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They’re under 40, smart, driven—and making fortunes in high-tech. Here’s how they’re doing it, and how to get in on the action.
Before the Internet, there was the Arpa-net. If you remember it, you were way ahead of the technology curve.
Doug Humphrey was an early convert. "When I first started using the Arpanet, there were 22 computers on it," says the 38-year-old high-tech CEO.
The story is similar for Raul Fernandez, president of software innovator Proxicom: The 31-year-old was the first kid on his block to have a computer.
Julie Holdren, 28 and the CEO of another software success story, remembers taking a class in her school's new computer lab as a sophomore in high school.
As Humphrey, Fernandez, and Holdren grew up, so did the computer industry. When they hit their twenties and thirties, businesses needed people who understood computer networks.
"Someone who was in their twenties who had five, ten years' Internet experience was by default the expert," Holdren says.
It may come as no surprise that twenty- and thirtysomethings who were breast-fed on emerging technologies know more about them than their parents.
What is surprising is that more and more of them, at such tender ages, are starting their own computing and communications businesses. And getting very rich.
Washington is in the midst of a high-tech business boom. This region has long been a hub for telecommunications, biotech, and satellite-based ventures, but in the past five years, more Web-based firms are emerging, such as America Online and UUNet.
"What you have in this region is a remarkably rich basis of content," explains Mario Morino, chairman of Potomac KnowledgeWay Project, a nonprofit organization that is fostering the high-tech community in Washington. In the past few years, government agencies, trade associations, and other Washington institutions have recognized the value of putting their warehouses of data on the Internet. That has meant increased funding for Web work.
With the addition of Web-based businesses to the region's high-tech mix, Washington has become one of the country's top technology centers. The major players already here are attracting even more businesses as well as investors.
"If you were to put us on a national chart today, we might measure third or fourth in the United States for areas that have critical masses of technology," says Dyan Brasington, head of the High Technology Council of Maryland.
All of which is good news for the local economy.
"This economy was not doing so great three years ago," says Roger Mody, CEO of Signal Corporation, a computer contractor in Fairfax. "I question where we'd be locally if it weren't for the high-tech community. First and foremost we're creating jobs."
Most new businesses started these days are by people under 40, according to a study done for the National Federation of Independent Business and Wells Fargo Bank. Entrepreneurs can do well at any age, but being young has its advantages.
"People should start a business when they're young, when they have the energy, when they don't have the responsibility," says Doug Humphrey, founder of SkyCache, a Web venture in Laurel.
"When you're very young, all you've got to lose is your time, and you've got a lot of that left, and your energy, and you've got a lot of that."
Starting a business means great outlays of not only time and energy but also capital. Here, too, young entrepreneurs in high-tech fields do well.
"The cost to compete isn't as expensive as it once was," says James Kenefick, CEO of NET-tel Corporation, a long-distance carrier. "The price of memory in 1986 was $5,000 a meg for an IBM mainframe. Here we are ten years later, and you can buy a whole PC for less than $3,000."
Proxicom's Raul Fernandez agrees. "The ability to get into these marketplaces doesn't require as much cash as it does to get into real estate or retail," he says.
Humphrey, Kenefick, and the other young entrepreneurs profiled in the following pages are creating a lot of wealth—for themselves and for investors and employees with stock options.
Starting a business has never been a sure-fire way to become a millionaire: Failure rates are high, and entrepreneurs who do make it often draw less of a salary than they would if they worked for someone else. For most business owners who succeed, it usually takes years of toil and sacrifice to accumulate real wealth.
But high-tech start-ups are about high growth: You can't spend years growing a business because technologies shift. The game is about working quickly and working smart, and then, after a few years, taking a company public or selling it. With the right idea and business smarts, one can do very well, very fast.
When Michael Saylor opened the Vienna office of MicroStrategy, a maker of decision-support software, half the desks were empty. When clients came for a meeting, Saylor would turn on the lights in the empty offices and shut the doors, to give the impression of prosperity. That was in 1994. MicroStrategy has since grown from 50 employees to 600. Revenues have risen as rapidly, and an initial public offering is in the works.
High-tech entrepreneurs have to move fast; slow thinkers do not survive. Fernandez has described the industry as "Darwinism on steroids."
"A lot of people who've been in business a long time are afraid of change," he says. "I'm afraid of not changing. The technology requires you to be constantly looking out into the marketplace and figuring out how to make course corrections."
The entrepreneurs succeeding in today's high-tech marketplace share a lot of characteristics: They're smart, confident, focused, and energetic. They're gamblers. They're also visionaries. Not only have they identified an opportunity, but they're also answering it better than most everyone else.
"Business has changed a lot in the past 15 years," says Jim Kenefick. "You see so many people doing part of other people's business, outsourcing. Twenty years ago that wasn't the case; companies like IBM did everything. There are more opportunities for entrepreneurs to say, 'Hey, you know what, I can manage that part of your business better.' That's the way the future is going to be."
Initial public-stock offerings are creating sudden wealth, but the entrepreneurs we talked with say they're not in it for the money.
"I think it's true of any entrepreneur—we do this because it's in our blood," says Roger Mody. "This is not work."
