By Lee Smith All Reporting By Joel Dreyfuss, Brad Grimes, Jennifer Keeney, Jennifer Pendleton, Karen Solomon, Scott Spanbauer, Sarah Roberts-Witt, And Louise Witt

(FORTUNE Small Business) – Whatever the indicators suggest about the economy, FSB has detected no slowdown in aspiration and imagination. The creative pipeline is bulging with so many new products and services that this year we have expanded our list to 65 from 25. And never has it been more diverse. True, the largest number of inventors and entrepreneurs profiled here are white males, and Silicon Valley is home to a disproportionately large number (20). Still, 13 of this year's creators are women, and 19 are members of minority groups. Many are in their anything-is-possible 30s; two have not reached adolescence. Meanwhile, venture capital is being distributed more cautiously, but there is still plenty of it. On average, our all-stars were able to raise about $22 million. Many have also formed strategic alliances with established companies. To select the 65, we contacted more than 1,200 sources for nominations, including the National Venture Capital Association, the National Business Incubation Association, colleges with entrepreneurial programs, and PriceWaterhouseCoopers, which surveys VC-backed companies. We're not going to engage in forecasting, but we asked five judges to pick their favorites (see page 69). We'll check in next year to see if they're right.

Tracking Group E-mail ABRIDGE Using e-mail to update colleagues throughout the workday can save a lot of time, but it also poses a problem: how to keep track of crisscrossing conversations and attachments that may involve dozens of people. Shana Fischer, a vice president at the investment bank Allen & Co., and Susan Hunt Stevens, former group director for New York Times Digital, hope their Abridge for Enterprises software will help.

How does it work? A client pays a minimum monthly fee of $5,000 for Abridge services to what could be numerous groups within the organization. Each is assigned a unique Abridge-hosted e-mail address. When group members exchange e-mail, they have to remember to send a copy to the Abridge address as well. If they do, e-mail and attachments pass across Abridge servers, where they are analyzed and organized according to user-defined criteria into folders, schedules, and contact lists. Two-year-old Abridge Inc., which is based in New York City, anticipates revenues of $1.5 million this year. Its backers--including Venrock Associates and John Landry, the former CTO of Lotus Corp.--expect Abridge to capture a sizable chunk of the electronic-messaging-services market (which will reach $57 billion by 2002, according to the Radicatti Group, a research firm).

Mobile Multimedia ACTIVESKY ActiveSky Inc. is one startup that should benefit from the handheld-PC surge. In December, in the midst of the dot-com meltdown, the two-year-old San Mateo, Calif., company snagged $22 million in venture funds from such firms as JK&B in Chicago. What has excited investors is ActiveSky's promise to deliver video and multimedia images to cell phones, personal digital assistants, and other mobile devices. The key is compression technology that squeezes data down to a size that can be sent over the air on a wireless connection and played by the various devices. So far the company (which won't disclose revenues) has introduced video players for popular handheld computers including the PocketPC, Palm, and Visor. It has also signed a deal with Handspring's Japan division to bundle its media player with that company's products.

ActiveSky's founders include Ruben Gonzales, a Ph.D. who was the first to transmit full-motion video via a wireless transmission. The company has been criticized for introducing a proprietary compression format not compatible with the more popular MP3 and Windows Media Format. ActiveSky says there are already several formats for video and that the success of its own will depend on its value to the market.

Build a Smart Plan ADVISE4STOCK Got a surefire business idea that just can't get off the ground? These days creators need a persuasive business plan and probably much more, including accounting, legal, and marketing advice. But how can an entrepreneur, operating on a shoestring, pay for that expensive talent?

Brian Shniderman, an experienced management consultant, has a strategy and built a company on it: Phoenix-based Advise4Stock. Through venture capitalists, Advise4Stock gets in touch with entrepreneurs who have recently been denied funding and need help. Advise4Stock then matches them with professionals who are willing to forgo all or part of their fee in exchange for shares. A $300-an-hour attorney, for example, might take $600 worth of stock for every hour worked. Advise4Stock charges entrepreneurs fees that start at $1,500, plus dues of $25 a month for continuing membership. Launched in December, Advise4Stock says it has "thousands" of clients and advisers worldwide.

Tell Me, Machine ANSWERFRIEND English isn't their first language, which makes the achievement of Gary Mekikian and Deniz Yuret even more impressive: software that allows computers to understand the folksy, natural language that Americans use when they tap out messages on their keyboards.

As a teenage mathematics whiz in Turkey, Yuret was inspired to ponder natural-language software by HAL, the sinister, smooth-talking computer in 2001: A Space Odyssey. In 1998, within three months after earning a Ph.D. in computational linguistics from MIT, Yuret had developed a prototype for the software now called QuestionEngine. A year later he met Mekikian, who had arrived in the U.S. as a teenage refugee from the Soviet Union, had worked his way through the University of Southern California to earn a degree in computer science--and had become a wealthy entrepreneur in the process.

The two men's collaboration has produced a commercial QuestionEngine designed for companies that sell online and want computers, not expensive personnel, to answer customers' questions. With $9 million in funding from Andersen Consulting (now Accenture) and star angels such as Sandy Robertson (founder of Robertson, Stephens & Co.), it's no wonder the entrepreneurs have clients such as Sun Microsystems. Estimated 2001 revenues: $35 million.

Rentals in Space ASSURESAT A few years ago 45 million pagers around the world went blank because a satellite failed. Such breakdowns are likely to become more common as satellites get bigger and more complicated, or so says Jerald F. Farrell, former president of Hughes Communications. He and other members of a high-powered team, including Mark Fowler, erstwhile chairman of the Federal Communications Commission (FCC), are raising $500 million to launch the space equivalent of rental cars. Already the founders have secured $310 million in bank financing and $17 million in venture capital. They intend to raise the rest in the corporate bond market.

AssureSat Inc. would like to put three birds in orbit, available to pick up the workload of a customer's satellite immediately should the customer's fail. The potential market is the 200 or so commercial satellites now in orbit, delivering TV signals, voice and data transmissions, and such. AssureSat will charge clients a $4 million retainer to have a backup satellite ready, and an additional fee if the client actually uses it. The El Segundo, Calif., company has already booked more than $150 million worth of business from clients such as LoralSkynet. AssureSat hopes to launch its first satellite in 2003.

Weather by the Minute ASTROVISION INTERNATIONAL What you may not know about those weather systems speeding across your TV screen during the evening news is that they are not news. The pictures, taken by government weather satellites, are as much as four hours old when they are passed along to your TV station. Malcolm LeCompte, who once dreamed of becoming an astronaut but earned a doctorate in astrophysics from the University of Colorado instead, would like to keep you up to date with real-time streaming video from space.

LeCompte is the founder of Bethesda, Md.-based AstroVision International Inc., which is trying to raise $139 million to loft two lightweight satellites with cameras into orbit that cost $70 million each, one-third the cost of traditional satellites. To get the venture off the ground, the scientist has obtained a license from the FCC to operate in the X band (the Earth Exploration band) in order to transmit high-resolution images. He has also raised $5 million in venture capital, and at press time he was closing on an additional $120 million round.

AstroVision will serve more than weather fans. Shipping companies and others may find its video invaluable, since it can provide early warning of hurricanes and natural calamities. Its first deal: a $9.4 million contract with NASA to study Tornado Alley in the central U.S.

Connect Without Clutter ATHEROS COMMUNICATIONS Wouldn't it be great if all the computers, printers, and other electronic gadgetry in your home or office could be connected without the bulky cables and wires that dictate the layout and trip the unwary? That's the plan of San Francisco-based Atheros Communications Inc. Chief technology officer Teresa H. Meng, 40, who is also a distinguished member of the Stanford University faculty, has designed a 'radio on a chip' that will allow machines to communicate with one another wirelessly and almost as fast as wired machines.

Since the early '90s, Meng had been working on the creation of an all-digital radio on a chip that would employ the standard low-cost technology known as CMOS (complementary metal oxide semiconductor) that was used to produce virtually all commercial computer chips. At that time, the only technology available was for specialized and expensive analog chips.

But over time she was able to take advantage of the increase in process-ing power and the decline of manufacturing costs. That combination made possible chips that produce digital equivalents of analog signals. Meng got another break when the FCC opened up some additional bandwidth for wireless local area networks.

