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Week of December 18th, 1997
Issue 29, Volume II

For the final 1997 issue of Netpreneur News, we thought we'd take a look back at the events of the year. We hope you enjoy this special Year In Review edition and we'll see you again on January 8, 1998.

ABOUT THE PROGRAM: The Year In Review
1. In Dog Years, We're 5.15
2. 1000 Netpreneurs A'Netpreneuring
3. Time To Make The Doughnut Jokes
4. Save Me A Seat At The Revolution
5. I Think It's Time We Had A Little Talk
6. Have We Got You In Our Sites?
7. All The News That's Fit To UUencode
8. Entrepreneurship Rule #1: Adapt
9. All Right Everybody, Group Hug

REGIONAL NETPRENEURS: The Year In Review
1. Looks Like We Got Us A Convoy
2. Late Breaking Stories: New News For The News:

1. e-Net Scores A Hit With Telecom 2000
2. Virginia Tech Spins Out Wireless Company
3. Isis Launches Online Vitamin Store
4. Eolian Releases Web Page Accelerator

FUNDING & FINANCE: The Year In Review
1. Baby, What I Couldn't Do With Plenty Of Bandwidth And You

UPCOMING EVENTS
1.Calendar


About The Netpreneur Program: The Year In Review

1. IN DOG YEARS, WE'RE 5.15
The Netpreneur Program was officially born in April of 1997, and a lot of preparation went into the several months before that grand opening. Morino Institute and MCI Telecommunications Corp. began the early work with the Potomac KnowledgeWay, soon joined by support from Virginia's Center for Innovative Technology (CIT). The initial and continuing work of these organizations has been instrumental, and a lot has happened in the subsequent nine months. One thing that has characterized the Program since those early days has been the number of regional companies and organizations who have continued to step forward as partners, like KPMG Peat Marwick, Capital Growth Interactive, Electric Press and so many more.

2. 1000 NETPRENEURS A'NETPRENEURING
Sure it's a Year In Review issue, but we've just reached a major milestone that took almost a year to complete-- the Netpreneur Database this week got its 1000th regional netpreneur recorded, and then kept right on going to hit 1004. Who'd have thought there were that many Net-based businesses in our region? Well, we think there are a lot more that haven't been found yet, and new ones being created every day. We'll keep on the hunt, building the database into a tool that netpreneurs can use to find potential partners, and that investors can use to find opportunities. BTW, we're very thorough about validating the companies in the database to be sure they are truly netpreneurs and in the region. Is your company listed and is the information up-to-date? Check out the Netpreneur Database to be sure. You can add and edit your information online.

Netpreneur Database: http://netpreneur.org/database/search-netpreneur.cfm

3. TIME TO MAKE THE DOUGHNUT JOKES
The first Coffee & DoughNets was held in February, before there even was a Netpreneur Program. It quickly became a successful ongoing effort.

Number of Coffee & DoughNets in 1997: 11
Number of attendees: 1,430
Number of doughnuts eaten: 2,145
Gallons of coffee consumed: 143
Programs suggested at C&DNets which have been implemented: 4
-----Community-of-Interest discussion group, Early Stage event, ------Barter Board, Public Relations event
Netpreneurs who have presented at C&DNets: 6

Our thanks to those presenters: Brian Deobald of DIGEX; Chuck Stein formerly of Netrix; Lisa Amore and Jennifer Jaasma of TV onthe Web; Oron Strauss and Eric Loeb of NetCapitol; and Andrew Stern and Mike Sheehan of Logex. And thanks also to the organizations who have sponsored C&DNets through the year: Morino Institute, KPMG Peat Marwick, Coopers & Lybrand, and the Dingman Center for Entrepreneurship.

What are netpreneurs getting out of C&DNets? Here's an example. As a direct result of Lisa Amore's "business challenge" presentation at the September session, TV onthe Web has developed business relationships with PSINet and Women's Connection Online. She said that TV onthe Web has significantly changed its marketing plan, largely using the advice they received, "but we've been so busy from the new leads we got at the meeting that we haven't had time to formally rewrite it!"

