This article is from the August 1, 2001, issue of Red Herring magazine.

Bill Nguyen, Seven NetworksSEEING MAGIC IN ONES AND SEVENS -- Bill Nguyen, founder, president, and chairman of wireless startup Seven Networks, proudly admits that he is "viciously focused on the numbers." He is not, however, referring to his company's enigmatic name, but rather to its bottom line. And numbers are an important reason for selecting Mr. Nguyen as our lead entrepreneur for 2001: in February of 1999, Mr. Nguyen sold his previous startup, Onebox.com, an Internet messaging provider, to Openwave Systems (Nasdaq: OPWV), a communications software company, for a cool $850 million. Exactly one month later, he left Openwave to begin work on Seven, a wireless software company that has already garnered $34 million in venture capital from Ignition and Greylock, retained British Telecommunications as a customer, and expects to be profitable by year-end. Mr. Nguyen sleeps three hours a night. He is 30 years old.

Mr. Nguyen has been a part of no fewer than six technology startups over the course of his young career, which goes a long way in explaining why he didn't have time to finish his undergraduate degree at Houston Baptist University. Speaking faster than most people think, Mr. Nguyen is at once self-effacing and eternally optimistic. He declines the label of serial entrepreneur and instead refers to himself as "serially lucky." However, luck had little to do with his ability to raise funding during a tight VC market.

"He's a rocket; you just strap in and try to hold on," says Brad Silverberg, CEO and partner at Ignition. Mr. Silverberg says that when Mr. Nguyen presented his idea for a software platform for wireless carriers that could provide companies with mobile access to their corporate data, Ignition told him, "Bill, we love you, but it's not going to work." Mr. Nguyen took the defeat in stride and went home to work on the idea's technical hurdles for three days straight, with no sleep. When he showed up at Ignition's offices with the new plan, he had not only solved the problems, but he had proved his mettle.

Seven's software makes it possible for wireless carriers to offer wireless data access directly to businesses, eliminating the need for expensive, custom-built software. However, building the highly reliable software demanded by carriers is no easy task. If Mr. Nguyen is successful, his company promises to help wireless carriers realize greater returns from their expensive new networks -- something they are eager to do.

Mr. Nguyen's serial luck should take him far -- it's in the numbers. Since its inception, Seven has burned through 30 to 40 percent less than it had budgeted, and is expecting revenue in the double-digit millions by year-end. Based in Redwood City, California, the company now employs 65 people and, unlike most of its Silicon Valley brethren, is now hiring.

--Dan Briody

Chris Stone, TilionSHEDDING LIGHT INTO DARKNESS -- The name of Chris Stone's company honors a character from J.R.R. Tolkien's The Silmarillion -- Tilion, the steersman of the moon, who brought light to darkness. The 44-year-old Mr. Stone grandly seeks no less, though in the more pragmatic world of supply-chain event management.

He earned a computer science degree and an executive M.B.A., worked his way up at Data General to become director of software products, then founded the Object Management Group to help create CORBA and other software standards. He next reinvented himself as second-in-command at Novell (Nasdaq: NOVL), a job that offered valuable experience with directories and a disconcerting view of how things can go wrong. When Novell took a $265 million hit in one quarter of 1997 because the company couldn't keep track of its inventory, Mr. Stone perceived a yawning gap. "We had no visibility into what our distributors were doing. It was a missing piece. So the lightbulb went off: I could solve this."

Tilion, founded in January 2000, is an Internet-based service that offers companies up-to-date supply-chain performance information. The company's software captures data from all supply-chain transactions, translates and encrypts it in Extensible Markup Language, then generates custom reports that users can access over the Internet. With real-time monitoring, companies can detect and correct inventory bottlenecks quickly and respond to changes in demand as they occur. "It's like switching from a typewriter to a word processor, where all of a sudden you can just delete the wrong word and put in the right one," Mr. Stone says.

Tilion has 89 employees; $46.5 million in venture funding from North Bridge Venture Partners, Venrock Associates, Lucent Ventures, and others; and four customers. This speaks to Mr. Stone's motivation: "I like watching a customer's eyes light up as he says, 'You can do that?!?'"

--Thomas Maeder

Klaus Wiemer, Communicant Semiconductor TechnologiesAN INSURANCE POLICY FOR A NEW CLASS OF CHIP -- Klaus Wiemer doesn't mess around. He is raising $1.5 billion to fund his next startup, Communicant Semiconductor Technologies.

Mr. Wiemer is building a contract manufacturing chip factory -- a foundry -- in the former East Germany, capitalizing on big subsidies from the German government and the European Union to cover half the startup costs. He's raising the remaining $740 million from banks and strategic investors like Intel, and expects to begin minting chips in early 2003.

