At first glance, Rearden Steel Technologies seems an unlikely name for a technology company. Nonetheless, Rearden Steel has two offices in Palo Alto, California (the heart of venture capital in Silicon Valley) and a studio called Rearden Steel Studios in SOMA (south of Market) in San Francisco. This studio includes "a motion-capture set where computer artists can create lifelike or superhuman action figures by monitoring the movements of human models." The story is in today's New York Times. Rearden Steel Technologies is the brainchild of Steve Perlman, a co-founder of WebTV, which Microsoft bought for $425 million in 1997. The name of his new venture is a kind of homage to Ayn Rand's Atlas Shrugged protagonist, Hank Rearden. According to the Times, while Mr. Perlman doesn't totally agree with the author's philosophy about corporate supremacy, he was "taken" with the Rearden character.
So what exactly is it that Mr. Perlman is trying to create under the name Rearden Steel Technologies (which he says is a place holder for his actual company, currently in stealth mode)? Mr. Perlman is deliberately vague, but people who know his style say he's creating a platform where television, the Internet and video games come together in a single system. Richard F. Doherty, president of Envisioneering Inc., a technology assessment and market research firm based in Seaford, N.Y., said the system is a "platform play" that would allow others to create specialized applications like games. Mr. Perlman's technology would need new development tools, which Mr. Doherty likened to designing new cameras, microphones, etc.
What is remarkable about the project is not that Mr. Perlman continues to develop creative tools that could bring about a lasting marriage between Hollywood and Silicon Valley, but the amount of venture capital that Reardon Steel has been able to garner. And the names behind the money.
The company has raised $67 million from investors like AOL/Time Warner (AOL), Cisco Systems (CSCO), Microsoft's co-founder Paul Allen and former Netscape chief, Jim Barksdale. As a hardware engineer, Mr. Perlman began his career at Atari, and spent time at Apple (AAPL) in its early days. Later, he headed the WebTV division at Microsoft but left in 1999, saying that within MSFT, like what happens in all big companies, politics got in the way of true innovation. (Microsoft he said is a "fast follower." They have the cash and the resources to move quickly, but they're not creators.) People who know Mr. Perlman say he's single-minded in his passion about the technology he's developing, and always has been.
You could say his latest company has had a long gestation and birthing period. But investors in Rearden Steel are betting on his focus and passion for designing the technology; especially as he is moving at his own speed this time. "At WebTV the wolf was always at the door," he says. WebTV suffered the ongoing underfinancing that most technology startups have to deal with (often making it impossible to do the job properly). "We had to design things very quickly. This time around we've had the luxury of doing things the right way." The company has filed 38 patents in the past 15 months and Mr. Perlman is in no rush to roll anything out. In the meantime, however, his studios have been busy and include work for HBO.
For investors and traders, the activities of Rearden Steel Technologies are clearly still a long way from the data feed. But it's worth adding to the radar screen for new technology. We're at a crossroads. Following the watershed of many unrealistic dot-com companies, I firmly believe that we'll see a great deal more breakthrough companies like Mr. Perlman's. Technology is coming into its own.There's a great feeling of confluence in the air. Mr. Doherty of Envisioneering comments, "I think Steve Perlman is going to produce a digital artists repertory company. He's made sure that the right tools and right canvases are there for creating the next Spielberg." Now, can someone please create the next Indiana Jones?
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