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Silicon Alley Meets Silicon Valley

May 4, 1998

SAN FRANCISCO (AP) _ Entrepreneurs need luck, and tonight she’s a lady.

Debbie Halloran wasn’t planning to attend this computer industry conference. She just dropped by the conference hotel to meet a friend for dinner. But Alex Sheshunoff manages to corner her before she can slip away.

Halloran develops national content for the Home Network, a cooperative of cable companies that provides high-speed Internet access in 22 markets. But for local Web content, the members of the cooperative are on their own.

Sheshunoff is president of Studio Now, a small New York City company that makes software for local publishers _ software that can take such newspaper staples as classified ads and entertainment listings from the news pages to the Internet.

Halloran’s market and Sheshunoff’s software might make a good fit.

Twenty-four companies from New York City’s Silicon Alley came to San Francisco last March for the first-ever Alley to Valley Conference. Most of them hoped to make connections with Silicon Valley investors.

Some of the New Yorkers were hoping to find investors who would provide capital in return for a piece of their companies. But that’s not why Sheshunoff came.

Sheshunoff, 24, hails from a Texas investment banking clan that instilled in him the pride of starting and running his own business. He wants as little dilution of that dream as possible.

It’s not investors he seeks. It’s strategic partners _ companies that can take what he has to sell and distribute it from Portland, Maine, to Manteca, Calif. Already, he has licensed his databases to the Newhouse newspapers. And he recently signed a deal with Cablevision so local cable companies with ultrahigh-speed connections _ called broadband _ can offer more and better local information.

``We have the best content,″ Sheshunoff tells Halloran.

``Yeah,″ she says in an I’ve-heard-this-before tone. Every month, she hears at least a dozen pitches just like this one. But she promises to get Sheshunoff a meeting with Dave Bagshaw, senior vice president of Home. Come down to see us, she says, before you leave California.

``He’s quite lucky I was here tonight,″ she says later. ``Otherwise ... ″ she lets the implications dangle. If Sheshunoff had tried to see Bagshaw on his own, he would have got the run-around.

Sheshunoff likes what he is finding in California. As he sees it, it’s a very different business culture from New York’s. On the West Coast, folks aren’t likely to dismiss you, even if your last deal fell through and your investors lost money. Hey, that’s just part of learning how to implement good ideas.

To forgive may be divine, but back East, it’s no substitute for the bottom line. At the Alley to Valley Conference, the talk is less about bottom lines and more about ideas.

Early the next morning, Sheshunoff paces the hotel lobby, cell phone pressed to his right ear. He stands on one foot, then shifts his weight to the other, looking like a gangly adolescent with bushy, blond hair. Celebrity look-alike: James Spader.

One call is to Halloran, to remind her of her promise. ``She remembered exactly who I was,″ he says, pleased he’d made an impression. Another call is to C/NET, an online news service, to set up a meeting.

It is a cross-town drive to C/NET, where its editor, an unsmiling Jai Singh, peers at Sheshunoff with an owlish gaze. Sheshunoff explains one of his products, E-the People, software that makes it easy for citizens to contact local officials or sign petitions.

Singh is uneasy. Why does the software ask for the name, age and e-mail address of those wanting to send messages to local officials? Isn’t that invasive? He worries that Sheshunoff’s company, Studio Now, might sell the personal data to marketers, something Sheshunoff assured him he would never do.

But Singh is impressed, nonetheless, with Sheshunoff.

``He’s got a neat little product in terms of catering to sites and publishers who aren’t Web savvy,″ he said. ``It’s a nice little tool.″

Returning to the hotel before lunch, Sheshunoff runs into Karl Dahlin, director of business development for Ericsson Inc., a company expanding into the high-speed access markets Sheshunoff is aiming for. It is another bit of luck; it would be hard for Sheshunoff to get through to someone as high-ranking as Dahlin by cold-calling.

Sheshunoff makes a quick pitch. Dahlin nods, smiles and accepts a Studio Now packet. He encourages Sheshunoff with six words: ``I think we have a fit.″

``That’s good news,″ Sheshunoff says, beaming.

After lunch, he hails a cab to take him to LookSmart, a Web search engine he had been e-mailing for six months, trying to work out a distribution deal. It’s just three blocks, the cabby says, so Sheshunoff decides to walk.

The cabby was misinformed. Nine blocks later, Sheshunoff’s long legs are still pumping, and time is running short. All around him stand the shiny new buildings of Multimedia Gulch, the high-tech center of San Francisco.

``There’s a very strong ... value placed on the new that we don’t have in New York,″ Sheshunoff says. ``The people here have been developing the Next Big Thing for ... so much longer.″

Straight up 3 p.m., Sheshunoff is right on time, giving him a chance to cool his heels in LookSmart’s lobby and look at two garden turtles in a little bowl.

``That’s T-1 and T-2,″ the receptionist says.

Finally, Tracey Ellery, a vice president, appears, and Sheshunoff once again gets to make his pitch.

That night, in his room, Sheshunoff prepares for his big moment at the conference, the Tuesday morning session when he will stand behind the podium for 15 minutes and pitch not just one person but a roomful of Silicon Valley heavyweights.

The next morning, the podium is there, but where are all the heavyweights? Not counting a handful of curious journalists, only 15 people are scattered about the hotel meeting room.

Sheshunoff plows ahead gamely, trying to impress the small audience not only with his pitch but with his frugality. He spent only $1,000 to furnish his company’s Soho office, he says, and until the Cablevision deal came through, the company health plan consisted of unlimited free Advil.

``It also helps that all of our coding is done by children in Indonesia,″ he says in jest, drawing a few laughs.

When he leaves the podium he looks tired, but more meetings are ahead: First a trip down the peninsula to San Jose for a get-acquainted meeting at Knight Ridder, the country’s second-largest newspaper group. Then to Redwood City, where Halloran wants to see him again.

The freeway drive gets Sheshunoff thinking. Silicon Valley may have a technological head start on New York, but Silicon Alley has a big advantage _ its subways. Sheshunoff and his employees spend hours on the subways, listening to what people are talking about. Valley entrepreneurs, alone in their cars, miss this cross-fertilization of ideas.

Halloran’s company, Home Network, isn’t much like Sheshunoff’s modest office in Soho. The two-story building fills a city block, and inside, the break room has a pool table and a Foosball game.

Together, Sheshunoff and Halloran view an online demo of Sheshunoff’s products. Because Home specializes in high-speed access over cable lines, the demo zips by with incredible speed. Halloran is impressed. ``That’s neat!″ she says. ``That’s fun!″

Again, she promises to get him a meeting with Dave Bagshaw, senior vice president of Home.

A few days later, Sheshunoff is back in his Soho office, and the e-mails from Knight Ridder, LookSmart and Home are flying fast and thick.

``Every single relationship we established in California is progressing smoothly,″ he says. Smoothly, perhaps, but not quickly.

Even in the light-speed business of the Internet, he adds: ″It all just takes time.″

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