Cars, Cards, and a Secret Startup


By Olga Kharif THE RIDE STUFF? The man who introduced Subaru to the U.S. is at it again. This time car importer Malcolm Bricklin wants to bring cheap Chinese autos to North America. On Jan. 3, Bricklin's Visionary Vehicles announced it would be setting up a local distribution network for Chinese carmaker Chery. By 6 p.m. that day, Bricklin tells BusinessWeek Online, he had received inquiries from more than 2,000 dealers interested in carrying the five model he'll be offering -- from an SUV to a low-end sedan.

He reckons they should cost 30% less than any comparable vehicles currently on the market. To put that dealer response in perspective, consider this: In all of his years in the auto business, Bricklin, 65, says he has done business with 1,500 dealers. Yup, this Chinese car could be big.

"If you missed the Japanese invasion, you don't want to miss the Chinese invasion," says Bricklin, who plans to unveil his wares at 2006 auto shows and begin selling them in 2007. "I think we'll be bigger than Subaru in our first year."

Of course, Bricklin tends to be unfailingly optimistic, even about lemons. There's the lingering memory of the Yugo, the ill-fated econo-bomb cursed by quality problems that he brought in from the former Serbia. Then there was the gull-winged Bricklin two-seater, which he manufactured in Canada -- and couldn't sell there or anywhere else. (Bricklin did draw one lingering benefit from that exercise in automotive optimism: He'll get a cameo in an upcoming movie about the project's implosion).

But Chery will be different, Bricklin says, adding that he traversed Serbia, Romania, Poland, and India looking for a carmaker whose products could thrive in the U.S. Chery, he says, makes the grade.

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CHINA HAND. Oh, that fascination with China! Venture capitalist Tim Draper, of Silicon Valley's famed Draper Fisher Jurvetson believes the Middle Kingdom's opportunities are unparalleled -- and that some of China's upstart outfits could eventually challenge industry leaders in the U.S.

Putting his money where his mouth is, Draper has invested in Chinese companies that see themselves as potential rivals to search-engine heavyweight Google (GOOG), social networking site Friendster, and payment service PayPal (EBAY). "They offer similar service, only they're often more advanced," he tells BusinessWeek Online. For instance, a Chinese equivalent of PayPal allows users to pay not just online but also via their cell phones.

"We look for extraordinary opportunities, and there seem to be quite a few in China," Draper says. Always watchful, he travels to the Middle Kingdom several times a year. For U.S. high-flyers, that could mean turbulence ahead.

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THAT STARTUP BUG. Rich Barton, founder of travel site Expedia, now part of InterActive (IACI), is back. From Italy, that is. That's where Barton moved himself and his family after leaving Expedia. Well, a year of good food and fine wine later, he's back in Seattle, starting a new company.

Called Zillow, it'll provide "a consumer Internet service" -- and that's about all Barton is prepared to disclose at this stage, although we do know it's not a travel business. Instead, it will address "a very big and obvious opportunity, one that hasn't been done yet," Barton tells BusinessWeek Online. He won't be divulging any more clues until a few months from now, when he and his partner, former Expedia man Lloyd Frink, start looking for VC funding.

In the meantime, Barton is hiring left and right, and he sounds really happy -- even though starting another business was never in his plans. "I was tricked into it by Lloyd," jokes Barton. Frink invited him to share an office for a few hours every day. Before long, the two had hatched Zillow. "I forgot how fun it is to be small," Barton says. Hmmm. Given the choice, I think I'd still be in Italy...

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IN THE CARDS? Eli Harari, founder, president and CEO of SanDisk (SNDK), the world's largest supplier of flash memory cards used to store data in everything from still cameras to cell phones, could soon start stepping on his customers' toes. In the past, these cards were mostly pretty dim devices, capable only of storing files. But on Jan. 7, SanDisk announced U3, a card that offers more security features and is being hailed as the first step toward turning memory cards into, essentially, smart computers.

You heard that right. In a few years, Harari believes all computing power will reside on memory cards, containing everything from work files to digital music to medical records. The cards will be inserted into whatever device is most convenient, be it a cell phone or a computer (the latter will be but a shell of its current self, simply a monitor and a keyboard).

"We're looking to create a completely new market of trusted devices," Harari tells BusinessWeek Online. He isn't carrying one in his pocket just yet: SanDisk has only a few prototypes, developed jointly with M-Systems Flash Disk Pioneers (FLSH). The first U3s will become available this summer.

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PAUL ALLEN'S EMMY. Yes, it's true. Paul Allen and Digeo, the Kirkland (Wash.) startup where he serves as chairman, recently won an Emmy for best TV interface design. The outfit makes souped-up set-top boxes, which are just now being given out to subscribers by cable companies like Comcast (CMCSK). The devices allow users to record programs and order on-demand services.

Deploying the software savvy that helped him make Microsoft (MSFT) what it is today, Allen was instrumental in developing the device's interface, Digeo CEO Jim Billmaier tells BusinessWeek Online. And that interface is "kind of what Macintosh interface is to DOS," Billmaier says. In other words, for all his billions, Allen is still a pretty good hand at software development.

Allen is expected to stump for Digeo at the Consumer Electronics Show in Las Vegas, which ends Jan. 9. We wouldn't be surprised if he makes a grand entrance. To promote Digeo at a show last spring, he had a yacht moored in New Orleans, ready to host a swanky on-board party for 300 VIPs. Kharif is a reporter for BusinessWeek Online in Portland, Ore.


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