It's easy for someone with money to say money isn't important. So how has striking it rich affected the lives of local entrepreneurs?
To be sure, there are more calls from stockbrokers, charities, and other entrepreneurs looking for funding. But the CEOs we talked with live busy but surprisingly simple lives.
For some, that's because they still roll profits back into their companies—they're millionaires on paper only. Those who do reward themselves do so sparingly—a new car, maybe a new house, but usually not monthlong vacations on the Riviera.
Jim Kenefick thinks that's a reflection of both the 1990s' supposed yearning for simplicity and the age of these entrepreneurs.
"Where maybe in the past, everyone had to be seen and be heard—'Hey, I'm Mr. Important and I want you to know that'—today people couldn't care less. There's always a few who want to have the fanfare, who want to have the chauffeur, but I think for the majority, they don't want fame."
"I think also some wealth has come at such an early age that it's not easy to handle. It's not like they spend 50 years getting this and—'I've arrived and I want everyone to know I've arrived.' A lot of people say, 'Hey, look at what happened to me in three years. I think I'm very fortunate.' Fortunate is the word. It's not, 'I'm the smartest, I'm the best.' I'm fortunate—and I'd rather keep that to myself because who knows if that opportunity will come around again."
Raul Fernandez agrees that the newer high-tech culture is different from Washington's K Street establishment.
"There's less focus, I think, from the entrepreneurs in the high-tech space than some of the traditional wealth in dining at the Prime Rib or being seen at some of the places that, frankly, we couldn't get into because we were in blue jeans."
But, just maybe, give it time. Another reason these entrepreneurs aren't on spending sprees and aren't well known may be because they don't have the time. There's no time for buying vacation homes, often no time to network and to socialize in the "right" circles. These new millionaires are working 10 or 12 hours a day to grow their companies.
"I think you'll see more spending of wealth in the next couple of years, as companies get bought out, as people have more time to look for homes," Fernandez says. "And as all of us get more active in local community issues—not just politics but giving back to the region, in terms of foundations—I think you'll see more influence. Because the financial power is definitely there. It's just untapped."
Doug Humphrey: Not a Bird Brain
Doug Humphrey doesn't look like a businessman, let alone a very successful businessman.
On a recent winter day, Humphrey is in worn jeans and a T-shirt. He's padding around his office in socks. On his shoulder perches his cockatoo, Shiro.
The office atmosphere is aggressively casual. There's no receptionist out front, no fancy furnishings. The building is drab, functional. Humphrey and his associates remind you of graduate students working on a science project.
Well, almost. When the laptop on Humphrey's desk chimes, he stops in mid-conversation, takes his feet off his desk, and sits at attention.
"Cisco is at 89," says Humphrey, smiling. "I'm waiting for it to crack 90."
Doug Humphrey is the 38-year-old CEO of SkyCache, a Laurel upstart that is planning to use satellite technology to relieve traffic jams on the Web. SkyCache, just six months old, is scheduled to be up and running by the end of April.
SkyCache is not Humphrey's first venture. Before this, he cofounded Beltsville-based DIGEX, now one of the largest Internet-service providers in the country. When DIGEX was bought this past summer, Humphrey walked away with several million dollars. He immediately sank much of the money into SkyCache.
"After I left DIGEX, I sat down and thought, 'What are the weak points of the Internet? Where is its Achilles' heel?' Where it's breaking is how it handles large pieces of data."
Lots of people are betting on Humphrey again. He is smart, a visionary. He's also eccentric and charismatic.
"Doug can get up in front of groups of customers, groups of venture capitalists, and within 15 minutes he's got all of them saying, 'Please, take my money,' " says Doug Mohney, SkyCache's director of marketing.
Doug Humphrey was born in Hollywood, Florida. His father was an airline pilot, and the family moved often—to Georgia, to Virginia, then to Maryland.
Humphrey wound up at the University of Maryland but left without a degree. He later worked at GTE and then at Tandem before starting DIGEX.
Humphrey, who works an average of ten hours a day, says that in the past few years, "I lost most of the hobbies I had"—such as target shooting. He still likes to collect port and single-malt Scotch, attend science-fiction fairs, and read about space flight and other cosmic news.
His only indulgence after the DIGEX payday is to fly first-class, because the seats are roomier.
"Most entrepreneurs who started a company with nothing in their pockets are extremely unlikely to start chucking huge amounts of money around on very wasteful things," says Humphrey. "That would be a 180-degree change in character. You are who you are, and the presence of money doesn't change who you are."
He lives in a modest house in Laurel with his wife, Lisa Losito, whom he met at DIGEX, and Shiro, the bird, as well as two other feathered friends: Luna, another cockatoo, and Deadeye, a green-winged macaw.
During a recent photo session at their home, the birds were flying free. Luna kept landing on people's heads. Deadeye got spooked by the camera lights and flew into a dining-room window, shattering it. The bird was unharmed.
"Welcome to Friday at our home," Losito said at one point.
Part of Humphrey's life now is managing all the distractions. It's the price of success.
