By Ben Heskett
Staff Writer, CNET News.com
Nov. 24, 2000, 4:00 a.m. PT
Silicon Valley veteran Judy Estrin has seen it all.
From her roots in the networking industry as a co-founder of Bridge Communications in 1981, Estrin's career has stretched across many of the most significant trends in the high-technology industry. From the growth of small-business networks, to alternate computing devices, to multimedia, Estrin, 46, has along with husband Bill Carrico, 50, pegged opportunities and hot technologies at their earliest stages.
When her last venture, Precept Software, was purchased by industry behemoth Cisco Systems in 1998, that company's chief executive, John Chambers, jokingly said he bought the company as much for Estrin's expertise as for the technology. Now, after a two-year stint as Cisco's chief technology officer, Estrin has returned to her start-up roots, founding a Menlo Park, Calif.-based company called Packet Design--made up of about 20 researchers and developers at the moment. The company expects to make public the first fruits of its work in the first half of next year.
Packet Design started with three ideas but has expanded its plan to incorporate five. The company will turn those technology concepts into actual companies, with their own executive staffs. With that work, plus Estrin's continued presence on the board of directors of Sun Microsystems, Disney and Federal Express, her plate, as usual, seems to be full.
With the telecommunications market in the midst of a huge shake up, Cisco having one of its more challenging years with a depressed stock, and a dot-com depression settling on Silicon Valley, Estrin took some time to tell CNET News.com what she's been up to, where the industry is headed, and how she views Cisco.
CNET News.com: There's been a lot of publicity surrounding a shakeup in the communications industry. What should we make of it?
If you look at the last two years, there were a lot of people moving very, very fast and, again, some of them were making the assumption that the capital markets would always be easy. It has to absorb all this change and while its absorbing it, it may look like complete chaos, and it may emerge from it with a new set of leaders. Some of them will be Old World companies and some of them will be New World companies. I don't think it's the case that just because someone was a leader in the Old World that they can't emerge from this, but I also don't think all of them will.
So what is this shift in your career about, from a high-ranking executive at one of the most successful large companies in the world to the chief executive at a start-up that spins out companies?
One of the problems with looking long term is you're not grounded. We wanted to be somewhere in between. We wanted to focus on some problems with a little bit longer-term view but still be practical and applied.
So the first premise is you don't go public, because being public is what caused that (short-term thinking). And the second thing is we didn't want to get bought. So what we constructed was a company that worked on technology and spun out companies to make products based on that technology. Then those companies can go public and Packet Design employees can benefit and have a return on equity, and those companies can get bought. It kind of allowed us to be a perpetual start-up.
Ideas fueling Packet Design, Cisco's strategy and more
So you're an incubator?
What's an example of an idea?
Are you trying to route information faster? Or in a more sophisticated way?
Of the projects today, some of them are in routing. We have a project in the mobility market. The security area is another place where there's some interesting things going on.
Do you feel comfortable in this environment after working at the Cisco juggernaut?
It's the lone big company that you've worked for.
It wasn't so much big company vs. little company for me as much as going from CEO to being a CTO, which is very much especially at Cisco an "influence" job and not a direct line of business kind of job. I'm used to having a vision, having a passion for that vision, and then going and making that vision happen. One's ability to do that when you're kind of working across (several businesses within a company) is less than when you're building a team and making it happen.
What if a venture capital firm calls and wants you to lead the next hot optical networking start-up?
It's a question of what you're looking to do. At this point in our career, what we're looking to do is build a team that we enjoy interacting with, solve some real problems, and build an environment that we can continue to lead and develop new things. We're not doing it for the hype.
What drives your career in technology?
The whole idea here is to solve some real problems. The analogy I've used with a lot of people is if there's a crack in a wall, you can hire a painter, and the painter will paint over that crack, and if it's structural, it's going to come back in three months. A lot of what's being done on the Internet today is painting over the cracks. In order to fix it, you need a structural engineer who really understands the root cause of the crack. If the engineer is really good he or she will figure out how to fix it without knocking down the wall. That's the analogy I like to think of with Packet Design.
Is Juniper Networks a structural engineer?
Now that you are on the outside looking in, what are the challenges facing Cisco?
Does Cisco's strategy to be all things to all people--or end-to-end, as Cisco chief executive John Chambers likes to call it--still work?
I don't necessarily see a trigger point or shift in the market right now that puts Cisco at a disadvantage, but I do believe that in this end-to-end argument you have to be good enough. It's not an excuse not to have good products.
It sounds like you felt the need to slow down after your time at Cisco.
On a larger scale, does that have implications for Silicon Valley?
It all comes from the fact that the stock market today is momentum driven, not long-term fundamental driven. The same way salesmen follow their comp plan, public companies are driven by what's going on in the stock market. Your job as a company is to do good by your shareholders.
If you have a stock market that is rewarding short-term momentum, you become very short-term focused, and again, there's a lot of positive things about such momentum, but there's some negative implications, specifically from a technology perspective. If you're not laying the foundation correctly on the technology, you can end up in a situation where you have houses built on a poor foundation.
Does this jibe with your philosophy?
And I think that Bill and I, in watching this herd, just said, "You know what? We're going to go do it our way and step out of the way, because we believe this herd will pass, and then there will be a new herd with different criteria."