Through the late '90s Meng raised more than $30 million in funding, with the help of John L. Hennessy, then provost and now president of Stanford. That's an impressive amount, but the cost of getting into semiconductor production is staggering. So rather than build its own fabrication plant at enormous cost, Atheros has formed a partnership with Taiwan Semiconductor Manufacturing Co., the world's largest semiconductor foundry.

Full production of the AR5000 chipset, as the radio on a chip is formally known, will likely begin in the middle of this year. Large, established businesses probably won't adopt the new technology immediately, mainly because they already have a huge investment in their wired infrastructure. That leaves small businesses and homes as the likely first clients. Neither is to be sniffed at. According to Cahners In-Stat Group, the market for home networking alone will reach $5.6 billion worldwide by 2004.

One of Atheros' biggest worries is Australian competitor Radiata, which was recently bought by the mighty Cisco. But although Radiata is nearer to bringing a product to market, Atheros says its product is slightly superior.

Killing Bugs Without Fear BIOGANIC SAFETY BRANDS After his twins were born, Steven Bessette was reluctant to spray his West Palm Beach, Fla., home with pesticides for fear of making the babies sick. So Bessette, a lawyer and accountant, began working with researchers at a cluster of universities to develop a natural bug killer that would not be toxic to humans or other mammals.

Over eight years he raised $30 million, mostly from private investors. Prominent among them was E. Douglas Grindstaff, a former president of Procter & Gamble, who was introduced through a mutual venture capital acquaintance. Now the company, Bioganic Safety Brands Inc. in Franklin, Tenn., is ready to launch its product. Unlike synthetic compounds that target enzymes and can make humans, especially children, ill, Bioganic is a patented mix of food additives approved by the FDA that includes the essence of cloves, peanuts, and thyme. The compound attacks an insect's neurotransmitters and stops its body from functioning, but has no harmful effect on humans or animals.

Bioganic is aimed at a $9.5 billion market that includes everything from gardens to golf courses to farms. Competition from established bug killers, such as Raid, will undoubtedly be fierce. But the upstart already has deals with Wal-Mart and CVS Pharmacy that could soon put Bioganic on shelves in 29,000 stores. The company has even signed up actress and uber-mother Jane Seymour as its spokesperson.

The Painless Warranty BRANDSTAMP After helping a Beverly Hills car dealer increase sales of SUVs by 50% in one year, consultant extraordinaire Sean Brown was ready for an encore. Rather than take another executive gig, though, Brown turned entrepreneur. The consumer ill he focused on: product registrations. Who hasn't tossed one in the trash rather than in the mail? They're annoying, but they are important when defects or recalls hit.

Brown's solution was Cambridge, Mass.-based BrandStamp Inc., which he launched in December 1999 with roughly $1 million in seed money from the Cambridge Incubator, a venture development company. BrandStamp is an Internet-based registry with warranties and the like submitted online or at special in-store kiosks. The information remains on the BrandStamp server, which allows users to do product research. Manufacturers can check the site for aggregate customer information and rely on BrandStamp for services like issuing product recalls.

The key to the company's success, Brown says, is finding the right partners. So far Oracle is one.

More Storage in the Hand DATAPLAY A limitation of handheld electronic devices, such as PDAs, MP3 players, e-books, and digital cameras, is that they can't store very much content, be it audio or visual images. Steve Volk, who has long toiled to solve electronic-storage problems, has come up with a tiny cartridge that can extend looking and listening by hours.

His company, DataPlay Inc., based in Boulder, Colo., makes a disk cartridge the size of a quarter that can hold more than 11 hours of music downloads and fits easily into a variety of handheld devices. It makes an attractive marketing tool for record companies. A consumer could listen for free to one song off an album that the record company placed on the DataPlay disk. If the consumer wants the whole album, he will have to go online and buy an electronic key. Investors that have poured $64 million in DataPlay include Toshiba, Samsung, and Universal Music Group. To date the company has partnerships with such music labels as BMG and EMI.

No Rest for the PC DATASYNAPSE Did you know that while the screensaver is on, you could lend your computer's power to a financial institution and receive gift certificates in exchange? All you need is a broadband Net connection, and DataSynapse Inc. will hook you into a network that will use your PC while you go for coffee.

New York City-based DataSynapse is the creation of onetime schoolmates James Bernardin, who holds degrees in physics, electrical engineering, and applied math, and Peter Lee, a former J.P. Morgan investment banker. Bernardin got the idea while crunching numbers for Bank of America. At 5 P.M., with hours of toil ahead, he looked out on a floor of idle computers and pondered how he could borrow their capacity to shorten his evening. He teamed up with Lee, who understood the savings to financial institutions if they farmed out work at peak times rather than buy additional computers.

As mind-bending as the idea is to a layman, it has been applied by others to create similar networks. But Data-Synapse is the first to design a network for financial institutions. Also, unlike other networks, it borrows your PC only while it is idle. So far DataSynapse has signed up more than half a dozen clients in the financial-services industry. For your PC's tireless efforts, you get gift certificates for purchases from the Internet marketer Flooz. If you're lucky, you might also win a Porsche Boxster.

The Smarter Wheelchair DEKA RESEARCH A priority for a humane society is helping its disabled citizens function fully. Dean Kamen, founder of Deka Research and Development Corporation Technology Center in Manchester, N.H., hears the call. Years ago he invented a wearable drug-infusion pump, a portable kidney dialysis machine, and flexible stents to keep collapsed arteries open. Kamen's latest contribution is even more impressive: the Independence 3000 iBot Transporter, which can go where no wheelchair has gone before. Kamen got the idea after slipping and nearly falling while getting out of the shower. If a human being could detect such an imbalance and right himself in time, why couldn't a machine?

The iBot can climb stairs, hop up curbs, and cross sand and other surfaces ordinarily off-limits to wheelchair users. That would be remarkable enough. Using gyroscopes and microprocessors, the iBot can rear up on two of its four main wheels and lift the occupant to standing level. A Johnson & Johnson subsidiary plans to start selling the iBot later this year at an expected list price of $20,000 or more. Let the revenues begin flowing.

Essence de Computer DIGISCENTS While on vacation in Miami's South Beach, biologist Joel Lloyd Bellenson, 36, and industrial engineer Dexster Smith, 32 (both former Stanford students), were swept up with the aromas of suntan lotion, ocean, and tropical drinks. They began researching the science of scent and learned that it's all about biochemistry. Realizing it could be represented mathematically and computationally, the two decided to find a way to introduce scent into media.

The result: the launch of DigiScents Inc., their Oakland company, which has created iSmell, a device about the size of an electric pencil sharpener that attaches to a PC. Within iSmell is a cartridge containing 64 scents in the form of natural and synthetic oils. When you visit a Website that has signed up with DigiScents, an atomizer sprays vapor into the air.

DigiScents has raised about $20 million so far and has an agreement with Procter & Gamble for joint market research. It expects iSmell to be available by the end of this year at a retail price of under $200. Food and perfume companies are eyeing the technology to be used for online product sampling.

Trade Talks E-XCHANGE ADVANTAGE Even in a system as carefully monitored as a stock exchange, human flubs cost companies billions. On the Nasdaq alone, companies write off about $30 billion a year to loose-lipped brokers who leak information, causing unnatural price swings. Fred Federspiel, a former nuclear physicist at Los Alamos Laboratory, thinks his 11-person company, e-Xchange Advantage Corp., which he founded in 1999, can change that. The New York City-based venture licenses an automated trading system to stock exchanges and brokers that lets institutional investors and Wall Street traders share their orders with certain buyers, but not the whole floor. Who gets notified is dictated by past trading histories.

So far the company doesn't have any revenues, but Federspiel is predicting sales of $1 million this year. There has been one good confidence booster: an investment of $1.3 million from Nasdaq and a former employer of Federspiel's, Bios Group, a Sante Fe consultancy.

Stopping Hackers Cold ENTERCEPT SECURITY TECHNOLOGIES When Yona Hollander and Ophir Rochman were teaching computer science in Israel, they noticed a big flaw in computer security systems. Most merely sounded an alarm when an intruder was afoot without stopping them from getting in. So with the help of a group of engineers--and investors who helped them team up with a U.S. company, Entercept Security Technologies--the men developed a guard dog of sorts for e-business: software that prevents hacks into Web servers and applications.