The first Coffee & DoughNets of 1998 will be held January 22 at Georgetown University. Time is still to-be-determined, but this one will be a Beer & PeaNets so mark your calendars for an evening slot.

4. SAVE ME A SEAT AT THE REVOLUTION
Coffee & DoughNets is an intimate, roll-up-your-sleeves kind of gathering. For sheer numbers, there were four major Program events in 1997:

Positioning Your Company for Early Stage Financing-April 4--462 attendees
An Evening with the Barons-June 12--750 attendees
An Evening with the Stars of Telecom-Oct. 22--1000 attendees
(at MAVA) Venture Opportunities in the Digital Age-Nov. 12--700 attendees

That's some 1912 people attending to interact with each other and with speakers that included: John Burton of Updata; David Gladstone of American Capital Strategies; Charlie Heller of The Dingman Center for Entrepreneurship; Jim Kimsey, founder of AOL; John May of the Private Investors Network; Bill Melton of CyberCash; Mario Morino of Morino Institute; Morgan O'Brien of Nextel; Robert Pittman of America Online Networks; John Puente of Orion Network Systems; Russ Ramsey of Friedman, Billings, Ramsey & Co.; John Sidgmore of UUNET and WorldCom; Alan Spoon of The Washington Post Company; Chuck Stein, formerly of Netrix; Brian Thompson of LCI International; David Thompson of Orbital Sciences; and Mark Warner of Columbia Capital.

Our thanks to all of the speakers and to everyone who attended. And thanks to the event sponsors: America Online; CyberCash; MCI Telecommunications Corp.; Morino Institute; Pamet River Partners; Riggs Bank, N.A.; TechNews; Ernst & Young, LLP; EXODUS Communications; Friedman, Billings, Ramsey & Co.; Orion Network Systems and Ryan McGinn. Thanks also to the netpreneurs who pitched in to help: Chris Hopkinson of Riparius Ventures, Gerri Garvin of Career Movers, David Lawrence of Online Today and Ron Schultz of netFilter Technologies.

5. I THINK IT'S TIME WE HAD A LITTLE TALK
Next to Coffee & DoughNets, email has probably been the best little community builder netpreneurs have had. In 1997 we started 13 email discussion groups which today have a total of 1058 members. Netpreneurs are meeting each other and sharing knowledge, talking about topics like online marketing, best practices and getting funding.

And they're finding partners. InterGuru and Wow Television International hooked up on a joint development project through Talk the Talk. Blackboard, LLC made a number of investor and management candidate contacts through a NET-INVEST summary. Nascent Technologies found the right developer to join their team through a random contact made in the Netpreneur Discussion Group. According to Ben Lilienthal of Nascent, "This stuff really works and has produced tangible results."

Thanks to all the participants who make the discussions into effective tools, and to the netpreneurs who lead three of those groups: Gerri Garvin of Career Movers who leads the Human Capital group; Harry Richardson of HearthStone Technologies who runs the Community Of Interest group; and Evan Smith of Sixbey, Friedman, Leedom & Ferguson, P.C. who heads the Intellectual Property group.

Netpreneur Program discussion groups: http://listserv.morino.org/archives

6. HAVE WE GOT YOU IN OUR SITES?
The Netpreneur Exchange Web site made its official debut on April 20 of this year. It's the hub for the Program's activities and a central meeting place for our community. Since April we've added a number of major enhancements, including: the FAQtory, support and follow-up for events, add/edit features for the Netpreneur Database, the Intellectual Property Resource Center, an enhanced Calendar, the Advisors Section and Web functions for ActionNet and Barter Board. Some background on the Exchange:

Number of registered users: 2832
Average visits per month: 4459
Number of events in the Calendar: 264
Total # of content pages: 734

