It would be tough to imagine a candidate more well positioned than CoManage Inc. to be the next company to take shape as a superstar after the big bang of FORE Systems.
Entrepreneurs David Nelsen and Andy Fraley are former FORE Systems employees, veterans of the four-year period during which the company went from $25 million in sales annually to nearly $500 million. Both have extensive experience in large and small companies, and are graduates of Stanford University and MIT, respectively.
But their resumes are only the tip of the iceberg. The factor that makes the mix gel is that they are plowing into a segment of the telecommunications market that promises astronomic growth over the next few years. Nelsen estimates the market overall generated at least $10 billion in sales in 1996.
CoManage is developing software packages designed to manage the newest generation of telecommunications networks, those based on high-speed asynchronous-transfer-mode technology. With thousands of telecommunications companies jumping into the business of building networks, the duo believes it can capitalize on the need for software to manage these complex systems.
Bill Hulley, a partner in Adams Capital Management, the venture capital firm providing $4.2 million in start-up capital for CoManage, acknowledges Nelsen and Fraley make a dynamic management team, but emphasizes the market is what really captivates him and his partners.
“A terrific management team in a lousy market will not build a successful company,” says Hulley.
Still, the team will be critical in leading the company through the fast-changing telecommunications industry, where technological advances and deregulation have created an extremely fluid market. Seven out of 10 high-technology start-ups flop, two are moderate successes and one is a runaway hit.
CoManage expects its first product to roll out during the second half of this year. Its biggest challenge won’t be in developing the product—Nelsen and Fraley are confident they can do that with some ease—but in recruiting the software engineering talent to do the work.
Says Nelsen: “It’s really going to come down to how quickly we can find people.”
