The NetSuds Monthly Report - February 1, 2001

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        1.0 Heard on the Net
        2.0 Jobs in the "com and .com" Market
        3.0 NetSuds on Tour - BridgeCom
        4.0 http://www.stanford.edu/group/eship/
        5.0 Calendar of Events
        6.0 Venture Finance in the (New) New Economy
        7.0 Guest Writers for This Report
        8.0 Apply to Present at a NetSuds Entrepreneurs Breakfast
        9.0 Earth to Entrepreneur
        10.0 Layoffs Everywhere
        11.0 Minnesota Networking Directory
        12.0 Living with Opportunity Obsessions

        Please email: people@netsuds.com to report a change in your
        job status if you are moving from or to a company in the
        "com or .com" space.

        NetSudser Dave Kelley, former Onvoy CEO, has accepted the position
        of VP and Group President at Pennsylvania Power & Light running the
        telecom division.

        ADC announced that AT&T-er Rick Roscitt will become the company's
        next Chairman and CEO, replacing Bill Cadogan. Lynn Davis, currently
        SVP and Group President will become President and COO. The changes
        will take effect on February 15 although the chairman's role won't be
        effective until February 27.

        NetSudsers Jim O'Reilly and Junaid Zeb recently joined Space
        Center Ventures. Based in Roseville, and as the venture arm
        of 85-year-old Space Center Incorporated, SCV makes investments
        in MN-based companies. Contact joreilly@spacecenterinc.com or
        651.604.4277.

        Chuck Riggle has left ADC's broadband wireless access group for
        a similar marketing position at NextNet Wireless
        ( http://www.nextnetwireless.com/ ) in Minnesota.

        NetSudser J.P. Cahill, former V.P. of Sales at ExpressPoint
        Technology Services has been hired as COO of Digital Prospects -
        www.digitalprospects.com Contact J.P. at 612.245.2813 or at
        jcahill@digitalprospects.com

        NetSudser John Griffin has left his VP/GM job at ADC to become
        CEO of San Diego start-up LightPointe Communications
        (www.lightpointe.com).

        NetSudser Sean Martin has taken John Griffin's position at ADC
        running all broadband wireless activities. Sean moved up from
        ADC's Dallas office. ADC is transferring "lots" of cable modem
        staff to its growing broadband wireless activities in MN.

        NetSudser Scott Mosley has left Fingerhut to found an Internet development
        and services company (JAVA, software development, business
        solutions) called Primary Group. Scott can be reached at
        763.268.0515.

        NetSudser Yossi Saad has left ADC Teledata (Israel) to join
        Actelis Networks as VP Product Management (Israel now, D.C. by
        June). Contact Yossi at either +972-3-924-3491 x220 or at
        yossi.saad@actelis.com Actelis Networks is the "Sonet over
        Copper" company.

        Mr. X - founder, CEO and CTO of his own successful ISP - has
        sold the ISP and is looking to relocate to the Twin Cities area.
        His strengths are in technology; all aspects of establishing and
        maintaining the WAN, LAN and servers for an ISP or data center.
        Contact matt@netsuds.com if you want to make contact with Mr. X.

        Company Y is looking for the following individuals. (1) Software
        Engineer with WAP expertise. (2) Independent web designer with
        Dreamweaver and Fireworks expertise. (3) Office Manager familiar
        with Microsoft Office 2000 and Dreamweaver. Contact matt@netsuds.com
        if you want to make contact with Company Y. No agents, please.

        The domain name "exadc.com" has been registered by me to track
        all those ADC folks who have left for other jobs. I am looking
        for someone (a local PR or web development firm makes sense) to
        develop a web site for this domain. Nothing fancy needed. It
        will be hosted by me and any ex-ADC employee can get an email
        address from me and email will be forwarded to them. Perhaps
        we can get a directory of names and email addresses going.
        This is not unprecedented. Look at www.excray.com and
        www.exmsft.com

        Speaking of domain names, contact me if you are interested in
        selfprovision.com, broadbandrouter.com or broadbandcopper.com.

