Two years ago, Dallas wasn’t even a blip on the Internet screen, much less a center of dot.com innovation. What a difference 26 months can make. In January 1998 D Magazine ran the headline “Too Rich to Risk?” asking why entrepreneurial Dallas was such a laggard in the high-tech explosion and challenging local investors to retool their strategies.
Just two years later, Dallas is positioning itself as the third coast of e-commerce and has made itself home to scores of multinational corporations, investment arms, and dotcoms as far as the broadband will take you. What drives Internet entrepreneurs to Dallas these days is the availability of capital, less competition than Boston or Silicon Valley, an abundance of talented labor, and cheaper living costs.
Add to that the willingness of the local population to move online. With 53.5 percent of all Dallas-Fort Worth households online last year, electronic commerce companies enjoyed a 39 percent online penetration, according to Forrester Research. That’s high. The firm also reported that 13 percent of Dallasites were making online purchases, again a high figure by national standards. And not just the techies see Web potential. Just as we predicted, many old-line companies and their leaders-by and large bom in the Dallas telecom sector when it was just “starting-up” thirty years ago-have moved online or jumped ship. Investors who once chased real estate deals are now packaging dot.com consolidations.
But the speed of innovation also leads to a certain wariness. Some of our nominees said that the Internet has arrived, but only in the sense that the VCR finally established itself in 1982. Others said not to get too excited about all the new dot.coms out there because in one to five years most Internet access won’t even be done through a personal computer. With Ericsson. Nortel, and Nokia in our backyard, we should be more aware than anyone that the nation will be connected through its cellular phones. And with Texas Instruments right down the street, we’ll be first in line to test connectivity through our televisions, refrigerators, and even garbage cans. People won’t have to rebuild their homes to become the Jetsons; the transformation will be effortless as new products, imbedded with connectivity, enter the stores.
Meanwhile, it looks like an Internet Corridor is in the works (maybe Deep Ellum?). Right now, the money is flowing, and the entrepreneurs are innovating. Employees are weighing stock option offers from companies that haven’t even filed their incorporation papers. Dallas is hot-wired, and these are the people who are leading the way.
Gene A. Fraitz: senior fellow, Texas Instruments
What if you could sit around all day and think of new ways to get the world connected? What if your job was to invent devices to prevent illness before it happened or to design interactive conversations? In short, what if you got to live the space age, today? Well, Gene Frantz does.
His job is to find new uses for the single-hottest development on the connectivity scene today, a device called Digital Signal Processing Chip (DSP). Talk with Frantz, and his excitement is palpable. The Internet’s data transfer capabilities have only just begun to be realized. Face-to-face online conversations through video conferencing will become commonplace; interactive medical exams and diagnoses will take place through your personal computer; artificial hearing and vision will be made possible with the use of DSP; and DSP chip bracelets will be developed to monitor and treat illnesses like diabetes, asthma, and heart disease.
DSP didn’t spring into existence overnight. Any kid or parent coming through Dallas grade schools in the early 1980s probably spent hours playing with a “Speak & Spell” toy, first manufactured by Texas Instruments in 1978. This hand-held educational toy was the genesis of the chip that would change the world. Beginning as a small department in the mega-company, the DPS team was made up of 15 people when it released its first general purpose device in 1982, and Frantz was there. As one of the original developers of this technology, Frantz has seen it through toy-boat stage to its current flagship status at TI, which holds 47 percent market share nationally.
Frantz joined TI in 1974 as an engineer in the consumer products division and has climbed the ladder to senior fellow, the highest technical position in the company. He holds 27 patents in the areas of digital memory, speech, consumer products, and DSP. This miracle device is installed in 90 percent of all digital cellular phones. 56K computer modems, Internet audio players, and high-definition TVs. to name a few.
Texas Instruments bet the farm four years ago on the success of this tiny innovation. The payoff has been huge.
