When Selina Y. Lo was growing up in Hong Kong, she loved to play the Chinese game of mah-jongg with her family. But the stakes were high in the Lo household: Losers had their hands slapped 20 times by the winners. Now, as the vice-president for marketing at networking equipment maker Alteon WebSystems Inc. in San Jose, Calif., Lo traces her business philosophy to those childhood games."I learned from mah-jongg that you can't leave your opponents with even a breath because they may be able to revive," Lo says. "You have to take them out entirely."
Strong stuff, but apt for the trench warfare the 40-year-old Lo has fought since helping launch Alteon in 1996. A 15-year veteran of the networking business, she has honed her in-your-face style at three startups, earning a reputation as one of the smartest, toughest managers in the industry. Lo's temper and intensity are legendary: During a product meeting last fall, recalls Alteon software engineer John Taylor, she sprang up yelling from her chair, banged her fist on the table, and shoved a finger in his face after Taylor said he couldn't add a feature she had asked for. Taylor quickly relented. "I've left a few dead bodies behind me," Lo crows.
"DRIVE-BY SHOOTINGS." So far, her aggressiveness has served Alteon nicely. Just two years after shipping its first system, a specialized computer that manages Internet traffic, the company is on track to sell $100 million worth of gear this year, up from $42 million in 1999, predicts brokerage Thomas Weisel Partners. Alteon should turn a profit by the fourth quarter. An initial public offering last September raised $76 million, giving the company a current market capitalization of about $3.5 billion. Analysts give Lo much of the credit. "Alteon's biggest strength is Selina," says Peter Christy, vice-president of consultancy Internet Research Group.
Lo's gift is an uncanny ability to spot new markets, says Alteon CEO Dominic P. Orr. "She's as good as it gets at sniffing around the market and knowing where things are going," he says. But Lo is no seat-of-the-pants visionary: She spends 80% of her time meeting with customers to discern their needs.
Often that leads to hasty changes. Lo has reworked Alteon's product roadmap so many times on the fly-- promising customers whatever she thinks they want--that Orr once threatened to take away her copy of Microsoft's PowerPoint software. She's notorious for returning from trips to bark out new marching orders to Alteon's engineering team, episodes known around Alteon as "drive-by shootings." Says Orr, an affable diplomat who must often mop up Lo's messes: "In the end, we're glad she pushes the envelope, because she gets results."
That's a fact not lost on rivals, some of whom "really detest" Lo, says her best friend and former boss Karen Mashima, now an executive at Lucent Technologies Inc. Competitors accuse Lo of stretching the truth with customers, promising features that don't yet exist, and even borrowing their ideas. Alteon, for instance, claimed to be first to market with an advanced feature last November, though rival F5 Networks Inc. had delivered the same capability months earlier. And competitors say Lo leaked news of Alteon's next model a year early to "freeze" the market for comparable gear. Lo denies any dishonesty but isn't apologetic about her hardball tactics. "I'm ruthless in using every bullet I have to gain a competitive advantage," she says.
Lo has been out to win from the start. After a five-year stint at Hewlett-Packard Co., her first job out of college, she joined startup Network Equipment Technologies in 1990 and helped create the first product that combined traditional telephone circuits with data networking--a precursor to today's Internet gear. Three years later, she co-founded Centillion Networks, where she helped invent a revolutionary data switch. Centillion was bought by Bay Networks--now part of Nortel Networks Corp.--for $142 million in 1995, and Lo pocketed several million dollars.
But her biggest breakthrough came at Alteon. The company was founded in mid-1996 by four engineers who dreamed up a way to speed the flow of data in and out of computer servers used for corporate and Internet applications. Orr, a top Bay Networks executive, signed on soon after as CEO. His first call was to Lo, tracking her down in Thailand, where she was getting daily massages on the beach after quitting Bay.
Competition was fierce from day one. That's when Lo's strong market sense kicked in. Customers such as Yahoo! and Concentric Network Corp. were hungry for a way to shift Net traffic from one server to another depending on the workload. Lo's solution: "Web switches" that handled traffic up to ten times more efficiently and lifted Alteon above the crowd. "She made lemonade out of lemons," says Tench Coxe, managing director of venture capital firm Sutter Hill Ventures and an Alteon director. Internet Research Group figures the market for such gear will be $425 million this year and nearly $1 billion by 2002. That opportunity has attracted a host of competitors such as ArrowPoint Communications, Foundry Networks, and the gorilla of the business, Cisco Systems.
HUGE PRESSURE. Can Lo keep Alteon ahead of the pack? The company is under huge pressure to deliver its next product, the Alteon 700 Series, which is six months late owing to problems with a custom-designed chip. That's one big reason Wall Street's love affair with Alteon has cooled: After more than tripling since its IPO, Alteon's shares are 35% off their Dec. 7 peak.
The job of getting the 700 out the door and into the marketplace falls squarely on Lo. Unlike many marketing execs, she enjoys strong respect from Alteon's engineers and customers. "She can speak the language of both sides," says Will H. Layton, vice-president of Ticketmaster-Online CitySearch Inc. and an Alteon user. Lo meets weekly with Alteon's technical team and likes to slip out the back door of the office to sneak cigarettes with the engineers. Even her screaming fits don't faze them. "She knows what she's talking about," says Wayne Hathaway, one of Alteon's founders.
And she's not all hard edge either. Friends and co-workers say Lo is fiercely loyal. She likes to reward engineers for completing tough jobs with bottles of expensive wine and weekend trips to Napa Valley. She has given away small amounts of Alteon shares from her own 2.6% stake--now worth about $93 million--to thank colleagues and friends for extra effort or support. And although she has never married, Lo is devoted to her family, especially her two nephews. "I'm not an entirely ruthless person," she says with a laugh.
Lo also has a spiritual side, a quality she attributes to her Asian background. A believer in the Chinese system of feng shui, which equates design with harmony, Lo insisted that Alteon's front door be moved from the corner of the building where it faced a hospital, a bad omen. Then she demanded that two trees in front of the new entrance be cut down because they were spiritual obstacles.
Adhering to the principles of feng shui, however, hasn't muted Lo's wild streak. At Alteon's user conference last April, she jumped up on a table, called for a toast, and then pounded tequila shots with the assembled crowd of techies. "These young male customers just worship her," says Taylor. Lo also gives in frequently to her love for fashion, snapping up Chanel and Alberta Ferretti suits and Prada bags during frequent trips to New York. And she's mad for pricey Ferragamo and Manolo Blahnik shoes, having recently built a rack in her house that holds 100 pairs--still just half her collection.
Such trappings are a long way from Lo's modest upbringing in Kowloon, where her father owned a sewing factory. Lo, the oldest of three, was a rebel even as a youth, spending money without her father's permission and luring other girls at her Catholic school to sneak off campus during lunch. She rejected her English name, Agnes, and chose Selina after she read the name in a novel. At 17, she left Hong Kong to attend college in the U.S., in part because she was fascinated with American TV shows like The Young and the Restless and The Six Million Dollar Man.
A liberal arts student at first, Lo discovered her aptitude for computers in a summer job and switched majors. Good move. At Hewlett-Packard, "she had a phenomenal comprehension of business and technology," says Mashima, who recruited Lo into her unit after the two became aerobics buddies.
Lo will need both skills as Alteon enters a make-or-break period. The delay launching the 700 Series clearly has her fired up again and also a little worried. "I must have left a tree somewhere that needs to be cut down," she says. When she finds that poor tree, it's a sure bet it will fall fast and hard.