Masters of their domains: 16 Netpreneurs worth watching
Magazine Contributor
14 min read

This story appears in the July 1999 issue of . Subscribe »

The dizzying speed with which new Internet companies pop up, get buzz and go public is enough to make your head spin (and the stock market soar). From a field of thousands, why did we pick these 11 companies to put on our pages? It's not necessarily fame or fortune but simply our sense that these businesses - which sell everything from software to security, from flowers to Fords - show the spectrum of possibilities open to any Internet entrepreneur ready to think fast and move faster.

Cybergrrl Inc.

Company Snapshot
Name/Age: Aliza Sherman, 31
Company/Description: Cybergrrl Inc. publishes women-oriented Web sites and provides marketing consulting to corporations and nonprofit organizations.
Based: New York City
Started: 1995
1998 Sales: $1 million
1999 Projections: $1 million-plus

A vast wasteland: When Aliza Sherman began exploring the Internet in 1994, she found that while there were Web sites devoted to the needs and interests of women, they weren't easy to find. So she decided to build Cybergrrl.com, a Web site that lists feminist academic sites and domestic violence resources. After receiving an award from Cool Site of the Day.com, Cybergrrl.com began getting so many visitors that Sherman's ISP shut her down, forcing her to buy her own server. With the additional space, Sherman added Femina.com, a search engine for women's resources on the Web.

Grrl power! Site users-dubbed Webgrrls-soon created an online community to empower women to use technology. Eventually, Webgrrls began meeting in person, and Sherman was flooded with messages from women worldwide wanting to form Webgrrl chapters. "The [Cybergrrl] site offers the best of both worlds," says Sherman. "It has the instantaneous global reach of the Internet, and the impetus for total strangers to meet and talk."

The female touch: Sherman's knack for bringing female Netizens together attracted notice: Companies such as cosmetics giant Estee Lauder now seek her expertise in reaching out to the rapidly growing market of women using the Net.

Next move: Having conquered cyberspace, Sherman plans to make her mark in the retail world with a line of Cybergrrl-themed computer accessories, clothing, games and a TV show.

Atomic Vision Inc.

Company Snapshot
Name/Age: Matthew Butterick, 28
Company/Description: Atomic Vision Inc. is a Web site design firm.
Based: San Francisco
Started: 1994
1998 Sales: $1.5 million
1999 Projections: $2 million

In the know: Matthew Butterick won name recognition even before starting Atomic Vision. With a forte for graphic and type design, he created typefaces for Apple, Microsoft and Ziff-Davis.

What to do? "Looking back, I was probably more sanguine than I should've been," says Butterick of his start-up days. "I was like, 'I guess I'll do this Web [design] thing.' "

Method to his madness: The firm Butterick started with $25,000 in savings was "cash positive within six months." Stressing the effectiveness of simplicity to clients is key: "When you make [sites] small, you can't go wrong," he says.

Young Turks: "There's a myth that bigger is better," says Butterick. "[But] we can say, 'Hey, we're a 15-person company-the senior people are going to be on your account.' "

True to form: Now that they've landed such clients as Netscape and Wired magazine, Butterick and his team hope Atomic Vision can double in size-and maintain its progressive corporate culture. That means not taking an overabundance of jobs or hiring a huge staff. Says Butterick, "That's when everything that's special, interesting and unique about it goes away."


Company Snapshot
Name/Age: Elliot Ng, 31; Eric Telenius, 31
Company/Description: Netcentives develops reward, incentive and loyalty marketing programs for e-commerce sites.
Based: San Francisco
Started: 1996
1998 Sales: $1 million-plus
1999 Projections: $5 million-plus

Talk of the town: Elliot Ng, a former product manager for Microsoft, and Eric Telenius, a software programmer, founded Netcentives while searching for Internet business opportunities. After talking to Webmasters, merchants and consumers, they found that while Web banner advertising was big business, the ads weren't very effective in drawing consumers to sites and keeping them there. Says Telenius, "We wanted to give merchants a more powerful motivational tool, as well as give consumers rewards that would benefit them."