Sanjiy Sidhu: founder, i2 Technologies
He didn’t start at EDS or Perot Systems. What’s left? That’s right,Texas Instruments, the third mill that most of our company creators have been through. Sidhu started at TI as an engineer working in the artificial intelligence lab. Most engineers are conservative by nature; Sidhu is anything but. In 1988 he left the TI womb to launch i2, which has transformed the Internet into a tool for planning logistical and manufacturing operations. Essentially, i2’s software thinks for its owners, telling them what customers want, where they want it, and how to deliver it quickly and cheaply. Sidhu says his vision is to save his clients $50 billion by 2005, and he’s hired an independent auditor to prove it. The company boasts powerhouse clients such as 3M, Amazon.com. Borden, Coca-Cola, Compaq, Dell, Ford, Frito-Lay, IBM. Johnson & Johnson Medical. Lipton, OxyChem, Toshiba, Volvo, Whirlpool, General Motors, and, showing that it harbors no hurt feelings, TI.
Sidhu was one of the new economy’s first and brightest stars. And the new economy doesn’t reward with gold watches and a pal on the back: With a run-up on his slock in mid-February. Sidhu”s personal stake in i2 is now worth $8.1 billion. He’s 42.
Mark Cuban and Todd Wagner: Yahoo!Broadcast
“The thought that the last wire to come into our homes is copper or cable is crazy. There will be fiber overbuilds to the home, and our kids will live in a gigabit world where il will be faster to click a button on a remote to order a pizza online then it will be to pick up the phone to call it in.” This foretelling of a fiber explosion is the latest blip on Mark Cuban’s screen.
No Internet list would be complete without the two guys who only wanted to listen to an Indiana radio station’s broadcast of home basketball games-and found themselves inventing a whole new industry.
No stranger to cutting-edge technology. Cuban founded MicroSolutions in 1983 and developed it into one of the leading systems integration firms in the U.S. He sold the company In CompuServe in 1990 and later became president of Radical Computing, a venture capital and investment company specializing in high-tech companies. He finally hit the jackpot big-time with broadcast.com, which he sold to Yahoo! a year ago. The all-stock deal valued broadcast.com at about $5.7 billion. Cuban currently sits as a vice president of Yahoo!, enjoys an almost iconic following, and has finally gotten back to the sport that got him in the game by buying the Dallas Mavericks.
The lower-profile Wagner shouldn’t be overlooked because of his counterpart’s celebrity status. He’s quieter, but under his leadership the company grew in less than four years to more than 300 employees in 11 offices throughout North America. His behind-the-scenes wheeling and dealing locked in exclusive partnerships with content providers, the catalyst driving the Yahoo! deal. As chief executive of broadcast.com
Jon Bayless: managing partner, Sevin Rosen
The legendary venture capital fund founded by L.J. Sevin and Ben Rosen in 19X1 is now in the hands of Jon Bayless. The firm has a history of picking tech winners, leading investment rounds for Compaq, Lotus Development, Cypress Semiconductor. Cyrix, Citrix Systems, and Ciena.
Bayless said that he looks for start-ups with a solid management team and a good idea. “A red flag lor me is somebody who just wants to promote, go public, and then move on,” Bayless said.
He added that, in the “e-commcrcializing of the entire U.S. economy.” business-to-business models are most interesting to him because “they actually see revenues and profits in a fairly short amount of time.” With the Internet providing anew form of media, it is likely that transmission will move beyond merely the personal computer to a new category of interface devices.
Sevin Rosen has in excess of $500 million in six funds, the most recent being Sevin Rosen VI, a $175 million fund formed in early 1998. With that kind of money to invest and the valuations of Internet companies so astronomically high. Sevin Rosen isn’t excited about Internet plays with no prospects of pulling in honest profits.
“Over lime, there will be an adjustment to reality with respect to revenues and profits,” Bayless said. “There will be real businesses with real profits, not just something you’re going to give away and hope you can charge for eventually. It’s not clear which will be the winners and which will be the losers, yet.”
