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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 20, 2000 MOVERS & SHAKERS By Charles Haddad Aaron Shapiro's Message: We've Got Enhanced E-Mail Avienda Technologies' chairman believes he can sell global companies on his vision for a more interactive e-mail
This rebellious flair is fitting for a 28-year-old Harvard University graduate who's out to make e-mail more fun and interactive. In the summer of 1999, Shapiro teamed up with business-school buddy David Bloom to found Avienda Technologies in Atlanta. Now Shapiro is chairman and Bloom senior vice-president for corporate development. So far, the company has raised $30 million to build a private worldwide network able to deliver e-mail gussied up with live stock quotes and streaming video and sound. A stock quote embedded in an e-mail, for example, would update itself throughout the day. Shapiro's network of 60 servers in 9 countries plugs into the Internet but offers greater security and more enhanced features using an up-and-coming technology called point-to-point. It enables more interactivity within a network, as the stock-quote example illustrates. And although it sounds similar, point-to-point is not the same as peer-to-peer, a model made famous by Napster. A peer-to-peer network is serverless, instead forging disparate individual computers into a system with no central control or security. POWER PLAY. Avienda's network, which is in the final testing phase, is expected to begin commercial operation sometime in February. The company could offer many different types of service but plans to emphasize e-mail first. Shapiro figures this most popular of online services will help him quickly establish the power of his network. He's targeting big companies with international operations, which would pay for access to the Avienda network. The idea of a separate, less-congested network running alongside the Net is nothing new. Akamai and Digital Island have both built them. But unlike Avienda's, their networks have focused on hosting Web sites. "E-mail is the single most important application on the Net, but it hasn't been improved on in 30 years," says Peter Christy, an Internet analyst at industry consultant Jupiter Communications. "It remains wonderfully arcane. Any improvements I think would be greatly welcomed by the market." Improving e-mail is no small task. It has worked well enough so far to satisfy most users. But that's not good enough for Shapiro, who has been tinkering with the status quo since he was a teenager growing up in suburban Long Island, N.Y. The son of an electrical-engineering professor, Shapiro entered his high school science fair every year, always searching for that something different that would change the world. One time he built a nonpolluting air conditioner that worked without Freon. To Shapiro, Avienda is just his biggest science project yet. "THE COOLEST." Shapiro also is a classic overachiever. At 15, he was working as a teacher's assistant at his father's school, the State University of New York at Stonybrook. He was the first among his friends to have a girlfriend -- "and that made me the coolest," Shapiro boasts. At 22, he entered Columbia University's Graduate School of Business, the youngest student in his class. You would figure that, given his science background, Shapiro would have preferred a doctorate in engineering or physics. But pure science has never been enough for him. "Academia frustrated me," Shapiro says. "I need something immediate and practical." Still, he has always wanted to profit from science, even as a teenager. The first computer program he wrote was a game about running a lemonade stand. Shapiro's interest in business led him to major in economics as an undergraduate at Harvard. But Shapiro didn't wait until graduation to try out what he had learned. During his junior year, he launched a magazine for male teens out of a friend's dorm room. Called Inside Edge, the mag at its peak had a circulation of 200,000 and was distributed by media giant Time Warner. When he graduated from Harvard, Shapiro, sick of the magazine business, shut down the publication. But its success persuaded Columbia's business school to take the unusual step of accepting him without any traditional work experience. NEXT BIG IDEA. The moment he entered business school, Shapiro began scheming to start another company. This time his focus would be the Internet. After knocking around a couple of years with several Web startups and consultants, he discovered his next big idea. It came from fooling around with greeting-card sites, which had strong traffic but little revenue. How, Shapiro wondered, could he make money off of all that traffic? His answer: build a network that would let users create e-mail resembling greeting cards, with the ability to add photos, video, and fancy text and update that information immediately. Shapiro was convinced big companies would pay for such a