Steve Kirsch is the perfect example of a serial entrepreneur. Running one company germinates ideas for his next deal.
 

Prologue
I-Builder For E-Tailors
Spreading The Wealth

Prologue

Propel, Mr. Kirsch's fourth startup, was born when he was still running Infoseek. "In developing the portal, we had to build a core service that offered both reliability and scalability," he remembers. "It wasn’t available then and it still isn't today."

So when Mr. Kirsch left Infoseek in November after selling the company to Disney, he immediately started Propel, a company with a mission to "create a revolutionary new way to build electronic commerce Web sites," according to its press release. For e-tailers, who have generally had to build sites from scratch through a patchwork of proprietary software, Propel wants to be an end-to-end builder. "Our vision is to do for e-commerce what Microsoft did for the desktop -- to create a standard platform for developing and deploying e-commerce applications."

Mr. Kirsch's vision impressed a number of high profile Internet players who chipped in $8 million for Propel's first round of funding. They include Marc Andreessen (on his second startup, Loudcloud), BEA Systems president and cofounder Alfred Chuang, Michael Dell, Intel chairman Andy Grove, Internet stock analyst Steve Harmon, Ebay  CEO Meg Whitman, and, to add a dash of national celebrity, Gulf War hero Colin Powell.

Was General Powell brought on for advice on how to run Propel like a military operation?
Mr. Kirsch explains: "I wanted someone out of the ordinary who would add credibility, respect, and trust. Colin's name kept coming up. A mutual friend floated the idea by him. He asked for a copy of the business plan, checked references with Marc Andreesen, who sits on America Online 's board with him, and signed on".
 

I-BUILDER FOR E-TAILERS

Mr. Kirsch unveiled Propel at PC Forum in Scottsdale, Arizona, this week. His elevator pitch to potential clients: "Instead of taking 100 man years to build the infrastructure, we'll allow you to build the site on top of the infrastructure."

Later this year, Propel will offer a new Java-compatible programming language that allows users to code faster than current offerings as well as prewritten and pretested options and a new architecture that Mr. Kirsch says will scale without bottlenecking.

Mr. Kirsch has developed a management team with previous experience at Apple Computer, Oracle, Symantec, and Sun Microsystems.

Propel is targeting mid- to high-end retailers who either need to have Web sites built from scratch, or want to add or delete features from their current sites. "We're aiming for those who want a reliable and well-designed e-commerce site and aren't satisfied with a Yahoo store but can't afford the $5 million for an I-builder," says Mr. Kirsch.

The company isn't adapting the trendy business-to-business (B2B) catch phrase to its business model because there's plenty of business in business-to-consumer (B2C) sites, Mr. Kirsch says. He cites Forrester Research figures estimating that the e-commerce software market will amount to $14.5 billion in 2003 and a Jupiter Communications survey stating that 70 percent of e-commerce site managers plan to upgrade or replace their software in the next six months.

Propel will face competition from companies like Broadvision, Blue Martini, and IBM, but, according to Forrester's senior e-commerce analyst David Truog, the e-commerce platform market is plenty big. "Propel seems to have spotted an area that is a huge need for e-commerce sites and that no other vendor in this space is focusing on -- usability," he said. "If it can deliver the tools and scenario, that can make a huge difference to their clients' e-commerce success."

Mr. Truog also thinks the B2C market can generate significant revenues. B2B e-commerce will be bigger in terms of dollar volume but software vendors usually only collect licensing fees instead of percentages, he says. "What matters is whether there are enough companies trying to do e-commerce to generate demand for commerce platforms and the answer to that is yes."
 

SPREADING THE WEALTH

Mr. Kirsch, an avid philanthropist, says he will give 1 percent of Propel's equity to charity. "Part of [the money going to charity] will go to employee matching, which will be at a much more aggressive percentage, and the rest will go to a local community cause." This is a policy the entrepreneur will most likely live up to -- Mr. Kirsch was the eighth most charitable philanthropist in the U.S. last year, according to Forbes. Most recently, he gave $1 million to the underfunded United Way chapter in Santa Clara County.

Mr. Kirsch has been outspoken on the paucity of charitable contributions from Internet tycoons, but he's not complaining about the money that's rolling into his pockets these days. He is looking to raise $30 million in his next round of funding. Although he expects his angel investors to easily ante up the entire amount, he may deign to let a few VCs play.

"It's getting easier and easier to start companies these days," says Mr. Kirsch, who began his startup streak with Mouse Systems, a computer peripherals maker, in 1982 followed by Frame Technology, a document publishing software company, in 1986. "I've never been oversubscribed before. Now they're chasing me and my problem now is to cut back the round rather than grow it. It's such a great time to be an entrepreneur."

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Source:  Vanessa Richardson, Redherring.com, March 16, 2000