When hackers try to break into the operating system of a Web server, say, they call in with codes that try to trick the server into thinking they are legitimate users. Entercept screens calls before the users get into the operating system and determines whether the callers are benign or malicious. Though the company is reluctant to talk about revenues, with the Web server appliance market alone it's tapping a $600 million market. Entercept calls Cisco Systems a partner, and it also has the blessing of investors like Dell and Intel.

Antibodies from Corn EPICYTE PHARMACEUTICAL Sometimes scientific inquiry leads to a commercial product. Plant biologist Mich Hein and biochemist Andy Hiatt are proof of that. The two scientists, formerly from the Scripps Research Institute in La Jolla, Calif., have invented a way of growing human monoclonal antibodies--the human's first defense against invaders--within plants such as corn, rice, and tobacco. Currently, antibodies can be reproduced and injected into the needy, but the process is expensive, requiring $300 million factories with huge fermentation tanks. In contrast, Hein's and Hiatt's approach costs one-tenth that of the current method.

Here's how it works: From a human cell, the gene known to be responsible for fighting particular invaders is extracted and inserted into a kernel of corn, say. The gene instructs the corn's protein to make human antibodies.

After a decade of research Hein and Hiatt launched the San Diego company Epicyte Pharmaceutical Inc. to get their breakthrough to market. The five-year-old concern has signed on Dow Chemical (an equity partner that has invested $6 million in the venture) to make the transgenic plants and turn them into drugs for clinical trials. If Epicyte is correct, its efforts will lead to an effective way of neutralizing the viruses that cause genital herpes, strains of pneumonia, and even AIDS. That's why the company has received $7 million in grants from the National Institutes of Health and the U.S. Defense Department's Advanced Research Projects Agency.

Total Temp Service EWORK EXCHANGE As Hans Bukow helped manufacturers like Intel develop automated just-in-time systems for the delivery of materials, he encountered companies that needed similarly precise methods for the delivery of temporary workers. He coupled his idea with the Internet, and the result is eWork Exchange Inc., based in San Francisco.

Prospective employees fill out profiles and post them on eWork's Website for free, and employers fill out project profiles for $100 each. The database finds matches. According to investors such as the Swiss VC firm ETF Group, what makes eWork distinctive is its Web-based ProSource contingent-workforce management system. It handles everything, from paying the temps' invoices to providing fringe benefits. It enables employers to tailor hiring standards and even keeps track of the total amount a company spends on contingent workers. EWork had revenues of $40 million in 2000, its first year of operation, thanks to alliances with Ariba, Account4 Software, and Novient.

Ticket Protection FAIRAIR All of us will find ourselves in this spot sooner or later. We buy an advance, nonrefundable airline ticket to Paris or wherever, and at the last moment we have to cancel our plans because the object of our travels has moved to Stockholm. The Paris ticket is worthless. Enter FairAir Inc., a service through which you can buy a plane ticket that you can resell to someone else at whatever price the market dictates, either on the Web or through a customer-service line.

Jim Lawrence, once CFO of Northwest Airlines, and Frank Levy, a former executive of an online address-book service, founded FairAir two years ago after overcoming the reluctance of airlines. FairAir eliminated their objections with a system that works like this: You, the consumer, pay an extra $9.95 fee when you buy your low-cost advance ticket through FairAir. The price is set by the airline partners. If and when you sell the ticket, the airline and FairAir will take 6% of the selling price and share it. (FairAir won't disclose how the 6% will be split.)

So far, Northwest, America West, Midway, and National have signed on. FairAir expects revenues of about $1.5 million this year.

Targeting Tumors FERX A shortcoming of chemotherapy is that the cancer-fighting cocktail may poison healthy tissue as well as cancer cells. But what if the tumor were magnetized to draw the drug directly to it?

Thomas Widder, M.D., had been mulling over such a strategy ever since he was a medical student at Northwestern University in the mid-'70s. By the 1980s he was given a patent on a technology that had been tested on animals. But it still wasn't considered safe enough for human trials. Then in 1993, he met Thomas Kent, a physicist, who had been traveling in Russia and come upon researchers there who had solved the puzzle of how to make a magnetic particle that could be used in humans.

Widder and Kent teamed up and brought in a third partner, Widder's wife, Jacqueline Johnson, a geneticist. She had years of experience working for several biotech/pharmaceutical firms, which was crucial in persuading investors such as Brentwood Venture Capital to come along. In 1994 the three incorporated their enterprise in San Diego as FeRx Inc., but it took them three years of filing patents, transferring the Russian technology to the U.S., and securing $22 million in funding before they opened for business.

FeRx has designed a proprietary technology called Magnetic Targeted Carriers. MTC is based on microparticles of elemental iron and carbon that are combined with the drugs to be delivered. The carbon absorbs the drugs. A small magnet positioned outside the patient's body creates a localized magnetic field at the site of the tumor. When the drugs are swallowed or injected, the iron, which is bound to the carbon, is drawn to the tumor like a sort of medical smart bomb. The first target of the new technology will be liver cancer. (Globally, one million people die of the disease every year, making it the world's deadliest cancer.) The treatment is now undergoing clinical trials at several major medical centers around the U.S., and FeRx hopes to receive FDA approval by 2003.

Catching Rays Cheaply FIRST SOLAR It took the genius of Harold McMaster, 84, the inventor of modern-day tempered glass and co-founder of Glasstech Inc., to revolutionize the solar-power industry. In his newest venture, First Solar LLC in Scottsdale, Ariz., McMaster has managed to develop a cheap way to produce solar panels based on cadmium-telluride cells as a substitute for silicon cells, using a thin-film deposition process.

As a result, First Solar can produce photovoltaic panels for as little as $1.50 per watt delivered at peak (noon on a sunny day), compared to $3.50 a watt for silicon-based panels. Eventually, First Solar expects to get the cost down to 50 cents. With $43 million in funding from the venture capital firm True North Partners, First Solar thinks that power generation systems using these cells could eventually produce electricity that sells for prices similar to that generated by coal- or natural-gas-fired plants. At press time it was close to snaring public utilities and government agencies as customers.

Psych Screening Online FITABILITY SYSTEMS What personality type makes the best administrative assistant? It would be good to know that before you fill that position in your small business. Fitability Systems LLC, an Atlanta company started by James Campbell (who has launched two other technology companies), says it can not only describe the personality but also help locate the right candidates.

The employer in need visits Fitability's Website, selects a job profile, and tweaks the profile to fit her specific requirements. The Fitability system then displays a personality norm for, say, a highly successful administrative employee, based on behavioral research. As applicants come forward, Fitability e-mails them a questionnaire that typically takes 15 minutes to fill out. The answers are matched against the profile of the ideal administrative aide, and the employer uses the information to help her decide whether the applicant will be a good fit. Fitability, which has raised $2.5 million from investors, charges employers about $100 a month. Already it has snared 21 customers, including Oracle and Yahoo. By year's end it should be profitable, although company officials decline to provide revenue projections.

Hold the Water FLOLOGIC When the ceilings of a colleague's house collapsed because of water damage from a leaky upstairs toilet, Charles deSmit raised an excellent question: Why is so much water, far more than the occupants can use immediately, allowed in a house to begin with? DeSmit, who until then had been working in health care, set about to create a method to keep water outside until it is needed.

The result is the FloLogic System, which does for water what circuit breakers do for electricity. A valve is placed inside the main water pipe where it enters the house. Within the valve is a flow sensor that keeps track of how long water has been running into the house and automatically turns it off after a set time; for example, 30 minutes when the residents are home, 30 seconds when they are not. The resident simply presses a button on a control panel to turn the valve on again. Earlier this year FloLogic Inc., located in Raleigh, signed a deal with Thompson Plastics to manufacture and distribute the system to plumbing contractors and construction companies. By year's end the company expects $4.4 million in revenues.

Gas at Great Prices FUEL LINKS Former attorney Jason Stancil, son of a Dallas oil-and-gas consultant, believes, like his father, that consumers would not think twice about changing retailers if they could save on gasoline. With prices skyrocketing, it is getting tougher to find bargains for the hot commodity.

Stancil's company, Fuel Links Inc., connects retailers--always trying to increase traffic through their stores--to a local gas station, and it already has some impressive clients: Wal-Mart and BJ's Wholesale Club. Here's one way the link works: The retailer runs a sale on Coke, for example, in which the customer earns a gasoline discount on every case he buys. The cash register is linked to a gas station the retailer owns or partners with. When a buyer shows up at the pump, he gets a discount of perhaps 30 cents on each gallon. At a Harps supermarket in Silom Springs, Ark., the grocer's sales have risen 25% since he installed the system. Fuel Links, which charges a retailer $40,000 for the system, expects $17 million in revenue this year.

