Tampa Bay Region

Venture City Ventures

While two true technology incubators are beginning to take form in the bay area - a private-sector incubator at the University of Tampa, tentatively named Tech Village, was due to begin operating in late summer while another at the University of South Florida may open its doors a bit later - the husband-and-wife team of Brenda J. Dohring and Jeff Hicks are celebrating a year of giving high-tech entrepreneurs a lift into the business world through their Venture City (www.venturecitytampa.com) operation in downtown Tampa.

Venture City's loft-style space in a brick building at 518 North Tampa Street in early August had 13 tenant companies, two of them virtual, that is, their owners showing up from time to time to occupy space temporarily, Dohring says. While not a true incubator, the experiment has succeeded "better than we could have hoped," she says. "I believe it's a shining example of what branding and some value-added can do. "We do some of the good things that an incubator does," Dohring says, "providing space for collaboration between companies and entrepreneurs so they can learn from each other. And we do a lot of value-added, meaning we use our network to try to introduce them to the right people, have informal lunches where CEOs get together and talk, help the startups find computer help, a CPA, attorneys ... they love for us to make the introductions."

Venture City isn't a charity, but does give startups a break. Would-be tenants must pass an initial interview, which means possessing a plausible business model as well as a personality that will fit the concept. "We don't charge security deposits, and companies now must sign a six-months minimum lease. We've had three companies fold, and if that's the case, we usually try to work out a 30-day window." Client firms run from one-person ventures to companies with eight to 10 employees. Tenants include firms such as Simple Solutions Inc. (www.simplesolutionsinc.com), which produces applicant tracking software for recruiting companies to Global Information Services Inc. (www.globalinfosecurity.com), which sells Internet security firewall software internationally, especially in Russia and in Ireland.

"We're small enough and different enough to get something done," Dohring says. "But perhaps the most valuable thing is that they are here in a downtown location and can talk to each other."

Dohring knows how it works. She is CEO of RealWired! Inc., a company she began in 1996 to provide a nationally shared database of commercial properties. Now she's raising funds for Tech Village and sees "the incubators as having a positive impact on the community. A lot of companies will be more aware of the bay area because of them. A lot won't fit the incubator profile but could benefit from being at an ancillary location." Perhaps at Venture City?

Bridging the 'Digital Divide'
A dozen networked computers at the Zonta Boys & Girls Club in Tampa and a similar number at the Northside Club in St. Petersburg may help bridge the so-called "digital divide," giving "kids access to technology ... and ... the advantage of the Internet to learn," says Tony DeBenedetto, CEO of Tampa's Tribridge Consulting Inc. and chair of the Tampa Bay Technology Forum's project to provide the needed hardware and software.

With Microsoft's Gulf States District donating up to $30,000 worth of software to the prototype computer labs and various TBTF member companies providing the expertise to wire the units and devise a curriculum, the clubs will provide "technology access to children who would otherwise not have it," says Andy Zupsic, general manager of the Microsoft Gulf States District.

Stacey Sulikowski of St. Petersburg's Netwise Technology Inc., who put together a Web site for the program (www.netwise.tech/boysandgirls/) and is helping design the curriculum, says tech company volunteers are still needed to help out. "These kids are so happy. They didn't have computer access before." For more information, E-mail Linda D'Olympio at ld@m4ebiz.com.

CP Ships Sails to Tampa
A subsidiary of Canadian corporate giant Canadian Pacific Limited, CP Ships, is to consolidate part of its global information systems activities from California and England to a new office at netp@ark.tampabay, the business park that was carved out of what had been the East Lake Square Mall in Tampa. Tampa Bay area systems architects, programmers, systems developers and analysts, among others pink-slipped by ailing dot-coms earlier this year may be glad that up to 150 new employees will be required.

