Bob Metcalfe is the Professor of Innovation, Murchison Fellow of Free Enterprise at the University of Texas at Austin.
He has taught an undergraduate course on entrepreneurship called Longhorn Startup for the past two years along with Joshua Baer and Entrepreneur in Residence Ben Dyer.
Metcalfe was also inducted into the Internet Hall of Fame this past summer for inventing Ethernet, a local area networking technology that lets computers communicate with one another. Metcalfe also co-founded 3Com and served as a publisher and pundit at InfoWorld. He worked as a full time venture capitalist for a decade as a partner at Polaris Ventures. He has also climbed Mt. Kilimanjaro. His wife runs ultra marathons. His children both just qualified to run the Boston Marathon, which they have run previously. And Metcalfe completed his first triathlon last year.
In this interview, Metcalfe recounts how he tried to license ARCnet, a local area network protocol similar to Ethernet, from San Antonio-based Datapoint, one of the first local area networking computer companies. Datapoint wouldn’t license ARCnet.
For 10 years, everyone told Metcalfe that the IBM Token Ring, a local area network protocol that also competed with Ethernet, would become the standard. He persevered and continued to promote Ethernet, which did ultimately become the standard.
Metcalfe started 3Com with $27,000 from a real estate settlement. He even lent $3,000 to one of his partners so he could invest it in the company and then take a salary and pay Metcalfe back $300 a month for 10 months.
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Longhorn Startup Lab started out two years ago as a way to jump start undergraduate entrepreneurs at the University of Texas at Austin.
The program run by Bob Metcalfe, UT professor of innovation, and Joshua Baer, serial entrepreneur and co-founder of Capital Factory, has graduated four classes so far. Ben Dyer, entrepreneur in residence at UT, officially joined the class this semester, but he has been helping out since its inception.
During the semester, undergraduate students create business plans, assemble teams and launch startup companies. They work with a group of seasoned veteran entrepreneurs who volunteer as mentors. Some even land financing at the end of the program from angel investors or venture capitalists. Many of the student-run companies are still operating today including Lynx Laboratories, which created 3-D imaging software, Clay.io, a platform for HTML5 games and Burpy.com, a grocery delivery service.
The fifth class, featuring 14 undergraduate startups, showcase their ventures at Longhorn Startup Lab Demo Day on December 5th. Each team will give a six minute pitch.
And this Demo Day will have two all-star entrepreneur speakers. Mark Cuban, founder of Broadcast.com and Dallas Mavericks owner and Cotter Cunningham, founder of RetailMeNot, the world’s largest online coupon and deal marketplace, will give keynote addresses at the event.
Baer officially announced the speakers on a Facebook post Sunday evening.
Metcalfe also announced the speakers on Twitter.
Cunningham opens, 14 Longhorn Startups pitch, then I get to interview, moderate your Q&A with Mark Cuban. https://t.co/H6Qlpe33Go
— Bob Metcalfe (@BobMetcalfe) October 28, 2013
Previous speakers have included Metcalfe, Baer, James Truchard, who co-founded National Instruments in 1976 while a graduate student at UT and Rony Kahan, co-founder of Indeed.com.
The event is open to the public and already hundreds of people have signed up to attend.
Disclosure: Burpy.com is an advertiser with SiliconHillsNews.com
Startup Grind San Antonio features an interview with Bob Metcalfe Tuesday at Geekdom in downtown San Antonio.
Metcalfe has had five careers so far and currently serves as professor of innovation at the University of Texas at Austin.
The Internet Society also inducted Bob Metcalfe, inventor of Ethernet, and Robert Taylor, an alumnus of the University of Texas and the first project manager of the ARPAnet, into its Internet Hall of Fame on August 3rd.
The Internet Hall of Fame, established in 2012, recognizes trailblazers who have contributed significantly to the creation and expansion of the Internet.
Other inductees have included Vinton Cerf, Mitchell Baker and Al Gore.
Metcalfe and Taylor were both named Pioneers, for their contributions to the Internet’s early design and development.
“Metcalfe and Taylor also worked together at Xerox PARC from 1972-1975, when Metcalfe created the Ethernet,” according to the University of Texas. “Both have received the National Medal of Technology (Taylor in 1999; Metcalfe in 2003) and have been named museum fellows by the Computer History Museum (Metcalfe in 2008; Taylor in 2013), among many other awards and recognitions.”
Congratulations! Thanks! to Dave Boggs, Butler Lampson, Chuck Thacker on #Ethernet ‘s 39th birthday, today.