Come fly with me: Further research showed airline frequent flier miles were highly valued by Web shoppers, who tend to travel more than the average person. So Ng and Telenius designed a reward program for e-commerce sites that offered consumers a certain number of frequent flier miles for every dollar spent. Called Clickrewards, the program launched in March 1998 on a variety of e-commerce sites, including Music Boulevard and 1-800 Flowers. By December 1998, Ng and Telenius estimate Clickrewards had driven more than $50 million in e-commerce sales.

Door prizes: Taking up arms in the "portal wars," Netcentives will soon offer custom-designed loyalty programs to help Internet portals such as Yahoo! and MSN entice more users to their sites.

Autoweb.com Inc.

Company Snapshot
Name/Age: Frank Zamani, 34; Payam Zamani, 28
Company/Description: Autoweb.com Inc. is an e-commerce Web site that allows customers to shop for new and used cars and make financing and insurance arrangements.
Based: Santa Clara, California
Started: 1995
1998 Sales: $13 million
1999 Projections: $20 million-plus

When life gives you lemons: Having the determination to survive a harrowing escape from their native Iran, emigrate to the United States with only $75 and earn advanced college degrees didn't make the Zamani brothers any less vulnerable to the wiles of car salespeople. "I felt like I had been the victim of the car-buying process more than anyone I knew," says Payam Zamani, who went through eight junkers in as many years. When Frank Zamani, a quality control manager for Microsoft, turned to the Net to research his next car purchase and found it offered little help, the brothers built a Web site (http://www.autoweb.com) to streamline the car-buying process.

Road rules: Autoweb.com is free to car buyers; the Zamanis have exclusive agreements with a number of national automotive outlets that charge member dealers for each customer referred to them by the site. Personal touches, such as online car-buying discussion forums and e-mail service reminders, bring users back.

In the driver's seat: The site received just a handful of visitors in its first few weeks, but by December 1998, had become the most-visited automotive site on the Web. Autoweb.com's network of member dealerships now numbers 4,000 and accounts for nearly $700 million in car sales per month.


Company Snapshot
Name/Age: Jared Polis Schutz, 24
Company/Description: Proflowers.com sells flowers online, shipping direct from grower to consumer.
Based: La Jolla, California
Started: 1997
1998 Sales: nearly $2 million
1999 Projections: "We hope to do 10 times that much," says Schutz.

A mind for business: At 16, Jared Polis Schutz sold scrap metal to steel mills for recycling. At 17, he spent a summer in Moscow trading on the floor of the Russian Commodities Exchange. At 18, he co-founded an ISP in Chicago (a feat he somehow fit in while majoring in political science at Princeton). Along the way, he also launched (and sold) an Internet political consulting firm.

Business blossoms:Proflowers.com applies innovations in distribution to what Schutz refers to as the "inefficient" flower industry. His business allows customers worldwide to have fresh-cut flowers FedExed directly from the growers to the recipients. Schutz self-funded the venture and launched on Valentine's Day, 1998: "I was up with the growers, packaging flowers into our test boxes, at 4 a.m.," he says.

Firmly planted roots: Despite bad weather, competitors and "growing pains," Proflowers.com enjoys a 50-percent month-over-month growth pattern.

Rose-colored glasses: Future expansion of the 15-employee company could mean accepting venture capital, going public or maybe even merging. Says Schutz, "We try not to close any doors."

pcOrder.com Inc.

Company Snapshot
Name/Age: Christina Jones, 29
Company/Description: pcOrder.com Inc. provides e-commerce solutions for the computer industry.
Based: Austin, Texas
Started: June 1996
1998 Sales: Nearly $22 million
1999 Projections: They could tell us, but then they'd have to kill us.

Applied learning: This class of '91 Stanford graduate co-owned Austin powerhouse Trilogy Software Inc. for six years before she realized the corporation's core technology (artificial intelligence), which allowed businesses to efficiently build multicomponent products, could cut down PC-building time as well.

Stepping out: The promise of her new idea was "so compelling," Christina Jones sold her shares in Trilogy to a fellow co-owner-but asked for access to Trilogy's technology and some start-up support in return.