Bayless believes Dallas is poised to be a dominant market in the Internet sector, partly due to the groundwork laid in telecom. The convergence of telecom activity to online activity has given the sector a large boost in Dallas, and the city’s position as a key distribution center is ideal for e-commerce fulfillment.
Matthew Blanton: president. STARTech
Matthew Blanton gets to see everything. Charged with the responsibility of heaping fuel on Richardson’s telecom fire, he sorts through proposals, helps with funding, counsels entrepreneurs on how to manage, and recruits advisors to work on-call on new ideas. This is not charity work. STARTech is a for-profit offshoot of the Richardson Chamber, founded in 1997 when the city began to fret that a dearth of start-ups would leave it behind in the new-tech world. It’s a classic incubator, where twelve companies have already hatched.
The capital comes from its $4 million seed fund. Eleven venture capital funds are members, including Austin Ventures, Capita] Southwest, CenterPoint, Sevin Rosen, and James M. Hoak & Co. Seed funding usually ranges from $100,000 to $300,000, but the partners are willing to fly as high as necessary for the right idea.
Sumy G. Vanderbeck: co-founder, Data Return
A Fort Worth native. Sunny Vanderbeck graduated from high school at the age of 16 and decided college just wasn’t for him. In this day and age where you need a degree to just Hip burgers at McDonalds, what’s a boy to do? Sunny joined the Army, got out, and went to work for Software Spectrum, a reseller of Microsoft products. There he met his future partners and co-founders Michelle Chambers and Jason Lochhead. The trio lived off credit card debt while they spent most of 1995 at Sunny “s kitchen table, experimenting with web-hosting. Two years later. Data Return was born.
The company is a provider of advanced managed hosting services based on Microsoft technologies. Does that sound boring? Allow us to wake you up: In the second quarter last year revenues jumped 372 percent over the first, and the market fell in love. Vanderbeck took it public in October, raising S8I.3 million, and the company has since achieved more than $1.5 billion in valuation. Vanderbeck is 27.
Gil Marmol and Michael H. Jordan: Luminant
A McKinsey veteran and former Perot Systems veep. Gil Marmol pulled off a coup last year that has other Dallas investors shaking their heads with admiration. He formed Luminant, talked eight start-up companies into selling to him, and eight months later launched an $84 million IPO.
Part of the sales pitch was the involvement of former CBS CEO Michael H. Jordan, who first lent his name as an adviser and now is chairman. Jordan has impeccable Establishment and new media credentials, sitting on the boards of Aetna, Dell, and
Each of the eight companies, mat comprise Luminant are managed by their founders, providing different forms of Internet and new media consulting. The theory: There’s more money in Idling people what to do than in actually doing ii. McKinsey guys learn their lessons well.
Mort Meyerson: 2M Companies
In the beginning there was EDS. Meyerson had his start at the company as a systems engineer trainee in 1966.
“I ant not a mover and shaker, just a humble systems engineer from Fori Worth who has been immensely lucky,” was Meyerson’s response when asked to participate in D Magazine’s Internet rankings. Many people beg to differ. After cashing out of EDS and offspring Perot Systems (in 1997), Meyerson couldn’t sit still for long and formed 2M Companies Inc., a private investment firm.
Meyerson points out that the new technology has brought a lot more than cash to Dallas. “It’s changed the face of education. People who work in this field demand high education for their children.”’ Meyerson said, “Some of them will buy sports teams and big houses, and that gets written about in the paper. What you don’t see in the papers is people buying cars, paying taxes, joining school boards, All those things have tremendous influence in the city.”
Meyerson said that he is suspicious of anybody who says they know what the future of the Internet holds. Though the industry is a white-hot investment area now, Meyerson said what goes up, must always come down. “I think the valuations are at astronomical, unprecedented levels. It’s very treacherous. I just try to pick good people that I trust.”
