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And lots of them. "The goal is to try to launch about a dozen a year," Kapoor says. Without batting an eye, he adds that Walker is on track to launch about 60 companies in the next five years. "When the asset is fully fleshed out, we will have a company that is unlike any on the planet today," Kapoor says. Outrageously ambitious? Perhaps. After all, the company Kapoor soon will head isn't boasting much in the way of assets today. In essence, Walker Digital, founded in 1995, is 180 people and a big promise: that it will convert its 60-odd patents and 400 pending patents into dozens of companies and by doing so craft a dazzling new business model for turning intellectual property into money. Kapoor takes over as CEO on Oct. 1 for Randy Christofferson, who'll stay on as director and adviser. A BUNCH OF BETS. Walker Digital's most famous offspring to date is Priceline.com, the "name-your-own-price" business that started off selling excess airline seats and wound up valued at nearly $10 billion on the day it went public in March, 1999 -- before joining tech stocks in a spectacular nosedive that sliced off two-thirds of its original market cap. While Walker doesn't have a stable of other similar big-name companies, a dozen already are percolating, some with as many as 100 employees and some with just a handful. Among them are the curiously named Retail DNA, a 100-person operation that in its simplest incarnation promises to help stores and fast-food restaurants improve sales and service, in part by using networked cash registers and voice-recognition equipment that can record customer feedback; High Circle, an Internet-based employee-referral service; and a yet-to-be named company that goes by "Project Pulse," a service designed to give consumer-goods companies near-instantaneous product feedback from customers. In many ways, what Kapoor is trying to pull off is the same thing venture capitalists seek to do -- make a bunch of bets figuring that a few will pay off big time. While those risks are considerable, Kapoor can draw from a deep roster of advisers who have invested more than $200 million in the company. Among them are financiers and consultants from Allen & Co., Bain & Co., Arena Capital Partners, and General Atlantic Partners. Moreover, Kapoor offers Walker an impressive track record. He helped build his own company, Mitchell Madison, to $250 million in revenues and 700 people worldwide in five years, before selling to USWeb for $300 million. When he left, he considered running several large companies before deciding on Walker Digital. "I feel like I've been in the idea business all my life," Kapoor says, "but what was really appealing about Walker Digital was that the aspiration was not just to invent new things but to invent, launch, and operate businesses." That sounds like a simple premise. But get Kapoor talking about what people really do around Walker, and suddenly it sounds as if he's trying to invent a new lexicon, one that's all about "surfacing" problems, communication networks, "wearing the Internet" (as a medical monitor, for example), and digital transformations. Priceline still probably offers the simplest explanation of what goes on at Walker. It started with a problem: Airplanes typically flew with 35% of their seats unfilled, and once a plane took off, the airline had lost that revenue forever. The solution -- a patented reverse auction that matches unsold seats with travelers who are willing to guarantee their bids with a credit cards -- became Priceline, which is now using the same method to sell everything from rental cars to long-distance telephone time. VISITS FROM COKE. Of course, a lot of companies today, from Xerox to Dow Chemical to Rockwell International, would love to do what Walker promises to do and turn their patents and intellectual property into cash or spin-offs. Still, it has proved a trying task for even the biggest companies, which is one reason why so many online patent marketplaces have become a popular outlet for companies seeking to maximize the value of their intellectual property. So why will Walker be more successful than others? Walker board member Nancy B. Peretsman, a managing director of Allen & Co., says Walker's advantage is in the strength of its ideas. "Our intellectual property was designed to solve a business problem from Day One," she says. "Our IP was never about designing a cooler, better widget. We start with a competitive advantage, [which is] addressing market needs." To be sure, Walker's efforts will be watched closely by Corporate America. Indeed, the company is already generating considerable interest from consumer-goods companies, garnering visits from executives at Coca-Cola and several other large companies. The attention is flattering for Kapoor, to be certain, but also yet another distraction for an exec who confesses to launching his workday on only three or four hours of sleep and constantly juggling multiple demands from his inventors and entrepreneurs. Indeed, when describing the demands, he calls upon the words of World War I French Army General Ferdinand Foch who, under intense battle pressure, once wrote: "My centre is giving way, my right is in retreat, situation excellent. I attack." Winning battles in the Digital Age won't be any easier. But if Kapoor does succeed, there will be plenty of evidence: You'll be able to count the companies. Moore covers insurance and high-tech for Business Week in Connecticut |