"People want to meet the Doug Humphrey," says Mohney, who also worked at DIGEX. "You've got people who want to hear his success story and listen to him speak. You've got people who have a great business opportunity and want his cash. We didn't have that problem when we had no money."
Humphrey doesn't have time for many of the inquiries—"stockbrokers can definitely not call me," he says—but he likes to help aspiring netpreneurs with good ideas.
To that end, he has also founded Phase1, a business incubator. Phase1—run by his wife—doesn't hand out money but provides entrepreneurs with advice, office space, and access to resources such as an accountant.
"The drive is, to me, having the opportunity to work with people who are at their creative zenith," Humphrey says. "If you can be involved in a start-up company, that is the best thing. It's risky. But it's fun, exhilarating, exciting. It's a million miles away from being a job."
Julie Holdren: Work Hard, Play Hard
Julie Holdren hasn't won any one-arm pushup contests–yet.
"We'll have these competitions in the office," says Holdren, the 28-year-old CEO of Olympus Group. "One guy, he can do 20 pushups on each arm. I come in second–I can do 17 on each arm."
Holdren is also flexing her muscles in the world of software design. Her three-year-old company, based in Alexandria, designs programs that enable people to more easily access large databases.
It's a competitive field, and to stay ahead Holdren and her team of 30 put in long hours. Holdren arrives each day around 7 AM and leaves about 10 PM.
The hours can inspire things like impromptu pushup contests.
"We have Nintendo that a few people play after hours," says Todd Levitt, the first person Holdren hired back in 1995. "We had a laser-tag outing in January."
The employees, most in their twenties and thirties, have gone bowling together and once whipped up a fondue party. Holdren installed a Direct TV satellite dish for the office, so people working on weekends wouldn't miss football games.
"Young start-up companies tend to have some real crazy atmospheres. People are under a lot of pressure, and they do all sorts of crazy things to have fun," says Katherine Clark, the CEO of Landmark Systems Corporation and a member, with Holdren, in a Women Technology Entrepreneurs group.
Olympus Group isn't Animal House crazy; it's a professional place. The outings help employees to bond, to recharge.
Holdren leads by example, making time in her schedule for other things—mainly her husband, Jim Harrison, their two Jack Russell terriers, and exercise. She jogs five times a week and lifts weights three times a week.
But even when letting off steam, Holdren can't completely relax.
Case in point: Many Olympus Groupers, including Holdren, spend their lunch hours jogging together. Holdren often uses some of the time to run ideas by colleagues.
Julie Holdren was born and raised in Mount Vernon, to a father who worked for the Interior Department and a mother who was a nurse. Holdren was first exposed to computers as a sophomore at Mount Vernon High School, in its then-new computer lab.
She went on to George Mason University, where she majored in computer engineering. To pay for college, she worked full-time at Sprint while taking classes.
When the entrepreneurial itch struck in 1994, Holdren withdrew the $5,000 or so she had in her 401(k) and founded her firm. She was 25, but you wouldn't have known it: Holdren is confident beyond her years. Take, for example, the name she choose to announce herself.
"Olympus Group is the home of the gods," Holdren says. "We were calling ourselves the Internet gods."
Her first client was UUNet Technologies, before it would become a multi-million-dollar Internet company. Since then, corporations like Gannett, non-profit organizations such as the National Football Players Association and even the Pentagon have hired Olympus to make their banks of data more accessible.
Revenues in 1997 totaled a few million, and Olympus just landed a big part of a five-year, $35-million federal contract. Although every employee holds stock options in Olympus, Holdren is the majority owner.
What accounts for Olympus's success? While Holdren gives much credit to her colleagues, there's no doubt her vision and energy have been one key.
"What we've been through in the past three years is truly roller coaster," says Todd Levitt. "It takes someone who can weather the storm. Julie has been the driving force."
Holdren is nothing if not driven.
"I want to be the first woman to found and run a billion-dollar corporation," she says. Holdren has a lot of work in front of her, a lot of one-arm pushups. But like most successful entrepreneurs, what keeps her going is that next goal.
Jeong Kim: Don’t Forget Your Friends
Bob Prettyman first met Jeong Kim in high-school physics. Of the 40 or so students in the class, all but a handful would drop out. It was not, Prettyman says, because the class was tough but because the teacher didn't understand physics and had never taught it before.
"In the second semester, there were seven or eight of us left," Prettyman recalls. He and Kim were two of those remaining. "What happened was, Kim went home and studied the physics book and ended up basically teaching the rest of us."
Prettyman would become fast friends with Kim, now the 37-year-old CEO of Yurie Systems, a Lanham company Kim founded in 1992. Yurie makes equipment that allows more efficient transport of voice, video, and data over phone lines.
The story of Kim's teaching debut is not a surprise to anyone who knows him. Kim is brilliant, determined, and impatient when it comes to success. And he places great value on helping friends.
In fact, Kim–whose net worth hovers around $300 million–has not forgotten any friends along the way. Walk the halls of Yurie, and you'll find that he has hired friends from high school, such as Prettyman, and buddies from college and from the Navy, where he was a nuclear submarine officer. He's even hired the high-school math teacher who introduced him to computers.