Mr. Wiemer has worked in chips for nearly three decades, running operations at Taiwan Semiconductor Manufacturing Company (NYSE: TSM), as well as at Chartered Semiconductor Manufacturing (Nasdaq: CHRT) in Singapore. He tried to start another foundry in Malaysia a few years ago, which failed when the Asian financial crisis struck.

Communicant will specialize in silicon germanium (SiGe) chips, which are ideal for communications applications like wireless phones and high-speed networking equipment.

The company will face tough competition from IBM (NYSE: IBM), the leading SiGe chip maker. But Mr. Wiemer is betting that demand will be so strong that IBM won't be able to handle it all. Other chip makers are also expected to make their own SiGe chips, but, just as in other businesses, there are benefits in outsourcing.

"Our plan is to be a differentiated foundry," says Mr. Wiemer. "We decided it would be suicide to take the other players head on. We're like their insurance policy in case something goes wrong in their own factories."

--Dean Takahashi

Josh Coates, Scale EightLATTER-DAY SAINT OF STORAGE -- Scale Eight, a distributed storage startup, isn't Josh Coates's first company. He pirated games software in junior high and ran a T-shirt business in high school. And the 27-year-old's ambitions haven't waned since. As a software engineer at Inktomi, he saw that existing storage systems were expensive and poorly organized. He told himself, "I can totally build a storage system that will kick butt for way cheap, and it would be totally cool."

With data centers worldwide, Scale Eight stores rich-media files for the likes of Microsoft (Nasdaq: MSFT), MTVi, and Akamai (Nasdaq: AKAM), which can access and update files over the Internet, even while they are in use. The two-year-old company has raised more than $31.5 million and was a Red Herring 100 company for 2001.

A former missionary for the Church of Jesus Christ of Latter-day Saints, Mr. Coates vows Scale Eight won't be his last company. "I've got too many things cranking away in my mind."

--Jennifer Lewis

Peter Molyneux, Lionhead StudiosHELPING OTHERS PLAY GOD -- Peter Molyneux is a 41-year-old game developer with eight No. 1 titles to his name. He says he is "absolutely addicted to game design; it's like a drug." If it is, then two-year-old Lionhead Studios, his game development company in Guildford, England, is his never-ending source of pleasure.

Mr. Molyneux's first game company, Bullfrog Productions, was a runaway success. In 1987, it created Populous, which sold 4 million units. Other hits followed and in 1994, Bullfrog's sales were just under $20 million. The next year, Mr. Molyneux sold Bullfrog to Electronic Arts (Nasdaq: ERTS) for an undisclosed sum of stock.

Two years later Mr. Molyneux cofounded Lionhead. The studio creates games and then partners with publishers for their marketing and distribution. Bankrolled with Mr. Molyneux's own riches, Lionhead's team of only 25 employees devoted the past three years to its latest title, Black & White, in which players assume the role of a god and battle other gods. "It's the best thing I've done in my life," Mr. Molyneux says of the game. Needless to say, when Black & White was released in April, it was an instant best-seller.

--Dean Takahashi

Teresa Meng, Atheros CommunicationsTHE ACADEMIC ENTREPRENEUR -- Teresa Meng, professor of electrical engineering at Stanford University, never dreamed of starting her own company. But her academic career took an unexpected turn in 1998, when she discovered a technology that could make wireless networking cheap and powerful enough for use in businesses and homes.

But when she and John Hennessy (then dean of Stanford's School of Engineering) approached companies to develop this "radio on a chip," they found no takers. Thus, out of "half frustration, half ambition," Ms. Meng jokes, her entrepreneurial career began. She and Mr. Hennessy, now Atheros's chairman, assembled a team and raised $98.3 million from backers including Fidelity Management & Research, Bowman Capital, and August Capital.

Atheros is targeting a third-quarter release of its first chip set, with an eye on profitability by year-end 2002. Meanwhile, in addition to her Atheros duties, Ms. Meng is once again teaching a full course load. "I have students I need to take care of," she says, ever the dedicated academic.

--Julia Lawlor

Ray Ozzie, Groove NetworksCHANGING THE WAY WE GET THINGS DONE -- Ray Ozzie's latest venture, Groove Networks, hopes to improve upon his first creation, Lotus Notes. Groove combines the collaboration of Notes with the communication of instant messaging to create a platform that will, for example, allow pharmaceutical maker GlaxoSmithKline's scientists to share information securely with outside researchers in real time.