Finding the Fakes GENUONE Counterfeiters of CDs, watches, golf clubs, software, and an endless list of other products with valuable brand names are now clever enough to duplicate even sophisticated markings, such as holographs, used to authenticate the real thing. "If you can see the identifying mark, it can be reverse-engineered," says Jeffrey Unger, 30, who with partners Stephen Polinsky and Ori Ron, founded GenuOne Inc., a Boston company that has designed what may be the mark that can't be copied. Its distinctive technology, GenuGuard, includes optical, ultraviolet, infrared, photonic microfibers, and digital watermarks that can reside on a product or its packaging and keep track of it from production through sales.

The GenuGuard fingerprints cannot be imitated by thieves because the prints cannot be seen, except by a special scanner. That's why the company has attracted venture investors such as DFS Advisors and Delta Management. By year's end it expects $10 million in revenues. Among GenuOne's clients are New Balance athletic shoes and Xerox.

Risk-Free B2B GEOTRUST E-commerce is well on its way to being as commonplace as a trip to the supermarket, but it still has more perils than a shopping-cart smashup. A lot of online business is done anonymously, and the small business can never be completely sure whom it is actually dealing with. GeoTrust Inc., based in Portland, Ore., acts as a middleman to verify the credentials of buyers and sellers in business-to-business portals.

CEO David Chen, who has a strong background in consulting, and software entrepreneur Charles Jennings founded GeoTrust in 1998. For a $15 fee, GeoTrust will query a vendor on its payment terms, return policy, and shipping charges. It will run a credit check and issue a digital certificate that guarantees the buyer or seller is a worthy business partner. Top industry players, including credit bureau Equifax and Ernst & Young, are supporting GeoTrust's efforts. The company, which went live in November, has received more than $15 million in two rounds of financing from VCs and private investors.

Streamlined Shipping GOCARGO.COM Eyal Goldwerger, once a captain in the Israeli Air Force, quit his job at Boston Consulting Group three years ago and locked himself in his New York City apartment, where he pondered overlooked opportunities in e-commerce. He concluded that the world needed an auction site at which shippers could find transportation firms that would deliver their goods fastest at the best price.

The result is New York City-based, which has taken off with the help of $16 million in funding from Cargill and Goldman Sachs. Say your company has to ship a ton of potato chips from Cincinnati to Tokyo. You proceed to's Website, and once your account has been verified, delivers several thousand e-mails to shipping companies to bid for your business. The winner pays a commission of 1% to 3% of the total transaction, and you get your goods delivered for 15% to 25% less than what you are used to paying offline, says Goldwerger. Large shipping companies just pay a subscription fee. has run 8,000 auctions for clients like Cargill and Warner-Lambert. Off to a strong start already, began 2000 with a couple of hundred registered companies and ended it with 13,000.

The Real Calorie Counter HEALTHETECH On James R. Mault's first day as a freshman at the University of Michigan, his father died, suddenly and unexpectedly, of a heart attack. The shock was terrible, and so was the fact that Mault no longer had the means to pay his tuition.

While some people might have been sidetracked by the tragedy, Mault responded by taking a full-time job as a medical technician. It was then, while operating a large and cumbersome metabolic counter, that he had the Idea. Why not create a smaller, cheaper version of the machine and sell it to medical centers as well as fitness clubs?

Today Dr. Mault--he's a cardiothoracic surgeon--is CEO of Golden, Colo.-based HealtheTech Inc., which produces BodyGem, the very device of which he dreamed. The BodyGem fits over one's mouth like an inhaler and is attached to a handheld monitor. Users breathe into it for a few moments and get a reading of the actual rate of their metabolism. The purpose: knowing exactly how hard one has to work to shed those extra pounds.

It took Mault 15 years and $35.5 million in funding--including $5 million from Procter & Gamble and $2 million from 3COM--to bring BodyGem to market. The rewards: The company had $1 million in sales in 2000; this year he expects that number to hit $30 million.

Less Scrap at the Fab IBEX PROCESS TECHNOLOGY Not many people spend their free time contemplating semiconductor production, but then Jill Card is hardly any old body. While working as an applied mathematician for Digital Equipment in the late '90s, she began developing software to help the semiconductor industry increase productivity.

How does it work? During the fabrication process, Card's software can monitor all of the 60 or so variables determining how much silicon will be turned into chips and how much will be scrap. Considering that making semiconductor chips is such an expensive process that increasing the yield of wafers from 80% to 81% can save a fabrication plant $8.8 million a year, it's not surprising that Card's got a bona fide company on her hands: IBEX Process Technology Inc., based in Lowell, Mass.

Backed by $2.4 million from Battery Ventures and angel investors, IBEX's program has already been installed at plants owned by IBM and Lucent. While Card won't disclose sales, industry stats help illuminate IBEX's potential: There are 700 fabrication plants throughout the world; and the semiconductor industry is expected to double investment in process control from $1 billion to $2 billion by 2002.

Transcripts Without a Fuss INTERFOLIO.COM For the graduate who wants his alma mater to send transcripts to a prospective employer or to another school, the wait can be irritating. For the school the request can be a nuisance. So a pair of recent Georgetown University graduates, Karen J. Fuerherm, 24, and Steve Goldenberg, 23, are compiling transcripts and other college records into an electronic database, Inc., that can be accessed by e-mail.

The graduate can enroll by paying a setup fee and then $39 for five years of service, plus a charge every time Interfolio sends out data on his behalf. Two-year-old scans the college's paper records into its system and makes sure they aren't tampered with and don't fall into the wrong hands. Customers of the Arlington, Va., dot-com to date include Georgetown, the University of Virginia, Notre Dame, Rutgers, and New York University.

Reading Your Phone INVISO It takes little wizardry to have that written report you need transmitted from your Internet-enabled cell phone or PDA, but how are you going to read the text on that minuscule display? InViso Inc., a Sunnyvale, Calif., company founded by Al Hildebrand, one of the inventors of the bar code scanner, has a solution that will give you the illusion of reading a 19-inch computer monitor when you look at one of those small handheld devices.

InViso's technology, OptiScape, is available in two forms: eShades, which you put on like a pair of glasses and plug into the cell phone or other device; or eCase, which resembles a PDA and which you hold close to your eye like the ViewMaster you may remember from childhood. OptiScape is not the first microdisplay technology. What makes it unique among rivals such as Colorado Microdisplay is that it is the first to integrate an imager on a microchip with the magnifying optics so text can be read easily from several angles. So far InViso has attracted $33 million from VC firms and corporations such as Qualcomm. Devices incorporating OptiScape should reach consumers later this year.

Kids Create a Company ITZ TOYS Children don't generally build real companies with their toys, which makes Matthew Balick, 12, and Justin Lewis, 11, both of Highland Park, Ill., extraordinary. When they were really little (eight and seven) they were at a basketball camp banquet, and during a lull in the festivities they got a little bored. So they extracted from some pizza boxes the small plastic stands that are put inside to keep the top from sticking to the cheese and tomato.

Matthew and Justin observed an interesting phenomenon of physics, along the lines of actions and equal and opposite reactions. When the boys pushed on the stands, the stands flipped--and switched on the boys' creative thinking. With the help of their fathers, they got in touch with toy developer Peter Gantner, who was the founder of Toy Craze (creator of Pogs), based in Cleveland.

Gantner traveled to Chicago to meet the boys and liked everything about the idea, including the fact that the inventors were kids who knew what kids like. However, no one else at Toy Craze was enthusiastic enough to take it on as a project. So Gantner quit and created a new company in Phoenix, Itz Toys Inc., based on the boys' creation. The toys, which they named Flip-Itz, look like three-legged spiders. They come in 28 designs, each a character devised by Matthew and Justin. There's a fireman named Burnie and a cat named Purrl. For a start Itz Toys has an agreement with a chain of 10 Pizza Hut franchises to have Flip-Itz replace the usual plastic stands in their boxes. The company expects sales of $5 million this year. It is now trying to take the concept national--and international.

Matthew and Justin are not officers of the company. They share in the royalties, however, and remain involved in the design of new models. Gantner calls the boys every Monday night for a conference, provided they have finished their homework.