"That's what life is about, working with your friends," Kim says. In his company's initial public offering last February, some of those friends and colleagues who owned company stock became millionaires.
Jeong Kim immigrated from Korea with his family in 1975, when Kim was 14. The family settled in Anne Arundel County.
Kim's family was not poor, but they could not afford to send Kim to college. To earn his way, Kim worked full-time at 7-Eleven while in high school. He manned the store at night, then went to class during the day. Despite his schedule and lack of proficiency in English, he graduated near the top of his class.
"I think Jeong, when he has to, can operate very effectively on little sleep," Prettyman says. "In high school, we used to play squash from midnight to 2 AM—Fort Meade had a court that we could use 24 hours a day. Jeong's biorhythms were so different."
Kim has never been one to waste time. He completed his undergraduate studies at Johns Hopkins University in three years. He earned a PhD in reliability engineering from the University of Maryland in half the usual four years. And he got those two degrees–plus a master's from Hopkins in technical management–while working full-time.
Yurie Systems has grown at the same rocket pace. The company, which has 250 employees, topped Business Week's 1997 list of "Hot Growth Companies." From 1996 to 1997 revenues doubled, from $22 million to an estimated $44 million. Profits in 1996, the last year for which figures are available, were $3.2 million. The company is currently valued at almost $600 million. Kim owns about 52 percent of the stock.
In the volatile stock market, a share of Yurie has fluctuated up to 40, down to 8, and now hovers around 22. "I have seen my net worth go from $500 million to $200 million. I guess it's back to about $350 million," Kim says. "You can calculate the numbers. I don't do that anymore."
Like many high-tech start-ups, Yurie has benefited from the explosion of the Internet, as more users transmit voice, data, and video signals. Fiber-optic lines can carry these signals without much trouble, but copper wires are less efficient. Yurie's equipment–black boxes the size of toaster ovens–helps move high-speed data through fiber and wireless links as well as through low-tech copper.
Yurie got a big boost in 1995 and 1996 when it signed a distribution deal with AT&T. The telephone company, with its antiquated copper system, resold the equipment largely to government agencies such as the Pentagon, where the machines come in handy for transmitting signals from outposts like Bosnia. Yurie also sells equipment to firms such as Prodigy and MCI.
Kim likes to say that his success is not because he is smarter or luckier than others but because he works hard. In the early days of Yurie–when Kim had mortgaged his house and borrowed from friends, family, and credit cards–he says he was working 120 hours a week.
"It was crazy," Kim said in a recent talk to Korean-American students. "This kind of extreme and focused effort almost ruined everything: our health, relationships with family members."
But, he later says, "The difference between successful and not-so-successful is not that much. Just the last push."
Kim has slowed down a bit, working 60 hours a week and spending more time with his wife, Cynthia, whom he met at Hopkins, and their two children.
Kim's other love is racquetball; he plays every other day—and with the same intensity he has for business.
"The other day I played two-and-a-half hours," he says one recent morning. "I couldn't walk up the stairs after that. Exercise was something I wasn't able to do for several years. I gained so much weight, I got thoroughly disgusted. I basically said to myself, I will make exercise a priority." On the days he doesn't play racquetball he lifts weights.
To give back, Kim has set up a charitable foundation. He recently pledged $1 million to the University of Maryland.
"I believe how you spend money is more important than how you make money," says Kim, who spends little on himself. He drives an Acura, for instance. "My president, he drives a better car than me, a Mercedes SL. He's a taller guy; it has more headroom. We only drive what we need.
"Obviously, I'm not in this just to make money. I have always had enough money. The United States, there's so much opportunity here if you are willing to work."
Roger Mody: Timing Is Everything
Roger Mody hasn't missed a Redskins game since he was eight years old. Not even the birth of his three children interfered: One son was born in the off-season, and another son and a daughter were born during bye weeks.
"Thank God I didn't have to choose," says Mody, chuckling. He's both a devout fan and father.
Most of his adult life, Mody seems to have been blessed with good timing. The 34-year-old is CEO of Signal Corporation, a company in Fairfax that designs, installs, and maintains computer networks for government agencies. The desktop-publishing company he started in 1987 with his wife, Lori, has grown to 1,100 employees and a projected $150 million in sales this year.
"Desktop publishing created the need to link computers together, thus creating networks, and networks became very popular in the late '80s," Mody explains. "We were well positioned because we had the experience of creating these networks."
He also distinguished his firm by meeting personally with every client every quarter.
"It was an era in the procurement process where companies didn't spend as much time face to face," Mody says. "I started doing that early. If a client has any issues, I'm there to fix them." Because of it, he says, he's never lost a contract.
It helps that Roger Mody has a presence. He's six-foot-three—and he's stylish, with his goatee and custom suits. He has a hearty laugh and a big smile.
"Roger has always comported himself as a successful person, even when we were working out of a townhouse in Fairfax," says Mike Dolton, a friend and a Signal vice president. "He will walk into a room and all eyes will focus on him. It's always been that way."
