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Psst . . . wanna join my Web startup? By Heather Cocks American-Statesman Staff August 29, 1999 Patrick Curry of notHarvard.com only half-jokingly shields his co-workers from view. The company relies on intrigue and its leaders' reputations, not an explicit company profile, to attract workers. Photo by Rebecca McEntee/AA-S In a nondescript downtown Austin office, an Internet startup is hiding, tucked away above the din of blues rock music from Babe's Bar & Grill. The "Titan Insurance" sign on the door is a disguise. Behind that mask is a plain office filled with brown folding chairs and rickety tables -- clearly not a typical insurance office, but still nothing hinting at the e-commerce company that's developing there. "Our first office purchase was a paper shredder," said NotHarvard.com co-founder Mike Rosenfelt, 32, who handles the company's marketing -- or lack thereof. "You can't be too careful." It's the stuff of spy movies: false signs, fake business cards, layers of company code names and a series of cryptic Web sites. Family members are clueless about their relatives' new jobs, and recruits join the company on faith and curiosity alone. Even "NotHarvard.com" is a pseudonym. Weeks away from publicly launching its site, the staff takes no chances. Dozens of Internet companies sprang up last year in Austin alone, backed by a record flood of venture capital. In such a competitive market, young companies are realizing that a good idea is just a fraction of their business battle. To win the war, they must tightly guard their business plans from copycats eager anxious to cash in on the Internet gold rush. Secrecy is their first line of defense. ``The Internet is easier to copy than any other industry around,'' said Seema Williams of Forrester Research Inc., a Massachusetts-based market research company. ``Everyone tries to think outside the box, but the box keeps getting bigger. So it's quicker and simpler to copy, and there's money out there to fund it." Because NotHarvard.com thinks it has carved out a unique niche combining e-commerce and education, Rosenfelt said its major goal is to be a household name -- the Amazon.com of its genre. Still, the secrecy strategy does have its drawbacks. NotHarvard.com' s idea germinated months ago, and from a publicity standpoint, that' s a long time with no marketing message. ``There's a lot of pressure to go from as little publicity as possible to as much as you can get,'' said Rosenfelt, whose business card dubs him the company ``Marketing Weasel.'' ``You need to explode onto the scene. First-to-market advantage is everything." But without testing the market before disclosure day, companies such as NotHarvard.com can't tell whether their strategies will, in fact, pay off. And if they wait too long, another young business could snatch away that advantage, according to William Carner, senior lecturer for the University of Texas marketing department. ``There's a lot of nimble people out there that might tweak what you' re already doing and get there first, and you're up a creek,'' Carner said. ``And it's an industry where the competition reacts quickly, so it's just as easy to get eclipsed very quickly." Still, even without advertising its Web site, NotHarvard.com gets about 1,000 visitors per day. The site contains just three short slogans and a vague help-wanted ad, but curious jobhunters still submit rsums via e-mail, Rosenfelt said. For that reason, he said he thinks the secrecy strategy can be a marketing campaign in itself. ``It's self-serving -- it creates a buzz,'' Rosenfelt said. ``It tantalizes people." Ducking corporate spies The need for silence is part of any industry's life cycle as companies jockey for customers and the biggest chunk of market share. ``There's vast amounts of secrecy out there,'' said Carner, of UT. ``Automobile companies have secret test facilities all over the country to keep designs under wraps. There's all kinds of corporate espionage that goes on." Years ago, Carner said, Procter & Gamble Co. began testing a laundry tablet that combined detergent with fabric softener and bleach. The company tested it for almost eight months but did not guard its secret sufficiently from a watchful competitor, which developed its own version and beat Procter & Gamble to the market, Carner said. But most tangible products -- from soap flakes to automobiles to computer components -- enjoy some protection in the form of patents that prevent competitors from cloning the idea. Internet companies in large part lack that security. ``The reality is, the technology we use isn't groundbreaking. It's the ideas and how we implement them,'' Rosenfelt said. ``You can't patent that, so there's very little precluding companies from grabbing our idea." Add to that a growing pool of savvy programmers and the relative ease of starting an Internet company -- a Web address and computer code are the bricks and mortar of cyberspace -- and it's open season. During its secrecy phase, Austin-based applianceOrder.com took just 45 days to build and launch its Web site, according to president Jason Wesbecher. Within three months of its launch, he said, the e-commerce company had captured 5 percent of the market. ``When you can use the Internet to build an e-commerce business that quickly, you constantly have to look over your shoulder at the competition, '' Wesbecher said. ``The Internet totally changed the rules of the game -- you can't build a Best Buy in 45 days." To adapt, the general game plan for Internet companies involves establishing a long-term strategy during the secrecy period, then bursting onto the scene with an intense marketing campaign. But it can be tough to strike that delicate balance between a long- range focus and attention to shorter-term details. ``If you look too far ahead, someone in the marketplace could blow you out of the water,'' said Patrick Curry, 20, NotHarvard.com's chief technical officer. ``Things are constantly changing, but we do need to think about all the long-term technical pieces that have to fit together." Austin-based software company Motive Communications Inc. kept silent for 10 months before its May 1998 launch. Motive, which makes software that handles businesses' customer support, says it was one of the first high-tech companies to adopt those tactics. Company Chief Executive Scott Harmon said he always planned two steps ahead, focusing on the current climate but paying close attention to market trends and evolutions. ``We look at who the new players will be and how the existing players will adjust and react to those things,'' Harmon said. ``We know the market won't look like it does today." NotHarvard.com has tried to cover all the bases. It files official documents under its attorney's name and asks employees to sign a nondisclosure form that, tongue-in-cheek, demands their first-born child if they break vows of silence. Only the venture capitalists get the full story -- and they aren't talking, either. ``They rely on investors, so they have to reveal everything to raise money,'' said Eugene Lowenthal, a venture capitalist with Growth Capital Partners in Austin. ``But investors don't want to see investments tank because of loose lips, and so are always interested in whatever protective measures a company takes." For initial dealings with bankers, accountants and suppliers, the company created three layers of code names based on the amount of disclosure the situation warrants. Rosenfelt said, ``It makes us think about everything we do. We're not listed in the directory. The companies that wire us and run our phones -- they don't even know who we are or what we do." Hiring presents one of the trickiest challenges. NotHarvard.com asked that its recruiters try to sell the company without actually talking about its idea. But to cull experts for its core staff, the founders had to stake a lot on their reputations, calling on trusted colleagues from other companies and from old business ventures. Moment of truth Faith in an idea means little if the company's debut is diluted by a flood of identical sites. Williams of Forrester Research pointed to the recent surge in reverse- auction Web sites. In the past month, respond.com, eWanted.com and iWant.com all entered the marketplace with minor variations on the same basic theme -- buyers post messages about what they need and, in some cases, how much they're willing to pay. Sellers then contact buyers through e-mail. ``They came so fast that first-to-market advantage never became a factor,'' Williams said. ``They haven't had time to build a customer base, so there's no good way to tell who's going to win. No one owns the marketplace." And with no clear market winner, the door is open for established sites like Amazon.com and eBay to nip those companies' growth in the bud, Williams said. Although they may not beat smaller companies to the market, huge e- commerce sites like Amazon.com and eBay can play on customer loyalty, use existing resources to add new e-commerce departments and keep their millions of customers from seeking services elsewhere. ``The Internet will be won and lost on creative business opportunities and marketing,'' said Wesbecher, of applianceOrder.com. ``If you're in the Internet retailing business and you don't worry about Amazon.com, then you won't be in Internet retailing for long." Before applianceOrder.com got started this year, Wesbecher and his staff relied on secrecy to help hone the e-commerce company's competitive edge. But most of that strategy involved common sense, he said, not cloak- and-dagger tactics -- something Wesbecher said he thinks can be far more dramatic than the situation warrants. ``Everyone is out there in a wild, wild West fashion, trying to stake claim to new territory and establishing new laws,'' he said. ``Anything goes. And things move so fast with the Internet, I shudder to think what it's going to be like a couple years from now. ``Hopefully, I'll be on a beach somewhere." You may contact Heather Cocks at hcocks@statesman.com or 912-5955.

