Wu-Fu Chen: It's Tough out There
Chen confirmed that OptiMight fired its staff on Friday and that the company's board is set to meet again soon to decide whether OptiMight should liquidate or file for bankruptcy protection (see OptiMight Be Shutting Down).
"There's not much new I can say about OptiMight," Chen says. "I still believe its technology is impressive, but the revenue opportunity has been pushed out to sometime in 2003, and investors are conservative regarding how much money it takes to bring the company to revenues and profitability.
"I think the current investors are supportive -- and they have been supportive -- but they're making a statement about the market right now. Today's VCs have all become bankers. The questions they ask are all about revenues and revenue backlog. They almost don't fund companies without revenues. It's unfortunate. I can't blame anyone. It's just the economic environment.
"It's going to take some time for people to get over all the bad news surrounding companies like Enron Corp. and Global Crossing Ltd. [see Global Crossing: Telecom's Enron?]. I don't think I can blame any particular party for not trying hard enough. OptiMight's technology, as you know, had been in trials at WorldCom Inc. and they were supportive in helping us raise money. We had also entered into trials with another big carrier. So clearly the technology is solid."
What does that mean for Cinta Networks Corp., another Wu-Fu Chen portfolio company that makes a long-haul box combining dense wavelength-division multiplexing (DWDM) transport and optical crossconnect capabilities?
"Cinta is going to have a tough time, unfortunately. The companies that are lucky are the ones that raised money at the right time. They'll have a better chance. Of course, we're raising money and insiders are pretty supportive, so it'll be interesting to see how we pull this thing together." (See Cinta Gets Leaner, Cites Attacks and Startups Suffer Setbacks.)
Of course, not everyone feels it was just the economy thats held back Chen's startups. In fact, some point out that Chen's assembly-line approach to startups during the rise of the bubble is what got him in trouble in the first place.
"You can quote me on this... Wu-Fu was one of most disappointing things about the whole experience," says Tom Walsh, the former head of sales at Geyser Networks Inc. who is now with Ethernet PON startup, Salira Optical Network Systems Inc..
Indeed, Chen's entrepreneurial hand has recently been cold. OptiMight is on its last legs, Geyser Communications recently shut down, and Cinta, as Chen mentioned, is struggling for funding (see Wu-Fu Chen Startups Hit the Skids).
It's a far cry from the Opticon conference in August 2000, when Chen painted a picture of easy money, boasting of bullish prospects for his companies (see Wu-Fu Chen: In It for the Long Haul).
"In the old days people said, 'We make money the old-fashioned way; we earn it,'" said Chen at the time. "But in optical networking we say, 'We make money the new-fashioned way -- we print it!' " — Phil Harvey, Senior Editor, Light Reading