LR Names Private Co. Statesman Finalists Light Reading November 30, 2005

With telecom recovery in the air, private companies are on the rise again, as are the people who run them.

Light Reading editors and Heavy Reading analysts pored through the lists of the best and brightest to pick the finalists for this year's Leading Lights Awards category for Industry Statesman, Private Company.

The Leading Lights Award winners will be announced at an Awards Dinner after The Light Reading Telecom Investment Conference in New York City on December 14.

Here are the finalists, in alphabetical order:

Cliff Duffey
CEO and Founder
Cybera Inc.

Out of Nashville comes a company that might be the model of a successful post-bubble CLEC. Cybera uses leased lines to construct private networks that don't touch the public Internet, providing an extra measure of security. The company has enjoyed growth of 75 percent per year since its founding in 2002, claiming name-brand enterprise customers such as Applebee's International Inc., Krispy Kreme Doughnuts Inc. -- and even some that don't have anything to do with food.

Duffey built similar private networks as CTO of Bluestar Communications, a CLEC acquired by Covad Communications Inc. (Amex: DVW - message board) in 2000. To power up Cybera, Duffey says, the company is mostly funded through individuals and angel investors, including himself. He's raised three rounds of equity funding and three rounds of debt and convertible debt financing, building a business that's won scads of regional awards and earned Duffey recognition as a star entrepreneur.

The thing that most impressed the judges? Cybera, a 50-person outfit, is cashflow positive, says Duffey, meaning it isn't forced to raise money at unfavorable prices. Here's somebody who took the lessons from the bubble and applied it to a new company rooted in fundamentals. He told Light Reading in an interview that he expects the company to go into "expansion mode" in 2006, possibly raising a sizable venture round.

Selena Lo
President and CEO
Ruckus Wireless Inc.

Lo has mellowed out from her former "drive-by shootings" management style, according to a recent Wall Street Journal article, but style points don't count here. Lo gets the Stateswoman call for repositioning Ruckus and giving it an ambitious edge in developing high-speed 802.11 customer-premises boxes for the carrier market. Specifically, Ruckus wants to unwire the broadband home via what it calls a multimedia wireless routing system that provides quality of service for multimedia services such as music and video. (See Ruckus: Causin' a Commotion?)

Lo is the type of person who steps into the the room and takes charge. A star of the telecom bubble when she was VP of marketing at Alteon WebSystems, she has grown into her new role as a CEO, putting a distinct stamp on the company. In recent months, she changed her firm's name from the mild Video54 to the rambunctious Ruckus and focused on selling through service providers, in the process sealing a deal with Hong Kong carrier PCCW Ltd. (NYSE: PCW - message board; Hong Kong: 0008).

Jonathan Reeves
CEO
Mangrove Systems Inc.

A telecom veteran, Reeves drew attention when his 18-month-old startup, Sahara, got sold to Cascade, which eventually melded into Lucent Technologies Inc. (NYSE: LU - message board). His next startup, Sirocco, also lasted 18 months before being bought by Sycamore Networks Inc. (Nasdaq: SCMR - message board) during the bubble. His third brainchild is Mangrove, a company that he helped start in 2002 by putting up some of the seed money himself. Mangrove collected a $20 million venture round during tough times and doubled down with $20 million more this year. (See Reeves Seeds Mangrove Systems and Mangrove Lands $21M Round.)

Mangrove is one of many companies talking up Pseudowires, a set of technologies for delivering legacy services across IP networks. Pseudowires are a key element of network convergence being touted by plenty of other companies. The bottom line? Reeves's track record gives him clout, and he has an obvious talent for getting startups up and running -- toward a successful exit.

Carl Russo
President and CEO
Calix Networks Inc.

Calix could have been another fatality of the telecom crash. Instead, it's well positioned to ride the surge in broadband buildouts, thanks in large part to Russo, an investor and board member who took the CEO job in January 2003. Since then, Calix's C7 access box has piled up more than 200 customers including Sprint (NYSE: S - message board), bagged with Nortel Networks Ltd.'s (NYSE/Toronto: NT - message board) help last month. Recognizing his hot hand, Russo is expanding Calix's broadband prospects into GPON with the planned acquisition of Optical Solutions Inc. (See Calix Comes Out, Nortel, Calix Get Access at Sprint, and Calix to Buy OSI.)

Depending on one's point of view, Russo might also deserve credit for not taking Calix public, despite its perennial appearance on Light Reading's Top Ten Private Companies lists. Calix has armed itself for an IPO but operates better without the pressures that face a public company, Russo claims. He had a similar situation as CEO of Cerent, which wasn't planning to get acquired but gave in to Cisco's acquisition overtures for, well, more than Scientific-Atlanta Inc. (NYSE: SFA - message board) got. (See Was Cerent Worth It? and IPOs Happen: Carl Russo Speaks.)

Ron Sege
CEO
Tropos Networks

Sege was at the helm of Ellacoya Networks Inc. when that company began engineering its turnaround. In 2004, he moved on to Tropos, which this year racked 250 customers to become a leader in the wireless mesh market. Tropos got an investment from Intel Corp. (Nasdaq: INTC - message board) early on, but Sege's term has seen the company reach out to more big companies, with moves including a partnership with Hewlett-Packard Co. (NYSE: HPQ - message board) and a strategic investment from Siemens AG (NYSE: SI - message board; Frankfurt: SIE). (See Tropos Taps Time-Worn Talent and Tropos Pairs With HP, Bags $15M.)

Now touting more than 200 customers, including a huge recent win in the Philadelphia municipal broadband project, Sege has led this aggressive startup into a leadership position in the red-hot wireless mesh market (See The Philadelphia Experiment.) Yes, Tropos faces tough competition, including Nortel, a host of startups, and now Cisco Systems Inc. (Nasdaq: CSCO - message board). But putting a startup in the pole position of an emerging market is about the best you can ask for, and Tropos has set up an impressive partnership network, bringing in names including Boingo Wireless Inc., Motorola Inc. (NYSE: MOT - message board), and Sege's alma mater, Ellacoya. (See Cisco Plots Mesh and Tropos Gets With the Program.)

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