Why Austin is on top of the high-tech revolution and how (like it or not) you're a part of it By Gregory Kallenberg Oct. 15, 1999 American-Statesman Staff Oct. 15, 1999 It was supposed to be about us, but it wasn't. It's beyond us. The world, which used to be about humans, has turned and left us behind. Now it's about the buzz, the click and the whir. Machines, chips, bytes and bits. Now it's all about the worst and the best of the "ology"s. It's about technology. Some were prepared, others weren't. Cities, ensconced in banking and steel and making cars, were left behind. But not us. We knew what it was all about, so we prepared. Got plugged in and thrived. Heck, we already called ourselves "The Live Music Capital of the World;" why couldn't we be "Silicon Hills" too? High-tech came and crashed our party, seduced us, and we were there with open arms. It was a perfect fit. The new world didn't wear suits; we didn't wear suits. The new world was hip; we were hip. The new world dug live music and Shiner Bock; we dug live music and Shiner Bock. The new world worked hard and played hard; we, well, we played hard. Now we have arrived. We are a presence, a player in this new technological world. A world where toasters talk, where your bike knows when you're tired of pedaling and where being "connected" is a good thing. A place where 100-hour weeks are revered, stock options are king and Cheetos is a food group. Do you question this? Then you better sit down. The numbers are dizzying: More than 71% of Central Texans own home computers; there are more than 1,750 high-tech companies in the Austin-San Marcos-Round Rock area; we are No. 1 in Internet use in Texas and No. 3 in the country; Yahoo! reported that Austin is the second most wired city in the country and P.O.V. magazine said we were "the most computer literate big city in America." Austin even graced the cover of Newsweek as one of the magazine's "hottest tech cities." And if that doesn't do it for you, Austin's favorite son, Michael Dell, is worth $21 billion and has a 22,000-square-foot home. Now, look to the University of Texas. Here, M. A. Syverson, a professor in the innovative "Technology, Literacy and Culture" program, stands in her computer lab, Macintosh monitors glowing all around her. She is helping set Austin apart, helping us rise above the technological fray. Syverson is not only shaping the minds that will hopefully stay in Austin and bolster our local tech industry, but she is also making sure those minds remember they're human. She says her students -- the techno whiz kids and 'Net entrepreneurs of the future -- will make our city a better place, help it fuse seamlessly with technology instead of banging our heads against it. "We don't want these young people to be cannon fodder for the big high-tech companies," says Syverson as she helps a student with his computer. "We want these students to take on leadership roles." The "Technology, Literacy and Culture" program is meant to combine the three disciplines. Make students think about using technology in a humane, warm and fuzzy way. Make them think about how it affects us, how it can make us a better community, better people. It's all part of the university's grand plan to help make Austin a shining, beeping, whirring example of how technology can make a city great. It is the only undergraduate program of its kind. "The great thing about Austin is we're interested in our way of life and we ask the right questions about our physical environment and social structure," she says. "In Silicon Valley, they are focused on one thing. They have this deterministic, narrow view of making things faster and making more money. TLC (Technology, Literacy and Culture) works to make technology benefit everyone, not just an elite few. In a sense, we are a larger expression of this city: technology, legislation and this university." At Graves, Dougherty, a local law firm, there is a conference room that overlooks the pinkish purple state capitol. Present in this conference room are two of the firm's barristers, Diana Borden and Donald Jones. If you think this would be the last place you'd find evidence of Austin as a thriving technology capital, you are wrong. For 50 years, the firm has handled all the regular litigious stuff, but, as of late, Graves, Dougherty found itself changing. It was no longer just about "estate planning" and "trial litigation." It advanced, evolved, "connected." Now, when Borden and Jones describe the bulk of the firm's work, they speak in terms of "software licensing," "trade secrets and patent infringement," "mergers and acquisitions." Their clients are Dell, Healthway.com and Radian. "I've been here 20 years," says Borden, who decided on Austin after graduating Harvard and wanting a place where she could "go two-stepping and have some fun." "I've seen companies like MCC come to town and spin these brilliant people off to form other companies. Then those companies spin people off and bring more people to town. The technology growth has been organic here and really melded with Austin's culture. It's made us who we are now." "Just to let you how far things have come," Jones leans in and begins. "When I moved here there were only a handful of intellectual property lawyers in the intellectual property law association (an association primarily concerned with protecting patents and technology ideas). Now we number 150. Technology has treated Austin well on all fronts." For a barometric reading of technology's impact on Austin, head downtown, duck into Sullivan's. Go past the smoky bar where venture capitalists talk dot com over live jazz. Walk to the table where enterprising teenagers are coming up with ways to change the ways we think and communicate over ribeyes, porterhouses and horseradish mashed potatoes. This place didn't exist four years ago. These people couldn't afford steaks four years ago. Now, meat, tech talk and equity are symbiotic. After you've finished your meal, drive through the Hill Country. The hills are now festooned with sprawling mansions, testament to our good work and our good ideas. It used to be a difficult task to spend a million dollars on a home in Austin -- now the task is a breeze. Now stand in the Land Rover dealership on West Fifth Street. The lot is brimming with shiny new "Oxford Blue" and "Epsom Green" Land Rover Discoverys (known as "Discos" to those willing to plunk down $44,000+ on the vehicle) and the top-of-the-line Range Rovers. Inside the dealership, Michael Koltz, the sales manager, sits behind his desk. He is dressed in a pressed khaki Land Rover safari suit and wears $2,200 Tag Heuer "timepiece" on his wrist. He makes it clear he has made a lucrative career out of selling Austin the "most expensive sport utility vehicle in the world." He says his success and Land Rover's success in Austin -- in the southern region, this is the No. 1 Land Rover dealer per capita -- has all been connected to technology. "Realistically, we sell people vehicles they don't need," says Koltz matter-of-factly. "And most of those vehicles are to people in the technology industry. To them, it's a reward, a status symbol. For example, if you go up to the Dell campus, I guarantee you'd see that the car of choice is a Land Rover or Porsche. And they pay cash for them." Koltz goes on to name his clients. They include the creme fraiche of Austin's software developers, game developers and computer execs. Now, visit Patrick Curry and Michael Rosenfelt. They are Internet leaders/gurus/ entrepreneurs who only agree to meet under a cloak of secrecy. They can't say what they do or how they do it. They can only give a name of their company -- NotHarvard.com -- and their titles -- Curry is the chief technical officer and Rosenfelt is the self-deprecating "marketing weasel." They can say they have grown from two to 27 employees in the past three months (and they claim that 300 e-mails a week arrive querying employment). That they only use cell phones. And that venture capitalists have been very interested in what they're doing. Curry and Rosenfelt are young, spirited and creative. They are mavericks for whom failure is not an option. Both are stereotypes and prototypes for what Austin is and what it is becoming. Like the other citizens of Austin's new world, they aren't afraid to think in the "what's next?" mode and don't mind working the 80-hour week in order to create it. And, the best part is, they love their city and don't feel they could be doing whatever it is they're doing anywhere else. "The great thing is that anything is possible here," says Rosenfelt, "It's the wild, wild west." "The stress level here is such that the buzz can still be here, and it can still be laid back," adds Curry. "It's the Austin flavor." "All that we ask," Rosenfelt concludes before leaning back and leaving the conversation in an impressive silence, "is that that the future allows us to do exactly what we're doing right here in Austin, Texas." The Internet go-getters, techno lawyers, glitzy SUVs and neato college classes aside, it's not all good here. We know that as much as technology launches us forward, it also keeps some of us back. There are poor schools where kids have to fight to use a computer, if there's even one to use. There are families more concerned with putting food on the table than taking part in the information age. There are houses being bought by Silicon Valley transplants that you will never be able to afford. We might be on our way, but we're not a technological Utopia yet. Yet. No mind. Rome wasn't built in one day and Austin won't be either. Brick by digital brick, we will continue to construct, but, in the meantime, we are here, in our glorious city, in this glorious time, eating technology, breathing it. Our PDAs tell us when to say "Happy Birthday," our e-mail box lets us know when we are wanted and our cell phones tell us with whom we will be speaking before we are even speaking. On Congress Avenue, it is the dead of an Austin night, a time when other, less advanced, cities sleep, a man sits in front of Digital Anvil, arms tight around himself, smoking a cigarette and contemplating those last lines of code as he calls someone on his cell phone. Buzz. Click. Whir. And it never stops.

