GOODBYE ARIZONA October 1, 2005 Written by Jay Jacobson The time has come for me to move on. I gotta go. There, I said it. I have been living in the Phoenix-metro area for almost ten years. During that time, I have had great successes, tragic failures, and a multitude of experiences in between. This story recounts my part in the invention of the first portable MP3 player, starting and growing several companies, raising the largest seed-round venture capital investment in the state's history, building communities, and creating some pretty damn awesome technologies - all right here, in the Phoenix, Arizona valley. This open letter is for myself, to take a personal inventory of my time here. Additionally, rather than explaining things a thousand times over, this letter is for all of the friends, colleagues, and other people I have met during the past decade. All the stories herein are vastly over-simplified for the sake of attempted brevity. No doubt this letter will be novelesque, but I have no desire to rival Tolstoy. Why leave Arizona? The weather is fantastic (usually)! The cost of living is reasonable! Phoenix has the great resources of a big city! The economy here is starting to boom! The technology industry and community is really growing here! The women are beautiful! The foo has great bar! No doubt about it, Arizona has a lot going for it. In fact, I like Arizona very much. Am I being silly? Perhaps. Nonetheless, I am still going. By the time you read my logic in this letter (if you make it that far - I am known for being excessively verbose), you might just agree with me. At the very least, you may understand. My friends know I have a *horrible* memory (and I have only smoked pot twice in my life... go figure) for some things, so please excuse me in some timelines are a month or two off. It is accurate enough for the gist of this letter. I was born and raised in Las Vegas, Nevada, and came to Arizona around late-1995 to attend college. I was 22 years old at the time, but my career was already in its infancy before college. I did not fully understand it at the time, but I did not go to college for my career. My classmates were all there to learn a skill set, graduate, and begin their professional work life. My professional life was already underway, so I was in college, ultimately, because of my father. My dad is a wonderful man in every way. Now retired, he was an electrical engineer (and a pack-rat), so I grew up around all kinds of great geeky tools, gadgets, and parts. Sometimes he would show me what these things did and how they could be put together to make/fix something. Among many benefits, this knowledge very likely led to my first federal crime - rewiring the neighborhood telephone junction box to run a pirated phone line into my bedroom. Thanks, dad! :) I would use this additional phone line to dial into BBS's when my parents would "ground me" by taking away the primary phone line. I was only about ten years old at the time, so I did not realize how illegal my actions were. I guess the "enterprising spirit" takes several forms throughout one's life. I also do not think I have ever told my parents about that "stunt," so I will likely get an ear-full over Thanksgiving dinner this year. Anyway, I generally knew HOW to make electronics work... I just did not understand WHY they worked. I always need to know WHY. So, I went to college to gain this knowledge. I started my electronics engineering degree in 1996 and graduated in February, 1999. I have never used, and likely will never use, any significant portion of my degree professionally. That is alright; I got the knowledge, and that is really what I wanted. While in college, for a class project around 1997, I started and led the team that created the first portable MP3 player, called CD^3. It was bulky by today's standards, a bit bigger, and twice as thick, as a CD player Walkman. However, it had a color touch-screen interface, played MP3 CDs, ran a custom embedded-Linux OS I built (before there was really such a thing as "embedded Linux"), had PDA functions, could play games... CD^3 was *very* cool, and *way* ahead of its time. With no desire to be in the personal electronics industry, all of the hardware designs and software were open-sourced (before "open-source" was a common term) and freely published. From what I understand, some of CD^3 was adopted by Sensory Science - a company that was acquired by Diamond Multimedia and went on to create the Rio - the first commercial portable MP3 player. Soon after I moved to Arizona, I was hired by a small local ISP called GoodNet. I already had a lot of telecommunications experience, having been a network engineer for both Sprint (Centel) and Cox (Prime Cable) for several years in Las Vegas. I had various roles at GoodNet over the ~three years I was there, culminating in managing the ISP Engineering division of the company. During my time at GoodNet, the company grew from a small Arizona ISP to the sixth largest Internet backbone in the USA with annual revenues of over $120 million. In 1998, GoodNet was acquired by WinStar Communications from New York. I worked