— Bob Metcalfe (@BobMetcalfe) May 22, 2012
In 1973, there were no personal computers, says Bob Metcalfe, co-inventor of Ethernet.
But 39 years ago today, Metcalfe and David Boggs, Chuck Thacker and Butler Lampson at Xerox set out to build a network for them. The idea for Ethernet first appeared in print in a memo that Metcalfe wrote on May 22, 1973.
They borrowed the word – Ethernet – from physics and the term: luminiferous aether – “meaning light-bearing aether” and describing “a medium for the propagation of light.”
In 1979, Metcalfe co-founded 3Com Corp. to build Ethernet products.
And in 1981, 3Com shipped the first adapter for personal computers when IBM invented its desktop PC at its Boca Raton campus in Florida.
Today, Ethernet has evolved so much that what people refer to as Ethernet has little resemblance to the technology developed 39 years ago, Metcalfe said.
In this video, Metcalfe discusses Ethernet’s past briefly and he focuses on the future of the technology. It’s worth watching.
Today, Metcalfe serves as professor of innovation at the University of Texas at Austin.
Photo courtesy of 1 Semester Startup
That’s what the co-founder, known as Dr. T, president and CEO of National Instruments, said last week during an interview with Bob Metcalfe, University of Texas professor of innovation and coinventor of Ethernet and cofounder of 3Com.
Unlike some of today’s technology billionaires by the name of Bill, Michael and Mark, both Truchard and Metcalfe finished college and obtained PhDs before becoming entrepreneurs.
Metcalfe interviewed Truchard at 1 Semester Startup Demo Day last Thursday evening in the Lady Bird Johnson auditorium at the LBJ Library and Museum. Metcalfe said Truchard played a huge role in convincing him to move to Austin from Boston more than a year ago.
Metcalfe quizzed Truchard on his background. He was born and raised in Austin County. Neither of his parents had a college degree. He received his bachelors and masters degrees in physics and a PhD in electrical engineering from UT. And in 1976, he cofounded National Instruments, in his garage in Austin with Bill Nowlin and Jeff Kodosky. The company makes test equipment and software including LabVIEW, a graphical development program. The company just reported revenue of $262 million for the first quarter of 2012, up 10 percent from a year ago and a profit of $18.6 million. It had revenue of more than $1 billion in 2011.
“I was always determined to be successful, I never thought of any other option,” Truchard said.
Truchard didn’t have a business plan when he started National Instruments.
“We just started working,” he said.
They also never sought out venture capital. Instead, they secured a $10,000 bank loan and they ran the company by bootstrapping operations.
Truchard also read hundreds of books on entrepreneurs including Crossing the Chasm and Thriving on Chaos. He also consulted with the IC2 Institute at UT.
“Keep as much of your capital to yourself as possible.” Truchard advised the crowd of student entrepreneurs. He also told them to make sure they have a good idea and to find as many mentors as possible. And great technology is at the base of innovation.
And nothing beats dumb luck, he said. “Don’t exclude it.”
Truchard took National Instruments public in 1995 to offer liquidity to its employees, not because they needed to raise money.
The company culture was born when National Instruments started, Truchard said. He tries to make the company a fun place to work and focuses on cultivating a leadership culture as the company grows. The company regularly makes it on Forbes’ best places to work lists.
In response to a question from a student about how he communicates the company vision to 6,200 employees.
“Well, I’m very repetitive,” Truchard said.
To share his ideas, Truchard has used 1,500 slides throughout the years in presentations to employees. His employees took all of those slides, shrunk them and then they made a portrait of him out them and presented to him as a gift.
All of the entrepreneurs presenting at the University of Texas’ 1 Semester Startup Spring Demo Day Thursday night appeared polished and professional.
The 10 company teams had solid ideas and at least one, PhotoWhoa is already turning a profit.
Josh Baer, one of the instructors and founder of Capital Factory and with UT’s Department of Computer Science, said he’s already recruiting for the next class and is looking for more mentors and motivated students.
The class teaches entrepreneurs how to write a business plan, market their products, network with other business professionals and pitch their ideas to potential investors. They also must write one single page paper a week along with two ten page papers. Baer along with Bob Metcalfe, professor of innovation in the University of Texas Cockrell School of Engineering and Johnny Butler of the IC2 Institute and the McCombs School of Business, also tells them to look out for their health.
“Doing a startup is not about staying up all night and eating bad food,” Baer said.