Congress Avenue, Austin, Texas POWER: The Next Silicon Valley by Gregory Kallenberg Fifteen years ago, Austin, Texas's historic Congress Avenue corridor in the shadow of the state capital was the stolid stomping ground of politicos, lobbyists, and overpaid lawyers. Then a guy named Michael Dell enrolled at (and dropped out of) the University of Texas, creating a computer company and an entrepreneurial revolution along the way. Congress Avenue and Austin have never been the same. Seemingly overnight, Congress Ave. became a magnet for VC technology prospectors loaded with Dell dollars, panning the city for money and mining UT for high-tech talent. The street (centrally located and near 6th Street's 73 bars) arose as a haven for digital renegades not wanting to play by Silicon Valley's rules (or pay for the lifestyle � the median price for a new home in Austin is $144,000 and $5 still buys you an enchilada plate and a stiff margarita). This sudden cash influx allowed some already funky Austinites to quit their coffeehouse jobs, run out the street's overpaid lawyers, and fill the spaces with their 22-year-old Web-savvy friends. Now the avenue is filled with cutting-edge design shops such as frogdesign, multimedia powerhouse Human Code, and a host of other startups, such as NotHarvard.com. They're not alone: Austin is home to more than 600 software companies and the site of 200 Internet startups in 1998. The local technology job market is growing at about 6 percent annually, more than twice the rate of the nation's job market. Technology is now one of the largest and fastest-growing markets in Austin, employing 120,000 workers. In the third quarter of 1999, Austin technology companies raised $173.6 million in venture capital, a dizzying 30 percent boost over the previous quarter. Patrick Curry, the 20-year-old chief technology officer of NotHarvard.com and Congress Avenue denizen, states it best. "The great thing about Austin is that anything is possible," he says. "The buzz is here, but it's still laid back. It's the Austin flavor."

Austin techies debut wares at Demo 2000 By Gregory Kallenberg American-Statesman Staff Tuesday, February 8, 2000 PALM SPRINGS, Calif. -- With the elite Demo 2000 technology conference as a backdrop, two Austin companies emerged Monday from their technological bat caves to give the world a first look at the fruits of their 100-hour workweeks. NotHarvard.com demonstrated an application combining education with e-commerce, and Tantau showed off an Internet security technology. To the high-tech world, the Demo conference is the ultimate product-launching pad. The 10-year-old event is famous for launching the Palm Pilot, Windows CE and a slew of other high-profile products. "Getting slotted at Demo is like having a Super Bowl ad or getting mentioned by Tom Brokaw," said Marc Andreessen, only half joking. The founder of Netscape was there to introduce his new company, Loudcloud, which provides startup kits and infrastructure for Internet companies. Not everyone gets to come to this prestigious event, which might be best described as part Sundance Film Festival and part "Gong Show." Tantau and NotHarvard were among the 81 technology companies that were whittled from a list of 1,000. Of those 81, 65 of the most innovative were given the honor of presenting on stage in front of 950 attendees, who included industry analysts, venture capitalists and technology journalists. Both Austin companies were picked to take the stage today, where they will have only eight minutes to present their technologies. A lot is at stake; an unsuccessful presentation could be a setback. "Tantau and NotHarvard are two of our most highly vetted companies," said Demo's Chris Shipley, one of the industry analysts who travel the world selecting the attendees. "Both companies addressed problems in the Internet space and came up with compelling solutions. That's why they're here." Tantau announced its Wireless Internet Platform technology, a secure server designed to protect the safety of wireless financial transactions over the Internet. NotHarvard.com is announcing its Freeschool suite, an "edu-Commerce" application offering free education resources on Web sites. In exchange, clients receive e-commerce -- sales and marketing -- opportunities. "Demo has been exciting because it's given me the opportunity to see how much better our product and our business plan is than our competitors," said Judy Bitterli, chief executive officer of NotHarvard.com. "We've even had a competitor come up and want to license our technology." Both companies also announced lists of partners. Tantau has teamed with Visa, Nasdaq, Merrill Lynch and Scandinavia's Merita Bank. NotHarvard.com will produce online universities for AskJeeves.com, Metrowerks, Jobs.com and Bloomberg.com. NotHarvard also revealed it had raised $8.5 million in the first round of venture capital funding. Tantau reported raising $11 million. These two companies are the fourth and fifth Austin companies to attend this conference. The other Austin appearances at Demo have been Motorola, Dazel and Activerse. In between demonstration sessions, the Demo crowd flocked to the exhibitors' tent, where companies showed their products to a high-energy crowd laden with cell phones, Palm Pilots and clever corporate giveaways. The tent, on the grounds of the regal Renaissance Esmeralda resort, was awash in press releases and handshakes. The Tantau and NotHarvard.com booths buzzed with activity. NotHarvard.com founder Mike Rosenfelt found himself at the center of attention as several techies -- including Esther Dyson, a leading technology author and cyber-thinker -- swarmed. Others crowded the Tantau booth. "Actually, we're finding a lot of potential partners here," said John Sims, Tantau's CEO. "Wireless and the Internet are two of the most exciting things out there. We're right in the middle of it." Trends at Demo have centered on expanding the Internet to the wireless format and securing more users on sites. Televend Limited, of Israel, introduced a technology that would enable cell phone transactions with vending machines and ATMs. X-Time, a Palo Alto, Calif., company that has been working under the pseudonym of a coffee company, showed a technology that would let customers manage all parts of their lives from the Internet and the phone. "All the people at Demo have come up with something real," said Dyson. "Now the test is if they can take all this excitement and energy, follow through and implement it in the Internet space."

NotHarvard.com Upshot February 08, 2000 by Deborah Branscum You could call him a Texan with attitude, assuming that's not redundant. Mike Rosenfelt, former creative director at Micron PC (MUEI), won plaudits there and at Power Computing for his stylish marketing moves. Now the fast-talking Austin resident has launched a business-to-business venture that marries education to e-commerce in a new twist on the Internet-university craze. At Micron, Rosenfelt created Micron U, which offered free online computer courses to new owners of Micron PCs and kept customers glued to Micron's Web site. Inspired, he left the company to develop NotHarvard.com, which builds private-label universities for e-commerce clients. For the Metrowerks division of Motorola (MOT), for example, NotHarvard.com helped create the content, courseware and curriculum for five programming courses. NotHarvard.com is also developing courses for consumer sites like FlexTrader.com, which offers sophisticated investment tools to nonprofessional investors. In return, NotHarvard.com takes a cut of any sales of books or software recommended for a course and expects to earn revenue from creating and maintaining university sites as well. Company execs argue that free courses build brand awareness, deepen customer loyalty and increase sales opportunities as students linger on a site to chat with fellow students, turn in homework or consult with teachers. According to Michael Moe, director of Global Growth Research for Merrill Lynch, this business model is "a win for NotHarvard.com -- it's a win for their partners, and it's a win for the customers." Rosenfelt, who sold his condominium to finance the company, hopes it will be a win for him as well. Deborah Branscum is a contributing editor at UPSIDE.

Austin companies shine at exhibition By Gregory Kallenberg American-Statesman Staff Wednesday, February 9, 2000 PALM SPRINGS, Calif. -- While anticipation was high over the innovations demonstrated at Demo 2000, the excitement heightened when Austin's Tantau and NotHarvard.com took the stage Tuesday to give attendees a taste of the technological boom in Silicon Hills. Demo is an annual invitation-only technology event where 61 companies handpicked from 1,000 applicants demonstrate their technologies in front of top-tier venture capitalists, industry analysts and technology journalists. Tantau was first on the bill, introducing its Wireless Internet Platform. John Sims, the company's chief executive, and Markus Pekkarinen, a Finnish technical assistant from Tantau's Helsinki development center, took the stage dressed in no-nonsense khaki shirt, and their demonstration followed suit. The presentation was to-the-point and fell two minutes short of the allotted eight minutes. Sims was at ease as he guided the crowd through the complex technology, using a magnified cell phone display as his only prop. Tantau has developed a secure server for financial transactions over wireless devices. "In Finland, we can already use our cell phones for transactions," said Pekkarinen. "You can buy a Coke, purchase train tickets or even get a car wash." Sims used this as a jumping-off point to show the possibilities of the wireless transactions. Soon, Sims said, there will be 500 million cell phones in use, and most will be Web-enabled. The Tantau server will ensure secure wireless Internet transactions and will be able to handle the increased traffic. Jim Forbes, Demo's co-executive producer, was impressed. "This is the wireless format to follow," he said after the Tantau presentation. "We looked at a lot of wireless companies, and all the others missed the mark. These guys will be the leaders in the wireless transaction revolution." The crowd noticeably increased moments before NotHarvard.com, one of the conference's most buzzed-about companies, took the stage. This was, in part, because they stacked the deck. Not- Harvard.com endeared itself to attendees by sponsoring Monday night's Demo 2000 Jam Session and importing Texas musicians Shawn Colvin, Jerry Jeff Walker and Eric Johnson to perform. After a snafu in the opening video cards, company founder Mike Rosenfelt had to wing it, minus multimedia for the first few minutes. "I'm here to clear a couple of things up," Rosenfelt said in his opening. "NotHarvard.com ain't no education company, and I didn't go to Harvard. In fact, it's not really clear that I graduated high school." Rosenfelt recovered to give a high-energy demonstration, outlining the company's plan to provide free education resources on Web sites. He said the company expects to have access to 100 million consumers in 12 months. If nothing else, both companies generated a significant wave of buzz to ride back to Austin. That, presumably, will make their respective second rounds of fund raising easier. "At the end of the day, Demo is about business development," said Forbes. "When a company leaves Demo, it's a success if they leave with strong relationships with the VCs and strategic partners. I think both of these companies accomplished this."