Brandon Cotter: founder, Slick Networks
Cotter is incorrigible. For the third time in four years. Cotter is creating another technology company. It all started in 1996 when Colter started CreateTech with partner Lance Horn. The successful web development firm was sold a year later to broad-cast.com, and Cotter went with it. He treaded water as a vice president of broadcast.com’s Interactive Group for a few months, but soon got the entrepreneurial itch to start something new. By November 1998 Cotter had launched Christian music site music-
So what’s Cotter up to these days? Stick Networks, an Internet wireless play targeted to teenage kids. The company’s offering integrates a wireless device, wireless network, and its own proprietary software designed for instant messaging. Willi his track record. .Cotter doesn’t have to waste a lot of time raising money. Investors include 2M Technology (Mort Meyerson’s fund), Charlie Jackson (former chief executive of Airtouch Paging,) and David Duffield (founder of Peoplesoft). All that, and Colter still finds time to serve as an Internet mentor at STARTech.
Parents across Dallas-Fort Worth can breath a collective sigh of relief. When Cotter’s instant message devices appear on the scene, their phone lines will finally clear up.
Kelby Hagar: GroceryWorks
Just can’t bear trying to shove 11 items past a harried express checkout clerk one more time? Neither could 29-year-old Dallasite Kelby Hagar. and that’s why he started online food store
A lawyer by training, Hagar joined the Dallas office of Gibson. Dunn & Crutcher after he graduated from Harvard Law School. But he couldn’t stand sitting on the sidelines while the next stage of Internet commerce was gestating. “The first generation of successful e-eommerce stores, like Amazon.com, were just front-end consumer fulfillment,” Hagar said. “There was no supply distribution.” He added that he. like many others on the D Magazine list, considered several cities before going online in November. He chose Dallas because
’The Internet possibilities in Dallas are still very underutilized. The city has very educated people, a fast band-width speed, and superior labor talent-especially when it comes to Net commerce,” Hagar said. “And the business community in town accepts new companies and helps them to succeed.” He added that telecom and biotechnology development in Dallas will eventually become one large Internet sector. “Dallas is an absolute hotbed of that activity, and the third coast mentality is a viable one,” he said,
Since March GroceryWorks has grown from two employees to 150 and has completed its first round of venture capital financing totaling $4X.5 million, led by Sprout Group. Other investors included Enterprise Capital Partners. J. P. Morgan Investment Bank. Blue Rock Capital Partners, and a group of private investors headed by Dallas-based Carl Wescott. Hagar said the company is experiencing a 15 percent to 20 percent growth rate each week.
Evidently, investors aren’t the only ones with faith in the company: In the first week of the New Year, the company added Gary Fernandes as its president and chief executive officer. A man who could make our list in his own right. Fernandes was the one-time heir apparent at EDS. serving as one of three members of the Office of the Chairman, After the big EDS shakedown in 1998, Fernandes left the company to start Convergent Partners, a private equity firm specializing in technology companies. Fernandes has big goals for the company, saying that he hopes to ride the Internet grocery machine into 20 national markets within two years. Hagar says that the new addition allows Grocery Works to move to the next level because Fernandes was a part of the management team that led EDS “from what was a start-up to what is now arguably the largest company in Dallas.”
“Contrary to popular belief. Internet success doesn’t happen overnight. You have to build an incredible management team,” Hagar said. “This is a challenge for someone like Gary: It took 20 years to grow EDS to what it is now. You can have the same growth in an online company in three years.”
Glay Mulford: partner. Hughes & Luce
Hughes & Luce has been building its Internet and e-commerce law for the past six years, and it has Clay Mulford to (hank. Few lawyers have as many ties to high-Hying Net firms. A snapshot of some of the higher profile companies that Mulford has navigated includes Netspeed Inc., from its formation through its merger with Cisco Systems in an acquisition valued at $300 million in late 199K. Mulford is lead outside counsel to CNET, helping the company in its $173 million offering of convertible debentures and with high-profile acquisitions. He is also lead outside counsel to
In his capacities with snap.com and
Mulford is a man of many parts, and Internet deal making is only one of them. He’s taught election law at the Kennedy School and is deemed a Fellow by both the Royal Institute of International Affairs and at the Johns Hopkins School of Advanced International Studies. Mulford received his baptism in politics as general counsel to father-in-law Ross Perot’s presidential run in 1992, and if that doesn’t teach you how to dance, you should stay off the floor.
