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The Nasdaq continues to slide, and the mood at last weeks Network Outlook conference was somber. VCs and investment bankers clustered anxiously around CNBC to watch the numbers drop, while concurring that the downturn is the most severe in 10 years. So what are those companies that are still getting funded doing (or not doing)?
Find a problem in the Internet world that looks like a problem in the real world. Disappearing Inc. makes e-mail disappear, a solution that comes too late for Bill Gates. Oracle veteran and CEO Mike Burkland—who joined the company in November to oversee the techies and closed a third round this month—says the idea is no different from shredding paper documents. He says companies should have granular policies on e-mail retention just like they do on document retention. Disappearing Inc. is partnering with platform providers like Microsoft and policy consultants like Ernst & Young, which also can advise companies on how to recover e-mail in case of a subpoena.
Use infrastructure and technology that already exist. Worldwide Packets closed a $44 million first round in January on plans to partner with electric utilities to offer Gigabit Ethernet access to homes. Founder Bernard Daines—who sold two previous startups to Alcatel and Cisco, respectively—argues that utilities are an efficient way for rural customers who may not have Internet access or even telephones to cross the digital divide. He says many utilities have fiber grids installed because they are prohibited by federal law from using telco communications circuits, so they can extend that fiber to customers easily. Utilities also are accustomed to making investments in infrastructure and recovering the cost over several years, and Ethernet—at around 28 years old—is ubiquitous and well-developed.
Gigabit Ethernet is not overkill, Daines claims, saying the coming of high-definition television will justify all of that bandwidth. He even speculates that Worldwide Packets could put data centers out of business. “Our businesses will be Joes Plumbing or Susies Wedding Gifts,” he says. “They want to market and sell as well [as] the typical enterprise business, and theres no reason for them to co-locate when they have all that access available.”
Dont get too far ahead of yourself. Last fall I cited Tealeaf, a spin-off of SAP, as a company that had prospects for the holiday season. Tealeaf tracks customers online sessions step-by-step so companies can improve those experiences, and it has a comprehensive policy on privacy. But last month Tealeaf acknowledged 16 layoffs—which is 21 percent of its workforce—along with a new version of its software and two new integrator partners. Co-founder Randi Barshack says Tealeafs software did too much—not all of it well—and the company is now focused on selling to Web operations executives, whose job it is to make their company Web sites run more efficiently.