Roger Mody was born and raised in Washington, to parents who immigrated from India. Roger's father, a freelance photographer, died when Roger was 12, leaving behind large medical bills. His mother took on three jobs. Roger lied about his age and got work washing dishes in a restaurant and delivering the Washington Post.
After his father's death, the Redskins were a constant in Roger's life, a sort of an escape. One of Mody's most cherished possessions is a photograph–taken by his dad–of seven-year-old Roger sitting on the lap of Chris Hanburger, one of the great Skins linebackers.
Mody put his name on the waiting list for season tickets when he was 11. He finally got them last season, 22 years later. By then he had the means to lease a luxury box—and to start what he calls "a nice little shrine to the Redskins" in his basement. In a burgundy-carpeted rec room, he has autographed jerseys from Sonny Jurgensen, Art Monk, and Joe Theismann, autographed footballs from all three Super Bowl teams, and signed portraits of Gus Frerotte and Sonny Jurgensen.
The kid who watched the Redskins all those years from afar now gets invited to functions where he hangs out with players.
"When I'm around some of the players I'll have my little boy with me and I'll get his photograph with those guys," Mody says, "because I know how much it means to me now, and I hope it means as much to him when he's older."
Money has enabled Mody to acquire other luxuries, including a suite at the MCI Center and a red '97 Ferrari. He had a mini mansion built in Fairfax County, with a separate condo for his mom.
Mody also takes joy in contributing to the kinds of charities that helped him in his childhood. He gives time and money to the YMCA, to a boys' home run by Youth for Tomorrow, and to the Volunteer Emergency Families for Children program, which helps abused, runaway, and other at-risk children.
"Some of the materials around me may have improved," Mody says, "but I'd like to think I haven't changed as a person."
Signal recently signed a lease increasing its office space to 70,000 square feet—more than half the building; with that came the right to put the Signal name on the building.
When the neon sign was mounted and the day came to turn it on, Mody reserved a table across the way, at Grevey's Restaurant and Sports Bar. He gathered friends and colleagues, passed out cigars, and waited."It was something he's been waiting for for ten years," says friend Dominic Orfitelli. "Fifteen minutes before the sign was lit, he was paged and found out that his daughter had broken her arm. So he had to leave before the sign was lit. The funny part is, he laughed and shrugged it off. There was only one thing in the world that would make him leave that function, and it was his family."
Michael Saylor: Thinking Big
"I'll tell you what inspires me," Michael Saylor says. He reaches for one of the many history books in his office, this one on the Roman Empire, and flips to a photograph of a stone bridge. "The Bridge of Alcantara," he says. "This bridge was built in the first century AD by C. Julius Lacer. The inscription is: 'This bridge will last forever through the ages.'
"At the time, people laughed at that inscription, but Julius Lacer knew this thing would last for all time. It was incredibly well built. It has lasted for 60 generations."
Generations from now, Michael Saylor wants people to marvel at the bridge he's building on the information highway.
Saylor, who turns 33 this month, is the founder and chief executive of MicroStrategy, a Vienna firm whose software allows companies to analyze massive amounts of data.
MicroStrategy, which is planning to go public sometime in the near future, counts among its clients MCI, Merck, AT&T, Giant Food, Hallmark, Xerox, American Express, and Levi-Strauss.
Using MicroStrategy's "decision support" software, Victoria's Secret crunched its sales figures and discovered, for example, that size-32 bras are 20 times more popular in New York than in most of the retailer's other locations. So Victoria's Secret shipped more size-32 bras to the Big Apple, and sales increased by 40 percent, according to spokesman Marc Reifeis.
McDonald's uses the software to analyze every product sold in every restaurant every day, allowing it to instantly measure the impact of an ad campaign.
"Everybody's always wanted to do this, but to do it well requires that you collect 100 million to a billion pieces of information," Saylor says. "Until '93 it was prohibitively expensive to collect that data."
When advances in technology made it less costly, Saylor's firm was there, providing tools to analyze these databases. That alone was big, but Saylor is thinking bigger. He intends to leave his mark not on the marketplace but on history.
The son of an Air Force sergeant, Michael Saylor grew up on military bases around the world before his family settled in Dayton, Ohio. A high-school valedictorian–he scored 1540 out of a possible 1600 on the Scholastic Aptitude Test–Saylor went to MIT on an Air Force scholarship, dual-majoring in aeronautics/astronautics and humanities. He planned to be a pilot and an astronaut.
Sanju Bansal, a cofounder of Micro-Strategy and a friend from MIT, recalls how hard Saylor has always worked. "I remember when the rest of our fraternity was partying around him, he'd sit and read," Bansal says. "When he's focused on something, he pretty much shuts out the rest of the world."
Hard work wasn't enough; fate intervened. For a while it looked like plain bad luck.
While at MIT, Saylor had joined the Air Force ROTC and learned to fly jets. In his senior year, a routine physical detected a heart murmur. Grounded for good, he ended up in the reserves.
Saylor needed a job and went to work for a software start-up. As luck would have it, that firm quickly dissolved.
"I was broke and in debt and psychologically a bit confused," Saylor recalls.
