Sunday, June 25, 2000

BYCZKOWSKI: New Economy


Here are some local dot-coms to watch

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        “Yesterday,” he said, and I just about choked.

        I had asked him when he went into business. It was Tuesday. I was sitting at Kaldi's in Over-the-Rhine, across the table from a 28-year-old dot-com CEO — too young, probably, to know who Danny Thomas is, but I almost spit my coffee all over him anyway.

        He and two friends — poster boys, I'm told, for Procter & Gamble's college recruiting — quit the company the Friday before to start their own firm. They've already become part of Main Street Ventures, and they're about to align themselves with an incubator, and they're talking to funding sources.

        Things move fast. In the past six months or so, the Enquirer has written about venture deals locally totaling nearly $100 million, and I can think of deals in the works that might be worth another $70 million. Keep in mind that VentureOne, a San Francisco company that watches the venture capital industry, tracked deals in 1999 worth $98 million for all of Ohio.

        OK, we're not Silicon Valley. But for this town, the action is fast and furious. Here are a few things I'm following:

        •eSpecto is one company to watch. The Over-the-Rhine start-up's software is a “virtual human” that monitors Web site performance. Most of that type of software is server-side (is the server running?), but eSpecto's product checks sites from the users' perspective.

        The product emulates users coming in a site's front door. It clicks the same links, marches through the same pages — all the while collecting data on how quickly the site responds.

        Version 2.0 was born two weeks ago. “It feels like we're right at the beginning of the wave,” said CEO Larry Steinberg. The board includes two local players — W. Stuart Dornette of Taft Stettinius & Hollister, and Rick Segal of Internet marketing consultant HSRB2B.

        HSR is putting together a marketing plan designed to last all of 60 to 90 days, including an analyst tour. Mr. Steinberg said similar companies are selling for nine figures, and that's where he wants eSpecto headed.

        • StartFree is a Cincinnati-based free (for users) advertising-supported Internet service. President Michael Lee said the ad software is less intrusive than other free services such as BlueLight and NetZero, and the company's strategy is to co-brand the product.

        In Cincinnati, StartFree has linked up with local portals Cincinnati.com (owned in part by the Enquirer), CitySearch and CincyNow. Mr. Lee said the company, acquired in March by Thinking Tools of New York, hopes to replicate this model across the country.

        • KnowToday Inc., which makes information auction software, signed up its second customer — Brainpower, an online marketplace for technology consultants. KnowToday has also found office space at 2 Garfield Place downtown for its expansion.

        I've gotten plenty of e-mail asking when First Tuesday's first meeting will be. First Tuesday is an international networking organization that links entrepreneurs with investors. If you're one or the other, go to www.firsttuesday.com, find the Cincinnati section and register. The first local meeting will be Aug. 1 (no site chosen yet).

        • The question about many Internet companies is: Are they for real? Are they serious? Check out the local site www.goblertoys.com.

        E-mail John at johnb@enquirer.com or call 768-8377.

       



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