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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | DECEMBER 6, 2000 MOVERS & SHAKERS By Jay Greene Microsoft's Turncoat or True Believer? As CEO of Web-tool maker Crossgain, Tod Nielsen walks a tightrope -- he's competing with the giant he once worked for and still feels loyalty toward
But oddly enough for someone once emotionally wedded to Microsoft, he's now running a company that could end up competing with his alma mater. Nielsen has become CEO of Crossgain, a Bellevue (Wash.) startup created by another former Microsoft executive, Adam Bosworth. ROOM FOR TWO? The company plans on providing next year a set of online tools for developers to create software applications that run on the Web. Of course, so does Microsoft. While this goal is only a modest piece of the software giant's overall vision, it's enough to keep Nielsen defensive about Crossgain's ambitions: "If you think Microsoft has to own every service, then I don't know how you can find something that isn't competitive [with them]." He believes that there's plenty of room for both companies to succeed. To help level the playing field, Crossgain has quickly enlisted the help of one of Microsoft's most prominent adversaries -- James Barksdale. He's the former CEO of Netscape, which prompted the government antitrust case again Microsoft. Barksdale's venture fund, the Barksdale Group, along with VC firm Benchmark Capital Partners, invested $10 million in Crossgain. The Barksdale connection puts Nielsen's new job in stark contrast to his old one. During his tenure at Microsoft, it would have been hard to find a more loyal soldier. When Gates took Nielsen aside at the giant Comdex trade show in 1998 and asked him to monitor the antitrust trial, Nielsen didn't hesitate -- even though he knew it meant spending six months in Washington, D.C., 2,500 miles away from his wife and daughter. And as badly as the trial went for Microsoft -- the court ruled that the company should be broken in two, though the decision is being appealed -- the halls of the courthouse could hold no more vigorous a Microsoft defender than the persistently affable Nielsen. A FINE LINE. These days, the exec walks a tightrope. Despite ties to the enemy and a product that potentially competes with a piece of Microsoft's business, he's steadfast in his allegiance to his previous employer. "I now think of myself as an alumnus," says Nielsen, who grew up just a stone's throw from Microsoft's Redmond campus in suburban Bothell, Wash. "I'm very proud. I'd wear the hat at a football game." And indeed, Crossgain is designing its product to work well with Microsoft's newly minted .Net initiative, an ambitious technical gambit to link thousands of Web sites together so that one mouse click could someday have the power of dozens of clicks today. "I'd love to be a poster child for .Net," says Nielsen, who nurtured it at Microsoft when the strategy was just in short pants. But Nielsen also realizes that he needs to be his own man, and Crossgain its own company. To succeed, the startup can't be beholden to Microsoft. That's why its programmers are creating tools that work with versions of Unix and Linux, in addition to the Windows operating system. NO DRAG. Indeed, one of Crossgain's advantages is that it isn't Microsoft. Perhaps the latter's biggest challenge in realizing .Net is the baggage that comes with being an industry leader. Microsoft has to cater to the tens of millions of customers in its existing business, while remaking it and bringing those clients into its new world. It's an enormous challenge, one that some of the brightest management minds think Microsoft can't pull off. Crossgain has no such baggage. "Being a small company, no one has the expectation that we have to have that broad a vision," Nielsen says. "I can worry about just one piece of the puzzle." The exec didn't think he would even be worrying about that puzzle when he left Microsoft. Already a multimillionaire at 35, Nielsen had planned to take at least six months off before plotting his next move. An avid golfer with an enviable handicap of 4, Nielsen planned days of hitting the links with his wife, also a golf fanatic, and taking things slowly. But in the world of technology, where CEOs are in short supply, Nielsen quickly became a hot commodity. Bosworth, the technical whiz who started Crossgain, had planned to hire a CEO by early 2001. But when Nielsen became available, he sped up his timetable. "What happened was opportunistic," Bosworth says. PROVING HIMSELF. It was just as opportunistic for Nielsen. Instead of six months off, Nielsen got six weeks. He took a big chunk of equity to join Crossgain and is only earning $24,000 a year as CEO. While Nielsen hopes to reap some significant rewards down the road, he took the job to prove something to himself -- that he could succeed at running a company. "One of the things you wonder about at Microsoft is: Are you successful because of what you're doing? Or are you successful because of brand Microsoft?" says Nielsen. He's about to find out. And he's not going to get much help from Microsoft along the way.  Greene covers Microsoft and other technology companies for Business Week in Seattle  | | |
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