Terry Rock: genera! partner, CenterPoint Venture Partners
“If Terry likes your deal, it’s going to get in. and it’s going to get funded.” Known as a king maker, Rock seems to know intuitively which dot.can and which can’t. Perhaps Rock can spot hot start-ups because he is not a newcomer to the local techie community. He walked the walk in the early 1980s as a founder of Convex Computer Corp. where a new form of computing was created. “Affordable supercomputing’’ became the high performance system of choice for large corporations. Convex merged with Hewlett-Packard in December 1995, and it now develops HP’s high-end computer systems.
Rock thinks Dallas will soon be the second-largest start-up city in the country, falling only behind Silicon Valley. He added that the “telecom/semiconductor/engineering/management talent” in Dallas is the critical part of the puzzle absent in other parts of the country. “I really think Dallas is the place to be in the next decade.” he says. “Not only is there a new game in town, there is the ability for people to act in a different way than they ever have before. The raw ingredient is here… the job for us is to put the money where it helps start-up companies become wildly successful.”
Barrett Wissman: CEO, eVentures Group
We have read and read about venture capitalists relishing their role in these Internet ays of fast talk and even faster money. But a venture capitalist in Dallas focused exclu-sively on Internet companies? The Lamar Hunt family decided to form one and picked Wissman to run it (He is also sole manager of HW Partners and a managing director of HW Capital, two Hunt family funds). Wissman has assembled a solid supporting cast for eVentures: Its management, board of directors, and strategic partners include the CEOs, senior executives, and directors of major communications companies, including AT&T, Metromedia, Lycos, and MCI Worldcomm.
Wissman has hit the ground running. Recent eVentures highlights include the acquisition of AxisTel Communications, a 66 percent stake in e,Volve Technology Group, and a 17 percent stake in i2v2.com (who invents these names?), which offers the popular PhoneFree. The company has also completed a S6 million private placement with investors who include John Kluge and Stuart Subotnick, sole owners of Metromedia. Its recent price has been hovering around $16 a share, with a market cap of $608 million. Not bad for a guy who hasn’t even hit 40 yet.
David Eubus: assistant professor of surgery, UT Southwestern
The good doctor designed an interactive, comprehensive computer program to provide both a general and genetic risk assessment for breast cancer. And it’s free. This physician-scientist offers the program (called “CancerGene”) at no charge to health professionals for breast exams. It collects family history, draws a pedigree, and displays probabilities of developing breast cancer at various ages, as well as probabilities of inheriting an abnormal breast-cancer-susceptibility gene. It leads physicians through a structured on-screen interview, and the user is also able to see if the program can suggest another cancer syndrome applicable to family history by simply clicking the appropriate button.
When we asked Euhus why he wasn’t jumping on the get-rich-quick tech craze, he said, “We’re giving it away because it is useful for assisting women who are concerned about their breast cancer risk. Does there need to be a better reason?”
Euhus’program is an integral part of UT Southwestern’s risk assessment program. Not only is the doctor one of the outstanding breast cancer specialists in the world, but he actually still sees patients at Parkland. St. Paul’s, VA Medical Center, and Zale Lipshy.
Lee Blaylock: co-founder, Fundu.com
Lee Blaylock defines himself as a sixth-generation Texan, third-generation Dallasite, and third-generation entrepreneur.
The name Fundu is Indian slang for “cool dudes who accomplish anything they try,” but it won’t be around for long. Effective this month, the company is changing its name to Servicelane.com in an effort to better identify what the company offers.