Everyone's a VC MEVC Who wouldn't want to experience the thrills and perhaps even the financial rewards of being a venture capitalist? So about 20,000 small investors have gone online and transferred $330 million of their savings into meVC Inc. in San Francisco, which runs a VC fund that will invest in tech startups before they go public. It started trading last June.

The idea is that of Peter Freudenthal, formerly a biotechnology analyst at the investment bank Banc America Robertson Stephens. Freudenthal is not at all discouraged that investors involved in VC undertakings seem wary at the present time. His bigger challenge could be some imposing potential rivals like Fidelity and Schwab that are developing similar funds for the wealthy, not the masses. The strategy seems to be working: is bringing in $7.5 million a year in revenue.

Palm of the Dashboard MOBILEARIA Do you take your cell phone into the shower and your PDA to the beach? If so, Tom O'Gara is a friend of yours: He has created a wireless service for using these gadgets in the car. The idea for MobileAria Inc., based in Mountain View, Calif., came to O'Gara while visiting auto-parts maker Delphi in 1998. He and co-founder Dan Kolkowitz were wowed by a futuristic van with TV screens and streaming audio and video. But they figured the James Bond getup was years away. Yet people needed help accessing information in their vehicles.

Considering that the market for voice and data automotive services is expected to reach $33 billion by 2010, it's not surprising that O'Gara counts Delphi, Palm, and the VC firm Mayfield as investors. He is lucky: Palm will help market the product. Delphi will ensure that vehicles are equipped with the hardware, the Communiport Mobile Productivity Center. The MPC will provide voice-recognition capability and sockets into which a driver can plug his PDA. MobileAria is the voice-enabled content provider that consolidates all the information the driver wants and delivers it wirelessly in the car at a cost of about $10 to $50 per month. O'Gara, who isn't making any revenue projections yet, says the service will launch by year-end.

How Much for an Atrium? MOCA SYSTEMS When working as a carpenter while earning a Ph.D. in civil engineering at MIT, Sarah Slaughter, now 40, began to wonder just what impact subtle changes in architecture and design--like the addition of another floor--have on a building under construction.

As an assistant professor at MIT in 1995, she and her students labored for five years to build a database of actual scenarios from more than 200 construction sites. To fund the effort, Slaughter got a $200,000 grant from the National Science Foundation to launch a Newton, Mass., company, MOCA Systems Inc. (Models of Construction Activities) last year. She hopes revenues will hit $10 million by 2002.

The Paperboy Abroad NEWSPAPERDIRECT Leaving your hotel room in the morning in Buenos Aires, you find that the staff has left a digest of news on the doormat. Nice, but it's not the same as getting the daily newspaper you have long relied on. A new delivery system can make you feel more at home abroad: NewspaperDirect, the creation of Miljenko Horvat, a former Citibank executive, along with Esther Dyson, an expert who runs a global information service specializing in Internet technology development (she's one of our judges; see page 69), and Anatoly Karachinski, president of IBS Group Holdings, a Russian information technology company.

Each day, NewspaperDirect transmits electronically the full version of some major U.S. newspapers--including the Wall Street Journal, USA Today, and the Washington Post, as well as some international papers--to hotels around the world including Westin, Hilton, Hyatt, Radisson, Marriott, and Ritz-Carlton. NewspaperDirect provides the hotel with a PC and a couple of printers large enough to handle paper 11-by-17 inches. The hotel gets only the newspapers it requests, pays NewspaperDirect $2 to $3 a copy, and either passes the cost on to you or writes it off as an amenity. To date, the New York City and Vancouver, B.C.-based company has clinched more than 140 alliances including distribution deals with the bookstore chain Borders and Holland America cruise line. Projected 2001 revenues: $5 million.

The Easy Network OPENREACH The small- or medium-sized business that wants to link its computers, servers, and printers scattered over half a dozen far-flung sites reliably and securely has been stymied by the cost. Leasing private communications lines is obviously pricey, and until now setting up a Virtual Private Network (VPN) over the Internet has not been a lot cheaper. The special equipment required has been expensive and complex to install and manage.

OpenReach Inc., is a Woburn, Mass., company that promises to make VPN networking simple and cheap. The idea is that of CEO Mark Tuomenoksa, whose unusual career path led from being a musician to garbage truck driver to mailroom staffer at AT&T. Then it moved upward, as he shifted into high tech and developed voice and data services at Bell Labs.

OpenReach's VPN software, True-Span, is downloadable from the Web and can be installed easily into a dedicated PC that then connects headquarters' computers, printers, and other machinery to remote locations also using the software. Charges start at $99 a month. With $23.5 million in venture funding, and an agreement with Dell to bundle its software, the company is aiming to capture 40% of the $3.7 billion VPN market by 2004.

Supply Chain 101 OPTIANT As graduate students at MIT, Sean Willems and John Ruark designed software that enabled Eastman Kodak to reduce by 40% the cost of maintaining the safety stock inventory for a couple of its businesses. (Safety stock is what companies keep on hand to meet an unexpected surge in demand.) If it clicked with Kodak, why shouldn't it click with a lot of others?

The two inventors, along with Ruark's brother Marcus, and Michael Braatz, a former consultant with Bain & Co., have formed Somerville, Mass.-based Optiant Inc. They are marketing the improved and broadened technology, PowerChain, as a means by which companies can design their supply chains for optimal profitability and market agility. What they say makes PowerChain distinctive is that it allows companies to design supply chains for maximum efficiency and not simply manage an existing system. It does this by using sophisticated algorithms that the software acts upon to evaluate inventory levels at locations, product life cycles, and increased service to customers.

Optiant, which has raised $7 million in venture capital, expects revenues of $3 million this year. Five years down the road? As much as $100 million, it says.

Reporting Trouble PHOENIX DATACOMM In December 1998, Ronald Godlewski left behind the safety of an executive position at a GE Capital spinoff. Considering that his budget as an entrepreneur called for lawn furniture rather than office desks and chairs, it was a bold move. But Godlewski had been working on a high-tech tracking system for the trucking industry, and it had given him an exciting idea.

Godlewski's brainchild, Norristown, Pa.-based Phoenix DataComm Inc., produces a device that attaches to sensors that companies routinely put on things like air conditioners and even Slurpee machines. The sensors tell anyone who reads them how the machines are doing. But Godlewski's creation lets people gather this information without ever leaving their desks. The device transmits the data to the Internet, where managers can monitor it from a PC or even a pager. One major client, Burlington Northern Railroad, uses it to alert supervisors when a refrigeration car goes on the blink; so far the device has saved Burlington a load roughly every 14 days, Godlewski says.

Last year, Phoenix DataComm, which is currently rounding up as much as $20 million from private investors, brought in $2 million in revenues. Next year, Godlewski expects that number to reach $10 million.

Know Your Hedge Fund PLUSFUNDS.COM Even the rich investors who put their money in hedge funds find them somewhat mysterious. How well is fund X performing relative to others? What risk did fund Y run to provide that return? The lack of timely, trustworthy information is enough to make a fellow shy away. Chris Sugrue and Diego Winegardner, who were investing separately in hedge funds on behalf of wealthy individuals, met by chance socially and began commiserating with one another on the murkiness of their craft. Over a meal at Au Mandarin in downtown Manhattan, they created a plan, sketched on a napkin.

At press time, their company, in New York City, was slated for a formal launch in the second quarter. The company will provide a free Website where potential investors can get the net asset values of hedge funds as they change moment to moment. That should help investors assess the amount of risk involved. Wachovia, Gryphon Investments, and Koch Ventures are among those that have helped raise $62 million to get PlusFunds started.

Makeover on the Fly POLISHED Waiting for a delayed flight, Kristin Rhyne fumed at the airport gate. Fortunately, Rhyne, now 30, turned that aggravation into something other than ulcers. First, it inspired her business plan at Harvard Business School. Then she raised $750,000 from family and friends and created a company, Polished Inc., headquartered in Boston.

Polished opened a retail store at Boston's Logan Airport in December that not only sells top-of-the-line beauty products but also offers makeovers. Now you can get a manicure, pedicure, and massage while you're waiting for that connecting flight that still hasn't left LaGuardia. Rhyne hopes to have seven more airport stores open by the end of the year and expects revenues of about $2 million. Among the encouraging statistics: Professional women travel one to four times a month on business and six times a year on vacation. And the percentage of on-time departures has become slimmer.

