The Portland Tribune
March 20, 2002

Dot-comeback? Survivors prove there’s life in e-commerce yet

Authored by Andy Giegerich

The home electronics merchant’s speedy Web site, comprehensive product descriptions and customer service skills pleased choosy consumers. But beneath a surface calm, the company was paddling ferociously to keep from sinking.

When it went under last month, it left a theater-TV-sized question: If 800.com couldn’t make it, what dot-coms can? Some believe that Portland, with its surviving residue of dot-coms, has a healthy collection of candidates for a post-shakeout “dot-comeback.” “I think there is a good chance they’ll come back,” said Marshall Runkel, who follows technology issues for City Commissioner Erik Sten. Runkel said he agrees with Intel Capital President Les Vadasz, who compares e-commerce to the railroad industry in the 1870s and 1880s. “It developed through a lot of boom and bust cycles,” Runkel said. “Right now, we’re obviously in a bust cycle, but when we straighten out some of the infrastructure — more customers need broadband, for instance — it’ll be back.”

Until then, 800.com offers a cautionary tale from e-commerce’s first go-round. So do Djangos.com, which recently filed for Chapter 11 bankruptcy, and electronic e-tailer Lucy, which shed its “dot” and its “com” to concentrate on store-based sales.

Here, however, is a list of companies that could be the drivers in any dot-comeback — if one revs up — based on interviews with an array of tech industry executives, investors and advocates. The 15-company Starve Ups collective, a nonprofit group devoted to developing nascent businesses, includes both old and new dot-coms.

For starters, viaLanguage (www.vialanguage.com), launched just before the dot-com boom, is currently profitable as a result of beneficial contracts with such customers as DaimlerChrysler AG ($4 million-plus) and Nike Inc. The company provides English language editing and translation services. “They successfully branded and repositioned themselves just after the (dot-com) fallout,” said John Friess, group coordinator for the Starve Ups program.

Starve Ups also includes wired.MD (www.wired.md), a 2-year-old outfit that supplies physicians with waiting-room educational materials. Using a doctor-supplied laptop, patients can use wired.MD’s programs to identify their ailment based on their symptoms. From there, users can uncover possible diagnoses and accompanying treatment suggestions. With Oregon Health & Science University leading its customer list, the company is said to be nearly profitable. After raising $900,000 in venture capital, its entering its second round of VC financing. “They’re an awesome company,” said Paul Anthony, chief executive officer of fellow Starve Up enterprise Rumblefish, a Web-based music licensing firm. “There’s a fine balance of young and old workers over there that produce a lot of good results.”

There’s also Keen Mobility LLC (www.keenmobility.com), which markets crutches, canes and walkers that incorporate such ergonomically friendly features as shock absorbers and pivoting bases. The definitive post-bubble company — it launched just seven months ago — it uses a Web-based distribution system to move its products. “They shipped their first product to Guam a month ago,” Friess said. “They’ve revolutionized the ambulatory aid market. Now people say ‘Hey, cool crutches,’ as opposed to saying, ‘What happened to you?’ ”

A fourth Starve Ups outfit, CoolerEmail (www.cooleremail.com), offers sporty e-mail services for mass communications senders. The company offers slick and easily navigable mailing formats, as well as list and message tracking services. “Their system allows anyone to create an e-zine in no time because it lays it out for them,” said Barb Anderman, special events and programs manager for the Software Association of Oregon. Her association uses it and so does the Oregon Entrepreneurs Forum, she said. “It’s getting forwarded to more people all the time,” she said.

Cenquest (www.cenquest.com) is on the comeback list, even though it never went away. The online education company offers its tailored services to such companies as Microsoft Corp. and IBM Corp. “Even though they’ve never used the dot-com suffix, they’re a good example of a dot-com that’ll make it,” offered Scott Gibson, co-founder of Sequent Computer Systems Inc. and a Cenquest investor.

The same goes for SnapNames (www.snapnames.com), according to the software association’s president, Larry Wade. The company helps users lock up desired Web domain names, as well as protect names they already own. The company enjoyed a fruitful January, collecting $3.325 million in funding and inking a lucrative deal with VeriSign Global Registry to develop a domain name wait-listing service

Wade said he also thinks that RuleSpace Inc. (www.rulespace.com) — an Internet infrastructure vendor that helps companies determine whether their Web sites are indeed useful — holds promise. It pioneered content-filtering technology based on applied neural network technology, Wade explained.

Familiar names Finally, the list includes several familiar Northwest names known best for their success as brick-and-mortar retailers rather than their Web savvy. Among them are Norm Thompson (www.normthompson.com), whose Web sales have gone like gangbusters, and Kirkland, Wash.-based Costco (www.costco.com), which sports a masterfully utilitarian site. Then there’s Powell’s (www.powells.com), which has grown into one of the country’s leading online booksellers. “Powells has successfully used the Web to extend its reach,” said Jim Craven, government affairs manager for the Oregon Council of the American Electronics Association.