Good Technologies: Taking Aim at Tech Greats

The startup's add-on music player for the Handspring Visor is giving it a big boost. Now it wants to take on the likes of Sony and Intel

By Cliff Edwards

Daniel Shader likes to live on the edge -- the cutting edge. No wonder the former executive jumped at the chance to become CEO of Good Technology Inc., a tiny Silicon Valley startup that makes products and services for personal digital assistants. When Good co-founder David Whorton made the offer in December, Shader didn't need any time to mull it over. "I told him maybe he should sleep on it, because I'm taking the job," Shader recalls, chuckling. "Where's the fun of it if you can't look death in the eye, where everyday seems like a new form of terror?"

Of course, Good's prospects may not be as frightening as some companies'. It apparently has solid financial backing from venture-capital heavyweights like Kleiner Perkins Caufield & Byers and Benchmark Capital. And the company's first device already has been music to the ears of Handspring Inc. execs, who last year launched a new personal digital assistant called the Visor, which can morph into a music player, cell phone, and more. The $249 SoundsGood digital music player fits snugly into a plug-and-play slot on the back of the Visor. Smaller than a business card and weighing less than an ounce, the player is selling well -- 3,000 units in just three months on the market, according to PC Data.

The showing is even more impressive given the potential drawbacks of the device: It costs as much as most Visor models and can download and play only an hour's worth of digitally encoded music. Stand-alone units from industry leader SonicBlue Inc. and others can hold much more at the same cost, but don't offer the versatility of the Visor. Handspring CEO Donna Dubinsky credits Good and other device makers with helping to boost the company's U.S. market share to 28% from nothing in just a year's time.


  Analysts, meantime, call the decision to add plug-and-play modules like SoundsGood an inspired one. "The Visor is selling extremely well because store clerks can easily explain to people that it can do more than keep your names and addresses, and the Good music module is just as easy for people to understand and use," says PC Data analyst Roger Lanctot.

Good needs the momentum in what's shaping up to be a fiercely competitive market. Handheld makers like Handspring, Compaq, and market-leader Palm are all vying to come up with the killer app. And those are just the big names. Dozens of others are racing for a piece of a mobile-device market estimated by International Data Corp. to exceed $18 billion in revenues by 2004, from less than $3 billion in 2000. Plenty more are making add-ons for the devices. In the digital-music-player market alone, the number of makers jumped last year to about 65 from 5, according to NPD Intelect.

Today, Shader is busy trying to prove that Good can become truly great -- and go head-to-head with tech giants like Sony and Intel, which will soon enter the market with its own MP3 player. Shader's track record suggests his optimism is more than talk. As vice-president for developer relations at Netscape Communications, he boosted the number of outside software developers fivefold. And after America Online Inc. agreed to buy Netscape in late 1998, he moved on to co-found, the first online consumer-to-consumer payment service. Six months after that, he joined Amazon after the online retailer bought Accept in a deal valued at $175 million in stock at the time. He served as general manager of Amazon's Commerce Network before returning to Benchmark Capital briefly late last year for a second stint as entrepreneur-in-residence.


  The trick now is to prove that Good, based in Redwood City, Calif., is no one-hit wonder. Shader says the company is testing its second (as yet undisclosed) product and hints that a service-side business soon could follow. And the company has tripled its staff to about 30 in recent weeks, adding engineers who will be able to create a range of products for handheld devices.

Shader himself has an industrial-engineering degree from the University of California at Berkeley that helps him understand the mechanics of new technologies. But he says he counts on Creative Director Brian Porea, who came up with Good's name, focus groups, and weekly team powwows over pizza to help him develop in his two months on the job "a gut instinct for what the customer really wants." It will take that, and cash, to succeed. Good is wrapping up a second round of funding, a spokeswoman says, in a market that has become notoriously tightfisted with its money. Kleiner Perkins and Benchmark were among those that chipped in an undisclosed amount in 1999, when Whorton and co-founders Jeffrey Mock and Joel Jewitt pitched their concept. Whorton was an associate partner at Kleiner Perkins who came up with the idea of the digital music player. Mock was the technical guy who co-founded Liberate Technologies, which makes software for TV set-top boxes. And Jewitt was director of business development for personal digital assistants at Yahoo! Inc.

Shader says Good can be the next Dell Computer or, providing a range of products and services that will make life easier for mobile-device users. "If we can give people a great user experience, that's going to be central to our success," he says.

But first he has to prove that Good can live up to -- or even surpass -- its name.

Edwards covers technology for BusinessWeek from San Mateo, Calif.

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