Measuring Word of Mouth QBIQUITY Viral marketing, or word of mouth as it was called in a simpler age, has become an enormously popular way to sell over the Internet for obvious reasons: The word spreads in multiple directions faster than the flu, at a transmission cost of zero. But how much business does it bring in? What's the payoff?

Seeing a market opportunity, Shanti Bergel, Zentaro Ohashi, and Andy Raskin founded Qbiquity Corp., an application service provider, in June 1999. What sets the San Francisco company apart from competitors that create viral campaigns for clients is its software, which gives Qbiquity the ability to evaluate the effectiveness of the campaign and to analyze customer behavior.

Qbiquity seems well positioned. It has raised $12 million from such firms as Aspen Ventures and Canaan Partners. It has distribution alliances with e-commerce software and services concerns like Appnet, and online payment services like PayPal.

Scanning for the Best QODE Michael and Gregory Miller, brothers with five years of experience in Web design, were impatient with the amount of time and effort it took to search the Internet for all the data they needed on products. The information was there, but scattered over a lot of sites. So they created Qode, based in Fort Lauderdale.

A shopper can go to Qode's Website and for $49.50 buy a Qoder, a device small enough to fit on a key chain. At the discount appliance store, the shopper zeroes in on the washer/dryer she thinks she wants. But is this machine reliable? Is this the best price? Is a newer model about to replace it? She scans the universal product code on the washer/dryer into her Qoder.

Back home she plugs the scanner into her PC and connects to the Net, where the Qode search engine collates all reviews, consumer ratings, and manufacturer's data on the washer/dryer in question. She can do the same for the other 100 million products reachable by Qode. An early partner is (The brothers decline to talk about revenues.)

All a Drug Will Do ROSETTA INPHARMATICS If pharmaceutical researchers knew in advance that the hypertension drug they were working on, for example, would have an impact on depression as well, they might save a lot of suffering on the part of victims of depression.

That's part of the goal of Rosetta Inpharmatics Inc., a company founded in 1997 in Kirkland, Wash., by Stephen Friend, an M.D. and biochemist, and two colleagues, Leroy Hood and Leland Hartwell, also M.D.s. Friend, who is also head of the program of molecular pharmacology at a leading cancer research center, led a team in developing the Rosetta Resolver.

Rosetta is software that enables researchers to understand how a drug affects every gene in a cell that is exposed to it and, consequently, how it affects all 30,000 or so genes in the human body. When the formulation is changed slightly, it becomes clear how the variation affects the genes differently from the earlier formulation. One out of every five drugs first developed to treat a particular disease later turns out to be an effective weapon against another ailment as well.

The company's financial support is impressive. After initial funding by the VC firm Vulcan Ventures and others, it raised $100 million in an IPO last summer. Amgen, DuPont, and Merck have bought the Rosetta Resolver. The company expects revenues of $15 million in 2001.

Map the Music SAVAGE BEAST Tim Westergren, founder of two-year-old, Oakland-based Savage Beast Technologies Inc., takes his job very seriously. In fact, he refers to it as the Music Genome Project and to himself as the CMO (chief music officer). You've heard of collaborative filtering--that's when a company like makes recommendations based on purchase patterns--but you've probably never heard of what Westergren's got up his sleeve.

With $1.5 million in private investment from industry VC legend Guy Kawasaki, among others, Westergren is hiring trained musicians to map songs based on more than 400 characteristics, including meter, tempo, syncopation, and even whether they have political lyrics. The point? Music sellers could use the info to make recommendations based on your taste and introduce you to music you might never have considered buying otherwise. Although the company has no revenues yet, Westergren plans to double his work force in the coming months. Earlier this year, he announced a kiosk deal with Tower Records, and a deal to incorporate Savage Beast's technology into Barnes & Noble's Website.

Investing a Day at a Time SAVEDAILY.COM Eric Solis's blue-collar background has served him well. It inspired him to create a Website called Inc., where any average Joe can make microinvestments in the stock market. The 37-year-old, who was a stockbroker at Merrill Lynch and then later founded eSolis brokerage, got the idea when his old friends couldn't afford the products he sold. After the Net arrived he came up with an idea that allows any person to invest in a mutual fund by putting up as little as $5 at a time.

By using the Web,, based in Irvine, Calif., is able to offer an investment tool that would be too expensive to manage otherwise. Participants can transfer money electronically from their own checking accounts to a SaveDaily account. They can also earn "microrebates" by buying online from merchants who have agreed to participate in the program. With $4 million in VC backing, has signed up the online arms of 80 vendors, including Wal-Mart, CVS, and Disney, who offer rebates of 1% to 3%. It has registered 10,000 customers, and its portfolio is close to $1 million.

A Chip Fights Blindness SECOND SIGHT Mark Humayun and Gene de Juan Jr., retinal surgeons at Johns Hopkins University, have developed the prototype for an artificial retina. It may sound more science fiction than academic, but it's very real. Since discovering certain blind patients still have healthy neurons, the partners have been working on developing a tiny camera to put in eyeglasses that would convert images into electronic signals, which would then be transmitted to a computer microchip implanted in the retina. With one in four senior citizens already suffering from macular degeneration and that number expected to skyrocket, Humayun and de Juan are eager to turn their research into reality.

Refusing VC money, the doctors turned to noted philanthropist Alfred E. Mann, 74, who had gotten rich with a rechargeable pacemaker in the '60s and a miniature insulin pump in the '80s. Mann agreed to license the technology, and, in 1998, Second Sight LLC in Valencia, Calif., was born. Although it could be eight years before it has a positive cash flow, Second Sight has raised $5 million. It's also participating in a $12.5 million grant from the National Institutes of Health. Even Stevie Wonder, a patient of Humayun, is a fan.

Blocking Hackers SECUREWORKS It was no mystery to Joan Wilbanks and Mike Pearson, friends and co-workers at CompUSA, why small- and medium-sized business were not buying security systems to keep hackers out of their PC networks. Existing intrusion detection systems were too costly and complicated. So the duo founded SecureWorks Inc., an Atlanta company, with a better way.

The company sells its clients a hardware firewall box called the iSensor that sits behind a network router, or switch, and is connected to the SecureWorks network operation center. If the client gets a hacker attack, the system will not simply send out an alert, as rival systems do, but will shut down the port or e-mail address under siege. The price, including iSensor box, is $1,495 to get started and $2,400 a year for the service.

SecureWorks' price makes it a good option for tiny firms that want to outsource their security systems. That's a market valued at more than $8 billion, according to the Gartner Group. Because of that sales potential, SecureWorks has raised $30 million from such firms as Noro-Moseley and GE Capital. To outdo rivals like CheckPoint, SecureWorks has OEM (original equipment manufacturer) deals with hardware makers like Sun Microsystems. Wilbanks hopes sales will hit $100 million by year's end.

Halting Runway Collisions SENSIS Although radar tracks planes in the air and warns pilots to stay away from one another, planes on the ground rely mostly on the naked eyes of pilots and traffic controllers to avoid collisions. The reason is understandable. Radar bounces off so many buildings, parked planes, trucks, and other obstructions on the ground that the signals are too confusing to be useful. But the consequences can be tragic, as they were for a Singapore Airlines plane that tried to take off in Taipei, Taiwan, and took a wrong turn onto a closed runway.

So with $10 million from the Federal Aviation Administration (and some help from the aerospace company Raytheon), Sensis CEO Jud Gostin is developing radar-processing equipment that will work for planes on the ground, much as a Global Positioning System works for a boat or a car. As a 747 taxis toward a foggy runway, for example, two sensors will track the plane's changing position and allow the controller to detect obstructions in its path.

Triangulation itself is not a novelty. The contribution of Sensis Corp., based in DeWitt, N.Y., is a system that works well in complex airport surroundings. Though the company brings in about $40 million a year in other revenue, the new radar technology is too young to be generating sales. But after testing this year, it will be deployed in 25 U.S. airports.

Sealing the Cracks SERVICEENGINE Angering a customer by ignoring him is something every business fears. Big corporations can afford expensive systems to keep track of customers' questions and complaints as they come in over the Web or phone. Now smaller firms can too with ServiceEngine Inc. of Shelton, Conn. CEO Jared Schulman, COO Douglas Fischer, and CTO Michael Sengstock, who've created search engines before, are co-founders.