By Gregory Kallenberg American-Statesman Staff Posted: Feb. 18, 2000 It is early afternoon on Super Bowl Sunday and Mike Rosenfelt, the founder of notHarvard.com, sits in his office looking like he has just pulled the ultimate all-nighter. Rosenfelt's clothes are wrinkled and bags too large to be allowed as carry-ons droop below his eyes. Since early the day before -- with a 3 a.m. break to watch a bootleg DVD of "Fight Club" -- he has handcuffed himself to his laptop, Diet Cokes his only fuel. This pace has been constant, seven days a week for the past eight months. In those months, Rosenfelt and his company have secretly worked on an Internet technology that could change the way users educate themselves on the Web, at the same time giving e-commerce sites marketing access to those users. He calls the technology "edu-commerce." As with most Internet startup ideas, this technology could make him and his colleagues at notHarvard.com rich enough to buy lakefront property with cash or leave them unemployed within a year. Lately, that's not what has been keeping Rosenfelt awake. In three weeks, his company will appear at Demo 2000, a top-tiered technology demonstration in Indian Wells, Calif., near Palm Springs, and has eight minutes to present its product to the world. This scene is more common than you might think. In recent years, Austin has experienced a wave of unbridled entrepreneurial firepower in the form of Internet startups like notHarvard.com. Companies like Living.com and Mall.com are quick to start, and many, like the recently defunct Electricwish.com, are quick to close. The startup and failure rate of Internet industry is so fast that Austin's usually precise Angelou Economic Advisors can only guesstimate that the number of Internet companies in Austin is between 300-350 (with hundreds of independent Web designers). But notHarvard.com has been given the chance to rise above the white noise and crazy ups and downs of the Internet startup rodeo and create a permanence for itself. The Demo 2000 conference, celebrating its tenth anniversary, is famous in the technology world for launching products such as the Palm Pilot, Windows CE and a slew of other technological household names. notHarvard.com is one of 85 handpicked companies (out of 1,000) selected to attend. Along with 60 other companies, it has also been awarded the ultimate prestige of appearing on stage. Abiding by a strict eight-minute time limit, the company will demonstrate its product in front of 950 highly respected industry analysts, highly influential technology press members and highly funded venture capitalists. "Being on stage is a lot of pressure," a top-level IBM executive says of the conference. "If you're successful, you have the opportunity to make a lot of money and put yourself on the map. If you fail, then it's back to the woods for a couple of years." Patrick Curry, notHarvard's 20-year-old chief of technology and programming wunderkind, staggers into Rosenfelt's office. Curry has crunched code all night. His eyes are bloodshot and his hair defies gravity. "You don't look so good," says Rosenfelt, sounding oddly alert. Curry tells Rosenfelt that he's going to get some sleep. "OK, dude," Rosenfelt says. "I'll be here." Rosenfelt pops open another Diet Coke and turns back to his computer screen. He won't stop working until late evening.

Posted: Feb. 18, 2000 The lather of innovation The idea for notHarvard.com came to Rosenfelt (who made a name for himself as an effective guerilla marketer and master hypester for the Austin arm of Power Computing) when he worked for Micron Computers in Boise as creative director. Standing in the shower, he was trying to figure out how to differentiate his company's computers from the other beige boxes in the marketplace. Somewhere in between the shampoo and the conditioner, he had an epiphany: Micron not only needed to create powerful systems, but it also needed to create powerful users. The epiphany led Rosenfelt to partner with online publishing magnate Ziff-Davis and create Micron U., an Internet site where Micron owners could learn how to use their desktops. The site still exists today. "Micron U. was wildly successful, but we saw the possibility of it being more wildly successful if we turned the market upside down and started offering the education for free," says Rosenfelt. "We saw a bigger pony here." Rosenfelt left Micron and moved back to Austin. He then enlisted Curry, Paul Danziger as general counsel and Mark Gonzales, a former colleague and friend, as CEO. The company then pulled down a curtain of total secrecy. Anyone interested in listening to the plan signed a strict non-disclosure agreement, and the first stop for all paper memos was the shredder. Rosenfelt was so focused on making notHarvard.com a reality that on April 26 of last year, he and his partners met with venture capitalists, just a single day after Rosenfelt married his girlfriend of nine years, Amy Alcorn. notHarvard.com was turned down; the marriage remains intact. Rosenfelt sold his condo to keep the company afloat; Gonzales stepped down as CEO. Still determined, Rosenfelt tweaked the concept to the venture capitalists' liking and contacted three former mates from Power Computing to form the final management team. It was a rock-star lineup. Bruce Gee came on as vice president of product marketing; Judy Bitterli took the helm as CEO; and Bill Goins assumed the role of chief marketing officer. Gee had made a name for himself by helping design and market the first Apple Macintosh Powerbook. Bitterli, a former Army captain, had served as vice president of Softbank and held executive positions at both Power Computing and Micron. And Goins, who started in the oil and gas industry, had named and helped market Apple's Mac Classic and had also helped start Motorola's PowerPC chip development center in Austin. With the team in place and a solid concept, notHarvard.com secured $8.5 million in venture funding and was on its way to becoming a reality. The MTV generation is called to order The notHarvard.com office is on Sixth Street, next to Babe's Hamburgers. From the lobby of the building, you can smell the fryer and hear the bassy thud-thud of the jukebox. The set-up, which takes up two offices (one for marketing and content, the other for programmers) on the second floor, is sparsely furnished with cafeteria-style tables and folding chairs, taking on the appearance of a hit-and-run bookmaking operation. On the technology side of the office, notHarvard.com's weekly staff meeting is called to order. The assembled group looks like a casting call for MTV's "Real World" -- a majority of sub-30-year-olds sport T-shirts, dyed hair and a smattering of interesting piercings; they eschew the folding chairs , preferring to lounge on the floor. "OK, we have a lot to get through," says Bitterli, appearing mature at 46, but just as hip. "Let's start with an update from Demo." Rosenfelt, at 32, looking patriarchal compared to the staff, proceeds to tell his audience every detail about the upcoming Demo 2000 conference, describing what the Demo team hopes to do with its eight minutes. He also reveals that they will be sponsoring the Demo Jam Session. The Jam Session is an annual Demo event where attendees are invited to bring their instruments and jam together. notHarvard.com plans to up the ante and generate some hype by enlisting B.B. King to play. Rosenfelt's cadence is quick and delivered in a "this is the coolest thing ever!" tone, which is how he delivers all his news. Bitterli takes over, guiding the meeting to its end. Her manner is more calm and straightforward. It is apparent by the staff's rapt attention that she is regarded as notHarvard.com's undisputed leader. While Rosenfelt plays the ebullient, frenetic, supportive cheerleader, Bitterli has inherited the role of stalwart team captain, the one everyone depends on in the clutch. The countdown begins >>

