I think he stole this line from Alex...
STARTUPS THAT COULD MAKE IT INTO THE MAJORS Sure, lots of promising candidates are from cyberspace, but don't forget the earthbound
By Peter Elstrom in New York, with Linda Himelstein and Andy Reinhardt in San Mateo, Calif.
06/21/1999 Business Week
Page 164 (Copyright 1999 McGraw-Hill, Inc.)
Who are these guys? Perhaps more than anything, this year's Info Tech 100 shows how tech upstarts can come out of nowhere to become industry heavyweights. The online auction house eBay Inc. went from an unknown private company last year to No. 23 on this year's elite list. And it's not the only one: Inktomi, InfoSpace.com, and Healtheon all went public in the last year and made it into the ranking. So who's next? Which undiscovered gem might make the list in 2000?
A good place to look is the same spot as the stars of this year's ranking, among the construction workers of the New Economy. But don't stop there. With each passing year, the allure of the Net grows stronger, drawing hundreds of millions of new cyberseekers. By this time in 2000, experts bet that Internet startups will have figured out some of the head-scratchers: from how to sell tailored clothing to how to deliver ice cream anywhere, quickly and profitably. And the information-appliance bandwagon may actually pull out, delivering highfliers with whizzy Web phones and other handheld gizmos.
Some of the most promising upstarts, though, are earthbound. Dozens of candidates are in the networking and telecom-equipment fields, including Juniper Networks and Avici Systems, both of which make high-speed routers that threaten Cisco Systems' position as the dominant supplier of Internet gear.
The real up-and-comer of the bunch may be Cerent Corp. The Petaluma (Calif.) startup lets phone companies handle voice and data traffic with equipment that's cheaper and one-quarter the size of existing products. With 60 customers already, Cerent's revenues are expected to quadruple next year, to $200 million, analysts estimate. ''If you look at eBay, we say, 'Why can't somebody [become an industry power that quickly] in the equipment space?''' says Carl Russo, CEO and president.
Still, when it comes to giving companies a fast start, the Web rules. One Net startup, Webvan Group Inc., is selling groceries over the Web, but that's only part of the story. Louis H. Borders, the Borders Group co-founder who heads Webvan, has developed logistics so that Webvan can deliver perishables such as kiwi and live lobsters within a specified 30-minute period. Once the delivery system is in place, the sky is the limit: Along with groceries, Webvan hopes to deliver your dry cleaning and your newly processed photos. ''If Webvan cracks this nut, it will reap huge rewards,'' says analyst Evelyn Black Dykema of Forrester Research Inc.
Another area so promising it's already crowded is the business of Web drugstores. With backing from Amazon.com, America Online, and Yahoo!, drugstore.com looks like it's headed for a scorching initial public offering later this year. A lesser known entry is planetRx.com. The South San Francisco (Calif.) company has attracted $80 million in funding and recruited William J. Razzouk, a former top America Online Inc. and Federal Express Corp. executive as its CEO.
Qubit Technology is leading the charge in information appliances. Its first product, due later this year, is a tablet the size of a sheet of paper that connects with the Internet wirelessly. With a touch screen, people can navigate the Web while they roam their office or house. And if your appliance-of-the-future has video, the technology may come from iCompression Inc. The Santa Clara (Calif.) company designs low-cost chips that are the brains behind digital video recorders. These are devices that most experts think will soon be built into millions of TVs, PCs, and other gizmos so you can record, say, a Knicks playoff game to watch later. ''What Intel is to PCs, iCompression is going to be to digital video recorders,'' says CEO and President Neal Margulis.
Perhaps the most ambitious private tech company also is one that has been around awhile: Teledesic LLC, the satellite system backed by wireless pioneer Craig O. McCaw and Microsoft Corp.'s William H. Gates III. With 288 satellites and a cost that could top $10 billion, Teledesic is supposed to provide lightning-fast Net connections to any point on earth. With plenty of dough, tech upstarts are making the kind of grand gambits that might just land them on the Info Tech 100 in 2000.
The Next Big Things?
COMPANY/LOCATION THE SKINNY
TELEDESIC Craig McCaw and Bill Gates want the $10 billion satellite
Kirkland, Wash. system to deliver the Net to every corner of the globe.
WEBVAN With speedy deliveries at precise times, this grocer
Foster City, Calif. could grow up to become the FedEx of E-commerce.
PLANETRX Forget about schlepping to your local drugstore. This com-
So. San Francisco, pany sells prescription drugs and vitamins on the Web.
Calif.
CERENT It wants to be the next eBay--and could be. In a red-hot
Petaluma, Calif. field, its communications equipment is scorching.
QUBIT TECHNOLOGY You've heard about information appliances? Here's who's
Lakewood, Colo. designing them.
ICOMPRESSION It makes the chips that let PCs, TVs, and other things
Santa Clara, play you video and audio.
Calif.
|
