clendenin, now a FÚxito board member. Right now, all that 20-year-old can say is, “We need money. But I try not to worry about it too much.” Like most other Internet entrepreneurs, he and Hoffer do worry about drawing traffic to their site. Live since the end of June, it has attracted far fewer user hits than hoped for. Working with Iconomy .com, a provider of E-commerce services for which Hoffer’s older brother David serves as chief operating officer and general counsel, the partners struggled to get the E-commerce component of the site up in time to generate holiday sales. Still, “there’s no way any broad-based E-tailer can focus on soccer the way they can,” notes Roger Cameron Wood, vice-president of E-commerce and global direct marketing at Reebok International. “FÚxito’s secret weapon is its focus.” Wood, who met FÚxito through Iconomy.com, says that Reebok has entered “a broad-based alliance” with the start-up. Clendenin, on leave from Harvard to launch an Internet business, is working to give FÚxito’s store “a competitive advantage” by applying principles he developed while managing the supply chain at Xerox Corp. Clendenin’s efforts are expected to yield prices at least 20% below FÚxito’s competitors’. “We’ve got some buzz going,” Hoffer says. Not enough, though. Right now, FÚxito’s brand-building strategy consists mainly of Powell’s dragging a three-by-six-foot banner to soccer matches, and an intern who systematically defiles the purity of chat-room dialogues by planting pro-FÚxito messages. Powell envisions sponsoring tournaments and camps, building kiosks in the United States and Latin America, and parking a multimedia van at matches. “There are a lot of breathless pitches out there, but Richie’s passion is not grafted on, and Daniel’s intellectual gifts are enormous and obvious,” says Wood. “Passion and gray matter on that level usually find a way of willing their way to success.” Which is why, last June, Wood joined FÚxito’s board — despite the circumstances of his invitation from Powell. “I called him in his dorm room, and he was definitely a little foggy,” Wood recalls. “I think he was recovering from exams.” Joshua Hyatt is a senior editor at Inc. Read the complete Start-Up Diaries series. Executive Summary COMPANY: FÚxito Worldwide Inc. FOUNDERS: Richard Powell, 20, president and CEO; and Daniel M. Hoffer, 22, chief operating officer and chief technology officer FAMILY: Both are single CONCEPT: Create the premier E-commerce site devoted to soccer, including news, free E-mail, discussion boards, contests, auctions, and a database for recruiting FINANCING: $300,000, mostly from three angels; seeking $8 million in venture capital PROJECTIONS: First year, $7 million in revenues, $4.1-million net loss; second year, $18 million in revenues, $4.3-million net loss; third year, $46 million in revenues, $1 million in earnings HURDLES: Given inexperienced management, being fleet-footed enough to raise the money needed to fulfill its aggressive plans. Better-heeled competitors, such as two-year-old Fogdog Sports, an on-line sporting-goods retailer positioned for an initial public offering, may be better equipped to establish market leadership in a fragmented industry. PERSONAL FUNDS INVESTED: $15,000 from Powell in stock trades and liquidated assets EQUITY HELD: Together the founders own a controlling interest. SALARY: Zip for both SOURCE OF IDEA: Powell’s extensive experience with the target market, which came from having played soccer on national teams in his native Jamaica BOARD OF ADVISERS: Nick Mehta, vice-president of marketing of Chipshot.com, an on-line golf retailer founded in a Harvard dorm; David Hoffer, chief operating officer and general counsel at Iconomy.com, a provider of E-commerce services; Seamus Malin, ESPN soccer analyst since 1979 and director of Harvard University’s International Office, formerly a leading scorer and then an assistant coach of Harvard’s soccer team; Steffan Berelowitz, founder and president of the Bit Group, a Boston-based Internet developer WHAT THEY DREAM ABOUT: That FÚxito has been acquired — first, at a price of exactly $170 millon, and then, in the sequel, for $250 million, says Powell WHAT THEY’LL DO IF THIS FAILS: “If we don’t succeed enough to retire, we’ll do it again,” Powell says. “I will be a millionaire off the Internet — if not through this company, then through another one.” SOURCE OF INSPIRATION: Seeing Netscape Communications Corp. cofounder Marc Andreessen, 24-year-old graduate-student-turned-jillionaire, on the cover of Time magazine in 1996 “made me realize I had to accelerate my personal plan” of making $1 million by age 30, Powell says. “I had to step things up.” ROLE MODEL: Bill Gates, for “having the right mix of technical and business savvy to turn Microsoft into a global giant. Every company would like to have Microsoft’s position in the marketplace.”