Posted: Feb. 18, 2000 The countdown begins Demo is now 10 days away and a few problems have popped up: First and foremost, B.B. King has canceled, and the search for another band for Demo's Jam Session has sent Rosenfelt into hyper-search-mode. Second, with deadlines quickly approaching, the wordsmithing of brochures and press releases is dangerously behind. Second, Bill Goins and Mike Rosenfelt are in a heated battle over an "n." The burning question: Should it be Rosenfelt's "NotHarvard.com" or Goins's "notHarvard.com?" And finally, Rosenfelt and the rest of the staff are still struggling with how to spend notHarvard.com's precious eight minutes. Demo has become notHarvard.com's obsession. Everyone in the office is counting down. A calendar, hanging in the technology side of the office, has "DEMO" scrawled in big, imposing letters over the two days in February when Demo 2000 will be held. Another sign hangs on Curry's office door that reads, "Demo! It's go time!" Curry works in a small room warmed to the brink of comfort by 11 whirring Dell servers. He wears the obligatory programmer's goatee and is quick to smile at almost anything. A "Death to the Pixies" CD sits next to a bottle of Allegra allergy medicine and the book "Netscape Time" by Jim Clark. Curry speaks of Demo like it's a high-level, critically important mission, the outcome of which will be determined by sure victory or utter defeat. "Demo is pretty damned important," he says as he constantly checks his e-mail. "We're going to be setting a huge precedent when we present our idea for free education online. I'd be pretty disappointed if we failed to make people understand our message, but I don't think that's going to happen." Over the next few days, the conflicts are resolved, except for one. Rosenfelt and Goins sign Austin artists Shawn Colvin, Eric Johnson, Jerry Jeff Walker and the Austin All-Stars to appear at the Jam. The exhaustive fine-tuning of the releases is finally done. And Goins's "notHarvard.com" wins out. Unresolved is the presentation. What to do in those eight minutes. Talk about the concept? The marketplace? The future? The partnerships? The time must be used effectively. Once your time is up, you are cut off. That's it. If you haven't gotten your message across, it's back to the woods. Into the mouth of the Demo By the time the notHarvard.com team lands in Palm Springs and sets up shop at Demo 2000, Bitterli has set up an organized battle plan. Rosenfelt, Curry and Gee will camp out in the hotel room, sustain themselves with room service and ChipsAhoy! cookies and practice the demonstration. Bitterli and Danziger will scout the Demo stage area and the Demo 2000 tent (where each company is given a small booth) to comb for demonstration tips and potential partners. Goins, Elisa Durrette and Ben Kusin, notHarvard.com's marketing team, will focus on setting up the Demo Jam and begin passing out notHarvard.com paraphernalia and generating buzz. In the hotel ballroom, Chris Shipley, the co-executive producer of Demo and one of the people responsible for selecting the companies invited to Demo, introduces each company and explains why each has been chosen. Companies then take the stage and present to the Demo audience -- the opinion-makers and check-signers of the tech world -- the next big idea. An Internet radio is introduced, as well as an Internet-based technology that will provide an array of information for any word on a computer screen at the click of a mouse. Both generate immediate, overwhelming applause -- the instant gauge of a product's success. It's heart-wrenching to see a company take the stage, present its demonstration and be met with relative silence. When Digital Bridges presents a lineup of cell phone games, you can hear the quiet room deflate. Worse is when a company is cut off. Shipley plays Chuck Barris from "The Gong Show" and, if needed, will physically stop demos. A number of companies suffer this fate. Rosenfelt quarantines himself in his room, hones and practices his speech, over and over. Curry joins him, charged with running the computer animations and moving the slides. Both practice to the point of exhaustion, sleep for an hour or so and begin again. "This is horrible," says Rosenfelt at 1:47 a.m., the morning before the demonstration. "This is horrible. Is anyone going to tell me it's horrible or do I have to wait until I leave the room for you guys to talk about it being horrible?" "No, it's great," says Gee, holding a stopwatch. "We just have to keep working." The Demo Jam provides a welcome respite for the notHarvard.com crew. Goins, Durrette and Kusin have done a stunning job promoting the event; the stage area is packed by the time Shawn Colvin, Eric Johnson and Jerry Jeff Walker take the stage. The Demo Jam session ends around 12:30 a.m. Rosenfelt and his crew retire to the room for more practice. It's go time >>

Posted: Feb. 18, 2000 It's go time! The next day at 3:27 p.m. at the Renaissance Esmeralda Resort, Shipley introduces notHarvard.com as the company that "parties too hard, thus proving their name, notHarvard.com." The joke gets a few laughs. When Rosenfelt and Curry hit the stage, the slides won't show up on the Demo screen. Rosenfelt looks at the large digital clocks on the side of the stage and sees his time has already started. Twenty precious seconds gone. The executive decision is made to march on. Rosenfelt energetically introduces the next big idea as notHarvard.com's first-of-its-kind online education/marketing format, to be known as "edu-commerce." By the time Curry's computer slides and animations hit the screen, Rosenfelt has captured his audience. Rosenfelt not only announces that the first online university (CodeWarriorU, which will appear on the Metrowerks Web site) is online, but also says the classes are already full, with 10,000 people registered. As an added bonus, he states, the CodeWarrior classes are expected to add $5 million in incremental revenue to Metrowerks' bottom line. And that's not the best part, he explains: notHarvard.com expects to have access to 100 million users in the next 12 months. A few "ooohs" and a "wow" drifts from the audience. There is a problem. Rosenfelt looks down and sees he is behind on time. He quickens his pace. Everything must get in. The last two minutes are a blur of facts, animations and a short demonstration of the software. He finishes the presentation with 10 seconds to spare which, he later says, is better than being stopped mid-sentence and not getting the message across. The applause is hearty, but the question still remains: Did the message resonate? The next few hours would be telling. Waiting for judgement >>

Waiting for judgement Rosenfelt, Bitterli and Gee rush back to their booth in the Demo tent, take a deep breath and wait to see if edu-Commerce registered with their audience, to see if Demo could be deemed a success. First, there is no one, then a trickle, next, an onslaught of interested potential clients (including IBM and drugmaker Pfizer-Warner-Lambert), venture capitalists and journalists (from Upside Magazine and the New York Times). They request partnerships with the company, hint at wanting to throw money at the venture and demand more detailed information about notHarvard.com. All told, the response is overwhelming. If Demo were a "Rocky" movie, this would be the part where notHarvard.com raises its arms in victory and shouts, "Adrian!" Outside the tent, Curry decompresses on the patio of the hotel's Charisma restaurant. He looks relaxed and is once again smiling. "You know, I think about what we're doing all the time," says the 20-year-old Curry as he illegally sneaks sips from a mimosa. "Do I want this to make me rich? Who doesn't? Would I be at notHarvard if the business plan was bad, and it didn't look like I'd make any money? You bet. This is truly amazing. We're bringing free education to the Internet, and we're going to change the world." Hitting the target While changing the world might be a priority, the acquisition of clients, raising money and other factors that directly affect notHarvard.com's existence supercede such altruism. It's two weeks after Demo, and this is about the time notHarvard.com should be seeing real results. And the results are in. Bitterli says she is still answering cell phone calls and e-mails as a result of their Demo performance. Before Demo, the notHarvard.com site was getting 200 hits a day; now they are receiving 2,000 hits a day. Before Demo, e-mails trickled in requesting information about the company; now they are getting 200 e-mails a day from potential instructors, funders, clients and employees. "It was a really nice coming-out party," says Bitterli of notHarvard.com's appearance at Demo 2000. "If I was a debutante, I'd be really pleased. I had a lot of suitors at the dance." First page >>

