(FORTUNE Small Business) – Ten years ago Michael Topolovac was luring sharks into cages for National Geographic photo shoots in the South Pacific. So what is he doing landlocked in Silicon Valley, selling software that helps manufacturing firms track product development?

Four years ago Topolovac gave up a career in oceanography to launch Arena Solutions. The company sells product life-cycle management software designed specifically for small businesses. Unlike larger-scale PLM applications such as MatrixOne (see preceding story), Arena's product is delivered over the Internet. That makes it more affordable (annual cost: $600 to $1,000 a user, about 25% cheaper than what the big guys offer). It also allows clients to get up and running in far less time.

Topolovac built the first version of the software in the mid-1990s, when he was running a company that made batteries and enclosures for underwater camcorders. His products required thousands of parts from manufacturers worldwide. No existing software could handle such complex product lists. So Topolovac and his engineers wrote code that organized all his product data into one simple application that could be shared with suppliers. Topolovac says the company's revenue jumped about 30% after it adopted the new software.

Five years later, after noticing that many firms suffered the same pain that his had, Topolovac bagged his scuba gear and moved to Silicon Valley. Just eight months after the dot-com crash, Arena Solutions raised $3.5 million in seed capital. "They were solving a problem that everyone has in a more cost-effective way," says Otter Capital managing member John Pasquesi, lead investor on two of Arena's early rounds. "It impressed us that these guys had already solved this problem for themselves."

Although Arena hopes to sell its product to clients of all sizes, the software isn't for everyone. It's probably best suited to companies that don't need to migrate large quantities of complex data from other software applications. "Arena's solution can't be modified to fit a company's special needs," says analyst Kevin O'Marah of AMR Research.

Does Topolovac still ache for the sea? "I can't lie about missing the South Pacific," he says. "But this was too big of an opportunity to pass up."