No one has failed the 1 Semester Startup class yet, but a couple of students dropped out, said Metcalfe. He doesn’t’ have a favorite company, because “I’m not allowed to have such things.”
He likes the smaller size of the class, but if they received an overwhelming number of applications from good companies they might expand it, he said.
For the Spring, 1 Semester Startup got dedicated space for its companies at Longhorn Camp, a 30,000 square foot building. It housed about 25 companies altogether. The others are from student entrepreneurs not enrolled in the class. But the space is going away at the end of the semester so 1 Semester Startup is looking for a new home.
“We failed to create the critical mass I was looking for,” Metcalfe said. He’s a general partner with Polaris Venture Partners in Boston. Polaris runs four incubators around the world. Whenever he visits them they are seething with energy and ideas and people running around, he said. The difference is they are all out of school and they dedicate most of their time to their startups. At UT, students have other courses and social lives, Metcalfe said. The kind of physical interactions and esprit de corps that exists in outside incubators is tough to replicate in a campus environment, he said.
Overall, UT has made a big commitment to fostering startups by students, said Thor Lund, student government president at UT-Austin.
Lund and Wills Brown, student government vice president, plan to write legislation creating a student run accelerator on campus aimed at helping students start and fund businesses. They spoke briefly to the crowd of about 300 people attending the Demo Day event at the LBJ Library and Museum.
“The student accelerator is aimed at getting students connected and empowered,” said Lund.
Nick Spiller, a junior and chairman of the UT entrepreneurship council, runs UThinkTank at the Longhorn Camp along with three other founders.
“What we really want to do next year is to reinvent Longhorn Camp to be for the students by the students,” Spiller said.
Eventually he has hopes to create a Big 12 Startup Team to collaborate with other universities.
“We want to create jobs, create wealth and clear up our national debt,” Spiller said. “We need to get the cash flowing in the right direction.”
The latest crop of entrepreneurs at UT showed Thursday night that they are serious about business. All of the companies planned to continue operating beyond the end of class. All of them are bootstrapped with some friends and family money backing them.
Photos courtesy of 1 Semester Startup
Its primary revenue stream comes from a fee on all transactions and secondary streams come from a coupon portal for restaurants, leads to financial institutions and app purchases for advanced features. The company is offering a special to people who pre-register for the AgreeOn app by Friday midnight, they will waive the transaction fees. The app is in beta and is expected to launch within two months.
Next up, Simeon Duong introduced beDJ in which “You are the DJ.”Duong and four other engineering friends didn’t like the music in a coffee shop in which they were studying. They decided to do something about it. They wrote code. They created an app that lets people control the music in a coffee shop, nightclub, store and other places.
“We’re using music as an icebreaker to promote conversation on a micro specific level,” Duong said.
The beDJ app just launched Thursday in three app stores. Austin is the test market to understand how the app functions in the ecosystem, Duong said. Then, the app will expand to New York and Los Angeles.
“We’re developing a communications platform that has never been done before,” Duong said.
A veteran from the first 1 Semester Startup course, Power Smart Labs aims to reduce electrical costs for data center operators. The company’s software works to maximize efficiency at the data center by turning off servers when they are not needed.
Its competition is Vmware, MiserWare, HP, Dell and Google. But Power Smart Labs targets a data center with
Photo courtesy of 1 Semester Startup
“Put your checkbooks down, because we’re not looking for an investment today,” said Michael May. The company will most likely seek a $50,000 investment in August, May said.
Another veteran of the first class, Predictable Data seeks to fix and filter data for companies.
“People aren’t predictable but your data can be,” Smurdon said.
Every day, 230,000 people move, change jobs, get married or die, he said. “Businesses are never done cleaning their data,” Smurdon said.
Poor quality data costs U.S. business more than $600 billion each year, Smurdon said. For example, Overstock.com had errors in 25 percent of its order forms, which cost the companies millions.
Predictable Data has built a software program that is scalable and secure and relies on proprietary algorithms to clean data, Smurdon said. Its aiming its product at small and medium sized businesses.
David Isquick and Dan Driscoll, founders of ReQwip along with Jay Combs, Matt Wedgwood and Saaket Dubey.
A recent New York Times article showed that parents spend about $500 for sports gear every year just for little league baseball, he said
ReQwip’s peer to peer marketplace first plans to sell bikes and accessories and then move into team sports. The company makes money by taking 10 percent on each sale or rental.
ReQwip has created a mobile app. Dealing with a locally based trusted source is less risky than selling on Craigslist or eBay, Driscoll said.
