Starting Over - Company Operations

Judy Estrin loves creating new companies. This one's for keeps.

Judy Estrin has made a fortune starting high-tech companies and selling them to the big dogs of Silicon Valley. Her first company, Bridge Communication, was purchased by 3Com in 1987 for $235 million in stock. Her third company, Precept Software, sold to Cisco Systems in 1998 for $84 million. In between, Estrin did high-profile stints at both 3Com and Cisco. But the 46-year-old techie finds it constricting to work for such behemoths, so now she's back to the familiar: overseeing a startup.

With Packet Design, an unusual venture she and her husband, Bill Carrico, launched last June, Estrin may have found a way to preserve what she calls "the perpetual startup" even as the company grows. The secret: spinoffs.

Packet Design wants to make life better for Net businesses. It aims to help service providers manage increasingly complex systems with fewer employees, to keep the Net running smoothly as traffic backs up, and to solve security and networking problems posed by the growing use of mobile devices. "We're focusing on real problems, but we're applying research techniques, which you don't typically have the luxury to do in a product company," says CEO Estrin.

Estrin and Carrico plan to spin off companies to market new Packet products, while keeping the mother ship insulated from a marketplace addicted to short-term profits. "Packet is not trying to go public:' says Estrin. "We've looked our investors in the eye and said this is going to be a longer-term investment. The return on equity for investors comes from our spinoffs."

Estrin's impressive track record, along with the list of luminaries she's recruited, make the Menlo Park, Calif., company worth watching. One of Silicon Valley's top women entrepreneurs, Estrin stepped down as Cisco's CTO last April to lay the groundwork for the new company, which has received $24 million from investors including Foundation Capital, former Netscape CEO James Barksdale and Bill Joy, chief scientist at Sun Microsystems. Cisco's chief scientist, Van Jacobson, left the networking giant to head Estrin's scientific research team, and Packet's advisory board includes Estrin's former mentor Vint Cerf, one of the architects of the Internet.

Technology runs in Estrin's family. Her parents both hold doctorates in electrical engineering. Her father, now a retired professor, worked under computing pioneer John von Neumann at Princeton University and later chaired UCLA's computer science department. Her sister Deborah, also a UCLA computer science professor, sits on Packet's advisory board.

Estrin and Carrico, Packet's chairman, started Bridge together in 1981. Estrin took a job at 3Com after it bought Bridge in 1987, and teamed up with her husband again the next year to form Network Computing Devices, which made Unix software and terminals. The pair later launched Precept Software, a company that developed streaming-video capabilities for corporations.

When Cisco bought Precept, Estrin went along as part of the deal. But after two years there, she's happy to be on her own again. Of course, now that she's leading the perpetual startup, there's the question of perpetual risk. Maybe that's why she's enjoying herself so much.

COPYRIGHT 2001 Standard Media International
COPYRIGHT 2001 Gale Group