        If you are a tech worker or executive looking for your next
        "big thing" consider interning at the NetSuds office.
        NetSuds sees lots of great opportunities every day in the
        start-up AND public company markets. To find out what it
        takes to be an intern = see http://www.netsuds.com/intern.htm

        1.2 Companies on the Move:

        Please email: start-ups@netsuds.com to report (1) the
        formation of a new start-up, (2) momentum change at an
        existing start-up, (3) addition of key hires, or (4) a funding
        event at a start-up. Please give details on the above
        including any information you do not want made public. We
        are very discrete.

	Visit Rauenhorst Recruiting at http://www.rauenhorst.com/ "Helping to take you where you want to go."
	If you would like to place an ad in a NetSuds email, contact Matt.Noah@netsuds.com by email or 952.934.5424

NetSuds loves on-site tours! Email me if you want to show off your
company. I can be reached at matt@netsuds.com

        Bridgecom - http://www.bridgecom.com/ is a unified messaging software
        and ASP. I have always wondered about the need or desire to have
        all of my email, fax and voicemail available at one central location.
        I am now convinced it is useful for many, if not most of us.

        The good folks at Bridgecom gave me an account to use and so far, it
        is both easy to use ... and useful. The web interface is simple and
        fast. I don't think I want all of MY email going there (As CEO of a
        network company I get dozens of emails every day ... like alot of you
        do). I'm not a big fan of web-based email because it is normally too
        slow compared to client-based email. It is also much less feature-
        rich than popular email clients (I won't do any advertising here).
        However, the voicemail and fax service is excellent from Bridgecom
        ... and email is there for those of you who want web-based email.
        You could forward only portions (rules-based or manually-selected)
        of your email to your Bridgecom account if you desire.

        Of course, one of the best features of the Bridgecom product is
        brought out in the web. If you can get to the web, you can get all
        your faxes, emails and voicemail ... from anywhere. If you can get to
        a phone, you can get your emails and voicemail instantly ... and get
        your faxes forwarded to you.

        For those of you considering unified messaging solutions, you should
        check out Bridgecom. My experience with their customer service and
        with the product has been excellent.

        "We have created a slide overview describing the ongoing relationship
        between Stanford University and Silicon Valley." - quote from this
        web page.

        I think the presentation on this web page, as well as the resources
        described on this web page, should form a basis for a discussion on
        how the technical business community interacts with a University or
        Universities in a geographic region. Stanford and Silicon Valley
        have formed an amazingly synergistic academic/business relationship.

        March 22 Entrepreneurs Breakfast - Phoenix, AZ (as part of Spring 2001 VON)
                (This will be the first EB outside Minnesota. 3000 people are
                expected at the Spring 2001 VON. To be considered for a presentation
                slot or even to attend, you must register for the the VON Conference -
                http://www.pulver.com/ No extra charge to presenters or attendees will
                made at this inagural event. If you would like to sponsor this event,
                contact matt@netsuds.com or call 952.934.5424. This will be a hot
                ticket at the Spring 2001 VON).
        pulver.com Schedule of Events - http://www.pulver.com/conference/
        Spring 2001 National Entrepreneur Conference, May 6-8 in Boston

        By Andrew Humphrey - AHumphrey@Faegre.com and Edward Green - Andrew Humphrey
        is head of the Emerging Companies practice at Faegre & Benson. Edward Green
        is Managing Director of Exigent Ventures in Redwood City, California.

        Forget the debate over the Old Economy versus the New Economy. As
        high-flying Internet stocks crash to earth, and cash-strapped start-ups
        hunt for additional financing, the rules of the New Economy are already
        being re-written. Fundamentals are back, tailored for the speed and
        intense competition of the technology marketplace.