Sink or swim? "I learned a lot about the computer distribution channel's inefficiencies at Stanford because many of my friends were industry [insiders]," says Jones. So she offered a solution. Using pcOrder.com's technology, corporate customers can choose the PC features they want using the Web; computer manufacturers can use pcOrder.com software to set up their own sites and take orders directly from customers. Now high-tech giants like Compaq, CompUSA, Hewlett-Packard, IBM and Ingram Micro partner with pcOrder.com. And boy, are made-to-order PC companies like Dell feeling the heat!

Roll out the red carpet: Jones knows pcOrder.com's services can't be matched and its place in PC-land is secure. (Her business even went public in February.) As for how secure she feels as a young woman in a cutthroat industry, she says, "In this industry, age doesn't matter. Results do."

EarthLink Network Inc.

Company Snapshot
Name/Age: Sky Dayton, 27
Company/Description: With more than 1 million members, EarthLink Network Inc. is one of the nation's largest ISPs.
Based: Pasadena, California
Started: 1994
1998 Sales: $175 million-plus
1999 Projections: $333.5 million

User-unfriendly: Sky Dayton's first experience with the Internet in 1993 would have scared most people off for good. "I was trying to get connected and was extremely frustrated because it took, like, 80 hours to configure my computer," says Dayton, who began using computers at age 9. "But once I actually got on, I recognized it to be the next mass medium and thought there could be a better way to help people get connected to it."

No experience necessary: After high school, Dayton co-founded a coffeehouse and a computer graphics boutique, but when it came to setting up an ISP, he was pretty much in the dark. "EarthLink was something that was definitely out of my sphere of expertise at the time, but so was the coffeehouse when I started. Like everything I do, I jump in with my head first, [learn] the hard way and work through it." Dayton leased EarthLink's Internet "backbone" from other companies to save money and emphasized customer support and reliable connections-"things I wish I'd had when I was first connecting to the Internet."

On the ground floor: Over the next few years, public interest in the Internet took off-as did EarthLink's membership. A deal last year with Sprint added 130,000 members and made EarthLink second only to AOL in membership size.

Internet for the masses: Despite the incredible growth of the industry, the market for ISPs is still wide open, says Dayton. "Seventy-five percent of U.S. households have yet to connect to the Internet, so we're still at the very beginning of this medium. That means we have to work every day like [we're] still a start-up and stay hungry. Our work isn't close to being done."

CDnow Inc.

Company Snapshot
Jason Olim, 30; Matt Olim, 30
Company/Description: CDnow Inc. is an online music retailer.
Based: Fort Washington, Pennsylvania
Started: 1994
1998 Sales: $98.5 million
1999 Projections: $200 million-plus

Singing off key: Jason Olim, a software engineer and music lover, was in a music store one day looking for Miles Davis albums. When he asked a clerk for a recommendation, he was told, "Miles is under M." This flippant response inspired Jason to create an online music store with a database that would combine artist biographies and album reviews with a list of albums for sale. With help from his twin brother, Matthew, Jason spent the next six months programming the database and building relationships with suppliers and data providers.

Rock-and-roll fantasy: The result was a music lover's dream come true. Without the high overhead of a brick-and-mortar location, CDnow is able to offer consumers a much larger selection-including books, albums, tapes and CDs. "We have more than 100 Madonna items!" says Jason. "But unlike other music stores, we also give insight into when her albums were released, what they sound like, who she is, even what clothing she was wearing."

Number-one with a bullet: Banner ads for CDnow can be found on all the major Web portals, including Yahoo!, Netscape and Excite, as well on a network of more than 200,000 Web sites put up by music fans. The brothers plan to take CDnow global by promoting foreign artists to fans in their native languages and accepting payment in other currencies.


