This summer's issue of Notre Dame Business told the story of high-tech innovators Tom (ND '73) and Kathy Mendoza. This issue we bring you eight more high-tech entrepreneurs. These illustrious Notre Dame alumni - six from the Mendoza College of Business - are going places fast. They offer an insider's perspective on the volatile, exciting new frontier of e-commerce. We think of them as new economy enablers. Here are their stories:
Gigabyte Laser Light
Dan Hesse (B.A. in government and international studies, '75) recently gave up his position as president and CEO of AT&T Wireless Services - and reportedly up to $50 million in stock options - to become CEO of TeraBeam Networks.
Why would a successful CEO leave a blue chip for a start-up? To be part of a significant technological breakthrough - an invisible, eye-safe laser beam that transmits up to one gigabyte of information per second. Much like a cellular network, TeraBeam shoots information from a central hub and is received using a system that looks like a small satellite dish. In addition to being incredibly fast, the technology is also affordable and easy to install (because it travels through windows and doesn't require digging up streets like fiber optic cables do). TeraBeam was created to break the bandwidth bottleneck that exists between business users on local area networks (LANs) and the wide area networks (WANs). Beginning in early 2001, TeraBeam will offer its services to clients in Seattle, the first host city for the technology. After Seattle, TeraBeam is poised to offer its services to cities across the United States and around the world.
"I have been in the telecommunications business for 23 years and I thought I had seen it all. But I have never seen anything in my career that can compare to TeraBeam," says Hesse. "It could be the most significant technological development in years and I have to be part of it."
Photo: Gary Gigot (Mendoza '72) and Dann Hesse (ND '75).
Driving Force Behind Several ND Start-ups
Gary Gigot (BBA in marketing, '72), who manages his own private investing group, Gigot Brands, is perhaps best known to the Notre Dame community as the benefactor behind the Gigot Center for Entrepreneurial Studies at Notre Dame. Gigot, who serves on the board of directors for several start-ups, has so far invested in six companies founded by Notre Dame alumni, including: Aprimo, which provides an e-business marketing operations platform; Who2Trust, an Internet site that aims to be the Internet's local business referral network; Prairielaw.com, a web site offering legal products and services; Eagles.net, which is targeted to be the learning network for not-for-profit organizations; Consolidated Commerce, the emerging leader in Supply Chain Execution software; and Nuron, a developer of encryption acceleration technology.
Gigot has more than 16 years of advertising and brand development experience, including six years working with Microsoft as vice president of marketing. Later, he was director of worldwide marketing for Visio, the winner in desktop drawing and diagramming software.
A passionate investor (especially when it involves investing in ND alumni or student start-ups), Gigot says, "e-commerce investment is a network of networks at work. There is a rhythm to deal flow - you work with someone who works with someone else and you forge positive financing, branding and human resource connections. You don't really have to look for deals; they find you."
Storage in a Flash
Jim O'Hara (BBA in marketing, '83) is vice president of corporate strategy for StorageNetworks, a market leader in data storage services. StorageNetworks provides an on-demand global data storage network to its customers - much like a utility provides electricity and water. Customers get as much as they need, when they need it. And customers have needed a lot lately - StorageNetworks revenues have increased from $823,000 to $12.7 million in the past six months.
"It takes a tremendous amount of storage to keep e-businesses, both emerging dot.coms and established enterprises, in operation. The market for e-business data storage is growing 70 percent each year," says O'Hara. "e-businesses operate 24/7 and they can't afford to have their sites go down - no active site, no business. As their comfort level with outsourcing increases, more and more companies are coming to us to manage their data storage."
Sail with Whiplash
Only 32 years old and already on his third start-up company, Rich Earley (B.A. in English '90) refers to himself as a serial entrepreneur. He's constantly on the lookout for investment and leadership opportunities in new businesses. Of his venture capital projects Earley says, "I invest in people. The quality of a business' management team is one of my first considerations. The Internet economy is where it's at and right now we are starving for talented, well-rounded people."
Earley is chairman of Whiplash, Inc., a business-to-business Internet infrastructure for the leisure industry which he co-founded with Louis Borders (co-founder of Borders Books & Music) and Carl DePaolis (co-founder with Earley of Synergy Software, Inc.).
Earley describes Whiplash as a "next generation distribution and reservations infrastructure for the leisure industry, serving both brick and mortar and virtual travel retailers. Virtual travel retailers are Internet-based travel retailers that have no brick and mortar stores." Wiplash provides a forum for travel suppliers to market and sell a broad spectrum of leisure products; travel agents can use Whiplash to find information and plan vacations in one place, on one itinerary and in real time. Under Earley's direction, Whiplash has hired 60 employees in a matter of months and signed up more than 300 leisure suppliers representing more than $1.3 billion in sales.