Speaking of content, some of the most interesting additions to Netpreneur Exchange have been in content provided by individuals and organizations. Our thanks to content partners Capital Growth Interactive and KPMG Peat Marwick, and contributors Susan DeFife, Katim Touray, David Gladstone, Krista Mohr, Bob Bailey and the Dingman Center for Entrepreneurship. More thanks to our friends at GovCon and Proxicom for contributing software to the site; NMP, Inc., Pamet River Partners and SilverWeb for original graphics assistance; Glynna Parde, Jocelyn Brittin and Tom Brown of McGuire Woods Battle & Boothe for help with legal agreements; and Electric Press for ably hosting a constantly growing and changing site.

BTW, we've been watching traffic at the site and see that it's getting attention from far outside the region-- 18 states and 22 countries including Australia, Belgium, Canada, Colombia, Czech Republic, France, Germany, Ireland, Italy, Japan, Jordan, Netherlands, New Zealand, Portugal, Romania, Slovak Republic, South Africa, Spain, Sweden, Switzerland, Thailand and the UK.

Register at Netpreneur Exchange: http://netpreneur.org/join

7. ALL THE NEWS THAT'S FIT TO UUENCODE
Well, if you're reading this, you know about Netpreneur News. It started in August of 1996 as a discussion group for about 30 people who were advising us on an unnamed idea for a program that would encourage Net-based business in the region. Today, there are 2943 subscribers and we covered some 536 stories in 1997. November saw the introduction of two new broadcast services, ActionNet and Barter Board. At 240 and 84 subscribers respectively, these matching services are young and growing fast.

ActionNet: http://netpreneur.org/connect/actionnet

8. ENTREPRENEURSHIP RULE #1: ADAPT
Our biggest disappointment of 1997? Loathe as we are to admit mistakes, we have to give it to JobLink, added in April. We thought it was a good idea at the time. After all, netpreneurs consistently tell us their biggest challenge is finding talented, savvy employees. It didn't quite dawn on us that our target audience wasn't really looking for a job writing HTML code. Besides, a lot of folks are doing a pretty good job with recruiting services already. Well, Momma always said "When it's time to eat crow, be polite, but no need to ask for seconds." Reflecting on where the Program could actually be of help to netpreneurs in this arena, Job Bank was replaced by Executive Summary postings to the NET-INVEST discussion group and then by ActionNet, where netpreneurs are successfully matching up with proven executives (among other strategic opportunities). Momma may have been wise, but we can teach her a few things about spin doctoring.

9. ALL RIGHT EVERYBODY, GROUP HUG
Since day one, the Netpreneur Program has been about building community. Throughout 1997 a lot of people have been carrying the message out to their constituents, contacts and colleagues.

Number of sites linking to Netpreneur Exchange (that we know of): 22
Number displaying banner or button links: 18

Our thanks to all-- too many to list here-- but it includes such sites as MCI, Washingtonian Magazine, The Washington Times, Patriot.net, Washington Technology, NBC News 4, The Journal Newspapers and Virginia Business.

The electronic reach of the Program goes even further than that. During 1997 some 65 organizations have become part of a network that distributes and redistributes information about Netpreneur Program events, projects and the Netpreneur News to over 50,000 people. Again, the list is to long to recite here, but our sincerest thanks to everyone who participates.

Wait. We're not done thanking people yet. Shortly before the MAVA Venture Fair in November, a few about-to-be-presenters wrote saying, "You folks have anything we can use to show we're part of the Netpreneur Program?" Never ones to pass up stealing a good idea, we said, "Give us a minute." Well, no one liked our first idea, tattoos, so it was back to the drawing board for Netpreneur Program placards. Thanks to the many netpreneurs who proudly displayed them at MAVA and the recent Internet World in New York.