“We are ReQwip and we are changing the game by making it easy to buy, sell and rent sports gear affordably” Driscoll said.
In addition to Driscoll, the team behind ReQwip includes Jay Combs, an MBA student, David Isquick, MBA student, Matt Wedgwood and Saaket Dubey. The team members met each other last Fall during a 3 Day Startup weekend. They came up with the idea and then decided to apply to the class, Combs said.
“The class was inspirational,” Isquick said. Mentors like Carol Thompson, Ben Dyer, Ryan Pitylak and others helped the company tackle business problems and deal with technical issues, he said.
“The mentors were phenomenal,” Isquick said. “They gave us lots of key insights.”
Matthew Amme, Agee Springer and Pranav Desai, founders of Solspot Systems
Solspot Systems is building a prototype at the JJ Pickle Research campus and expects to have it finished soon.
“We would like to be in production by the beginning of next year,” Springer said.
Stache Studios is also a repeat in the class.
“We make games like gentlemen” is their tag line. The company is making a game, Teknedia for PC, Mac and Linux users and another one for the IOS mobile platform.
Two of the companies zeroed in on the college market for their products.
Nowoncampus.com is an online events directory and aggregator that pulls information from Facebook to compile a weekly list of events at a college campus. The idea is to let students see the events they have not been invited to in case they might want to attend.
Personab.ly is an online registry of who like who, said Jimoh Ovbiagele, cofounder. The product is aimed at making dating simple and easy through online matchmaking. Its competition is DatemySchool.com, which has 100,000 users. It expects to release a beta version in the fall. The site is free. It makes it revenue by charging food and entertainment sites to advertise in its recommendation site for dates.
The site is even on Angellist.
Eric Yang and Kevin Tang, founders of PhotoWhoa
The market for photography gear was $68.4 billion in 2011, Yang said. PhotoWhoa sells photography software and other products at a discount on its site.
After five months, PhotoWhoa has 15,000 subscribers and all of them are photographers, Yang said.
This month, PhotoWhoa will have revenue of $40,000, Yang said.
“That’s a small drop in the bucket,” Yang said. “The photography industry is growing at 8 percent a year.”
And PhotoWhoa wants to change the way photography products are sold, Yang said.
Getting the first 1,000 customers was the hardest, Yang said. But the class helped accelerate their business, he said. They learned from mentors how to maximize their use of Google Ad words to reduce their customer acquisition costs from $5 to 75 cents. They also learned how to build a network.
“Through Josh Baer we’ve been able to connect with people to do deals with,” Yang said.
PhotoWhoa is completely bootstrapped. Each founder put in $250 to startup the company. Five months later, PhotoWhoa is profitable and growing, Yang said.
Damon Clinkscales, an Austin software developer, volunteers with the 1 Semester Startup class as a mentor. He generally spends two to four hours a week helping Personab.ly, the company he helped out.
“I guess you could put as much time into it as you choose to,” Clinkscales said. He also served as a mentor for the first 1 Semester Startup Class last fall. This class is smaller and more focused, Clinkscales said. They chose companies that were beyond the idea phase, he said.
“It is really awesome that they are getting this experience now,” Clinkscales said. “Just imagine them in a few years.”
UT's Spring 1 Semester Startup
View more PowerPoint from Laura Lorek
If you don’t have plans tonight, snag a ticket to 1 Semester Startup Demo Day.
It starts with drinks and appetizers at 5 p.m. and then the program kicks off an hour later with Bob Metcalfe, one of three instructors in the program and professor of innovation in the University of Texas Cockrell School of Engineering, interviewing James Truchard, president and CEO of National Instruments.
The event runs until 9 p.m. and is open to the public. It takes place at the LBJ Auditorium at the LBJ Museum and Library at 2313 Red River St.
This is the second 1 Semester Startup Demo Day. We covered the first one last fall. The Spring class is half the size of the last one. It has just 35 students and 10 companies, compared to 75 students and 20 companies for the first class. And in fact, four of the 10 student startups were in that last class. They include Solspot Systems, PowerSmart Labs, Predictable Data and Stache Studios. The other startups include AgreeOn, BeDJ, Stick.it/Breadcrumbs, NowOnCampus, Photowhoa and ReQwip. 1 Semester Startup has full descriptions of the companies on its site.
The startups will each give short pitches to investors and the rest of the audience. In addition to Metcalfe, 1 Semester Startups instructors include Joshua Baer, founder of Capital Factory and with the Department of Computer Science and Johnny Butler of the IC2 Institute and the McCombs School of Business.