        There's no shortage of capital. Venture finance firms are awash in cash
        and still hungry for quality investments. But the speculative bubble of
        the past few years has quickly given way to a new focus on business issues.
        Entrepreneurs looking for funding in the "new" New Economy face tougher
        scrutiny of their business strategy, venture partners, and market savvy.
        Before laying cash on the line, funders are taking the measure of
        entrepreneurs and probing their business plans with a simple question: how
        will you make it pay?

        Business Plans - The business plan is where it all begins. A solid plan is
        not only a road map for launching a successful venture, but also the key
        tool    for attracting investment capital. Unfortunately, only 1 in 200
        business plans truly provides a crisp, exciting grasp of the company's
        product and market potential. Even promising ideas often fail to garner
        attention because the entrepreneur hasn't invested the time and care to
        develop a credible plan for translating an innovative concept into a
        profitable enterprise.

        What are the most common weaknesses in business plans? They're poorly
        written. Too many plans are laden with buzz words or dense,
        technology-heavy product descriptions. Instead, the plan should cleanly
        and succinctly review the product and market. This isn't easy. Distilling
        complex concepts and core ideas into a clear, persuasive document takes
        considerable effort - but the result is a superior plan.

        They're too long. Most venture capitalists won't take the time to wade
        through excessive detail. While some entrepreneurs think they will impress
        potential funders with sheer volume, they're more likely to lose the power
        and punch of their message. Be concise, and always include a one- to
        two-page executive summary. In all likelihood, only the executive summary
        will be read.

        Even professionals who should know better forget the importance of brevity.
        One entrepreneur submitted a 120-page business plan with a 25-page
        executive summary. Ironically, his experience included serving as an
        adjunct professor at a local college - teaching people how to write
        business plans!

        They focus exclusively on the product. It's not a technology plan - it's a
        business plan. While the value and uniqueness of the product are
        important, the key issue for funders is how the product can be marketed
        profitably. That means addressing market demand, marketing strategies,
        competing products, competitors' resources, production and distribution
        costs, pricing, revenue goals, and potential partnerships.

        These messages may seem like common sense, but in reality, they are widely
        ignored. Many entrepreneurs fail to get professional help in thinking
        through business issues or in crafting the plan itself. The lack of
        adequate counsel shows. Entrepreneurs are rarely experts in all the
        components of building a business - and venture capitalists don't expect
        them to be. But as with all other aspects of developing a successful
        business, entrepreneurs need to know when to get outside help to supplement
        their own expertise. A "do-it-yourself" mentality isn't likely to impress
        funders.

        Choosing Partners - You have a plan. Now what? Developing the right
        professional contacts is critical in selling the business plan itself.
        Publishers always say they read their slush piles of unsolicited
        manuscripts. Some venture capitalists say the same thing about
        unsolicited business plans. But the fact is that material      sent over
        the transom gets little attention, and the odds of getting funding
        simply by sending in a business plan are very long. What you need are
        partners who can open doors for you and get your plan in front of the
        right people.

        Few things say more about the quality of a business than the people around
        it. Your funding partners, advisers, and professional colleagues all
        testify to the credibility of your venture. It's also a self-selecting
        process: if you can gain the confidence of the right partners, they in
        turn will attract other partners, particularly funders, to sign on. The
        corollary is also true: missteps in identifying and recruiting partners
        can derail even a quality business plan.

        Here are some basic principles to remember in building partnerships:
        Choose angels wisely.   Although some venture finance firms will invest
        smaller sums, many firms aren't interested in deals under $10 million. As
        a result, entrepreneurs often turn to angel investors and seed funds for
        the money needed to get started. But be careful. Venture capitalists
        looking at your next round of financing are often reluctant to invest in
        deals where angels are unsophisticated or too closely tied to you or your
        product. Similarly, having too many "little" shareholders potentially
        creates a cumbersome ownership base that can't respond quickly when the
        capital structure needs to be changed. Most funders want a clean and
        nimble corporate structure.