For more info on connection efforts, contact: Mitch Arnowitz at marnowitz@morino.org

Regional Netpreneurs Year in Review

1. LOOKS LIKE WE GOT US A CONVOY
1997 was a banner year for the region's netpreneurs. Since no one ever counted this stuff up before, we're pretty sure we won't get an argument on that one. What we counted was those 540 Netpreneur News stories in 1997 and here's what we came up with:

Number of stories about new products and services: 75
Stories about new versions of existing products: 17
Number of partnerships covered: 65
Number of companies involved in those partnerships: 134
Percentage of those 134 companies inside the region: 60

Some pretty impressive numbers, when you consider that all we counted were Netpreneur News stories. Proud (and humble) as we are of our efforts, we know we're only hitting a fraction of the stories out there-- many were not announced, or we didn't hear about them, or we didn't cover the story because of space limitations or because the Post or the Times was doing a dang fine job on that one, thank you very much (Momma also had things to say about wrasslin' with the bigger kids). Since we've already found 1004 netpreneurial companies in the region, we must have missed more than a few of those products and partnerships.

That said, it's pretty clear the cyber-elves along the Potomac are cooking with gas. In fact, in 1997 we began to see the second wave of spin-offs and revivified netpreneurs. Look at a genealogy like Freeloader being created by ex-AOLers who sold it to Individual, Inc. then started Torso which was sold to Wayfarer then going on to start the Adrenaline Group. (We think we got that right. Now say it three times fast.)

What's more, it's pretty clear that word of this is getting out. In May, Business Week said the #1 Hot Growth Company is Yurie Systems based here. Take a look at the Clippings page at the Netpreneur Exchange and you'll see stories from Reuters, Wired, Business Week, Fast Company and NBC News. Through connections made at Coffee & DoughNets and Talk The Talk discussion group, we've seen netpreneurs like superSonic BOOM!, TV onthe Web, Cross Media, Simutronics, Interboard, Blackboard, Houck & Associates, NetCapitol, 1492 Technologies, Photos 2 Puzzles, GovCon and Logex get hooked up with reporters this year. It's snowballing.

Clippings page http://netpreneur.org/about/clippings.html

LATE BREAKING STORIES-- Some New News For The News:

1. e-NET SCORES A HIT WITH TELECOM 2000
(Germantown, MD) LAN Times recently provided a glowing review of e-Net, Inc.'s Telecom 2000 product which lets companies send voice, data or both over nearly any type of network, including ethernet, IP, ATM and frame relay. Telecom 2000 runs on Windows 95 or NT 4.0 and, according to LAN Times, "gives you all the features you would expect from a high-end PBX, and then some.... most important of all, the voice quality is excellent." The magazine rates five characteristics by poor, good or excellent. In all five rated characteristics (installation, features, scalability, interoperability and value), the product was rated "excellent."

e-Net: http://www.datatelephony.com
Article: http://www.lantimes.com/lantimes/97/97dec/712a048a.html

2. VIRGINIA TECH SPINS OUT WIRELESS COMPANY
(Blacksburg, VA) Researchers at Virginia Tech's Mobile & Portable Radio Research Group have launched a firm specializing in indoor/microcellular wireless planning and system management. Two new products, SitePlanner and Optimatic, allow wireless engineers and consultants to rapidly measure, install and manage the wireless infrastructure used to provide cellular, PCS or wireless LAN technologies in buildings and campuses. Prof. Ted Rappaport, Virginia Tech faculty member, is CEO of the newly formed Wireless Valley Communications, Inc. A Web site will be up soon.
3. ISIS AND APOTHECARY LAUNCH ONLINE VITAMIN STORE
(Bethesda , MD) Isis Interactive, an interactive publishing company, has launched vitaminsplus.com, an e-commerce site for the sale of non- prescription health products. Associated with Isis in the project is The Apothecary, a Bethesda company which has provided health products for more than 30 years. The e-commerce site is an outgrowth of Isis's latest CD ROM, "A Guide to Vitamins, Minerals and Supplements," which was produced in association with the Solgar Nutritional Institute.