full-time at GoodNet in addition to double-time college pursuing my degree. I left GoodNet (WinStar) around January 1999, just before I graduated college. Around this time, I was approached to co-found a company called Valley Local Internet, and I became the Chief Technology Officer there. That project only lasted a couple of months and the company never really got off the ground, at least not at that time. However, I felt the entrepreneurial itch burning strong, and no topical creme could relieve it. In early 1999 I founded another company, Wired Global Communications, with a little bit of money I raised from the three F's (those of you that have raised money before know this means "friends, family, and fools"). Wired Global was originally an ISP for tech-savvy people (read: we hated doing ISP technical support), but quickly grew into a company that provided back-end outsourced engineering for small ISPs across the country. This was my first experience at being a CEO, and boy, I made a ton of mistakes. The good news is that I learned huge lessons from all of them and I *never* made the same mistake twice. Wired Global was sold in early-2000 to a medium-sized ISP in Arizona. During my time at Wired Global, we acquired a small local information technology consulting company and the two owners, John and Nick, joined the Wired Global team. I introduced them to some ideas and concepts I had been mentally-formulating about how to improve the intelligence of global Internet routing (make routers and routing protocols smarter). As a side-project, the three of us started working on those ideas and we quickly realized that we had a valuable business concept. Taking a quick step back, sometime in the late-90's, I got word of a new group forming in Arizona. The premise of the group, called AZIPA, was to bring together Internet professionals. This sounded pretty cool to me, so I signed up. Today, AZIPA is a huge powerhouse in Arizona, and I am told that I am the oldest member (excluding AZIPA's two founders) in the group. That is pretty cool too. :) Back in 1999, I had the pleasure of meeting Ed, one of AZIPA's founders, a few times to discuss the routing intelligence technology John, Nick, and I were working on. Ed also introduced us to a lady with whom he had recently began working, Francine. The five of us pretty quickly hit it off and became friends. We all fell in love with this crazy routing intelligence technology idea, and together we were the founding team of a new company called Opnix. We spent several months writing business plans, doing R&D, consuming obnoxious quantities of pizza and Mountain Dew, and hunting down money to get the company off the ground. To make a very long, dramatic, and interesting story more concise, on March 24, 2000, we raised the money for Opnix' seed-round, over $8.25 million cash from eStreet Capital (Phoenix) and Garage.com (San Francisco). At the time, it was the largest seed-round venture capital investment in Arizona's history. I am not sure if that "record" still remains or not. What a surreal day that was... I will never forget it. I was the CEO/Chairman of Opnix from its inception until May 2001, and then I was the CTO/Chairman from May 2001 until I left the company in February 2002. We built the world's most intelligent Internet network and an astonishing data center in Tempe (now the headquarters for Limelight Networks). I could easily write a thrilling novel on the story of Opnix alone, but to sum it all up, I will just say it was one fantastic voyage and wild ride. In addition to the revolutionary technology itself, Opnix built a technology team that was absolutely nothing short of astonishing. Words can not even begin to describe the amazing talent, and wonderful people, we had. My Opnix experience taught me a cornucopia of lessons: some good, some bad, all immensely valuable. After Opnix, I was working on a few different projects, one of which included consulting to AT&T and American Express to direct the design and deployment of AMEX's disaster recovery network. This project was interesting in the aspect of its size: new fiber construction, fresh DWDM network, well over a dozen locations, interconnecting several data centers, and a new cross-country private backbone. Ultimately though, the bureaucracy and crappy politics were downright painful, severely dampening my creative abilities and skills. I get things done. I lead. I make things happen. Do not get in my way. As anyone who knows me might expect, I was thrilled when this contract was over. I also worked on a couple of concepts in the realm of "technical entertainment and socializing." Yeah, I know that description is vague, but neither of these concepts got off the ground (not yet at least), so the description is good enough for now. I have the business plans for them, but the ideas are not really refined. Some of my ideas see the light of day, however many more of them do not. I have absolutely no shortage of ideas, yet there is only one of me to make them happen. :) In August 2004, my friend Erik and I got somewhat of a wild hair up our cumulative asses. I forget the specific