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Optical Mania in Texas

Light Reading
News Analysis
Light Reading
6/28/2000

A group of VCs and entrepreneurs dubbed Iris has reportedly started an optical incubator in Texas to help get startups up and running. And they plan to launch and market these companies in groups.

So far, however, the project is tougher to crack than PKI code. It seems to have two parts: an incubator group called Iris Labs Inc. in Plano, Texas, and an umbrella organization for joint marketing.

Let's start with the incubator. According to an article in this week's Dallas Business Journal, (http://www.bizjournals.com), two former founders of Monterey Networks (now part of Cisco Systems Inc. http://www.cisco.com, Nasdaq: CSCO), H. Michael Zadikian and Zareh Baghdasarian, have joined forces to create Iris Labs (Web site under construction) in order to provide seed money to new optical companies and match these startups with recruiters, venture capitalists, lawyers, and other vital ingredients of a high-tech business. The idea is that the companies then can focus on their primary purpose -- developing optical networking gear.

Zadikian and Baghdasarian have other jobs in addition to Iris Labs, so confirmation was hard to come by. They've founded an optical stealth-mode startup called Metera Networks Inc. http://www.metera.com, whose Web site lists them as chairman of the board and CEO, respectively. They've also got an interest in another closely held startup called Latus Lightworks Inc. http://www.latuslightworks.com, in Richardson, Texas. (Oddly, sources at Metera told Light Reading that Zadikian lives in California.)

The other half of the Iris story involves a marketing launch: The VCs involved with Iris Labs have their own plans for the companies in Zadikian's incubator. According to Todd Brooks, general partner at the Mayfield Fund http://www.mayfield.com, he and representatives from Sevin Rosen Funds http://www.srfunds.com and Weiss, Peck & Greer Venture Partners http://www.wpgvp.com plan to launch a coalition of optical startups in the Dallas metropolitan area sometime within the next few weeks. By sending the newbies out as a group with a coordinated offer of optical network solutions for business customers, the VCs hope the companies will make a bigger impact than they would going out alone.

"The problem is that one startup alone has a harder time differentiating itself," said Brooks. "We take a different approach, offering an end-to-end solution in the metro area."

The Iris launch will reportedly include three or four new companies the VCs feel are promising but perhaps less glamorous than optical startups like Ciena Corp. http://www.ciena.com (Nasdaq: CIEN), which Sevin Rosen and Weiss, Peck & Greer helped launch in the past.

A source at Iris Labs, who requested anonymity, confirmed that the Iris startups Metera and Latus Lightworks would be involved in the launch, along with other, as-yet-undisclosed stealth-mode seedlings.

-- by Mary Jander, senior editor, Light Reading http://www.lightreading.com

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