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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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MAY 29, 2003
Judy Estrin's Unfailing Eye for Opportunity After four startups, the serial entrepreneur thrives by concentrating on niche plays. Glamorous? Not really. Successful? You bet Judy Estrin's life resembles an entrepreneur's fairy tale. In 1981, at age 26, she founds her first company -- which goes public four years later. After selling that, she starts a second venture, which does an IPO in 1992. Then Estrin moves on to startup No. 3: Launched in 1995, it appeals to Cisco Systems (CSCO ), which buys it in 1998 for $84 million in stock. And Cisco makes Estrin its chief technology officer. The bursting of the Internet bubble threatened to ruin this Cinderella story, but it didn't daunt Estrin. After leaving Cisco in 2000, she found funding for the company that becomes the mother ship for three spinoffs. She got the money, she explains, because she is a conservative entrepreneur: "I'd rather take a calculated risk than shoot for the moon with a 10% chance of success." "NO-MAN'S LAND." A good example is Packet Design LLC, the company Estrin founded post-Cisco with her husband and business partner, Bill Carrico. Rather than setting up Packet Design to develop the next big thing in technology, Estrin and Carrico designed it as an incubator that would deliver subtle but significant innovations in networking, then create outfits to commercialize those. By November, 2001, server king Sun Microsystems (SUNW ) had given Packet Design millions to fund the incubator. Other investors added millions more, even as the capital markets froze over. Packet Design's target customers are chief information officers who need to cut costs. "During the bubble, operational efficiency was considered boring," Estrin says. "Everybody wanted new, cool technologies and didn't worry about what it took to make things actually work. But in this environment, operational efficiency is really important." Notes Packet Design advisory board member Vinton Cerf, an Internet pioneer: "[Judy] has an unusual talent for recognizing a good business idea and turning it into something." For instance, one spinoff, called Packet Design Inc., ships a special add-on, priced at $35,000 to $75,000, that sniffs out inefficiencies on a network. It detects if one building in California, for instance, is routing data via Miami to another building in California -- and reroutes the data through a more direct route, so to speed the transfer and save money. Another recent spinoff, Precision I/O, is developing a hardware-software combo that will speed up communication between servers and their network. That should let companies buy cheaper servers or upgrade less often, says Laurie Yoler, Precision's vice-president of marketing and business development. "It's not a glamorous area," she says cheerfully. "It falls in a no-man's land." DISPASSIONATE. Even so, it's one market that Estrin believes will grow in the near future, unlike much of tech. Her edge, if she succeeds, will be uniqueness: "It's a very difficult technology to develop," says Wes Raffel, a general partner with venture-capital firm Advanced Technology Ventures, an investor in Packet Design Inc. Raffel has known Estrin since his days at networking gearmaker 3Com (COMS ), where he negotiated resale contracts with Bridge Communications, the router company that was Estrin's first business. During dealmaking, "Estrin was a win-win sort of person," Raffel says. "We talked about how we both needed to walk away from the table smiling." 3Com acquired Bridge in 1987.
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