BUSINESSWEEK ONLINE : JULY 10, 2000 ISSUE
INTERNATIONAL -- LETTER FROM CAMBRIDGE, MASS. An Entrepreneur Is Born (int'l edition) Shishir Mehrotra, the energetic co-founder of an Internet infrastructure startup named Centrata, waits outside a meeting room at the posh Four Seasons Hotel in Boston. It's a cloudy morning in April, and it's hard to describe him at this particular moment: He's half brash entrepreneur encountering potential backers, half anxious college senior taking the first steps into his own future. ''I'm pretty sure they'll give us an offer,'' he says of CommonAngels, the group of private investors he's about to meet. A moment later, Mehrotra transforms into a dreamy undergraduate. ''I think I went to a fraternity formal here,'' he mutters wistfully. That could be. Mehrotra, 21, is in the Class of 2000 at the Massachusetts Institute of Technology. And it's MIT that has propelled him to the door of the conference room at the Four Seasons. Centrata is a semifinalist in MIT's annual 50K Entrepreneurship Competition. Named for its $50,000 prize money, the contest helps budding techies find investors, and vice versa. CommonAngels, a group launched two years ago to back early-stage high-tech projects, now has 50 members and already has put $22 million behind 14 startups. Mehrotra's presentation will determine if Centrata becomes No. 15. Even by MIT standards, Virginia-bred Mehrotra is a driven techie. Graduating in June with majors in computer science and mathematics, he has already completed the first semester of a master's degree, also in comp sci. Mehrotra has spent two summers working for Microsoft Corp. in Redmond, Wash., and one with the MIT Artificial Intelligence Laboratory. Besides all that, he put in a semester as president of his fraternity, Alpha Tau Omega. But during his final undergraduate semester, his mind has been far from either the classroom or the frat house; instead, Mehrotra is busy launching Centrata out of his bedroom. ''Once or twice a week I sit down and think about school,'' he says. The road to 50K and the Four Seasons began back in October, when Mehrotra and fellow senior David Ratajczak were researching similar topics for their graduate work. The shared vision rested on unused computer resources that would be networked together to create the world's fastest computer--topping even supercomputers--and largest hard drive. Unlike previous attempts, this pooling of computer resources would be decentralized. It would require millions of computer users to leave their machines running so that others could share excess bandwidth and disk space. This network could allow for very large-scale computations. EXPOSURE. That was the basic idea. But who would be involved, what the incentives would be, and how such an enormous exchange would work was still fuzzy. And neither of these ambitious techies had any significant business experience. ''Six months ago, I didn't know due diligence was a process,'' admits Mehrotra. That's where MIT came in. The 50K competition awards $30,000 to the winning entry and $10,000 apiece to the first two runners-up. For techies without MBAs, however, the real prizes are the resources and exposure that competing affords. Workshops for entrants cover everything from intellectual property rights to marketing. As for connections, 50K opens doors to MIT alums and others eager to lend a hand--or capital--to a student with a solid idea. The requirements for entry are as simple as a mouse click: Each team needs only a concept and at least one MIT student onboard. From then on, it's a matter of meeting several deadlines. Executive summaries describing the projects are due in February, and business plans in April. After reading the latter, the judges choose finalists. In early May, after listening to a 20-minute presentation by each team of finalists, they choose the three winners. TARGETS? When the competition began 11 years ago, it was nicknamed the 10K. The grand prize of $10,000 was just enough to cover the cost of a patent, and there were 54 entries back in 1989. Entries this year came to 206, the best turnout to date. There are more events, such as dinners to help teams find new members, and more sponsors to cover the cost of these events. This year's sponsors included Motorola, Microsoft, investment bank Robertson Stephens, and consultants Booz Allen & Hamilton. It helps that the 50K brags an impressive list of success stories with enviably high market caps. The competition has helped give birth to more than 50 companies, with a market value of more than $10 billion. Many have since been bought by such big names as Microsoft, Cisco Systems, and Motorola. As he encountered more than a dozen venture-capital firms, Mehrotra understood that his business credentials were a little light. So he landed an adviser: Mike Cassidy, a 50K veteran with an extraordinary track record. Cassidy won in 1991 with Stylus Innovation Inc., a computer-telephony software outfit that Boston-based Artisoft, another provider of software-based phone systems, acquired in 1996 for $13 million. In 1998, Cassidy became CEO of another winner, Direct Hit, which was sold earlier this year to Internet search engine Ask Jeeves Inc. for $500 million. These successes made Cassidy the adviser of choice among 50K entrants, and by mid-April, Centrata could tap his expertise. So it goes in the 50K crowd. MIT isn't the only university to offer students a stage to play out their business ideas; Dartmouth, Stanford, and Duke hold similar contests. Yale University held its first competition this year. But MIT's 50K is among the oldest, and according to organizers, it's the trendsetter in emphasizing education and networking. The competition is student-run and financially independent of the university. ''These guys are good,'' says Kenneth P. Morse, managing director of the MIT Entrepreneurship Center. ''They've cloned the model for business competitions.'' Back at the Four Seasons, Mehrotra is ushered into a room full of croissants, cell phones, and a dozen CommonAngels investors, about half of whom are MIT alums. It's their monthly breakfast meeting where they listen to eager entrepreneurs and decide whom they're going to fund. Although the average pitch comes from a 30-year-old with at least 10 years of industry expertise, Mehrotra merits special treatment because of his alma mater and Centrata's status as a semifinalist. CLOSE CALL. For Mehrotra, the pitch is good practice; he will present the same idea to the 50K judges in a month. But already, his presentation is smooth. He knows the technology and casually drops impressive names, such as Marc Sawmer, founder of eBay Germany. By now, the consumer application is defined. Centrata's big customers would be companies that need a lot of computing resources, such as eBay, Yahoo!, or any of the large investment banks. Once networked, they could run various assessment tests, for example, to see if a Web page is downloading efficiently and if it can handle many hits at once. The CommonAngels investors seem to like Mehrotra and his idea. But Mehrotra is careful not to push too hard: He has other investors in mind, and he's waiting for the competition's close. When it comes, on May 10, the awards ceremony feels like Oscars night. The seven finalists give 10-minute presentations before a packed auditorium, and then the envelopes are unsealed. Centrata makes the cut as one of two runner-ups along with Amtek, a company that has invented a water-quality testing device that doesn't require electricity. The winner is a biotech company called EyeGen that has developed a dye to make DNA visible to the naked eye. The judges insist it was a close call--closer, they say, than in previous years. As the auditorium empties out, Mehrotra is surrounded by Bob Metcalf, co-founder of 3Com and host of 50K's final networking bash; Kevin Kinsella, an investor from Silicon Valley; and one of the CommonAngels people. If this were freshman rush at a frat house, they would be asking him to join. Instead, they probably want in on Centrata. By VICTORIA MURPHY Murphy graduated in the Class of 2000 at Wellesley College. EDITED BY PATRICK SMITH _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS An Entrepreneur Is Born (int'l edition) MAP: Boston INTERACT E-Mail to Business Week Online

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