Education: Web's New Come-On By LISA GUERNSEY March 16, 2000, Thursday New York Times A FEW years ago, when educators and company executives first talked about the prospects of online education, they borrowed terms from the business world. Students are consumers, they said. Treat them as valued customers and offer them convenient courses at prices they can afford. Traditionalists cringed at the commercial mentality. But many were heartened by the thought that the product being packaged was still education. And few disagreed that adult students, especially, would do some comparison shopping before devoting their time to an online course. Now a group of Internet entrepreneurs is trying to turn the shopping analogy into something more literal. Students are not merely consumers of knowledge, they argue. They are consumers, period. A student in a photography course, for example, could be in the market for a new camera. Someone learning French might be inclined to buy a travel guide or airline tickets. Instead of relying solely on revenue from tuition, the entrepreneurs asked, why not offer online courses -- perhaps even free ones -- and make money from people who might shop while they study? Why not use education as a marketing tool to attract potential shoppers the way other sites use free e-mail or home pages? Michael Rosenfelt, the founder of notHarvard.com (notharvard.com), argues that the combination of courses and consumerism will be the next marketing wave to hit the Internet. ''Education has always been at the basis of commerce,'' said Mr. Rosenfelt, who coined the term eduCommerce to describe the concept. ''Sellers need to teach, and buyers want to learn.'' Some who follow trends in education do not know whether to be amused or appalled by the concept. ''It would be interesting to consider what is meant by the term 'course,' '' said Alex Molnar, director of the Center for the Analysis of Commercialism in Education at the University of Wisconsin in Milwaukee. ''If you mean something as straightforward as having people learn a fact they didn't know before, that certainly doesn't rise to the level of a course as most people think of it.'' William L. Rukeyser, a former official in California's Department of Education and director of a nonprofit organization called Learning in the Real World, also questions the concept. ''If the so-called education has the intent of getting people to buy a product,'' Mr. Rukeyser said, ''then there is an open question as to whether it can be dignified with the name education at all.'' But the companies involved are confident that adult students, their primary targets, will understand the value of these courses. notHarvard.com is banking on the concept entirely. Instead of charging tuition, it is making deals with commercial Web sites that will offer the courses at no charge in an attempt to acquire new customers. ''We make no pretense that this is, in fact, a for-profit venture,'' said Mr. Rosenfelt, who once had the title ''marketing weasel'' on his business card. (Officials at Harvard University are not content with the apparent differences between their institution's name and that of notHarvard.com. They have asked lawyers to explore whether notHarvard.com's name is a trademark infringement.) Other companies that hope to profit from student shoppers include Learn2.com, Smart Planet and Hungry Minds. Learn2.com (learn2.com) creates its own courses and tutorials; most of them are free, but some are subsidized by courses that cost money. Smart Planet (smartplanet.com) and Hungry Minds (www.hungryminds .com) are designed to be clearinghouses for online courses developed primarily by other companies and universities. Most of their courses are not free, so the sites make some money on commissions on tuition or on sales of CD-ROM tutorials. But for all three companies, shopping still plays a role: students at each site are invited to make online purchases, and the sites pockets a percentage of each sale. ''We are essentially a marketing platform,'' said Stuart Skorman, chief executive and founder of Hungry Minds. In his company's case, that marketing takes the form of promoting courses that are available for a fee from places like the University of California at Los Angeles and consumer products from stores like Reel.com and Amazon.com. Students browsing Hungry Minds courses, which include subjects like art history and alternative medicine, are invited to shop in the Knowledge Store, where they can buy items like books, music and software. Such mixtures of marketing and education could backfire, critics say. Adults may shun courses that seem to focus more on selling than teaching. And qualified instructors may not want to teach for companies that can change the content of the courses the instructors want to teach or are blatantly using education as a way to increase sales. Dr. Molnar said he could not imagine spending his time as an instructor for such sites and did not expect that his colleagues or students would want to, either. ''That is not an edifying model of a scholar,'' Dr. Molnar said. ''That is a scholar as a used car salesman.'' But Chris Dobbrow, president and chief executive of Smart Planet, said the strategy could work, as long as lines are drawn between course content and advertising. ''The trick,'' he said, ''is not to make it an infomercial.'' A Web site called CodeWarriorU (www .codewarrioru.com) provides a view of the kind of education offered by notHarvard.com. CodeWarriorU was developed by notHarvard.com for Metrowerks, a software maker that creates tools for computer programmers. Its first courses were offered in February: one on C++ programming for the Macintosh and another called an introduction to Code Warrior, one of Metrowerks's software packages. In both courses, instructors posted new lessons every week and responded to questions posed by students on the course bulletin board. In the introductory Code Warrior class, the instructor was Joe Zobkiw, a software developer who started his own company. The class on C++ was taught by Ronald Liechty, a Metrowerks employee who has been teaching similar classes for more than six years. Metrowerks screens all instructors to determine whether they know the material and can lead a class, said David Perkins, the company's chief executive. By the end of February, the courses had attracted more than 2,000 students -- well over the 500-student limit per course. Many who did not sign up in time audited the course by reading lesson plans without posting any messages. To register, students were asked to provide their names and e-mail addresses and to identify their interests. notHarvard.com collects that data, Mr. Rosenfelt said, only to get a sense of what courses it should offer. Students were also directed to a Web page that listed the course's required materials, which included a book on C++ and one of two versions of Code Warrior software, priced at $49 or $119. That unabashed attempt to promote the software did not faze Karl Kornel, a high school senior in Cincinnati who took both courses. ''I saw obviously that they were planning to sell some kind of products,'' Mr. Kornel said. ''I wasn't surprised.'' He had already bought the software to supplement a computer-science course he was taking at school, so he was able to take the courses by spending only $36, the cost of the book. Mr. Kornel said the course had been better than just reading a textbook or a tutorial because he could interact online with other students and the instructor. ''It's pretty well laid out, I must admit,'' he said. Yet when asked if such a course would ever replace computer courses offered by universities, Mr. Kornel was skeptical. ''If you are paying for education, it is probably going to be written with a lot more forethought,'' Mr. Kornel said, adding, ''I have not heard of any colleges saying, 'We'll give you credit for CodeWarriorU courses.' '' notHarvard.com is developing courses for other commercial Web sites, each of which will be designed with input from the host companies. The CodeWarriorU courses, for example, are fairly light on advertising, Mr. Rosenfelt said. Other companies may want to promote more products, but Mr. Rosenfelt said his company would try to ensure that the course content did not become an advertisement. A site sponsored by a car dealership, he said, would not offer a course on how to select the best car dealership or even the best car. Instead, it might offer a course on car maintenance, in the hope that people would come back to the site to shop. ''As with anything,'' Mr. Rosenfelt said, ''there are agendas. We just need to be sure that we are upfront about what this is.'' But Mr. Rukeyser, whose organization examines educational technology's effect on the way students learn, wonders whether the terms ''education'' and ''courses'' are deceptive in the case of notHarvard.com. ''There is a cloak of objectivity and disinterest that wraps around somebody who says, 'I'm here as an educator,' '' Mr. Rukeyser said. Sites that are offering courses as part of a marketing strategy, he said, should ask themselves: ''Are the signals clear enough for people to perceive it is in fact primarily advertising and secondarily instructional?'' A site like Hungry Minds raises slightly different questions. Instead of developing courses that are offered through the Web sites of specific companies, it displays online courses created by its own online guides or by outside instructors. The site encourages those course creators to list related Web sites, books and videos. ''When someone recommends something, it's totally from the heart,'' said Mr. Skorman, of Hungry Minds. ''It's not, 'Let's sell something because we can make money.' '' And what if a teacher has written a book and lists it as required reading? ''We're going to watch it very, very closely,'' Mr. Skorman said. ''If they are going to sell their own book, we'll say this is their book and they'll profit from it.'' (Questions about such potential conflicts, of course, can also arise on even the most prestigious campuses.) Steve Gott, the president and chief executive of Learn2.com, said that it might take awhile for consumers to become used to linkages between commerce and online learning. ''It's a new concept, to buy while you learn,'' Mr. Gott said, ''but we're there and ready for it, when people become accustomed to it.'' The sites' founders say they are not trying to replicate the experience of traditional offline and online college courses. Instead, the commercial sites' courses are intended to attract adults who are engaged in what is called ''lifelong learning,'' a buzzword among college administrators and among people running corporate-training and continuing-education programs. The Internet is considered by many experts to be the main arena for this new version of education, and universities have been scrambling for the past few years to stake out their spaces online. Many colleges are already offering online education tailored to adults, like the State University of New York, which delivers hundreds of such courses, many for college credit, and New York University, which offers many noncredit courses through the Internet. Now colleges face competition from commercial Web sites that may not offer exactly the same kinds of courses but have the potential to overlap in areas like computer training and self-improvement courses. ''There is nothing wrong with traditional education,'' Mr. Skorman said. ''But it is just a piece of the puzzle.'' Even offline, education comes in many forms. The Home Depot, for example, sometimes offers free how-to classes. No one is forced to buy Home Depot products, but it is obvious that The Home Depot is using the classes to win customers and build loyalty to its brand. Mr. Rosenfelt of notHarvard.com said the Home Depot model was similar to what he was trying to do online, with a much larger audience. He likes to say that his company is simply offering people another choice. ''It's like saying: 'Hey, you can go physically take classes, you can go online and pay for them, or if you'd like, there is a new option, which is this notion of eduCommerce. Here are free courses taught by branded, compelling instructors. They are free, but they are sponsored by a company,' '' he said. At the same time, he said, notHarvard.com has to remember that people will not take courses that feel like advertisements. ''Education is a lot more than simply a veiled marketing message,'' he added. ''We have to provide, and we think education provides, a real value to consumers.''

