Wednesday, March 14, 2001

The Cyber Scene in Denver ~ by Suzanne Lainson

On March 14 I trekked down to Denver for the monthly Forum for Women Entrepreneurs ( meeting. This time it was held near Cherry Creek at the Sheraton Four Points Hotel. As Denver locations go, this was a good one since it is centrally located without the parking hassles and one-way streets that come with downtown. And with Tiffany & Co. and the Denver Country Club just a few miles away, it’s ever so convenient for those who have places to go and people to see.

I saw many familiar faces including Patty Rivera, CEO/founder of KidItCard, Laurie Wagner, president/CEO of MD-IT (, Erika Brown, founder/principal of NetGoddess (, Deborah Arhelger, managing partner of DuoVoce Group, and Kelly Brandner, VP of PR firm Citigate Cunningham (a sponsor of the event) ( Suzy Thevenet, an attorney with Holme Roberts & Owen (, told me the Venture Capital in the Rockies ski trip had been great and too bad I missed it. Bernice German, CEO of Peak Achievement (, said that her educational software company now has a demo up and running on its website.

At dinner I sat with FWE co-founder/CEO Denise Brosseau, who was on her way back home to San Francisco after having just come from New York. She attended Springboard 2001 (, where twenty-five female entrepreneurs were pitching their companies to potential investors.

The evening’s program involved a discussion about funding. Here are some highlights:

Catharine Merigold, a principal with Vista Ventures (, a firm that looks for early stage technology companies (“that’s where the fun is”) with a defensible position such as a patent. She talked about evaluating money sources based on what you need and what they bring you. Sometimes you go with venture capital not because you need the money but because getting it gives your company credibility and may allow you to hire the right CEO. She was very upbeat, saying it’s a great time to be in the market and there are incredible opportunities to create value.

Chris Wand, a NetBatsu development officer with SOFTBANK (, said that SOFTBANK looks for early stage investments, takes a significant minority position, and seeks to shape strategy. (To an entrepreneur, such an investor can either be perceived as active or meddlesome.) The first step is getting VCs to pay attention. The best way to do that is to get an introduction from a credible source that VCs trust. In addition, don’t send in a massive business plan. A teaser will do, perhaps two screenfuls of text to pique interest. He was not upbeat about the market, saying it is a crappy time to raise money and that SOFTBANK has an obligation to its currently funded companies.

Colleen Oberbreckling, director of business development for Sun Microsystem's Support Services Group (, said that Sun invests in companies which will drive the industry and get Sun where it needs to go. If an idea doesn’t scale, they won’t consider it.

Lisa Ireland, a partner in The Hamilton Companies ( (a private partnership that invests in small to mid-cap companies), said that they look for an entrepreneur who shows a willingness to hand the company over to a new CEO if necessary.

On March 15 I attended "Public Values and the Architecture of the Information Age: The Future of Intellectual Property, Privacy and Open Source," put on by the University of Colorado School of Law ( We sat in a mock court room and some of the presentations were appropriately steeped in legalese. Luckily for those of us who have trouble following massive amounts of case references, other presentations were geared for a lay audience.

Some highlights:

Julie Cohen, associate professor of law at Georgetown University, said that we should care about intellectual property issues because they impact freedom of speech. She emphasized that while the U.S. Supreme Court has called the Internet the most revolutionary public forum for free speech, it is not: commercial interests have exerted considerable control over online postings.

Stephen Keating, executive director of the Privacy Foundation (, said that his organization looks for holes in Internet security. ... The widespread use of social security numbers has given identity thieves a skeleton key to open all your documents. ... The best analogy of what is happening today isn’t “Big Brother,” but Kafka’s “The Trial.” ... Major online privacy issues include (1) opt in/opt out, (2) secondary use of data, and (3) overlay of data (combining data obtained from mulitiple sources). At the heart of the debate is who owns information and how much is it worth. ... Politicians are sympathetic to privacy issues because they have experienced a loss of privacy themselves. Sometime during the next four years Congress is likely to pass some form of privacy legislation.

Douglas Sicker, director of global architecture for Level 3 Communications (, predicts that technology, not legislation, will solve the privacy problem.

On March 19 I attended McData’s ( first ever analysts’ day. Although the company has been around since 1982, it has been public less than a year. The turnout was very good -- approximately 75 analysts, mostly from New York, San Francisco, and Chicago. For those who arrived a day early, there was an outing to Winter Park via the ski train.

Monday morning we were served a substantial breakfast at the Omni Interlocken Resort where everyone was staying. McData employees arrived in black button-down shirts and khaki pants, a look that had nothing to do with European military history and everything to do with making it easy for analysts to spot them to ask questions. Jack McDonnell, McDATA chairman/CEO, delivered the welcome and then turned the podium over to John McArthur, IDC ( VP of worldwide storage. He talked about the state of the market and the future of storage area networks (SANs). Basically he said that there has been and will continue to be an explosion of data and as a result storage capabilities must follow. This sentiment seemed to be shared by those in attendance because every analyst I talked to said long-term prospects for the industry look good.

There were several other presentations, followed by lunch at the Omni, and then a trip over to McData for more presentations and a tour. The showpiece is the $15 million Solutions Integration Lab (SIL) which tests complex SAN solutions using a customer’s choice of hardware, software, and applications -- even when that involves competitors’ products. The SIL has been designed to recreate a customer’s systems to insure reliability before installation.

Learning about switches and directors is all well and good, but my particular interest is where McData wants to go with its new branding campaign. Since the company did an IPO last year and since it acts as both a manufacturer and a systems integrator, target audiences for its brand messaging include investors, OEM/resellers, and end users. Some customers go to McData for switching products; others for complete turnkey solutions. Either way, the goal is to make the McData brand synonymous with open storage networking. Well, here’s a suggestion: sell the “legend” of McData, even if you have to fabricate one. Maybe something about crazy guys who started the company years ago at the base of the Rocky Mountains and who are now billionaires who plan to donate all their money to cure mad cow disease. The media likes a good story.