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Estrin, one of the fabled serial entrepreneurs of Silicon Valley -- with three successful startups under her belt -- is trying something brand-new with her latest company, Packet Design. Launched with husband Bill Carrico, Packet Design aims to develop technologies that improve the performance of the Internet infrastructure and make the Net easier to use ("Can Networking's 'First Couple' Save the Web from Techno-Paralysis?"). But rather than operate Packet Design like a traditional company, Estrin and Carrico plan to spin off separate businesses that would market the products and serve providers and enterprises. "Packet Design is a technology company, not a product company," explains Estrin, the 45-year-old CEO. "Bill and I have created product companies before, but this time we were looking instead for something we could do for a long time." While Estrin runs the company's day-to-day operations, Carrico serves as chairman of the board. Over the years, they've learned the roles each should play -- so that they can focus individually on the areas of greatest personal interest and make maximum use of their respective character strengths. Observers point to Estrin's unfailing patience as the plus that makes her right for the CEO spot. At Packet Design, the duo hopes to avoid the temptation of short-term focus that plagues so much of the technology industry today. "We really felt like there was a set of issues not being solved correctly because the stock market drives such short-term thinking," she says. "We wanted to create a culture where the focus is not on taking the company public as fast as you can, but on creating technology that truly solves problems," she says. CISCO'S TECH CHIEF. Expect to see five or so spin-offs from the Menlo Park (Calif.) company in the next five years. Estrin is tight-lipped on the details of what the first ones will be, but she points to four chief areas that Packet Design will focus on. Two are technical: optical networking, and combining voice and data on the same networks. Two others are to grow out of market phenomena: the continued rapid growth in the number of people using the Internet and the rapid adoption of mobile devices for accessing the Net. On the basis of their reputations and business plan, the two have raised $24 million in seed funding. Estrin and Carrico put up a chunk of it themselves. After all, with millions in stock from their previous ventures, "It's not like we needed to do anything at all," says Carrico. And they also didn't have much trouble finding a handful of others willing to invest. Bill Elmore, general partner at Foundation Capital, the VC firm that is an investor in Packet Design, bet about $10 million, he says. "I think it's refreshing and delightful to have an entrepreneurial team not focused on punching out a product and taking the company public in 18 months," he says. "Besides, Judy is genetically incapable of not making money for her investors." Investors have been rewarded for backing Estrin before. Estrin's and Carrico's first company was Bridge Communications, a router maker, which they founded with current 3Com CEO Eric Benhamou in 1981. Bridge had a successful initial public offering and was purchased by 3Com in 1987 for $235 million in stock. Estrin and Carrico went on to startup No. 2, Network Computing Devices, which had its own successful IPO in 1992. By 1995, the company was pulling in $140 million in sales. Nonetheless, that was the year Estrin and Carrico opted to leave and found Precept, which sold Net video technology. Precept was sold two years ago to Cisco Systems for $84 million in stock. Estrin was chief technology officer and senior vice-president for technology planning at Cisco until she quit in April to start Packet Design. "I committed to being there for at least two years," Estrin explains. But when the two years were up, she was ready for something new. "YIN AND YANG." And it's no surprise by now that Carrico would once again be her partner in business. "They are an interesting ying and yang," says Frank Quattrone, managing director and head of the technology group at Credit Suisse First Boston. Together they have a unique ability to see into the future and get a head start into commercializing technology that's in demand, he says. And they seem to have no trouble getting along as they waltz easily back and forth across professional and personal lines. "Judy is certainly the people person," acknowledges Carrico. "I came from the semiconductor industry -- which has a much more aggressive and in-your-face style," he says. They've learned from one another over the years. "I've grown more tactful thanks to Judy," says Carrico. And Estrin? "I've become much more decisive -- which was always my greatest problem -- thanks to the example set for me by Bill," she says. They both confess to talking about work just a little too much when they're at home. "But as long as you enjoy it, I don't find it an intrusion to have a discussion about business at breakfast," says Carrico. And what does 10-year-old son David think of his parents' propensity for shop talk? "Truthfully, I think he gets a little tired of it," admits Carrico. As to whether David will embrace technology as his folks have or rebel against it, Carrico doesn't have a clue. His son does, he says, like to play video games. Estrin credits her mother for sparking her own interest in technology when she was growing up in Southern California. Thelma Estrin is a retired computer science professor at UCLA and a pioneer in biomedical engineering. But Judy Estrin credits her dad as well, who was an electrical engineer. "He encouraged me to take shop in high school," she remembers. And she did. Now Estrin teases her father, saying that maybe she'll go for her doctorate just to make him proud. Brown covers e-business for Business Week in New York |