Though Blaylock is grateful tor the equity and venture firms that finance local talent, he says Dallas needs to harness governmental and corporate efforts to develop the local University of Texas system into world-class research institutions, like Stanford or MIT. Dallas needs its local universities to construct a technological infrastructure.
As for himself. Blaylock says he never plans to “call in rich” and is in the sector for the long haul, enjoying the ride every step of the way.
Lance Cunningham: founder, iChoose
Bargain shoppers, race to your mouses: iChoose is going to make your life much easier. This is how il works: When an iChoose consumer decides to buy a product online-let’s say on Amazon.com-and a better offer is available elsewhere on the Net, an iChoose window appears, directing the customer to the better deal. Here comes the choose part: The consumer can either decline the offer and continue the transaction, or accept the iChoose offer. If the customer accepts. iChoose automatically transfers the contents of his shopping cart to the new merchant’s order page. Web shoppers pay nothing (you can download the software for free), and iChoose gets paid for bringing a purchasing customer to the merchant.
Lance Cunningham launched this service in mid-November, and nobody was more surprised than he was when Sevin Rosen took the lead in its latest $10 million round of investment. Cunningham says he’s not trying to win a popularity contest with his in-your-face style of Internet marketing, adding that it’s no different than what merchants do to each other every single day. He and his partners had funding options in Austin, Los Angeles, and San Francisco, but Cunningham decided on Dallas because of its abundance of eager investors.
“There aren’t 100,000 start-ups in Dallas, and the infrastructure costs and cost of living are so much lower,” says Cunningham on why Dallas is an ideal place for budding Internet entrepreneurs. “You have more of a chance here. It’s a very lucrative market that we’re playing in.”
Mark Layton: founder, PFSweb and chairman, Daisyte
“This Internet investment craze has not only been the significant fuel for one of the greatest Wall Street bull runs of the 20th century, but has provided these e-businesses with enormous amounts of invested cash,” writes Mark Layton. “Yet it seems that little sanity was applied to understanding the cost of the investment.”
The author of .Corns or .Bombs…Strategies for Profit in e-Business examines four critical factors of the e-business phenomena, collectively dubbed “the e-revolution.”Through anecdotes, data, and business models, Layton addresses how “freewheeling e-com-merce companies with unlimited and inexpensive capital resources,” but unable to sustain a profit, can quickly go from “outstanding dot.corns to potential dot.bombs.”
When he’s not writing books. Layton heads up two multi-million dollar companies. And boy, does he practice what he preaches. Under his direction in the early 1990s. Daisytek, a distributor of computer and office automation supplies, made the leap from its traditional distribution channels to e-commerce. Layton also spun off PFSweb to provide transaction management, customer service, billing, information management, and distribution services to Internet clients on an outsource basis. It now does up to 21,000 packages a day in its e-commerce fulfillment business. Layton sits on the boards of uBid. a publicly traded e-commerce auction site; ISA. a leading European distributor; and Virtual Village, a software development company specializing in Internet-enabled recruiting and online learning.
John McCain: head of Evolutions, EDS
John McCain’s assignment was to get this behemoth connected. The mission seems to have been successful.
Organized in the second quarter of 1999 as one of EDS’ four major business units. Evolutions grew 38 percent by the third quarter. How much of this was already in the works doesn’t matter; after a giant reshuffling, the last man standing gets the credit. Now that he’s in the spotlight, McCain intends to keep it shining: He’s launching a full-scale marketing campaign to help his Internet service group “come out of the closet.”
McCain said in a recent analyst event [McCain did not return phone calls from D Magazine] that his unit has a great piece of business. “We’ve been a well-kept secret for too long. We’re spending some good money to get recognized in the marketplace,” he said. “I’ve got a hundred-plus sales and sales-support folks in the United States right now letting customers know we’re in this place. We’re going to grow in Europe and Asia quite a bit in the first and second quarters. So I’ve got a nice leadership team in place and a big market. You should expect a lot from us.” Okay.