The 45-year-old entrepreneur is betting that Groove's peer-to-peer collaboration platform, which bypasses a central server, is the next networking "killer app." Mr. Ozzie founded Groove in October 1997, bootstrapping it at first. Since then Groove has raised $63 million from Accel Partners, Intel Capital, and angels.

The always-modest Mr. Ozzie says his recipe for entrepreneurial success is simple: "Don't do the same thing everybody else is doing." Though it may be a while before Groove goes mainstream -- version 1.0 shipped in April -- he hopes it will create useful collaboration among people, technology, and organizations, improving the way we get things done.

--Michael Fitzgerald

Jagdeep Singh, Zepton NetworksNETWORKING MADE SIMPLE -- Jagdeep Singh is a prototypical networking entrepreneur -- brilliant, shrewd, and very secretive. Two of his first three companies were network equipment makers. His fourth, Zepton Networks, is another one. "Equipment is a very straightforward business model; the only problem is technical execution," Mr. Singh says.

Cagey as ever, Mr. Singh says only that the six-month-old Zepton is an optical equipment maker based in Cupertino, California, that has a chance to eliminate the need for a so-called all-optical network. The company raised $37 million in first-round funding from Kleiner Perkins Caufield & Byers, Accel Partners, and Benchmark Capital.

What makes Mr. Singh so special is his track record. He entered the University of Maryland at 15 and joined Hewlett-Packard upon graduation. After stints at Sun Microsystems and as a VC, he got a master's in engineering from Stanford University, where he caught the entrepreneurial bug.

He sold his first two networking companies, AirSoft and Lightera Networks, for a total of $625 million. His third company is one-year-old OnFiber Communications, a metropolitan area networking services provider.

Earlier this year, Mr. Singh hired a new CEO for OnFiber, to allow himself time to pursue what he does best -- invent hardware. To help him with this, Mr. Singh has tapped Drew Perkins, former chief technology officer of Lightera; David Welch, former chief technology officer of SDL; and Fred Kish, former research, development, and manufacturing manager at Agilent Technologies, to join him. Given his past success, it seems likely he is onto something big -- again.

--Om Malik

Vani Kola, Nth OrbitTAKING ENTERPRISE SOFTWARE TO NEW HEIGHTS -- For Vani Kola, building supply-chain startup Nth Orbit is very much like her climb to the summit of Mount Kilimanjaro this summer: a lot of fun, but also pretty damn serious. She trained to scale that famous mountain during a five-month "retirement" from her first startup, a B2B software company called RightWorks. Ms. Kola sold a majority stake in the four-year-old company in March 2000 to Internet Capital Group at a valuation of $1.25 billion. Although Ms. Kola enjoyed being with her husband and two daughters and devoting time to mountain climbing, she grew restless as she began to think about streamlining manufacturing supply chains. "I didn't really plan on coming back; it just happened," Ms. Kola says of entrepreneurship. "It sucks your soul into it and takes everything you've got."

In March 2001, she founded Nth Orbit, a supply-chain collaboration software company in San Jose, California. The company raised $7 million in venture funding from Sequoia Capital and individual investors -- all of whom were early backers of RightWorks. The company is developing software to help business partners exchange orders for supplies and finished products in real time. Several of the company's 14 employees are Ms. Kola's former RightWorks colleagues.

While some entrepreneurs might be daunted by the complexities of creating supply-chain software that is always up-to-date, Ms. Kola is drawn to them. The 37-year-old native of Hyderabad, India, has spent most of her career developing enterprise software for manufacturers. Improving companies' supply chains is a ripe opportunity, she says. "This is where the most creativity comes out, because there are no answers, just chaos," says Ms. Kola. If successful, Nth Orbit will bring order to the manufacturing universe.

--Julie Landry

Bala Manian, Quantum DotPROOF THAT NO MAN CAN LIVE ON MOLECULES ALONE -- To get a sense of Bala Manian's genius and modesty, consider that the same person who developed the bar code, won an Academy Award for developing special effects for the Indiana Jones and Star Wars films, and holds some 30 nanotechnology patents also once had business cards that read: "I'm just an Indian, I'm no chief." Yeah, right.

Dr. Manian has hatched seven companies in fields ranging from biometrics to medical imaging, including Entigen, Lumisys, and Molecular Dynamics. Those that have been acquired have fetched prices ranging from $7 million to $250 million. His most recent creation is the nanotech-based genomics firm Quantum Dot, a 2001 Red HerringTen to Watch selection that specializes in fluorescent tools used in drug discovery. Dr. Manian serves on the top-secret NASA-National Cancer Institute Mars Project, which sees nanotech as the key to getting astronauts to Mars and back in 2020.

--Stephan Herrera

0