CP Ships, a 115-year-old firm that began as a cargo specialist bringing tea from Asia to Vancouver, British Columbia, after its parent company had finished the Canadian transcontinental railway, has been in an expansion mode for the past several years. In 1999 it formed Americana Ships as a 50/50 joint venture with Transportaci—n Maritima Mexicana to manage Americas-based container shipping services. Lykes Lines and TMM Lines, with their combined fleet of 80 ships that transport about two million containers every year, operate under its management. Americana has had an IT team working in Tampa for several years. CP Ships posted an operating income of $108 million for the first half of 2001.

Online Buyers in Training?
Two-thirds of teenagers from 13 to 17 are using the Web to research products before going offline to actually buy them, according to research published by Jupiter Media Metrix. The study said 89 percent of such teens have never made an online purchase. While this may be disappointing to online retailers trying to hook teens right now, perhaps the habit of surfing for products may pay off in the long run, suggests Jupiter digital commerce analyst Jared Blank. He noted that age group doesn't have credit cards. "When they [do], they will be very ready to purchase," he says. The online teen population in the United States grew 11 percent to about nine million from April 2000 to April 2001, the research shows, while the adult Internet user population grew 18 percent and as of April stood at 71 million.

Publix Expects To Deliver
Webvan Group Inc. may have spilled its groceries all over the streets of San Francisco, but PublixDirect, the Lakeland-based supermarket company's online grocery business, is expected to begin delivering in September in Broward County. Delivery fee will be $8, minimum order will be $50 and deliveries will be made until 9 p.m., according to the Miami Herald.

In late July, a fleet of PublixDirect vans painted in the company's traditional shades of green, was parked near Lakeland Linder Regional Airport, ready to roll. Publix has chosen a grocery warehouse model as opposed to the "store-pick" model used by others. Warehouses have been built in its three first-round target markets, Atlanta, Orlando and in Broward County.

Of online grocers, the largest left standing is Chicago-based Peapod.com, which serves New England and Chicago. Its owner, giant Dutch food provider Koninklijke Ahold (Royal Ahold) NV, says it will be profitable by 2003. Boise, Idaho-based Albertson's Inc. has a high-tech prototype working in Seattle, and Pleasanton, Calif.-based Safeway Inc. is due to open its GroceryWorks.com delivery service somewhere (the company won't say; the speculation is the San Francisco area abandoned by Webvan).

Webvan, based in Foster City, Calif., and once considered the leader among online grocers, shut down in July, firing 2,000 workers as it stopped service for 750,000 active customers in seven markets that included Los Angeles, San Diego, San Francisco and Orange County, California, as well as Seattle, Chicago and Portland, Ore. The company had lost more than $800,000.

Analysts have suggested that the company, in November 1999 valued at $8 billion, was done in not by the online grocer concept but by its profligate spending, even after it had swallowed a more frugal competitor, San Diego's HomeGrocer.com just over a year ago. In a lesson sure to be written up in New Economy history lessons, Webvan had $650 million on hand after the HomeGrocer.com merger. In a culture where money was no object, after just nine months, "most of it was gone," writes TheStandard.com's analyst Miguel Helft, who also suggests that Webvan's ambitions, conceived in the era of "lofty dreams and gargantuan miscalculations," played a role, too.

Helft notes that when he was asked early on whether his concept could be a billion-dollar enterprise, founder Louis Borders (of Borders Books and Music Inc.) answered, according to Randall Storss's book eBoys: "Naw, it's going to be $10 billion. Or zero. He was right."

Flaming Out in Style
Stories of dot-coms that vanished during the past two years are filled with examples of how excessive spending was at least one of the factors that did them in. So imagine the lost world of the former 150 employees of little Agillion Inc. of Austin, a software firm that won a partnership with IBM and indulged in 2000 Super Bowl advertising. High-salaried employees got trips to Mexican resorts, they worked in a luxurious office building with cool curved walls and exercised in a state-of-the-art fitness center.