Here's an example of how it works: A company with three or fewer customer-service representatives pays an initial fee of $299 and then $79 a month. ServiceEngine then tracks all online inquiries and responses, organizes customers by mailbox, and keeps tabs on employee productivity and performance. Management is alerted to overdue inquiries. ServiceEngine customers include the Empire State Building and PriceClick. Hewlett-Packard is on board as a partner and investor.

Connecting at Home SHAREWAVE If you have two computers at home and only one has a broadband Internet connection, it would be handy to link the two without running a cable through the living room. One barrier keeping them from being hooked together wirelessly is that your house is full of noise created by your appliances.

Bob Bennett, once a marketing director at Intel, recognized that barrier as a deterrent to high tech while he was at home researching consumer behavior for Intel. So he and a colleague, Amar Ghori, started El Dorado Hills, Calif.-based ShareWave Inc. and developed semiconductors that foil the noise. That is especially important if you want to share high-quality digital audio and video. The first device that will incorporate the new chips is a wireless networking card from Panasonic.

With $60 million in funding from a long list of corporate VCs (including Cisco and Intel), as well as from Microsoft co-founder Paul Allen's Vulcan Ventures, ShareWave is well positioned. It hopes investors will help forge deals to get its product to market.

Solving Protein Mysteries SIGNATURE BIOSCIENCE Now that the human genome has been mapped, attention is turning to the next step: functional proteomics, the science of understanding the structure and function of proteins that follow the genes' instructions and in turn control life processes, fight disease, and determine how the body responds to drug therapy. Among the pioneers is John Hefti, who has both a medical degree from Stanford and a doctorate in physics from U.C. Berkeley.

While at Stanford, Dr. Hefti observed the limitations of existing techniques for observing proteins; the techniques were slow, expensive, and often used artificial conditions that don't show how proteins behave in nature. So as a newly minted physician, he decided to take two years off to find a better method. Dr. Hefti set up a small lab and went to work with a $50,000 piece of equipment the size of a refrigerator to produce microwaves.

The result is a company, Signature BioScience Inc., and its technology, Multipole Coupling Spectroscopy. The technology bombards proteins with microwaves, and the charged properties reveal the structure and movement of proteins as they perform their natural tasks. Signature estimates that MCS could cut two years off the four- or five-year period that manufacturers of new drugs routinely go through before they reach clinical trials. The company, which has raised $21 million, expects revenues (including fees from pharmaceutical and scientific instrument companies) to reach as high as $10 million this year, leaping to $100 million in three years' time.

Say What You Want SKYFLOW Nibha Aggarwal, an MBA graduate of U.C. Berkeley, wanted to start a business, but she wasn't quite sure what she wanted to do. She needed a partner, so she made a pitch by e-mail to an extremely busy man on the Berkeley campus, Anthony Joseph, an assistant professor of electrical engineering and computer science, who was leading a team researching the future of telecommunications. Lucky call. Aggarwal and Joseph hit it off.

After months of brainstorming, they focused on an opportunity that Joseph reasoned would become greater with the proliferation of cell phones and other handheld wireless devices (cell phones alone claim 800 million subscribers worldwide): software that makes developing applications easy.

Software applications in the wireless world, as it turns out, have not kept pace with those in the wired universe. When a wireless company wants to add a service to a particular device--a pager, let's say--the procedure takes months. So Joseph set to work devising software that would allow wireless companies to add services with a minimum of fuss. Over the summer of 1999, he invented voice command software that allows multiple networks and standards to interconnect immediately.

Aggarwal, meanwhile, crunched numbers and examined the marketing prospects. By January 2000 the partners had written a business plan for the company that would become SkyFlow Inc. They submitted it to the U.C. Berkeley business-plan competition, which proved to be a smart step. They not only won $50,000, but they also got some invaluable advice. Top Silicon Valley VCs who sit as judges counseled the first-time entrepreneurs to concentrate on particular markets.

They did. They recognized that they didn't have the money or market power to establish SkyFlow as a consumer brand. So they developed a business model through which they will license their technology to major telecom providers, such as Verizon and Sprint. If your cell phone service company were using Skyflow software, for example, you could simply say into the phone, "Send my bank balance to my pager," or, "Fax the Benson report to my home."

SkyFlow has raised $3.5 million in VC (it also won a Hewlett-Packard Garage e-Scholarship that comes with a $150,000 prize) and has moved from the U.C. Berkeley incubator into subleased quarters within the offices of a marketing firm in Emeryville, Calif. Joseph has no doubts that SkyFlow will succeed. "Our software is reliable and flexible enough to handle new technologies as they arrive," he says. And adds, "What we're doing is much more about where the market is going than where it's been." So far SkyFlow has snared one customer, Bravanta Inc., a company in the rewards-redemption business. Revenue forecasts are optimistic: The company projects $500 million in sales by 2006.

Diagnosing Snorers at Risk SLEEP SOLUTIONS Hard to believe, perhaps, but although myriad sleepers snore harmlessly if annoyingly, a whopping 20 million Americans suffer from a condition called obstructive sleep apnea. OSA lowers the blood oxygen level during sleep and may lead to life-threatening hypertension. How do physicians evaluate snorers at risk? The traditional method is to send them for a night to a sleep clinic for examination. The experience is not painful, but it costs about $2,500, and the foreign setting sometimes upsets normal sleep patterns and distorts the reading.

So Sleep Solutions Inc., of Palo Alto, has created the Bedbugg, which snorers pay $500 to use for a three-night sleep study. The Bedbugg contains two microphones embedded in headgear that slip in place in front of the nose and mouth. Other parts of the device monitor heart rate, oxygen saturation, and respiration. The snorer sends the kit back to Sleep Solutions for evaluation and follow-up by a physician.

Bedbugg has competition, but Tom Fogarty, who designed the hardware, has an impressive record. He is the founder or co-founder of 25 medical-surgical companies, including one that invented the catheter that led to the world's first balloon angioplasty. Financial backers include Johnson & Johnson, which has helped raise $35 million for the enterprise. Sleep Solutions is supplying its technology primarily through ear, nose, and throat physicians, and expects to reap revenues this year.

The Web Comes Alive SORCERON For all of us spoiled by the rich, breathtaking visual effects of contemporary movies, the computer screen is a very dull place. Animated Websites look hokey, and streaming video appears in a small box with fuzzy images and voices that sound canned. Jonathan Prince, who began his extraordinary career as a jaw and facial surgeon and later became a film producer, wants to bring the PC to life.

His company, Sorceron Inc., based in New York City, has created a media-distribution technology that makes a narrowband transmission into a PC look like broadband and a broadband transmission look and sound as dazzling as digital TV. Chief creative director Devin Shelley designed some of the spectacular effects for Titanic. Sorceron is targeting large businesses that want to create lively, interactive Websites for their customers. Its official launch is slated for the second quarter of this year. The company, which has more than $20 million in funding from ETF Group, Hiver Capital, and other investors, expects to have $15 million in revenue this year.

Aiding the Disabled Online SSB TECHNOLOGIES Because of their physical limitations, some disabled people can find the Web to be a lifeline. The Internet takes them to resources that are hard to reach, such as shopping centers, without someone else's help. Unfortunately, because the Net was not designed with the disabled in mind, it can be difficult for many of them to navigate it.

Two Stanford graduates, along with Princeton alum Marco Sorani, raised about $500,000 in angel financing and founded SSB Technologies to correct that. Among its services, the San Francisco-based company has designed a diagnostic tool that goes through HTML and integrates descriptive sound into Websites for the blind or enhanced graphics for the deaf.

For companies that do business with the government, adapting their sites may be more than a goodwill gesture. As of June, Section 508 of the Rehabilitation Act will require that all technology, including Websites, be accessible to the 54 million Americans with disabilities. While the company won't disclose revenues, it already has 25 clients, including AT&T and the U.S. Social Security Administration.

Memory Plays Catch-Up T-RAM Moore's Law, as everyone knows, states that computing power doubles every 18 months. But that refers only to the advances of microprocessors, the glamour chips. It is somewhat embarrassing that the power of the mundane random access memory chip has barely doubled over the past 10 years. Industry uses two kinds: dynamic and static. D-RAMs are dense but slow; S-RAMs are fast but can hold less information.