FOR RELEASE ON FEBRUARY 7, 2000 PRESS CONTACTS: Michael Rosenfelt 512-658-7854 mike_rosenfelt@notHarvard.com. Nancy Morrison 831-429-5024 or 408-918-9080 nancy@krause-taylor.com notHarvard.com Unveils First Business-to-Business eduCommerce Offering Austin Start-Up Helps E-Businesses Win Brand Loyalty And Revenue Wars with Free Online Education as a Sales and Marketing Weapon INDIAN WELLS, Calif., DEMO 2000 - February 7, 2000 - Austin-based notHarvard.com today unveiled the web's first business-to-business eduCommerce offering, created to enrich its customers' brand and strengthen e-commerce through the use of free online education as a permission-based, sales and marketing weapon. At the personal-technology industry's elite DEMO 2000 forum, notHarvard.com debuted the Internet's first eduCommerce solutions - free online universities it has created for e-businesses such as Ask Jeeves, Inc., Bloomberg.com, Jobs.com, Motorola/Metrowerks and Talk City among others. With the knowledge that an informed consumer makes wiser choices with greater confidence, these e-businesses are augmenting their web site with free online courses - providing a context that helps build a stronger brand, more intimate customer relationships and increased revenues. "We believe that eduCommerce is about to emerge as the key strategic weapon in the competition to acquire customers and develop lasting brand loyalty online," said notHarvard.com Chief Executive Officer Judy Bitterli. "Free online education provides a compelling context through which our clients can lower their customer acquisition costs, enhance their consumer value proposition and drive incremental revenue through permission-based marketing." notHarvard.com has made a substantial software investment to develop its FreeSchool EduCommerce Suite� of software which provides the foundation for quick and easy deployment of an online university for an e-business customer. These learning centers feature high-quality, free online courses led by expert instructors. The universities facilitate both student/instructor interaction and student communities, and also feature message boards and chat, calendar and notebook capabilities. Using FreeSchool's unique syndication features, clients can reach prospective and current customers as well as students in the greater community of notHarvard.com client universities. For example, a C++ programming course created for Metrowerks' CodeWarriorU.com can also be offered by Jobs.com's online university, allowing Metrowerks to reach out to Jobs.com clients and enhancing Jobs.com's customer value proposition. The current number of potential students of notHarvard.com universities already totals more than 20 million, based on registered customers of the e-businesses who have signed on with notHarvard,com. "notHarvard.com is helping democratize education by turning the current pay-for-content model upside down and making education free and accessible," said Mike Rosenfelt, notHarvard.com's founder. "We're building a high-value context for e-businesses to interact with their customers. Students can attend classes and meet other students - on their own timetable - for professional development, personal enrichment, or to get more out of products and services. E-businesses can build greater intimacy with their customers and use online learning as an e-commerce opportunity." According to Michael Moe, director of Global Growth Research for Merrill Lynch, eduCommerce is "a win for notHarvard.com -- it's a win for their partners, and it's a win for the partner's customers." "notHarvard has been a great partner in helping us build and deploy CodeWarriorU.com - the first online institute for free programming courses, said David Perkins, CEO of Metrowerks Corporation, a Motorola Company. "Free programming courses taught by experts at CodeWarriorU.com have already begun to lower our customer acquisition costs, drive revenue through contextual sales and uniquely enhance our customer value proposition." About notHarvard.com notHarvard.com is the eduCommerce company. Based in Austin, Texas notHarvard.com has attracted more than $8.5 million in its first round of financing through Austin-area venture capitalists Austin Ventures and TL Ventures, along with private Internet angel investors. The company's board of directors includes Chris Pacitti, Partner in Austin Ventures, Robert Fabbio, Managing Director of TL Ventures and Patrick McGee, Founding Partner of The Brazos Investment Partners. About notHarvard.com's Management Team notHarvard.com's management team is led by Chief Executive Officer Judy Bitterli, a fifteen-year technology veteran who held the position of executive vice president for SoftBank Services Group and was a former executive with both Micron Electronics and Power Computing. Founder Mike Rosenfelt, brings a decade of marketing experience from Micron Electronics and Power Computing, and oversees notHarvard.com's marketing communications efforts. Bill Goins, notHarvard.com's chief marketing officer, has more than fifteen years of marketing background, including serving as vice president of product marketing for Micron Electronics and vice president of marketing for Power Computing. He also held senior positions in marketing at Apple Computer for seven years. Bruce Gee, notHarvard.com's vice president of product marketing, spent ten years in product marketing at Apple Computer and most recently worked in 3Com's Palm Computing Division. Patrick Curry, notHarvard.com's chief technology officer brings more than five years of experience in user-interface and web design. Most recently with frogdesign, Inc., Curry founded Zero Factor Interactive (ZFI), which was acquired by frogdesign in 1997. Paul Danziger, notHarvard.com's vice president of business development, is an alumnus of Arthur Anderson and brings more than a decade of experience in business development, accounting, finance, tax law and intellectual property law. - 30 - Editors' Note: Please refer to notHarvard.com Corporate Announcement Press Release Also Dated 2/7/2000.

FOR RELEASE ON FEBRUARY 7, 2000 PRESS CONTACTS: Michael Rosenfelt 512-658-7854 mike@notHarvard.com Nancy Morrison 831-429-5024 or 408-918-9080 nancy@krause-taylor.com notHarvard.com Announces Management Team and $8.5 Million in First Round Financing Austin, Texas-based Web Startup Turns Lucrative Online Education Model Upside Down; Business-to-Business Approach Attracts Web Leaders. INDIAN WELLS, Calif., DEMO 2000 - February 7, 2000 - Against the backdrop of the technology industry's elite DEMO 2000 forum, Austin, Texas-based notHarvard.com today shed its six-month stealth mode of operation to introduce its company and business-to-business web offering to the industry. Founded by a group of risk-taking, rule-breaking technology sales and marketing veterans, notHarvard.com is the first company to use free online education to address the need for a better sales and marketing weapon for businesses battling for brand mindshare. Calling their unique approach to e-commerce, eduCommerce, the start-up has attracted more than $8.5 million in its first round of financing with top Austin venture capital firms and high-profile Internet angel investors. Recognizing the powerful vision and differentiated business model of notHarvard.com, the Series A investment round was lead by Austin Ventures with additional investment from TL Ventures as well as a number of high profile internet angels including Patrick McGee, founding partner of Brazos Investment Partners, Daniel Jinich of Hicks, Muse; Dan Routman of Yahoo/Broadcast.com, Gene Lowenthal, partner at Sanchez Capital Partners and David Kahn, executive vice president of Grupo TeleCable. The financing also included $2 million of venture financing by Silicon Valley Bank. "NotHarvard.com has a business model that makes strategic and business sense in today's competitive e-commerce race," said Chris Pacitti, Austin Ventures Partner. "Partners and consumers alike will benefit from eduCommerce, and the rules will never be the same for e-commerce and brand building. It's time for e-commerce companies to put their budgets to work investing directly in the customer and then reap the benefits from the symbiotic relationship with them. " "It is not often that we find a business as compelling as notHarvard.com," said Bob Fabbio managing director, TL Ventures (and founder of Tivoli and Dazel.) "The company's business-to-business proposition fulfills a gaping hole in today's e-commerce offerings and transforms static online education into something much richer and more valuable to both vendors and consumers. A key differentiator for emerging e-businesses, eduCommerce, provides a timely, 'sticky' and intimate solution to the customer acquisition challenge." eduCommerce Attracts Web Leaders: notHarvard.com is already working with a number of industry partners including: Ask Jeeves, Inc., Bloomberg.com, Jobs.com, Motorola/Metrowerks, Pervasive and Talk City among others. "Ask Jeeves plans to work closely with notHarvard.com to make online learning available to a wide array of online customers," said Rob Wrubel, president and CEO of Ask Jeeves, Inc. (NASDAQ: ASKJ). "notHarvard.com's unique combination of education and e-commerce compliments Ask Jeeves suite of real-time personal services for corporate customers." The notHarvard.com Management Team: notHarvard.com's management team is led by Chief Executive Officer Judy Bitterli, a fifteen-year technology veteran who held the position of executive vice president for SoftBank Services Group and was a former executive with both Micron Electronics and Power Computing. Founder Mike Rosenfelt, brings a decade of marketing experience from Micron Electronics and Power Computing, and oversees notHarvard.com's marketing communications efforts. Bill Goins, notHarvard.com's chief marketing officer, has more than fifteen years of marketing background, including serving as vice president of product marketing for Micron Electronics and vice president of marketing for Power Computing. He also held senior positions in marketing at Apple Computer for seven years. Bruce Gee, notHarvard.com's vice president of product marketing, spent ten years in product marketing at Apple Computer and most recently worked in 3Com's Palm Computing Division. Patrick Curry, notHarvard.com's chief technology officer brings more than five years of experience in user-interface and web design. Most recently with frogdesign, Inc., Curry founded Zero Factor Interactive (ZFI), which was acquired by frogdesign in 1997. Paul Danziger, notHarvard.com's vice president of business development, is an alumnus of Arthur Anderson and brings more than a decade of experience in business development, accounting, finance, tax law and intellectual property law. notHarvard.com's board of directors includes Chris Pacitti, partner in Austin Ventures, Robert Fabbio managing director of TL Ventures and Patrick McGee, founding partner of Brazos Investment Partners. About Austin Ventures: Since 1979, Austin Ventures has grown to be the largest venture capital firm in the Southwest. With more than $1.6 billion of capital under management, Austin Ventures is one of the largest venture capital firms in the United States. Located in the technology hotbed of Austin, Texas, Austin Ventures attributes the successful fundraising effort of Fund VII to the strong growth of entrepreneurial activity in Texas. With an active portfolio of more than 70 companies, Austin Ventures has been part of such corporate success stories as: Vignette, Tivoli, garden.com, Crossroads Systems, IntelliQuest, Dazel, Mission Critical, MetaSolv, Crystal Semiconductor and VTEL among others. The firm will continue to invest approximately three quarters of its capital to support businesses throughout the state of Texas while using the remaining quarter to fund other companies in the Southwest. Austin Ventures is on the web at www.austinventures.com. About TL Ventures: TL Ventures is an established institutional venture capital firm with approximately $750 million under management. Focused on software, the Internet, information technology services, communications and life sciences, the firm offers unique assistance and responsive involvement to portfolio companies through its nationwide network of investment professionals who have extensive experience as operating and entrepreneurial executives. TL Ventures is located in Philadelphia, Austin, Los Angeles and Phoenix. For more information, visit the company's Web site at www.tlventures.com. Editors' Note: Please refer to notHarvard.com Product Announcement Press Release Also Dated 2/7/2000.