        Look for more than money. The value of partners goes beyond their
        investment. You should look not only for funders willing to participate
        financially, but also those who can bring added value to the business,
        such as contacts and experience within the industry, connections to
        potential Board members, and a track record launching similar businesses.

        Don't assume that luminaries will impress investors. Some entrepreneurs
        try to recruit "big names" to serve on the company's advisory board. But
        such high-profile individuals may commit little personal time to your
        business. Their value is limited if they cannot provide you with real
        leadership and advice, and their name alone is not particularly useful if
        they cannot speak knowledgeably about your company and why they chose to
        become involved.

        Don't misrepresent relationships. The funding community is small, and most
        players know each other. Don't imply that you've signed on partners, when
        in reality you may have had only preliminary or tentative discussions that
        haven't been finalized. It's easy to let your enthusiasm carry you away -
        but if a potential funder finds you've exaggerated a relationship, your
        credibility will be severely damaged.

        Remember that partnerships go beyond investors. The same principles apply
        when identifying lawyers, accountants, Board members, and other
        professionals who can deliver services and support to your business. Like
        investors, these professional partners have strong contacts throughout the
        venture capital and investment banking community and can be invaluable
        resources in getting funders to take you and your venture seriously. The
        lesson is to involve substantive partners early in the life of the
        business.

        Doing Business - Potential funders aren't looking solely for the next
        great idea. They're also looking for an entrepreneur who has the business
        savvy to understand the market and the determination to make the tough
        decisions necessary to make the business work.

        What do venture capitalists expect from entrepreneurs? Bring in
        experienced management. One of the hardest lessons for company founders is
        realizing that they can't and shouldn't do everything, even though it means
        giving up control. Recruiting experienced managers to help in marketing,
        accounting, human resources, and other areas is an essential part of
        growing a successful business. (But it doesn't allow a founder to ignore
        business realities - see below.)

        Understand financials. Even though a founder may end up focusing on the
        product - and bringing in outside professionals to assist in operations -
        there is no substitute for grasping the financial dynamics of the business.
        If a founder defers to an accountant to talk about financials in a business
        pitch, it suggests that he or she doesn't understand the business strategy.
        Venture capitalists look for entrepreneurs who understand and can
        articulate the path to profitability.

        Understand the market. Similarly, entrepreneurs must understand the trends
        within the market and how to establish and sustain market share. As
        recently as six months ago, e-commerce theory held that web sites should
        first build a brand and drive traffic and worry about monetizing users
        later. No longer. Now brand is less important than an earnings plan - and
        don't even think about a strategy built entirely on banner ad sales.

        Similarly, "first in" to a market space no longer has the value it once
        did. Instead, potential funders want to understand how the business will
        use distribution channels, patents, infrastructure, and other barriers to
        ward off competitors who may enter the market with better contacts or
        capital. (If you're looking to develop an e-business related to automotive
        parts, for example, how do you propose to compete with the resources of the
        big automakers?)

        Be prudent with cash. E-commerce companies have become legendary for their
        ability to burn through large amounts of venture funding through excessive
        marketing budgets (think Super Bowl ads). Most funders now expect rational
        budgeting, as well as strategies for developing channels to provide
        immediate cash flow to the business.

        Show Me The Money - Entrepreneurs thrive on great ideas, such as new
        technologies to make business more efficient, new medical devices to
        improve human health, or creative new concepts to lure diners and shoppers.
        But venture capital firms are about money. They invest their assets,
        often in high-risk enterprises, and they require a healthy return.

        So here's a little secret. Venture capitalists want to work with
        entrepreneurs who are in it for the money. If that sounds crass, it's
        actually realistic. An entrepreneur who is focused on money will usually
        make the hard choices necessary in order to make the business succeed. If
        a founder needs to be the CEO to satisfy his or her ego, or is more
        interested in the power of the idea than its profitable potential, those
        are red flags for funders. After all, would you buy stock in a company
        that wasn't fully committed to increasing the value of its shares?