Now two Iranian-born engineers who met as graduate students at Stanford and last year won the school's business plan competition--Homan Igehy, 27, and Farid Nemati, 29--have come up with a chip that could give memory a big shove forward, the T-RAM. T stands for thyristor, a 40-year-old technology. Until Igehy and Nemati worked on it, thyristor was very slow. Now it combines the speed of the S-RAM with the capacity of the D-RAM. It will likely take years before their company, T-RAM Inc. of Mountain View, Calif., can bring the new chip to market; but when it arrives, it will speed up PCs, servers, routers, and other devices. To date, they've raised $11 million from Mayfield Fund, Tall Wood Venture Capital, and U.S. Venture Partners.

Calling All Fans UPOC If teens in Europe are doing it, why not here? That's what Gordon Gould, 31, CEO of New York City-based Upoc Inc., is figuring. With $3.5 million from U.K. VC firm Arts Alliance, Upoc has developed a platform to let teenage cell phone and pager users create the equivalent of mailing lists.

Using the Short Message Service (SMS), which most wireless carriers support, or wireless application protocol e-mail, Upoc lets users send brief group messages via cell or pager. In parts of Europe, SMS is more popular with teens than TV is. Gould--former president of Rising Tide Productions, the parent company of the Silicon Alley Reporter--hopes to jump-start the enthusiasm among U.S. Gen Yers. Considering there are 56 million Americans between the ages of 15 and 29, it's not a bad idea. That's what giants like AT&T and VoiceStream think: Both have signed on with the two-year-old startup as distribution partners.

College Miles UPROMISE When he was a student at Boston University, Michael Bronner, 42, had to struggle to pay his tuition. Now he's trying to make it easier for other kids by helping their parents save.

Bronner's latest venture, Brookline, Mass.-based UPromise Inc., works like an affinity program. When participants buy goods or services from certain companies, a percentage of what they spend goes into a college savings program, where the money can grow tax-free until it's needed for tuition. After all, 38 million people take advantage of the American Airlines Advantage card, which doles out frequent-flier miles. Why not use the same idea to help kids pay for college? Bronner must be on to something; he actually turned down about $30 million from wannabe investors, content with the $90 million he'd already raised. He's also landed powerful partners--i.e. Citibank, AT&T, and Lands' End--that have committed $100 million to market his concept.

Distant Intensive Care VISICU After making the morning rounds of the hospital's most critically ill, the intensive-care physician goes about other business. If an ICU patient enters a crisis, the staff is not always able to reach the doctor immediately. Deliberating on this time lag, two Johns Hopkins physicians, Michael Breslow and Brian Rosenfeld, created a monitoring system that's the medical equivalent of an air traffic control center.

Their company, Visicu, based in Baltimore, wires the vital-signs monitor at each bed in the ICU to a software interface that transmits data to a center that could be many miles away, but is continuously manned by ICU physicians. The doctors have all the records of each patient at hand and are ready to advise the staff instantaneously should one patient start to fail.

Visicu has raised $18 million from VCs. Although its system has not yet replaced traditional monitoring at most hospitals, a pilot study at Johns Hopkins produced some very impressive results, including a 60% decrease in mortality. Visicu declines to speculate on revenues in the next few years, but the potential market is sizable: 50,000 ICU beds in the U.S., tended by far too few ICU physicians.

Diagnostics in a Vest VIVOMETRICS The patient is in no immediate danger, so there is no pressing need to keep her in the hospital. Her heart is damaged and frail, however, and requires constant monitoring. She would be a candidate to wear LifeShirt, a vest that weighs only six ounces despite being embedded with an array of sensors that keep track of 40 cardiac and respiratory signs around the clock. VivoMetrics Inc., the Ventura, Calif., startup that created the vest, was founded by Andrew Behar, who was once a documentary filmmaker.

The idea began with Behar's father-in-law, Marvin Sackner, M.D., a quarter of a century ago. Dr. Sackner developed technology that monitored a patient's breathing in a hospital bed, but the measuring instruments were so bulky and heavy they couldn't be worn while the patient was walking. His son-in-law persisted, and with the indispensable help of the miniaturization of electronics components and $11 million from investors, he succeeded. Pundits say that one day it's possible LifeShirt will not only monitor vital signs but also dispense drugs directly into the body to abort medical crises. Currently LifeShirt is undergoing safety testing. An undisclosed pharmaceutical company is doing clinical trials on the product. This year's projected revenues: $3.7 million.

Fetch My Passport VVAULT Three years ago, William Ho's brother was temporarily stranded overseas after his passport and other vital documents were stolen. The misfortune inspired Ho to create a "virtual vault" in which people could store documents and send them over the Internet anywhere in the world. Ho, who had spent a decade building client-servers, databases, and Internet software for Oracle and others, founded vVault Inc. with the help of William Aldrich and Sharif Rahman.

The San Francisco-based vVault, which has raised about $5 million from VCs, provides its technology to telecom carriers and PDA software makers, who pay vVault an undisclosed licensing fee. The customers then use it as a service to attract more clients.

The customer sends his crucial documents by fax or e-mail to the telecom, which keeps them in storage. When the customer needs his birth certificate, say, he can use any Web-connected PC or PDA and have it forwarded to a fax number or e-mail address. Wireless carrier OmniSky is the first to offer vVault. Still, Ho expects revenues to grow from $500,000 this year to $22 million by 2003.

Picking Compounds Fast XANTHON Isolating compounds that might be useful in drugs is such a laborious manual task that it could take 80 years for a lab to sift through 10,000 of them. With that daunting burden in mind, Holden Thorp, a chemistry professor at the University of North Carolina at Chapel Hill, has invented a way to get a reading on the likely uses of compounds so remarkably fast that researchers can analyze 10,000 of them in a day and a half. Thorp, aided by Carson Lumas and Jim Skinner, has founded Xanthon Inc., in Durham, N.C., and raised $20 million from VCs.

Its device, the Xanthon Xpression Analysis System, looks like a large microwave oven hooked up to a desktop computer. Once a compound is placed inside the Xanthon, electrons are pulled out of its nucleic acids; the changes to the messenger RNA are measured, indicating whether the compounds might have useful properties. The equipment can analyze as many as 96 compounds simultaneously in a few minutes, a capacity and speed that may help bring drugs to market much sooner. At press time Xanthon was negotiating deals with drug companies to test its product in their labs so it can be commercially available next year.

Safe on the Doorstep ZBOX Silicon Valley attorney Tony Paikeday had no time to shop and wait for deliveries from e-commerce merchants. One day he got so fed up with packages being returned because he wasn't at the delivery site to claim them that he started his own company, zBox Co., with his wife, Tina Shah, and his friend Mike Duran.

The San Francisco-based company hopes to supply consumers with a plastic strongbox for $5 a month that would hold packages left by delivery services. Worried someone would steal your stuff? An algorithm changes your combination daily, and when you make an order online, deliverers get only a temporary combination printed on the shipping label. It may sound too good to be true, but the U.S. Postal Service has already agreed to help market it, and a subsidiary of General Electric is lined up to manufacture it. FedEx and UPS, which lose money on every missed delivery, are also getting in on the act, agreeing to use the box when it debuts later this year. Baccharis Capital has been the lead investor on the project, which has raised about $5 million.

When Half a Car Will Do ZIPCAR Maybe you don't need a whole car, or maybe you need a car and a half for those occasions on which your spouse wants a vehicle but you need the family auto to get to work. The answer could be Zipcar, a company founded by two women in the Boston area: Robin Chase, former managing editor of Public Health Reports, and Antje Danielson, once project manager for the Harvard University Committee on the Environment.

Zipcar buys cars and negotiates with local governments and businesses for parking spots in urban areas. Members join at the Zipcar Website and pay a $75 annual membership fee. Each car is equipped with a smart card and a wireless hookup to a central system that tracks where it is and whether it's in use. When a customer wants to use a car, he or she goes online, locates the nearest available vehicle, and then pays 40 cents a mile and $4.50 to $7 an hour, depending on the location.

Zipcar hopes to fill the niche between inconvenient public transportation and expensive rental cars. It's much cheaper than owning and operating your own car, which costs on average $8,147 a year in Boston. Using Zipcar for 15 hours a month will cost as little as $1,300 a year. The company plans to expand and will introduce its cars into Washington, D.C., San Francisco, Chicago, and New York City this year.

All reporting by Joel Dreyfuss, Brad Grimes, Jennifer Keeney, Jennifer Pendleton, Karen Solomon, Scott Spanbauer, Sarah Roberts-Witt, and Louise Witt