Vitamins Plus: http://www.vitaminsplus.com
Isis Interactive: http://www.isismedia.com

4. EOLIAN RELEASES WEB PAGE ACCELERATOR
(Fairfax, VA) Eolian, Inc. announced its InfoStorm Web page accelerator and local caching system which increases the speed of downloads and reduces overall bandwidth requirements by storing frequently accessed pages closer to the end-user. InfoStorm is a hardware and software unit that communicates with any Internet-ready network. Users typically experience more than a 50% reduction in delays caused by Internet backbone traffic at a fraction of the cost of leasing additional backbone circuits.

Eolian: http://www.eolian.com

Funding & Finance: Year In Review

1. BABY, WHAT I COULDN'T DO WITH PLENTY OF BANDWIDTH AND YOU
Fourth quarter VC surveys aren't in yet, but with Q1, Q2 and Q3 numbers all breaking records, it's a good bet people will be crowing about 1997 for netpreneurs, and Greater Washington netpreneurs especially. Here's a round up of facts, figures, anecdotes and milestones that caught our attention:

The largest valuation of a company at IPO in the history of the universe (CIENA at $3+ billion) occurred here.

WorldCom acquired MCI in the largest merger to date.

The WorldCom/AOL/Compuserve deal showed that the social fabric is growing among the region's netpreneurs. People are getting to know each other, to interact, to plan bold moves.

Money is flowing into the region. Here's a partial list of new funds created here in 1997: Fairfax Partners, Novak Biddle Venture Partners, FBR Technology Venture Partners LP, Carlyle Venture Partners and Women's Growth Capital Fund.

Investors are taking notice. 1997 was the first year for the Capital Region Technology Investors Conference and there will be more to come. It was also the first year the Mid-Atlantic Venture Association (MAVA) held its Venture Fair in the region. 41% of presenting companies at the Fair were Greater Washington netpreneurs.

We covered seven IPOs in Netpreneur News this year including Best, GTS, Erols, Didax, Visual Networks and CIENA. Other regional Net IPOs included Advanced Communications Systems, Deltek Systems, E-Net, Objective Communications, Template Software, Yurie Systems and Network Solutions.

Netpreneur News also covered 26 mergers and acquisitions. CommScan counted another 13 through November.

Netpreneur News covered 15 venture investments in regional netpreneurs including Powerplay, LocalEyes, Women's Connection Online, $9.5 million in Telogy and $40 million in Access Beyond. superSonic BOOM! got $450K from International Business Group in a connection they made through the Netpreneur Program.

At the Program, we've been spending a lot of time with the financial community, trying to build those connection points for netpreneurs. Among the initiatives we began in 1997:

-- the NET-INVEST discussion group where we have circulated 27 netpreneur business summaries to some 51 investors;

-- a weeklong guest appearance by security expert Win Treese of Open Market accepting questions about opportunities in that space from NET-INVEST members;

-- four breakfast meetings in which 35 key venture capitalists discussed how to enhance the investment climate for regional netpreneurs;

-- a presentation by John Woloszyn of McGuire Woods Battle and Boothe on issues related to soliciting investments on the Web and via email;

-- creation of the Early Stage discussion group for netpreneurs to explore questions about financing.

Said Peter Barris of New Enterprise Associates, "What I saw at the first Investor Breakfast was a recognition on the part of the venture community of the real opportunity in this region. There was an energy level there that I haven't seen before."

Upcoming Events

For more information on these and other regional events of interest to netpreneurs and funders, visit the Netpreneur Exchange calendar at (http://netpreneur.org/calendar/calendar.htm).

Dec. 19-----Netpreneur Program Coffee & DoughNets
Jan. 9-------Intro to the Internet: Basic Uses for Business
Jan. 14------Young Entrepreneurs Changing the World
Jan. 20------An Anatomy of a Successful IPO
Jan. 22------Netpreneur Program Beer & PeaNets
Jan. 28------B-W Venture Group Networking Breakfast
Jan. 29------Century Club's Grubstake Breakfast


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