MILCOM creates tech companies from the ground up, choosing the technology and investing time, expertise and money.
Perhaps Florida's best-kept technology secret is a small Orlando company called Military Commercial Technologies Inc., or MILCOM. As its name suggests, MILCOM focuses on commercializing cutting-edge technologies developed by U.S. government labs and military contractors such as Lockheed Martin, ITT and Honeywell. "Last year we looked at well over 100 technologies," says MILCOM Chairman and CEO Mike Buffa. "From that we chose five or six."
MILCOM is neither a venture capital firm nor a typical technology incubator, although it aids companies in many of the same ways. It invests startup capital and helps with the basics, such as legal support, marketing and accounting. What sets MILCOM apart is that it actually creates the company from the ground up -- vetting the technology, recruiting a management team and, most of all, investing its own time, expertise and money in the venture.
Since its founding in January 1997, MILCOM has created five companies (see box). Four of the five are based in Orlando, including the newest, Interpretive Information Systems LLC (IIS), a joint venture between MILCOM and a Russian software development and computer leasing company. Buffa says the value of the five companies is $300 million to $500 million and will likely exceed $1 billion by the end of the year. Together, the five companies have raised more than $100 million in outside venture capital.
MILCOM was started in Tampa by a handful of high-net-worth investors who had made a bundle as original investors in Inktomi, the high-flying California-based software company fueled by military technology developed at the University of California at Berkeley. Today MILCOM has investors in Orlando and the Southeast U.S. as well as institutional investments from BancBoston and others.
Buffa says that MILCOM, which has 12 employees and a team of 20 consultants, will launch four to five new companies this year and five to 10 companies in 2001. Some of the technologies on the docket include optical communication, wireless access and business-to-business digital distribution.
To keep up with growth, MILCOM plans to double its staff and set up a Silicon Valley office by the end of the year. An office in the Northeast U.S., likely near Boston, is slated to open either this year or next.
MILCOM's portfolio of companies all have one thing in common: They are designed to either go public or be acquired by a big technology company within three to five years of launch. Asked whether MILCOM itself might go public, Buffa says, "Absolutely." He adds, "It's reasonable to think we could go public in the next 12 to 24 months."
Domain Names: Moldova and Medicine
Fort Lauderdale Internet entrepreneur John Harris' quest to develop a new domain name registration system for doctors took him halfway around the world -- to the former Soviet republic of Moldova. Four years ago, Harris, 60, discovered that Moldova, which borders Ukraine and Romania, held the rights to domain names ending in .md. After two years of negotiations, he convinced Moldovan officials to sign a 25-year-contract allowing him to market the .md designation in return for a $20 payment to Moldova for every name registered. "They couldn't understand why this lunatic was willing to pay them to use .md," says Harris.
Canadian-born Harris set up the Domain Name Trust (www.register.md) and began marketing the .md moniker 16 months ago. He raked in $2.5 million in revenues last year by registering 10,000 names at $299 a pop, a fee that includes web hosting. For 2000, he projects 100,000 registrations, which will bring in $22 million to $30 million.
Who's buying the names? One purchaser is Coral Gables sports medicine physician Harlan Selesnick, who signed up for www.selesnick.md and www.jockdoc.md addresses. It's not just doctors and other healthcare professionals, though. Companies that have signed up for the .md designation include pharmaceutical giant Glaxo Wellcome (www.glaxo-wellcome.md), Visa credit card (www.visa.md), and even automaker Chrysler/Mercedes (www.daimlerchrysler.md). "It has a huge application," says Harris.
Household Products: Orange-Peel Insecticide
Rich or poor, urban or rural, the battle against bugs is a constant in Florida. To combat the pests, Floridians spray and spray, often wondering what the toxins are doing to people and pets.
Enter Bob Rod, a 79-year-old Boynton Beach entrepreneur who has developed Bugs 'R' Done, a food-grade insecticide made out of an extract of orange peels. "It's a natural product," says Rod.
The active ingredient in Bugs 'R' Done is d-Limonene, an oil extracted from citrus peel and used in paint, cosmetics and household cleaners. Rod says that his formulation of d-Limonene in a mineral oil base softens the wax coating that protects insects, which releases pressure inside the bug causing it to "explode."
Bugs 'R' Done's label, approved by the U.S. Environmental Protection Agency, says the product can be used around food, children and pets anywhere in homes, schools, restaurants and around allergy sufferers. So far, Rod hasn't been successful in getting Publix, Winn-Dixie or other large retailers to carry the product. He sells primarily through natural foods stores and his website (www.safeinsecticide.com), where the cost is $9.95 for a 16-ounce bottle.
Philanthropy: Giving Without Pain
Opening a charitable solicitation often produces a pang of guilt. It's a good cause and you want to give. Somehow, though, there never seems to be money left over after the bills are paid.
Now, Miami lawyer Michael Greenberg has found a painless way for Internet surfers to give to non-profits such as the ACLU of Florida, the Baylor University Alumni Association and United Way chapters in Miami-Dade, Broward County and New York City. The best part is it doesn't cost individual givers a dime.
Greenberg, son of Greenberg Traurig law firm founder Mel Greenberg, started an Internet portal called USite.net in 1998. USite (www.usite.net) partners with organizations such as universities and charitable groups, offering them a percentage of the revenue that USite earns on e-commerce sales.
Here's how it is designed to work: USite signs up an organization such as the Baylor University Alumni Association. When Baylor alumni enter the web address of their alumni association, they are automatically connected through the USite portal.
The site includes Baylor news, national news, weather, ads and a shopping center. Once an alumni registers, every time he or she makes a purchase from one of 300 vendors, including Amazon.com and the Disney Store, both USite and Baylor get a cut, which comes out of the vendor's price.
Non-profit organizations and their members don't pay to participate. USite makes its money from banner ads, e-commerce commissions and sponsorships from corporations that run more prominent ads. More important, USite hopes its relationships with non-profits will help it attract a pool of loyal site visitors without spending millions on marketing.
Tech Word of the Month: FIREWALL
Picture a firewall as a giant 'Keep Out' sign at the entrance to a computer network. A firewall, the first line of defense against hackers, is a system designed to stop an outsider from gaining access to privileged information on a company's private network, such as an intranet. Hardware, software or a combination of the two can build a firewall.
Until recently, primarily large companies used firewalls. But many small businesses and individuals have become more susceptible to hackers due to the increasing availability of "always-on" Internet service via cable modems and digital subscriber lines (DSL). Now, there are inexpensive software solutions such as Network ICE's BlackICE Defender and Sybergen's SyShield and SyGate. And Internet service providers are starting to offer anti-hacking firewalls. Also internal firewalls are now being built into cable and DSL modems.