For the Spring Semester, the 10 1 Semester Startup companies resided in the Longhorn Startup Camp along with 27 other student startups.
In 1984, Michael Dell started his computer company in a dorm room at the University of Texas and now he is one of the world’s richest men and runs Austin’s largest company.
Since then, hundreds of entrepreneurs have launched ventures while at the university or upon graduating.
To put the spotlight on entrepreneurship, a group of student leaders at the University of Texas have planned the first entrepreneurship week, from March 5 to 9, to foster further collaboration and networking among student entrepreneurs and community innovators.
Fifteen university organizations and institutions organized the event.
“We want to encourage students to network, share their ideas and help each other succeed,” Nick Spiller, co-founder and President of uThinkTank, a student startup that connects other student entrepreneurs to critical resources, said in a news statement.
Events include a stop on the SXSW Startup Crawl, a talk from Pike Powers, a big promoter of Austin’s technology industry, Bob Metcalfe, co-inventor of the Ethernet, founder of 3Com and professor of innovation at the UT, a talk from Kevin Koym, founder of Tech Ranch Austin.
For a schedule of events and to RSVP, visit UT Entrepreneurship Week. You can also follow announcements on Twitter at @TheUThinkTank and @nick_spiller.
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Bob Metcalfe, photo courtesy of the University of Texas
Metcalfe, who moved to Austin in January, serves as professor of electrical engineering and director of innovation at the University of Texas at Austin.
This fall, Metcalfe, who also serves as general partner of Polaris Venture Partners, created a new class, One Semester Startup, along with Joshua Baer, entrepreneur and computer science specialist and John Butler, director of H.K. Entrepreneurship. On Thursday, 75 students pitched 20 startups.
But one of the most interesting ones came from Metcalfe, who halfway through the event, shared his 1980 pitch for 3Com, which sold Ethernet products. Just a few days earlier, Metcalfe had been in Japan receiving an award for his groundbreaking work at 3Com, according to this story in The Daily Texan, the UT newspaper.
A powerpoint slide form One Semester Startup
“3Com’s business plan is in my hand,” Metcalfe said. “It’s about 25 pages of text that was typed on an IBM Selectric typewriter.”
3Com stood for computers, communications and compatibility.
“Three standards and compatibility was our goal” Metcalfe said. “These three standards I’m about to mention were not standards at the time For example, UNIX (operating system), TCP-IP (networking technology) that was quite new. It would take 10 more years for it to be installed on the Internet.”
The last new standard they sought to establish was Ethernet, local area networking technology that allowed computer systems to share information.
“We were going to implement those three standards and sell them to other companies,” Metcalfe said.
But 3Com’s first product was a book. Metcalfe wrote a book outlining his vision for networked computers. Then he got a directory of venture capitalists in the Silicon Valley area and called them one by one and invited them to 3Com’s offices to listen to his pitch about the company. He talked to more than 100 venture capitalists during a two-year period, he said.
“They hated the pitch you are now hearing,” Metcalfe said. “But before I let them out, we got them to buy a copy of the book at $250 a copy. I would sell a book every single time.”
3Com’s second product was the implementation of TCP-IP networking technology on a 10 megabit per second modem. The company made Ethernet adapters for mini-computers and the Fax machines.
“Ethernet had been developed for PCs of which there weren’t any,” Metcalfe said.
The first Ethernet adapter cost $5,000, Metcalfe said.
“We anticipated there would be some price erosion,” Metcalfe said. “Ethernet adapters are now virtually free.”
Sun Microsystem was just getting started and bought 3Com’s multi-bus Ethernet.
“Very soon we were selling hundreds every month – hundreds of them,” Metcalfe said.
Then 3Com created an Ethernet product designed for a new computer called the IBM personal computer.
“Very soon we were shipping millions per month,” Metcalfe said. “This is what they call being in the vortex of the tornado and I recommend it highly.”
3Com decided to sell its product directly to consumers. But that was a really bad idea because the company didn’t have a way to reach those consumers.
“The next day we lucked out and they invented computer stores,” Metcalfe said. “We put our product in computer stores and the business took off.”
3Com had $5.7 billion in revenue in 1999.
“But everyone had $5.7 billion in revenue in 1999,” Metcalfe said.
Last year, 3Com became part of Hewlett Packard.
An audience member asked Metcalfe what would he do differently if he could change anything.
“Not one single thing” Metcalfe said. “It’s very dangerous to mess with the past. I would not change one thing about that outcome. It has all worked out perfectly and let’s not mess with it.”