Judy Estrin's life resembles an entrepreneur's fairy tale. In 1981, at age 26, she founds her first company -- which goes public four years later. After selling that, she starts a second venture, which does an IPO in 1992. Then Estrin moves on to startup No. 3: Launched in 1995, it appeals to Cisco Systems (CSCO), which buys it in 1998 for $84 million in stock. And Cisco makes Estrin its chief technology officer.
The bursting of the Internet bubble threatened to ruin this Cinderella story, but it didn't daunt Estrin. After leaving Cisco in 2000, she found funding for the company that becomes the mother ship for three spinoffs. She got the money, she explains, because she is a conservative entrepreneur: "I'd rather take a calculated risk than shoot for the moon with a 10% chance of success."
"NO-MAN'S LAND." A good example is Packet Design LLC, the company Estrin founded post-Cisco with her husband and business partner, Bill Carrico. Rather than setting up Packet Design to develop the next big thing in technology, Estrin and Carrico designed it as an incubator that would deliver subtle but significant innovations in networking, then create outfits to commercialize those. By November, 2001, server king Sun Microsystems (SUNW) had given Packet Design millions to fund the incubator. Other investors added millions more, even as the capital markets froze over.
Packet Design's target customers are chief information officers who need to cut costs. "During the bubble, operational efficiency was considered boring," Estrin says. "Everybody wanted new, cool technologies and didn't worry about what it took to make things actually work. But in this environment, operational efficiency is really important." Notes Packet Design advisory board member Vinton Cerf, an Internet pioneer: "[Judy] has an unusual talent for recognizing a good business idea and turning it into something."
For instance, one spinoff, called Packet Design Inc., ships a special add-on, priced at $35,000 to $75,000, that sniffs out inefficiencies on a network. It detects if one building in California, for instance, is routing data via Miami to another building in California -- and reroutes the data through a more direct route, so to speed the transfer and save money. Another recent spinoff, Precision I/O, is developing a hardware-software combo that will speed up communication between servers and their network. That should let companies buy cheaper servers or upgrade less often, says Laurie Yoler, Precision's vice-president of marketing and business development. "It's not a glamorous area," she says cheerfully. "It falls in a no-man's land."
DISPASSIONATE. Even so, it's one market that Estrin believes will grow in the near future, unlike much of tech. Her edge, if she succeeds, will be uniqueness: "It's a very difficult technology to develop," says Wes Raffel, a general partner with venture-capital firm Advanced Technology Ventures, an investor in Packet Design Inc. Raffel has known Estrin since his days at networking gearmaker 3Com (COMS), where he negotiated resale contracts with Bridge Communications, the router company that was Estrin's first business. During dealmaking, "Estrin was a win-win sort of person," Raffel says. "We talked about how we both needed to walk away from the table smiling." 3Com acquired Bridge in 1987.
One of Estrin's strengths is her ability to view her brainchildren dispassionately. Earlier this year, for instance, under pressure from investors, her incubator stopped developing new products in order to concentrate on its three existing ventures, including Vernier Networks, which makes security and management systems for Wi-Fi networks. "I'm a big believer in being realistic about the market and adapting," Estrin says.
She's also known for picking the best ways to monetize her ventures. For instance, she decided that her second startup, Network Computing Devices, should go public. But she sold her 1995 venture, Precept, to Cisco, which she felt could best market Precept's technology for sending audio and video to large numbers of PCs on a network. That technology is now widely used in distance learning, but Estrin has no regrets about leaving Cisco, which she found moved more slowly than the startup pace she prefers.
NO GLASS CEILING. In fact, Estrin may be the most pragmatic member of a family of high achievers, says Cerf, who is friends with Estrin's father, Gerald, and has known Judy since she was 10. One of her sisters is a doctor, the other a professor of computer science at the University of California, Los Angeles (UCLA). Gerald Estrin is a world-renowned computer engineer. And his wife, Thelma, is a pioneer in biomedical computing and "a very assertive woman, very forthright," says Cerf. "Judy couldn't have asked for a better role model."
Estrin claims she has never had to fight the glass ceiling -- because, she says, she has built her own houses. And she has done so with hard work as well as ingenuity. While getting her master's degree in electrical engineering from Stanford University, Estrin often had to arrive at the lab at 3 a.m. to work on Internet protocols with a team based in London, says Cerf, who oversaw that project. And Estrin and other co-founders spent Bridge's first Christmas installing routers at UCLA, the company's first client, says Eric Benhamou, a Bridge co-founder who is now chairman of 3Com.
Carrico, Estrin, and Benhamou met at Zilog (ZILG.OB), a San Jose maker of semiconductors, where they worked on the Ethernet, now the most widely used architecture for networking PCs. When the three founded Bridge several years later, Estrin also helped find funding and customers. "She has a strong, charismatic presence, and she's good at overcoming objections in a diplomatic way," Benhamou says. Estrin's people skills may account for much of her success. "She's able to get along with almost anybody," says Cerf. "And she has gained the respect of very smart people who work for her." For instance, colleagues say that her thorough understanding of technology helps Estrin unruffle the feathers of prickly software engineers -- a key to success in product development.
HALL OF FAMER. When she isn't running her businesses day-to-day (husband Carrico is chief strategist), Estrin serves on the boards of Disney (DIS), Federal Express (FDX), and Sun Microsystems. She also says she leaves herself time to spend with her husband and their teenage son -- and to think. "I don't believe in being completely frenetic," she says. "I may go home at 5 p.m., interact for a while, then get back into work mode, perhaps while working out on the treadmill."
In 2002, Estrin was one of three women inducted into the Women in Technology International Hall of Fame in Encino, Calif. But she remains humble, as befits a cautious entrepreneur. "Some people put her on a pedestal, but she puts her pants on the same way everyone else does," says Raffel. It's afterward that she begins to stand out. By Olga Kharif in Portland, Ore.