Former Cisco Systems CTO Judy Estrin and her husband, Bill Carrico, have started up yet another entrepreneurial company, the fourth in 20 years.
But this one has a twist. Instead of bringing products to market, growing revenue and then filing to go public, Packet Designs will develop Internet technologies and then rely on others to bring them to market.
That's a different business model than the other three companies Estrin and Carrico founded. Remember Bridge Communications, founded in 1981, which went public in 1985 and merged with 3Com in 1987? How about Network Computing Devices, founded in 1988? Finally, there was Precept Software, which was founded in 1995 and acquired by Cisco in 1998.
When Precept was acquired by Cisco, Estrin became Cisco's chief technology officer, and Carrico spent a year as senior vice president of Cisco's small-and-medium line of business. But big-company life did not suit the startup duo, so now we have Packet Designs.
Packet Design is chartered with developing IP technologies that enhance the performance, scalability, provisioning and ease of use of the Internet. The company's technologies will address optical networking, voice and data convergence, user mobility and high growth in the amount of Internet traffic and the number of Internet users.
"There's an architectural vacuum in the Internet infrastructure," Estrin said.
"We're asking the Internet to do things it was not originally designed for."Rather than selling its technologies in the form of branded products, Packet Designs will spin off separate businesses to market those products to service providers and enterprises. The company will also license its technology to established players. Investors will realise a return by having a stake in the spin-off companies, which Packet Designs will invest in, Estrin said.
Also, Packet Designs is going to take its time. Rather than trying to meet a time-to-market product deadline or an IPO window, the company is going to develop technologies that will improve the Internet three to five years from now.
Let the spin-off startups deal with the time constraints of product delivery and public offerings, said Estrin and Carrico. "The Internet needs hard problems solved," not quick product turnaround, Estrin added.
Estrin is the new company's president and CEO; Carrico is chairman of the board. Packet Design's chief scientist is Van Jacobson, most recently Cisco chief scientist and known for his work at Lawrence Berkeley Laboratories on TCP congestion control, IP operations tools and the Internet Multicast Backbone (MBONE). Douglas Klein, formerly president and chief operating officer at NuvoMedia, is the company's vice president of business development.
Members of Packet Design's technical advisory board are Vint Cerf, senior vice president of Internet architecture and technology at MCI WorldCom; Scott Bradner, senior technical consultant at Harvard University and a founder of the Harvard Network Device Test Lab; and Judy Estrin's sister Deborah Estrin, professor of computer science at the University of California-Los Angeles.
Packet Design's initial funding of $US24 million has been provided by Foundation Capital, Carrico, Estrin and a number of individual investors. The investors include James Barksdale, former CEO of Netscape Communications; and Bill Joy, chief scientist at Sun Microsystems.
Packet Design's board of directors includes Estrin, Carrico, Bill Elmore of Foundation Capital and Frank Quattrone of Credit Suisse First Boston. Packet Designs expects to spin-off its first company within two years.