Game of Risk

Plan B

Judy Estrin is all in favor of a Plan B, and she probably wouldn't mind a Plan C. Estrin, 47, is a serial entrepreneur. She and her husband, Bill Carrico, 52, have been starting businesses since 1981, when they formed Bridge Communications, which made computer hardware and merged with 3Com in 1987. Then they moved on to start Network Computing Devices in 1988, going public in 1992; and in 1995, they created Precept Software, which was purchased by Cisco Systems three years later. Estrin, an engineer as well as an entrepreneur, serves on the boards of Federal Express, Disney and Sun Microsystems.

Estrin is now CEO of the couple's latest company, Mountain View, California-based Packet Design, founded in 2000. The new firm launches startups-taking risk to a seemingly foolish degree, especially today. But the first company Packet Design launched, Vernier Networks, which develops software that helps network managers protect wireless local area networks from intrusion, raised more than $10 million from investors last year. Everything seems to be off to a roaring start.

But like Kamfar's, Estrin's type of risk-taking is analogous to a stuntwoman driving a car into a brick wall: It's less dangerous than it looks because of all the precautions taken. Packet Design relies on plenty of internal research before sinking finances and energies into a startup.

"You have to believe in your convictions, but that doesn't mean you follow them blindly."

"I believe in calculated risks and known risks," says Estrin, who surely is thinking of a few dotcommers who have come and gone. "There are a lot of entrepreneurs who say 'Let's jump into it and let's not worry about it.' I think we have been much more about understanding what the risks are, and then making the right trade-offs and deciding which risks to take, as opposed to just thinking that taking a risk is always the right thing to do."

One of Estrin's biggest risks came early in her career, when she and her husband had secured investments to create Bridge Communications, which relied heavily on Ethernet technology. At the same time, a technology research firm concluded that broadband technology would stomp the Ethernet into the ground.

"The investors were very concerned," recalls Estrin. "But we stood fast and said, 'That's not going to happen.' We ended up being right, and we really did believe we were right." And that belief is crucial to taking a risk, Estrin adds. "You have to believe in your convictions, but that doesn't mean you follow them blindly."

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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This article was originally published in the April 2002 print edition of Entrepreneur with the headline: Game of Risk.

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