        For start-up companies seeking venture finance, the "new" New Economy may
        look a lot like the old one. Fundamentals matter. Profitability matters.
        A sound business plan wins the day. But even if the standards for funding
        have become stricter, there's plenty of venture capital to be found.
        Investors make money by investing. If they can't find a reason not to do a
        deal, chances are they'll do it. But they'll look for a lot of reasons.

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7.0 Guest Writers for This Report

        I want to open up the Monthly NetSuds Report to guest writers. If
        you have a passion for a topic, and you can write (at least no worse
        than me), send an email to me at matt@netsuds.com You can even send
        copies of your work. It needs to be on "com and .com" topics and can
        include entrepreneur/investor activities. Good information from our
        service providers and vendors is also welcome so long as it is not a
        "commercial" for any one company or individual.

        We will consider both sponsored and unsponsored columnists and guest
        writers.

        Every month since Autumn 1999 NetSuds has had an Entrepreneurs
        Breakfast (see http://www.netsuds.com/eb/ for past and current
        events). If you are a pre-IPO "com or .com" start-up, you can apply
        to present your company to the investment community at a future
        breakfast event. Apply online at http://www.netsuds.com/eb
        Our next Entrepreneurs Breakfast in February 8. See
        http://www.netsuds.com/eb/2001/February/ for details and to register.

        By Eric P. Strauss. Eric is a public relations and business development
        consultant focusing on the needs of emerging technology companies. He can
        be reached at eric@entrepreneursforhire.com

        You've got a great concept for a new business. Or maybe you're already in
        business and are exploring additional fundraising opportunities. Whether
        you're writing a business plan from scratch or updating an existing plan,
        consider these factors to maximize your odds of success:

        Different stokes for different folks: What people glean from your business
        plan will depend on their own frame of reference. A venture capitalist
        will be most interested in your exit strategy and existing management team.
        Prospective partners will want to better understand what's in it for them.
        And CEO candidates will no doubt want to perform plenty of due diligence on
        your technology and business model. Know who your audience will be -
        whether they are angel investors, loan officers, or service providers - and
        know what they're looking for, before starting to write your business plan
        or updating an existing one.

        Size does matter: Not long ago, it seemed anyone with a two-page plan could
        stroll down Silicon Valley's Sand Hill Road collecting millions from
        venture capitalists along the way. Those days are over. So too, are the
        sixty-page plans with even longer appendices. Most investors are
        interested in a well-written, twelve to sixteen-page plan with minimal
        attachments. If they need more, they'll let you know.

        Content, content, content: Start with a clear, concise, two-page executive
        summary. Follow with the market opportunity, information on the products
        and services you will sell to satisfy that opportunity, and a realistic
        plan to market those products. Next, include information on the company's
        business model, the competitive landscape, and biographies of each member
        of your management team. Providing readers with detailed information on
        each member of your management team is critical to your success, as
        investors, partners, and employees, will all want to know who will be
        responsible for steering the company towards financial success. Finally,
        include a financial overview, a detailed use of proceeds, a list of risk
        factors, an exit strategy, and no more than three pages of financial
        appendices.

        Earth to entrepreneur: Many entrepreneurs become so caught up in their own
        ideas that the content of their business plans and their financial
        projections divert from reality. Don't overstate your market potential,
        don't underestimate the competition, and don't set unreasonable targets.
        Prospective investors are likely to disregard your business plan entirely
        if they think your plan doesn't reflect current market realities and good
        old-fashioned common sense.

        Looking Good: Like it or not, an attractive visual presentation is vital to
        catching a reader's attention and encouraging them to give your plan the
        attention it deserves. Don't be afraid to include charts and graphs
        wherever appropriate.

        Distill complicated, technical information into simple, straightforward,
        and attractive diagrams. Choose a single font that's easy to read and
        stick to it. Don't dilute your message with unnecessary fluff. Include
        the company logo on the cover page, the table of contents, and the first
        page of the executive summary.