He then landed a job with DuPont. DuPont wanted a computer simulation that would predict the profitability of investing $1 billion in a chemical refinery. Saylor spent months writing the program, fed in the numbers, and reported back: The investment was not a good idea.
DuPont managers, ready to spend the money, were not satisfied. They sent him back to rewrite the program, factoring in global currency fluctuations. The results were the same, so he was sent back again. And again. Eighteen months later, Saylor had learned a lot about databases.
In 1989, DuPont asked Saylor to build a "war game" that could predict business trends. He agreed to do it, but as an independent contractor–he had decided to start his own company. He was 24 years old. DuPont paid him $250,000 for the war game and gave him office space and contacts.
He finally had control of his life.
"There are many paths to happiness but few maps," he says. "If you had given me what I wanted at any point of my life, I wouldn't have got what I have now. There are some things where fate has a hand."
Michael Saylor is a serious man. His inspirations are Winston Churchill, Julius Caesar, and Gandhi. In his spare time he reads books like Decline and Fall of the Roman Empire, plays classical piano, and enjoys spirited debates.
Not that he has much free time. His Vienna townhouse remained unfurnished for two-and-a-half years after he moved in—he made do with a bed, a milk crate turned upside down with a lamp on top, a piano, and his books. Finally his mom took him shopping, buying 50 pieces of furniture in a week.
"I live essentially as a middle-class engineer, in a townhouse with a mortgage and one car, a black Lexus," says Saylor, who is single. "I have about $10,000 or $20,000 in cash. I pay myself a modest salary. If any one of my salesmen makes their quota, they make more money than me. I've invested every dime back into the company."
Saylor is passionate when talking about his company. Last January, during a new-employee orientation session, Saylor's remarks went on for eight hours—he took no breaks and used no notes.
"Mike gets a little excited about the company," says Sanju Bansal, laughing. "Those people came out at 2 in the morning a bit dazed. But Mike can go two, three days with little food and an hour of sleep."
What's next for Micro-Strategy, which has grown 100 percent annually in both revenue and employees and last year earned $50 million?
One idea is what Saylor calls Query Tone—as in dial tone, but for calling up answers to any question, any time, using a computer. Want to find a resort in Jamaica that costs less than $150 a night and has a guest-return rate of more than 50 percent? Type in a query. Who are the top five heart surgeons in Washington? Again, type it in.
"It's no more difficult to ask, 'What percentage of people live through open-heart surgery in this hospital?' than it is for you to ask, 'How many Snickers bars get sold through that store?' " Saylor explains.
Saylor is betting that the marketplace will force institutions and businesses to make their databases public—if hospital A puts the information online and starts attracting patients, other hospitals may have to follow.
There are a lot of "ifs" in Query Tone, but Saylor knows that the Romans laughed at C. Julius Lacer, the bridge-builder.
"I want MicroStrategy to become a great institution," Saylor says. "Any great institution—the Roman Catholic Church, the Boy Scouts—has at its core a mission that's timeless, ethical, and imperative.
"We're the most technically advanced nation on earth, but we have a 99-percent ignorance ratio because we don't have access to these databases. Our mission is to purge ignorance. "
Raul Fernandez: Staying Focused
By 1991, Raul Fernandez had saved enough money for a down payment on a house. Instead, the 25-year-old used the cash to start a company.
"I figured I was young enough, and single, and if I lost it all I could always get back to that point again," he says. "So I bet it all."
It was a good bet. Fernandez, now 31, is CEO of Proxicom, a hot high-tech company in Reston. Proxicom designs Internet sites, extranets (networks accessible to a company's employees and select outsiders), and intranets (employees only).
Proxicom's Web sites are stylish and fun–its L'eggs Pantyhose site won the first Clio awarded to Web design–but Fernandez recognized early on that Web-site design was limiting. He refocused.
"There are a lot of Web-site development firms," he says, "and they're never going to be able to do mission-critical applications. We were able to make the transition."
When Fernandez says mission critical, he means sites that help corporations operate more efficiently—not sites that just feature nifty graphics but ones that save a company time or money, build stronger client relationships, or help transact business.
For example, Proxicom developed an extranet for Mobil that allows its distributors to place and track orders. Other powerhouse clients include GE, MCI, Visa, American Express, Pepsico, and Citicorp.
Again, Fernandez bet right. While Proxicom charges about $100,000 for Web sites, extranets are priced up to $1.5 million. Since 1994, Proxicom has posted annual revenue gains of more than 100 percent, from $1 million in sales to an estimated $30 million-plus for 1998.
"What you can do on the Web, and what a lot of people don't understand, is you can fundamentally change the way business is being done," says Fernandez, with his trademark brilliant smile.
Raul Fernandez grew up in Silver Spring. His father had immigrated from Cuba; his mother was from Ecuador. Raul was probably the first on his block to have a computer, an Atari 400. He went to St. John's College High School in Northwest DC, then an all-boys military academy.
While getting an undergraduate degree in economics at the University of Maryland, Fernandez worked on Capitol Hill as a legislative assistant to Congressman Jack Kemp.
Besides being a staff expert on Latin and Central American issues, part of Fernandez's job was to write a software program to analyze proposed tax cuts.
