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Netscapees Storm The Valley


Information Technology: Internet

Netscapees Storm the Valley

Alumni of the browser giant are launching a flurry of startups

When Michael McCue and Angus M. Davis started their new company, Tellme Networks Inc., their pedigrees as brainy tech strategists at Netscape Communications Corp. paved their way. Even before they secured temporary offices this month in Silicon Valley's Mountain View, they had landed investment pledges from heavy hitters like Netscape co-founder James H. Clark. And they got their pick of A-list job candidates who didn't mind not being told exactly what the company is up to. That's still top secret. As a joke, the duo handed applicants T-shirts that said "Tellme" on the front. Printed on the back was the kicker: "I'll tell you, but then I'll have to kill you."

Yes, folks, there is life after Netscape. Mar. 17 marked the end of an era as the five-year-old company that launched the Internet gold rush was absorbed into America Online Inc. in a $10.2 billion merger. Becoming part of the 9,500-person AOL puts to rest Netscape's dream of replacing mighty Microsoft Corp. atop the software industry. But the revolutionary fervor that fueled Netscape lives on in the battle-hardened veterans of the Web-browser wars. Now, with stock-option profits bulging in their pockets, dozens of Netscape's top engineers and middle managers are launching companies and joining startups. They're the Netscapees--and they're aiming to shake up the world again.

The diaspora began in the middle of 1998, when stock options for the company's early workers began to vest. Already, ex-employees have produced promising new ventures, including an E-commerce technology company called Accept.com and Apogee Venture Group, a venture-capital firm. Some 500 more workers are expected to be cut from the 2,500-person payroll in the wake of the AOL deal. It all adds up to a massive infusion of new blood from Netscape into Silicon Valley's body politic. "The Netscape alumni network will have as profound an effect on the Valley as Apple alumni did in the 1990s," predicts James W. Breyer, managing partner of the venture-capital firm Accel Partners.

Certainly, the Netscapees are swinging for the fences in their new endeavors. Passpoints.com is creating a Web shopper profiling system that alerts companies when a consumer is ready to buy something they're selling--trying to overturn the paradigm of companies waiting passively for customers. Allbusiness.com aims to provide the country's 20 million small businesses with the software tools to get everything from credit reports to trademark info. And Tellme promises its secret plans will make a big splash. "We tried to come up with the largest possible idea we could--so big our brains would hurt," says McCue.SPEED COUNTS. The former Netscapers take with them hard-won lessons learned in the crucible of the first Internet company. Above all, they know how to operate quickly. At Netscape, the rule was you were supposed to come up with a new idea in the morning and test it on a Web site before the sun went down. "We say, screw traditional marketing theory. Just test the idea out--fast," says Todd Rulon Miller, a former Netscape marketing chief who is now a partner at Apogee.

When success doesn't come, you switch tactics just as fast. "At Netscape, we changed our business model every three months--out of necessity," says Tom Bennett, vice-president of marketing at Allbusiness.com. The upstart company is braced for rapid strategy changes. It's starting with corporate sponsorships as the main revenue source. But it hopes ultimately to charge its small-business customers on a pay-as-you-go basis for services. Then there's Plan C: Get sponsors to set up storefronts for small-business-oriented items on its Web site and charge referral fees.

Plenty of Netscapees haven't plunged back into the tech business--at least, not yet. Jon Mittelhauser, one of Netscape's original engineers, launched The Basin, a Saratoga (Calif.) restaurant, which appeals to high-tech workers with late-night hours and Net connections. Aleks Totic, another original engineer, organizes weekly lunches for his old gang. They talk about starting companies--and skiing in Tahoe. Because of burnout at Netscape, "a lot of people are still in recovery mode," he says.

With the AOL merger, the Netscapee exodus is likely to pick up. Says Totic: "You want interesting things to do, and interesting things usually happen at smaller places." That's not Netscape anymore.By Steve Hamm in New YorkReturn to top


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