Company Snapshot
Paul Gauthier, 26; Eric Brewer, 32
Company/Description: Inktomi (pronounced ink-tummy) provides the computing muscle behind Internet search engines such as Yahoo!
Based: San Mateo, California
Started: 1996
1998 Sales: $20 million
1999 Projections: $35 million

Killer app: Paul Gauthier and Eric Brewer originally developed Inktomi as a University of California, Berkeley research project to demonstrate the possibilities of parallel, or clustered, computing, which offers the power of a super-computer without the expense. "Clusters are cost-effective," Gauthier says. "You can build [the equivalent of] a supercomputer for three to 10 times cheaper than the real thing." The system also makes it easy to increase computing capabilities by adding another PC. By spring 1996, Inktomi was serving as the brains behind HotWired, one of the first search engines.

Sharing the wealth: The Internet contains about 400 million pages of information and is growing at a rate of 1 million pages per day. Fast, accurate searches require plenty of computing power-just what Inktomi's four data centers (each containing 200 computer processors) have. The company now outsources its search engine technology to 15 different Web sites, including GeoCities, Snap.com and Yahoo!.

Shop till you drop: Inktomi's latest project is an e-commerce search engine called C2B. Explains Gauthier, "In the same way our search engine lets you find information on the Net, our shopping product allows you to comparison shop on the Net."

Kana Communications Inc.

Company Snapshot
Name/Age: Mark Gainey, 31; Michael Horvath, 32
Company/Description: Kana Communications Inc. makes software that helps companies communicate with customers more efficiently over the Net.
Based: Palo Alto, California
Started: 1996
1998 Sales: $3 million-plus
1999 Projections: Would not disclose

You've got mail: Escaping after five years working for a venture capital firm, Mark Gainey was on the hunt for a sports-related Web business. While talking with big firms like Spaulding and Trek, Gainey heard the companies complain about their biggest Internet problem: too many customer e-mails. "They were so frustrated, they were turning it off," says Gainey. "[Their Web sites were] basically a million-dollar billboard."

Wag the dog: The partners, who met at Harvard, started Kana to help companies handle their high volumes of e-mail. The origin of the name "Kana?" "It's my dog's name," Gainey admits, "but it's also a great domain name people remember."

Read 'em: The Kana philosophy is summed up in two books: The Art of War by Sun Tzu and Jim Collins' Built to Last: Successful Habits of Visionary Companies. "Take those, mesh them together and that's what we want to do," Gainey says.

Next stop: Through it all, Michael Horvath has remained a professor of economics at Stanford. And with everybody from eBay to Northwest Airlines using Kana software and services, Gainey is looking ahead: "We want to help companies redefine the way they do e-business." With a fresh $11.5 million of third-round capital in its pocket, Kana's bite is now as big as its bark.

Internet Security Systems Inc.

Company Snapshot
Name/Age: Christopher Klaus, 25
Company/Description: Internet Security Systems Inc. develops software to protect networks.
Based: Atlanta
Started: 1994
1998 Sales: $36 million
1999 Projections: Would not disclose

Cyberpunk: Reading William Gibson's sci-fi classic Neuromancer in the ninth grade influenced Christopher Klaus to create Internet Scanner, a network-protecting, anti-hacker program.

Career change: After just two years at Georgia Tech, Klaus got his priorities in line. "I was either going to keep my grades good or keep my project going. I decided, 'Let's wing it.' " Dropping out and moving into his grandmother's house, he founded Internet Security Systems (ISS).

Think global: Whether you call it "adaptive network security management" or "security expert in a box," Klaus' business has become a corporation with more than 400 employees and offices all over the world. ISS now counts the Army and the American Bankers Association among its clients.

Ahead of the game: The company's secret weapon: the ISS X-Force. "It's a security research group geared toward monitoring all the hacker channels and chat systems that looks for new exploits we can incorporate into our technology," Klaus explains.

Up, up and away: Not content to just identify network security holes, Klaus says programs in the works are "like a command and control center to watch your network, be proactive, prevent attacks [and] respond to attacks in real time." William Gibson should be proud.

Contact Sources

Autoweb.com Inc.,http://www.autoweb.com

CDnow, (215) 619-9900

Cybergrrl Inc.,aps@cgim.com


Internet Security Systems Inc., (800) 776-2362

Kana Communications Inc., (877) 480-KANA, http://www.kana.com


pcOrder.com Inc., (512) 684-1173

Proflowers.com, (800) PROFLOW

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