"I would run the numbers on children, on the elderly, to see the impact of the new tax law," he recalls. "I took what was a lot of calculations by hand and automated it."
He was on the Hill from 1984 to 1988, then spent a few years at a Bethesda high-tech before founding what is now Proxicom.
"He's very focused. No chitchat or nonsense," says friend Josh Young. "He's got a really good vision of what he wants to do. God knows I don't understand it. Which is why he's going to be the next Steve Jobs and I'm not."
In the hard-sell world of business, Fernandez is low key. He's a listener, not a talker, which is important when your job is to address client needs.
"A lot of guys, they want to tell stories about themselves. Raul listens," says Stephen Vermillion, a friend from the Hill.
Fernandez, who is single, seems to put others first. He's bought himself a few nice things—a Jaguar XK-8, a house in Potomac, a share in a luxury suite at Jack Kent Cooke Stadium. (The limited-liability corporation he helped form to buy the box named "Dallas Sucks.")
But he's probably given more than received. He is endowing a scholarship at his alma mater, St. John's, in the name of a classmate and friend who died of cancer. He often buys gifts at charity auctions for friends and family.
"Raul is very generous," says Josh Young. "He leads with his heart."
Proxicom plans an initial public offering this year. The company, which has more than 200 employees in Reston and New York, may open offices in Chicago, Houston, and Atlanta. All of which keeps Fernandez busy: He works 12 to 15 hours a day; two-thirds of his time is spent on the road.
"When you make this decision to start a business, you put a lot of your personal life on hold," Fernandez says.
"I know that I will not be doing this for 30 years, that I will have an opportunity to live that part of my life.
"The sense of balance for me is being able to give back. This is going to be very rewarding for myself, my investors, my employees. And I would like to eventually start a foundation. But today my whole focus is continuing to grow the business."
Jim Kenefick: No More Toys
In 1995, James Kenefick found himself several million dollars richer. He wondered: How to spend the money?
Kenefick had sold Keystone Corporation, a company he had founded that provided a more efficient infrastructure for hotel telephone networks.
Maybe he should buy a bigger house? Then he looked around at what years of hard work and success had already made possible. He had a Porsche, a Toyota Landcruiser, a house in Reston, a second house in Vermont, a sailboat. There was only one thing he really coveted: time.
"It's nice to have toys, but once you have a few toys, the reality is you really don't have time for all this pomp and circumstance," says Kenefick, now 33. "People are really searching for happiness and not necessarily the collection of toys. When you run a successful company what you don't have is time. Balance of life is much more important than all the fanfare."
After the sale of Keystone, Kenefick took a few months off, using part of it to travel. He pondered his next career move.
"I was too young to not do something else," he says.
After helping some other entrepreneurs to start Epoch Networks–now the largest business-to-business, private Internet-service provider in the country–Kenefick decided to be his own boss again. In June 1996 he founded NET-tel Corporation, a full-service long-distance carrier that sells discounted services to residential users and to small and midsize businesses.
This time around Kenefick vowed to keep his work and personal lives balanced.
"The thing I tried to avoid was getting back on the treadmill. I think as an entrepreneur you should take at least four weeks off a year, one week a quarter," he says, knowing few entrepreneurs do.
In recent years he has recharged by going fishing in Alaska, New Zealand, Costa Rica, and Maine. He's sailed in the Virgin Islands, hiked in Switzerland, skied the best peaks in North America.
"I've gotten to know Jim fairly well, and we always talk about this balance of life," says friend René Kirchfeld. "Before, he was so work-oriented, and now he's sold his first venture; he's realized life is about several baskets. He's gone back to the outdoors to search for that balance."
Kenefick not only skis, fly-fishes, sails, and hikes, he also plays golf, basketball, and tennis. When he wanted to learn to kayak, he asked two guys he had met, Olympians John Trijullio and Steve Trumpower, to teach him. Why do anything halfway?
With his boyish good looks, reddish hair and goatee, and casual attire, he also looks the part of weekend warrior.
"A sport he doesn't do?" jokes Kirchfeld. "Maybe bungee jumping."
Kenefick views business as a game, too—a challenge to be faced and mastered, like kayaking.
There are more than 250 long-distance companies, he says. They range from the giants–AT&T, MCI, Sprint–making a billion or more a year, to firms with revenues of less than $100 million. Kenefick's goal is to grow NET-tel rapidly: In November, he had 30 employees and six offices; by this month he planned to have 150 employees. He expects to have 300 people working in 25 offices by the end of 1998 and revenues of more than $50 million.
"After 30 months, who knows what's going to happen?" he says. "We'll probably get acquired and/or do a public offering. But probably get acquired—that's our intent."
That could mean another big payday, but not just for Kenefick.
"We're giving the people who perform the opportunity to share in the pie," he says. "For me that's really very important because I want a lot of other people to grow as individuals.
"You had families over the past 150 years, whether it was the Hafts or the Grahams, just because of the name, they became extremely powerful," he says. "Today, because of technology, the playing field is different. You have access to a lot more information, and if you move quickly, and you harness that access and you harness that information, and you can provide a service, you can legitimize a great business opportunity."