Tim Armes: founder, Jobs.com
Tim Armes will likely never need his own online service. The job-posting site can host your résumé, recruit talent for your company, or simply provide information for a one-stop job search.
Helping a friend plan and develop technical career fairs in Dallas-Fort Worth in his spare time sparked Armes’ interest in the employment business. In 1992 Armes founded a bulletin board service for job postings, seeing it as a natural progression from career fairs. With the rapid advancement of the Internet, the bulletin board transformed itself into
Since then. Armes has secured $72 million in private funding from Capital Partners and CBS. What was once a dial-up job-posting bulletin board now has more than 30.000 listings for more than 3,000 companies.
Jean M. Hobby: partner, PricewaterhouseCoopers
As head of the technology, infocom, and entertainment practice for the Dallas office of Pricewaterhouse Coopers LLP, Jean Hobby is involved with some of the biggest brands out there: Dell, Compaq, Cisco. Hewlett Packard, EDS. Perot Systems, AMFM, Blockbuster Video, Nokia, PrimeCo, Ericsson, and Yahoo! She knows her way around a start-up as well, including
The Dallas practice seems to be in good hands, as Hobby’s experience includes IPOs, secondary offerings, mergers and acquisitions, and providing services to U.S. subsidiaries of European companies. Hobby gets her hands messy and seems to love it, saying “the e-business world is fast-moving and fast-changing,” but nevertheless is “the most exciting place to be in the new millennium.”
Terrell Jones: president, Travelocity
Travelocity.com has been ranked as one of the best and brightest of Internet plays since it was launched in March 1996. The travel site is a unit of Sabre Inc. and is a force with annua! gross sales of $301 million for the first half of 1999 and $285 million in 1998-almost double its S121 million in sales the year before. Though Sabre is publicly traded, it is 82 percent owned by Dallas-based AMR. parent of American Airlines. Jones readily admits that he does not have a technology background, but he does know travel. And content is king: The travel business is going online, and travel agents are going the way of the buggy whip. The explosion in e-commerce will happen here more profitably and more quickly than in any other segment, and Travelocity is positioned to lead it.
Jerry Mills: partner. Baker & Bolts
Many a person, including Shakespeare, has imagined a world without lawyers. But the tech-world is grateful for the likes of Jerry Mills. As chairman of Baker & Bolts’ intellectual property group, which has more than 100 attorneys. Mills oversees patent applications, litigation, and intellectual property protection programs. But perhaps more importantly, Mills just digs the Internet. Teenies call on him not only if they have legal woes, but also if they need some money for their latest whiz-bang ideas.
Mills is part of a group that calls itself the Dallas Angels, also known as millionaire private investors to fledgling companies. The Angels started forming last April when Mills and real estate developer Roland Bandy met for lunch with Pat O’Brien of Rogers-O’Brien Construction Co., Cyrix founder Jerry Rogers, VMX founder Dal Berry, and entrepreneur Van Hubbard, who sold Technol to Kimberly-Clark. Mills kept hearing and reading about the Silicon Valley Band of Angels and “it sounded like fun.” Dallas Angels operates very similarly to its tech-counterpart in San Jose. But their emphasis is on networking because Mills’ greatest concern is that the various sectors in the local connectivity game-from telecom to software to semiconductor to Internet-don’t know or act like the others exist.
Jerry White: director, SMU Cox School of Business Caruth Institute
Most people on this list are either techies or investors. Jerry White is neither. He’s a teacher, and his subject is “do it yourself.” Teaching courses in entrepreneurship since 1972 and counseling more than 22,(KJQ aspiring business owners throughout the United States, While has helped launch some of the most successful ventures in the Dallas business community (including, we add modestly, D Magazine). Take brother-and-sister team Bill and Julie Brice, who wrote the business plan for their I Can’t Believe It’s Yogurt stores in White’s class and later sold the chain for about $14 million.