        Print your business plan using a high quality color ink jet or laser
        printer for a crisp, clean look.

        A work in progress: Business models come in and out of fashion, technology
        improves, and your industry's competitive landscape has about as much
        staying power as an ink jet printer cartridge. With that in mind, dedicate
        yourself to reviewing and, when necessary, revising, your business plan, at
        least every three months.

        If you are reading this, you probably have not been laid off of your job.
        The vast majority of us are still employed. I can gauge the local industry
        turnover with one critical yardstick: How many of the NetSuds' emails
        bounce back to me after an emailing. On January 24, I sent out an email
        inviting people to the February 27 evening gathering. I had never before
        received the deluge of automated responses back reading in part "User
        Unknown" and "Unknown Recipient". It was a sad day but an indication that
        layoffs are widespread in our industry. We have all heard the news about
        wwwrrr, ADC, Agiliti, Net Perceptions, Interelate, BORN, Virtual Fund, etc.
        in the newspapers but it is still sad to see it happen first-hand.

        The layoffs point to the fact that having a good network of contacts in the
        industry is critical in "good times and in bad". People who are connected
        will bounce back better and faster than those who are not connected. And
        for those companies hiring (Optical Solutions, IntraNet Solutions, etc.),
        the NetSuds events are a good way to find potential new employees.

        One well-kept secret around town is the breadth (not depth) of networking
        companies with headquarters or satellite offices here. I am compiling a
        list and need your help in completing it. Take a look below. Tell me
        which companies I have missed. Email me at matt.noah@netsuds.com If
        you know the General Manager or CEO of the company/division, pass that
        along to me as well. Thanks!

        ADC
        Optical Solutions (Ziga Systems)
        CNT
        Digi International
        Multi-Tech
        Cisco (NuSpeed)
        Zhone (Roundview)
        Lucent (Ascend (NetStar))
        Ciprico
        Nx Networks (Aetherworks)
        Bravida
        Tellabs (SNT)
        Envoda
        Caspian Networks
        Aravox
        NextNet Wireless
        FireSummit
        Allot Communications
        RIP Networks
        Seagate (XioTech, Ancor)
        Nortel
        BridgeCom
        Gearworks
        Vitesse Networks
        Secure Computing
        StorageTek (Network Systems)
        NorthStar Photonics

        By Nancy Meyer, founder and Chief Visionary Officer at WeMentor, Inc.
        a professional mentoring organization for emerging to experienced
        entrepreneurs, business owners and executives who desire to grow
        themselves along with their venture(s). Contact Nancy at
        nancy@wementor.com or check out http://www.wementor.com/

        One key to a prosperous venture is the leader's ability to understand and
        appreciate his intuitive insights. Entrepreneurs are typically obsessed
        with opportunities and ideas.   In order to capture their creativity and
        imagination, I advise my clients to record their thoughts and intuitive
        messages. Create a file folder of ideas and opportunities that can be
        refined, expanded and deleted. Use it as a melting pot for information
        and ideas picked up through daily conversations, reading, listening and
        observations.

        If you are not able to write your thoughts down, computers now have
        Dictaphone capabilities that you can be utilize. Whatever methods you use
        get your thoughts written down. Develop a daily discipline of writing,
        even if for five minutes is recommended. The volume of information we sift
        through each day is incredible. Tailor the daily writing to what will work
        for you.

        To be able to complete a daily 'brain dump' serves four purposes. One, it
        frees up mind space used to remember and track good ideas.   Secondly, the
        subconscious mind can now work on creative ideas. Thirdly, you learn to
        trust your intuition and become mindful of your creative process. Fourth,
        you learn to plan and project into the future with more accuracy.

If you are aware of others who would like to receive the NetSuds Report,
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Please send your comments and feedback regarding this issue of the NetSuds
Report to matt@netsuds.com

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