Kenefick–who was raised in Connecticut by a mother who was a nurse and a dad who was an aeronautical-stress engineerk–nows that success in telecommunications means doing something better than the competition. It's about developing a niche and leveraging it. By all accounts, Jim Kenefick has an intuitive mind that easily wraps around business.
A graduate of Babson College, Kenefick shares his knowledge and experience by serving on a variety of boards, such as the Young Entrepreneurs' Organization, and by guest-lecturing at area colleges.
Kenefick has toyed with the idea of leaving the Washington area, partly because of its obsession with money.
"If I met a woman at McCormick & Schmick's and we were to strike up a conversation, it would be, 'Hi. What do you do? Where do you live? What kind of car do you drive? And by the way, what's your name?' " says Kenefick, who is single. "I like to say I'm a sales rep for a telecom company."
"It's about me," he explains. It's not about what I have. Because what I have is going to come and go. People who are quote, unquote successful, who have sold a company, gone through an IPO, whatever, say, 'Geez, I don't have to worry about my rent, I don't have to worry about my car payment, but you know what I really have to worry about—what makes me happy.' And that's what was important all along."
You Could Strike it Rich, Too
When Telco Communications, a discount long-distance carrier in Chantilly, was sold last year to Excel Communications of Dallas, it wasn't just Telco's principals who got rich.
Telco's founder and CEO Donald Burns earned about $111 million in cash and $118 worth of Excel stock, and the windfalls for Burns's partners, Henry Luken III and Thomas Cirrito, were more than $150 million each. But Telco employees further down the chain of command also found a pot of gold. Stock options for some of them were worth millions.
It's the Microsoft model of success: Get into a company on the ground floor, earn stock options, watch the company go public, make millions. Watch the company get sold, get richer still. It's happening more and more to employees of local computing and telecommunications firms.
"It's happening enough that it keeps the dream alive," says Robert Templin, president of the Center for Innovative Technology in Herndon. "It's not without downsides and risks. There are people who give it their all, and could be earning more somewhere else, only to find the company failing. I hear as many of those as the other."
Being part of a start-up usually means long hours. And not all start-ups offer stock options; some owners prefer profit-sharing or bonuses. But being part of a start-up can be exhilarating.
"One of the reasons people sacrifice to be on an entrepreneurial team is everything is horizontal, a team approach, and you're involved in everything," says Dyan Brasington, head of the High Technology Council of Maryland. "It's exciting to feel you're an owner of the company, that you have a stake in it."
It takes a certain type of person, though.
"You have to be a person who can withstand a tremendous amount of change, someone who doesn't need a regimented environment. And you have to have a good sense of humor, above all," says Julie Holdren, president of the software start-up Olympus Group.
What you don't need is a high-tech background. What these firms want are hard workers who learn quickly.
"They're also interested in people with artistic, musical, and liberal-arts backgrounds who are Net-savvy. People who can think with both sides of their brain, not just one," Templin says. "Someone quick, bright, articulate, very flexible. A liberal-arts graduate with a lot of street smarts and proficiency on the Internet is perfect."
How do you find hot companies that are hiring?
Rule No. 1 is you do your looking on the World Wide Web," says Templin. "If you're not adept at locating these companies and their job opportunities on the Net, they don't want you. The second recruiting tool is by word of mouth. They often will create bounties for employees to bring in new talent. You will rarely see them at career fairs or with traditional postings in the paper."
Web sites with good job postings include netstartinc.com, monsterboard.com, mdhitech.org, and nea.com.
Don't underestimate word of mouth.
"You know what I'd tell a young kid?" says April Young of Potomac KnowledgeWay Project. "Hang out in Reston. It's ground zero at the moment. Listen to people around the bar at Clyde's, at South of the Border. I've overheard interesting conversations at bars in Ballston, too, and at Clyde's in Tysons."
Young also suggests plugging into a netpreneur group such as Internet Society, New Media Society, and the MIT Enterprise Forum. Most meet regularly; Potomac KnowledgeWay Project's netpreneur.org site has a calendar of some of these events.
There's no guarantee that a start-up will hit it big. Often companies that make a fortune come out of nowhere.
The firms we've profiled are some of the region's hottest, and good bets. Many are hiring—and most have yet to go public. We asked local experts to pick other up-and-comers that may turn out to be the next Telco or America Online.
These companies generally have Web sites where you can learn more about them.
Julie Holdren likes the chances of three other Web ventures: Clara Vista Corp. and HCL James Martin, both in Fairfax, and Women's Connection On-Line in McLean.
Dyan Brasington would keep her eye on Maryland biotechs HT Medical in Rockville, Sensors for Medicine and Science in Germantown, and Guilford Pharmaceuticals in Baltimore. She also suggests telecommunications start-up Telogy Networks in Germantown and software maker Visual Networks in Rockville.
Other high-tech firms to watch: NetStart in Reston, PathNet in Georgetown, pragmaSYSTEMS in Fairfax, Reliable Integration Services in Dunn Loring, Manugistics in Rockville, Versatility in Fairfax, Net Capital in DC, and LeapFrog Solutions in Oakton.
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