The Institute was established in 1970 by a grant from SMU alumnus W.W. Caruth Jr. White has served as director since 1988. “What drives an entrepreneur is opportunity, getting the three windows-timing, a good idea, and access to capital- to line up,” White says. “We’re trying to teach students skills that will enhance their ability to win.” While is also the chairman of the Southwest Venture Forum, a bimonthly meeting of entrepreneurs and venture investors. He is the author of two books on entrepreneurship. the co-founder of the Dallas 100 Awards, and an independent management consultant.
Next Tier: Players to Watch
Here are a few noteworthy techie-types and companies that missed our list but are still players in the developing Dallas Internet scene. B2C. B2B. start-ups. and investors each have a role. B2B is the sector darling (or maybe, the flavor of the week). Investors may be better known for non-Internet interests, but they’ve at least gotten their big toes wet.
BUSINESS TO CONSUMER (B2C)
Dennis Gonier, 39, America Online, Digital Marketing Services: Provider of online return-on-investment marketing services and online custom market research.
Bo W. Lycke, 53. Claimsnet: Automates transaction and reporting of medical claims processes via the Internet.
Scott Leslie, 36, Prodigy/FlashNet: Internet service provider.
Todd Hollenshead, 31. ID Software: Named for Freud’s Id, makes the popular software games Doom and Quake and markets other computer games.
John Romero, 31. Ion Storm: Makes computer games.
Bob Wood, 43, Shabang!com: E-com-merce shopping site; merchants post products for sale and/or marketing.
Lawrence Schwartz, 34, Service9II.com: Delivers support content, video, and on-site computer services-real-time via the Internet.
Bob Gellman, 54, Tandy: Information services program; online strategies tech info group; operates all mainframe computer systems; operates web site and technical work associated with it.
BUSINESS TO BUSINESS (B2B)
Abid Abedi, 36. Aden Group: Technical staffing firm.
Krish Prabbu, 46. Alcatel USA, Inc.: Builds networks, end-to-end data and voice communications; designs, manufactures, and installs undersea, fiber-optic cables that transport Internet 1 raffle worldwide; DSL-Internet access technology.
Paul Grayson, 50. Alibre: Computer-assisted design, using the Internet as a platform, engineers in different locations can work on same project simultaneously.
Vin Prothro, 60. Dallas Semiconductor. Designs, manufactures, and markets electronic chips and chip-based subsystems.
Mark Floyd, 44, Efficient Networks: DSL equipment manufacturing company.
John Ferguson, 47, Infospinner. Makes software that helps other companies utilize their information and format it for the Internet.
Mark Lynd, 37, Vectrix.com: Builds, maintains, and markets customers’ electronic commerce web sites.
George Plait, 58, Viewcast.com: Designs, manufactures, and markets video communications solutions for the Internet.
Laura Kelso, 30, and Mary Jane Whiteside, 29, UBundle.com: Online telecom services.
Bernard DiFiore, 51, BenefitMall.com: Online marketplace for buyers, sellers, and providers of employee benefits for businesses with 100 employees or less; offers online access to more than 3.000 employee benefit plans.
Steven Solomon, 35, How2.com: Online outsource customer care services, including rebates, extended warranties, product information.
Chris Schinabeck, 32, Texas-Trade-days.com: Online trading mall.
Steven Leeke: 2M Technology Ventures
Shelly Stein: Bear Stearns
Will Cureton: CLB Partners
Bob Kaminski: Kaminski Interests
Jeff Marcus: Marcus & Partners
Roger Staubach: Investor
Rod Jones: Investor
Joe Colonnetta: Investor
Two years ago, Dallas wasn’t even a blip on the Internet screen, much less a center of dot.com innovation. What a difference 26 months can make. In January 1998 D Magazine ran the headline “Too Rich to Risk?” asking why entrepreneurial Dallas was such a laggard in the high-tech explosion and challenging local investors to retool their strategies.