In a July auction, about 1,500 showed up at the clearance sale of laptops, desktops, phones, furniture, treadmills, overstuffed bean bag chairs and a punching bag. Among the objects: A coffee station with 13 portals for gourmet brews ranging from Arabica to Sidano Gold.

Florida High Tech Corridor

Florida Digital Network Stays Focused

At Orlando-based Florida Digital Network Inc. (www.floridadigital.net) the four founders are still smiling, still adding customers, still playing for keeps in a telecom industry universe that would be unrecognizable to anyone who has been away for the past two years.

This is the year the phones went dead at innumerable firms created in the wake of the Telecommunications Act of 1996. Bluestar Network, Teligent Inc., WinStar Communications Inc., Rhythms NetConnections Inc., among others, had their plugs pulled or quietly disappeared into bankruptcy court. In August, even Santa Clara, Calif.-based Covad Communications Group Inc. was trying to hold on in the wake of analysts' dire predictions and a stock price delisted by Nasdaq and moved to the OTCBB because it hovered around the half dollar mark. There was no more pixie dust, as Fortune magazine put it, left for the CLECs (competitive local exchange carriers).

James DaBramo, a founder and vice president of sales, says FDN never needed any magic, and that's why the firm in June secured $130 million in new financing, including a third-round $50 million equity investment. "We have over 15,000 customers and we're now growing at 1,500 to 2,000 a month," he says. "We have more than 50,000 lines installed and are adding roughly 4,000 to 5,000 a month, plus we're getting about $40,000 a month in Internet traffic." Some of the recent growth has come from customers abandoned by the failures.

Founded in 1998 by four men who had been trained in an unbundled network element strategy - that is, use the copper lines from existing ILECs (incumbent local exchange carriers) rather than spend millions installing new fiber where it's not necessary. Focused tightly on Florida, the nation's fourth largest telecom market (after California, New York and Texas) and with a high percentage of its calls directed within the state, FDN concentrates on providing small and mid-sized businesses with packaged telephone services, including Internet access. It's been working, even in a tight economy.

"There are still thousands of businesses looking for increased value, and that's what this company offers, all your phone service for less than you paid before," DaBramo says.

Other key strategies, says DaBramo, include an aggressive sales force that makes in-person cold calls ("we have a sales force that presses the flesh; 90 percent of them are out in the street"); and a proprietary automated ordering system (built by company president Matthew Blocha) that switches new customers quickly to FDN's service. "That Rapid Integrated Ordering system," DaBramo says, "will electronically pull your records from the ILEC and create the order for loops for your location using the ILEC's data. Otherwise, you're using faxes."

FDN also leases dark fiber or high-capacity fiber from other providers, and blows its own through ILEC conduit, a smart building strategy, DaBramo says. "I think the industry right now is paying for the sins of a few bad, poorly run organizations. The players left, including us, are hunkering down, doing our daily business. Real companies doing real business. I think the outlook is bright for us, but we're focused on executing our business plan. We're not going to light up the rest of the U.S. in the next few months. We'll continue to grow in a controlled fashion."

Harris Corp. Sees Black
Melbourne's Harris Corp., the largest high-tech company based in Central Florida, is doing well in tough times, reporting an increase in sales of 13.3 percent to $1.96 billion for the fiscal year ended June 29. Profits rose 23 percent to $100.6 million during the same period, the company reported.

Harris, a telecommunications giant that employs about 5,000 in Melbourne and Palm Bay and another 5,500 around the world, seems to be weathering the telecom industry woes better than many other players, analysts agree. The firm's broadcast and defense segments were credited with boosting performance. Broadcast technology sales rose 50 percent in the final quarter, compared to a year ago, and profit in government communications went up 19 percent, the company says. Those dramatic increases offset a drop of 40 percent in revenue from its telecom network support business and a weak 2-percent gain from its microwave communications operations.

-David J. Wilson

Copyright ©  Maddux Report L.C. 2001