details, but the basic story is that we were attempting to read some article linked from Slashdot. Of course, the Slashdot-Effect was going on and the site hosting the article was totally unavailable. (If you do not know, Slashdot is a very popular geek news site which is famous for driving so much traffic to a site (the "Slashdot-Effect") that the site goes down. More details at: .) This particular event was aggravating enough, combined with the knowledge that the Slashdot-Effect impacts tens-of-thousands of people some days, that we decided to do something about it. We created MirrorDot to solve the Slashdot-Effect. It only took us about a week to build MirrorDot from scratch. MirrorDot pretty much became an instant hit, growing to serve over 500,000 visitors per month, only a few weeks after we launched it. We never intended for MirrorDot to become a big cash-cow or anything. We really just did it to prove that the infamous Slashdot-Effect could be solved with a little brainpower. The technology behind MirrorDot is not revolutionary or anything, but nobody had done it before. With some cool custom software (thanks to Erik), excellent network (thanks to Deru ), and very fine-tuned systems, MirrorDot has easily handled dozens of *parallel* Slashdot-Effects, tens of millions of *daily* hits, with just two PIII 700 MHz servers. It is amazing what a little ingenuity will accomplish. In February 2002, I founded Edgeos, where I am still the CEO today. Edgeos focuses completely on private-labeled managed vulnerability assessment services. Nothing more, nothing less. Every aspect of Edgeos' system can be customized and private-labeled, enabling businesses to create complete managed vulnerability assessment service offerings for their customers almost overnight. Edgeos has no outside investors - the company's startup money came from my pocket, and it turned cash-flow positive just a few months after inception. Edgeos has been profitable for years, is the absolute leader in private-labeled vulnerability assessment and network security services, and has served customers spanning six continents around the world. Now, if only there were more opportunities in elusive Antarctica. My business partner, Erik (the same friend mentioned above with regard to MirrorDot), and I have grown Edgeos from just a seedling idea (the way all of my projects start) into a great company. I have tried many different methods, structures, and styles with the companies I have founded. Unquestionably, Edgeos has proved to be the best combination thus far, at least for me. At various times from 1999-present, I served on the Board of Directors for the New Economy Council at Arizona State University, was the Chairman of the Tech Oasis Alliance Telecommunications Council, and was elected one of the top executives and entrepreneurs in Arizona by the Business Journal ("40 Under 40"). I founded the Technology Officers' Association, XUsers, and served as a technology advisor and strategic advisory board member for DeVry University. I was an adjunct professor for the Maricopa County Community College district, wrote many published technology-related articles/papers, and spoke about technology at dozens of companies, universities, conferences, shows, and events across the country. I founded six technology companies in Arizona. We tried to build communities of technology professionals in Arizona. We attempted to bring more investment money, innovation, and startups to Arizona. We worked to make Phoenix the next Silicon Valley. Sometimes we saw progress, while other times we saw failure. Nonetheless, today, Phoenix is much more technology-savvy than it was prior to these efforts. All of the above - every bit of it - was done right here in Phoenix. Further, this is just my story... one guy. There are dozens of great stories, of great people, doing great things, in Phoenix. In the end though, Phoenix is not the next Silicon Valley. (Cue the flames... now!) As I said earlier, I like Arizona very much and I have an incredible number of memories here. The Phoenix-metro area holds significant potential to be a juggernaut of technology cities. Unfortunately, Phoenix' focus is still manufacturing and Real Estate (neither of which stimulate me). Phoenix is still largely a branch-office town. There are some amazing people and technology companies in Phoenix, no doubt about it, but Arizona is not the proverbial center of the technology universe. Granted, there is some value in Phoenix not being Technology Mecca, but *personally*, I am yearning for a big dose of geeky religion. If it is not glaringly obvious already, I am moving to San Francisco. Yes, it is crowded and expensive. So what. Who cares? Not me! For a serial technology entrepreneur, there is no place in the world that can provide the experience of the Bay Area. "I left my heart in San Francisco..." and now I am going to claim it. That is my story of my professional life in Arizona. Now, to begin the next chapter, I must bid Arizona farewell and best wishes. My personal email address, < jay (at) kinetic (dot) org >, will always reach me. Feel free to drop me a line. ~Jay