service. "Heck, I'd been in the e-mail business, and I didn't see this," says Bill Nussey, Avienda's president and CEO. "Aaron saw enhanced e-mail would be the next hot thing 18 months before anyone else." What would make such enhanced e-mail possible is point-to-point technology. While small today, point-to-point distribution of content is expected to mushroom into a $2.5 billion market by 2004, according to IDC. Avienda has developed its own version of point-to-point, patented as SmartDeploy. This system allows users to maintain online inventory reports, for example, in which changes are immediately visible to employees on the network anywhere in the world. Or the boss could send every employee an e-mail containing a live presentation of his next strategy. Those receiving the e-mail video could tune in while the presentation was in progress or rewind to the beginning -- basically, operating on the same principles as a digital-video recorder. VOTE OF CONFIDENCE. Shapiro's idea has attracted some powerful backers. Venture capitalists such as Draper Fisher Jurvetson, NeoCarta Ventures, and Imlay Ventures are among those who have invested the $30 million in Avienda. He'll never forget his first check, for $7.4 million in November, 1999. "We took it down to Kinkos to make a color copy," Shapiro says. "Needless to say, the woman clerk was a little bit floored." But money and ideas are never enough to guarantee the success of a tech startup like Avienda. You need an entrepreneur who can attract top engineers and sell others on his idea. And that, more than anything, is why Draper Fisher and the others have invested in Avienda. "I've talked with some of Shapiro's former professors, and they said this is a guy who doesn't know how to quit," says Draper Fisher Director Andreas Stavropoulous. Indeed, Shapiro has already attracted some serious programming and management talent. Among his recent catches is veteran tech executive Nussey, who most recently worked as president and CEO of Atlanta-based Internet consultant iXL Inc. Before that he was a venture capitalist for Greylock. "I know how to raise money and manage hundreds of employees," Nussey says of his role in the company, which already has a 90-person staff. As for Shapiro, Nussey says, "he knows how to see over the horizon and has the guts." He cites Shapiro's early recognition of the potential of both point-to-point technology and enhanced e-mail. STRATEGIC FAILURE. One example of Shapiro's chutzpah has already become myth at Avienda. When Shapiro and Bloom started raising money two summers ago, their point-to-point technology wasn't quite up to snuff. So they rigged an Apple 5300 PowerBook containing a demo of SmartDeploy to feign a momentary failure. The screen dimmed automatically when the demo reached the unperfected part of SmartDeploy. Venture capitalists looking on were none the wiser. Shapiro and Bloom say they're perfectly paired. Bloom is the rainmaker, beating the bushes to sign up customers and raise money while Shapiro dreams up ways to soup up Avienda's network and offer new alluring services. They met at Columbia, but then Bloom moved back to Atlanta, where he had attended Emory University as an undergrad. He stayed in touch with Shapiro, who remained in New York. The two friends compared notes as fledgling entrepreneurs. "Aaron challenges me intellectually like no one else," Bloom says. "We've always tried to outsmart each other." Finally the two decided to join forces, though with a competitive edge. They staged a contest to see who could get the company up and running first. The winner would have to move to the other's city. In the summer of 1999, Bloom won the bet. He lined up more programmers and potential investors in Atlanta. Shapiro moved from New York City to his friend's two-bedroom apartment in Atlanta. HOTHOUSE ATMOSPHERE. Before long, Shapiro and Bloom were sharing the apartment with about a dozen programmers and scores of computers as they began building the Avienda network. "It grew so hot in there during the winter we had to turn on the air-conditioning full blast," recalls Marketing Director Jacqui Chew. Such pluck will come in handy during the next year or so. The $30 million that Avienda has raised so far sounds like a lot of money, but it won't go far in building and maintaining a network. And raising more capital in today's market is hard, if not impossible. "At some point, these guys are going to be up against the wall," says Jupiter's Christy. "The trick will be whether they can find things people can already do, but do better with their network." Shapiro agrees, arguing that an enhanced e-mail service is just the ticket to persuade corporate IT officers to sign up for his Avienda network. If that pitch doesn't work, he'll have to jump on his Razor scooter and zip across the office complex for a brainstorming session.  Haddad covers tech companies for Business Week in Atlanta  | | |
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