Legendary Entrepreneur and Author Judy Estrin (Part 4)

SM: You merged with 3Com, which has a completely different dynamic and culture.

JE: The biggest mistake is that we merged with the notion there was going to be an office of the president. Bill Carrico and Bill Krause were sharing the key roles. Bill Carrico was chairman and president and Bill Krause was CEO, or something like that. I don’t remember the exact titles. They were an office of the president. When we decided to merge, we had the notion that Bill Krause was going to retire so it would be a short-term arrangement. It wasn’t, and Bill Krause decided to stay.

Second, we had different strategic views as to where the company was going to go. Bill and I saw the company as a communications company. Bill Krause wanted to turn it into a computer company with PCs and servers. We had this incredible strategic divide. Bill and I knew we could either take it to the board or we could leave, but having that strategic tension was not going to be beneficial for the company. We decided we did not want to have a board fight, so we left.

Eric Benhamou stayed and had the patience to wait it out. When the company was not doing well he presented his renaissance plan which, in essence, was the communications strategy that we all wanted in the first place. He was then able to bring 3Com back.

After we left I got a call from Sandy Lerner. We had never met, so we arranged a meeting. All of our old Bridge customers were going to Cisco, and their sales were going through the roof. In many ways our merger with 3Com, and the consequential mismanagement of the Bridge portion of the business helped give Cisco a growth spurt. There is definitely irony there, especially since I became Cisco’s CTO a few years later.

SM: What did you do when you left Bridge/3Com?

JE: We were going to take six months off, but the day we announced we were leaving we received a call from someone we had worked with when we were at Zilog who asked me to listen to a business plan. This group of five guys came and pitched a business plan that they had worked on for five months. They had a prototype but no money. They were not able to raise money because they did not have a management team. We decided to do it. We jumped right in. Bill was CEO and I was executive VP.

SM: What did that company do?

JE: It was Networking Computing Devices which had one of the first X terminals. Essentially it was thin clients before they were popular. Our first year sales were $13 million. We came out of the shoot very strong.

SM: There was tremendous market demand that quick?

JE: There was tremendous initial market demand. We took the company public, unfortunately the year we did that was the year Windows came out and the price of PCs started dropping. The Unix market started fragmenting. X terminals were sold primarily into the Unix market, and when PCs started taking off the Unix guys could not get together on applications so their market started going down, which impacted the market for terminals.

We took the company public in 1992. Bill and I had been going 100% since 1981. We did not have a single break, and my son was turning four. I had become the CEO the year prior. I knew that I was getting ready to hit a wall. I found a CEO to replace me and we left in 1994. Unfortunately, the CEO I found to replace me was not the right choice and took NCD down the wrong path.

This segment is part 4 in the series : Legendary Entrepreneur and Author Judy Estrin
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