Speed Ahead: A Giant Portal in the Sky
Jim Hunt (BBA in marketing, '73) is at the helm of Ernst & Young Technologies (EYT), a spin-off of Ernst & Young consulting. Just over three years old, EYT had 1999 revenues of $77 million.
One of the biggest new markets EYT is tapping into is that of Application Service Providers (ASPs) - hosting applications at a central EYT location and allowing clients to access them via the Internet. ASPs allow companies to reduce capital and IT expenses, give smaller businesses access to more sophisticated software, and increase workforce mobility through expanded dial-in access. Still in its infancy, ASPs are expected to grow into a $14 to $21 billion industry by 2004, says Hunt.
Hunt is also an expert on Internet taxation and frequently testifies before Congress on this hot-button issue. "Many online businesses are under no obligation to collect a sales tax because they don't have nexus in a particular state. The Computing Technology Industry Association [of which Hunt is head of the public policy committee] supports the National Governor's Conference proposal for a 'Giant Portal in the Sky' in which state governments can use data from intersecting portals to collect a use tax on Internet transactions," says Hunt. The "Portal," which draws upon existing use tax laws, could be an effective and efficient means for states to more fairly and systematically collect taxes on products purchased via the Internet without placing the burden of tax collection on merchants.
Hunt commutes between Virginia and South Bend to teach a weekly class on high technology marketing to senior marketing majors and MBA students at Notre Dame. The class provides a glimpse into new ways of partnering with businesses and focuses on case studies and real-world experience. The class is a huge hit with students.
Order to the Chaos of the Internet
A former Navy SEAL, Bill Bonde (BBA in finance, '82) is no stranger to taking risks - which may be one reason he thrives in e-commerce. Bonde is managing director of Venture Logix, a Wall Street venture capital firm that invests exclusively in e-commerce and high tech start-up companies like About.com, Juno, idealab! and IndustryNetworks. Bonde helps the firm evaluate new business opportunities and investments and serves on the Board of Directors for many of the start-up companies Venture Logix funds. He and his partners receive 3,000 to 5,000 business plans for funding consideration each year. Venture Logix focuses on start-up businesses that, Bonde says, "bring order to the chaos of the Internet." For example, Venture Logix funds companies that provide web-based integration and management of the entire range of a company's supply chain functions.
Tracks in a $7 Billion Market
Nearly four years ago Bill Herp (BBA in accounting '84) and his partner, Andy Estes, decided to capitalize on a growing need in e-commerce - to measure the Internet as a direct marketing channel and allow companies to market directly to their clients through e-mail. Three years and two rounds of funding later, they have built their company, e-Dialog, from a team of two to a staff of 70. Herp predicts that e-Dialog will have more than 300 employees by next year. e-Dialog has a powerhouse client list including the National Football League, Staples, Ticketmaster and Gillette. Using precision e-mail, e-Dialog directly targets people who have already exhibited an interest in a particular company; for example, delivering team specific newsletters to NFL loyalists or providing up-to-date concert information to Bruce Springsteen fans for Ticketmaster. While there are other companies that do what e-Dialog does, Herp believes that by providing a wider range of strategic marketing services and products and using cutting-edge processes e-Dialog will set the pace. "This market is in its infancy. We plan to be at the head of the pack in a market that is expected to grow to $7 billion," says Herp. "The next step - and the biggest challenge - for us is to keep growing and adding talented people to our staff."
Force to be Reckoned With
Recently named "one of the 100 most influential people in technology" by Crain's Chicago Business, Ellen Carnahan (BBA in accounting, '77) has carved an impressive niche in e-commerce. As managing director for William Blair Capital Partners, LLC, a venture capital and private equity investment fund, Carnahan focuses on business and communications technology investments. She also serves as a director of CPRi, Inc., a national marketing services firm; Practicity, a cutting-edge provider of Internet-based collaboration software; MatrixOne, a leading provider of Internet business collaboration solutions; and Thazar Solutions, a provider of business intelligence solutions for the insurance industry.
With more than 20 years of management experience in the software and financial services industries, Carnahan is the firm's top technology investor. She is responsible for leading the business and communications technology investments of a $400 million venture capital fund. Approximately 25 percent of the fund is invested in technology.
Before joining William Blair in 1988, Carnahan was vice president of marketing and planning for SPSS, an applications software company. She joined SPSS when the company was privately held and revenue was $8 million. Before she left to join Blair, revenues at SPSS had grown to $29 million.
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