NOTHARVARD.COM BOOKS STRATEGIC EQUITY DEAL WITH BARNES & NOBLE.COM: CLOSES $26 MILLION VENTURE ROUND Adam Dell�s Impact Venture Partners and Merrill Lynch KECALP Join Major Austin, Texas Venture Capitalists In Supporting eduCommerce Business Model AUSTIN, Texas-May 30, 2000 � notHarvard.com, the pioneer in developing online branded universities and the concept of eduCommerce, today announced it has raised $26 million in its second round of venture funding. New investors include Barnes & Noble.com (NASDAQ: BNBN), and several prominent venture firms including Adam Dell�s Impact Venture Partners and Merrill Lynch KECALP. The round was led by Austin Ventures, which also led the company�s first round of funding, and included previous investor TL Ventures. Other investors included CenterPoint Ventures and Sanchez Capital Partners. Central to its strategic equity investment, Barnes & Noble.com announced it has selected notHarvard.com to create Barnes & Noble University, which will be a free online education resource for the bookseller's millions of customers. Barnes & Noble.com also becomes the primary distributor of notHarvard.com's eduCommerce course materials across its network of branded online universities. **(See related press release "Barnes & Noble.com Acquires Minority Stake in notHarvard.com" issued today by Barnes & Noble.com.) �We consider distance learning as a natural extension of Barnes & Noble.com's core business,� said Steve Riggio, vice chairman of Barnes & Noble.com. �By partnering with notHarvard.com to create Barnes & Noble University, we bring together the recognized expert in eduCommerce and the best online bookseller to provide a completely new and unique learning opportunity to Barnes & Noble.com�s millions of customers." "There is no question that eduCommerce is a strategic asset for companies looking to provide greater context to their sales and marketing efforts,� said Adam Dell, General Partner at Impact Venture Partners. �eduCommerce is the ultimate permission-based sales and marketing tool that generates additive revenue streams. notHarvard.com is strategically positioned to become the leading provider of eduCommerce solutions." "We are pleased to enlist the support of a key strategic corporate investor in Barnes & Noble.com and the support of well-respected venture capital and investment banking firms,� said Judith Bitterli, CEO of notHarvard.com. �This underscores the scope of the opportunity we envision for free online education as a contextual sales and marketing tool, and the strength of our overall business model.� With the newly committed funds, notHarvard.com plans to expand its eduCommerce development efforts, course offerings and the sales and marketing of its flagship platform, the FreeSchool eduCommerce Suite�. The software provides the foundation for quick and easy deployment of a branded online university. About notHarvard.com notHarvard.com is the pioneer in developing online branded universities and the concept of eduCommerce � the use of free, online education as a sales and marketing weapon. Based in Austin, Texas, notHarvard.com�s client list includes Barnes & Noble.com (NASDAQ: BNBN), jobs.com, Pervasive Software (NASDAQ: PVSW), Motorola/Metrowerks, and TalkCity (NASDAQ: TALK), among others. Through its private-labeled network of universities, notHarvard.com has access to millions of prospective students. The company, founded in July 1999, has attracted more than $34 million in financing from a number of marquee venture capitalist firms (Austin Ventures, TL Ventures, Adam Dell�s Impact Venture Partners, CenterPoint Ventures and Sanchez Capital Partners), investment banks (Merrill Lynch KECALP), and Internet angels. For more information, visit www.notHarvard.com. About Barnes & Noble.com Since launching its online business in May 1997, Barnes & Noble.com (Nasdaq: BNBN) has become one of the world�s largest Web sites and the sixth largest e-commerce site, according to Media Metrix. Focused largely on the sale of books, music, software, magazines, prints, posters and related products, the company has become one of the fastest growing online distributors of books. Customers can choose from millions of new and out-of-print titles and enjoy a variety of related content such as author chats, book synopses and reader reviews. The site also offers thousands of bargain books discounted up to 91 percent, the most popular software and magazine titles, as well as gift items for every occasion. The company recently launched its Prints & Posters Gallery, a unique collection of images that can be produced on demand on museum-quality canvas or high-quality paper, and its eCards service, an exclusive selection of greeting card images that can be personalized and enhanced with animation and music. With access to more than 800,000 in-stock titles, Barnes & Noble.com has the largest standing inventory of any online bookseller ready for immediate delivery. The URL http://www.bn.com makes the site easy to find. The Barnes & Noble.com affiliate network has more than 360,000 members and the company maintains strategic alliances with major Web portals and content sites, such as AOL, Lycos and MSN. The company is also a leader in business-to-business e-commerce with its unique Business Solutions program.

Press Room Barnes & Noble.com ACQUIRES MINORITY STAKE IN NOTHARVARD.COM Companies to Offer Online Learning Courses Barnes & Noble University to Open This Summer NEW YORK, N.Y. May 30, 2000 � Barnes & Noble.com (Nasdaq: BNBN) (www.bn.com) announced today that it has acquired a minority stake in notHarvard.com, the pioneer in developing online branded universities and the concept of eduCommerce. The companies plan to create a Barnes & Noble University, a free online education resource offering thousands of online learning courses to Barnes & Noble.com's millions of customers through the bookseller's Web site, www.bn.com, beginning this summer. The financial terms of the deal, including the price, were not disclosed. Barnes & Noble.com is one of several new investors announced today by notHarvard.com, which raised $26 million in its second round of venture funding. Other investors include Adam Dell's Impact Ventures, Merrill Lynch KECALP, CenterPoint Ventures and Sanchez Capital Partners. The round was led by Austin Ventures and included previous investor TL Ventures. Customers will be able to register for courses at Barnes & Noble University online, through www.bn.com, beginning this summer. The courses, which will be offered free of charge, are scheduled to begin in mid-July. Under the agreement, Barnes & Noble.com also becomes the primary distributor of notHarvard.com's eduCommerce course materials across its network of branded online universities. "We consider distance learning as a natural extension of Barnes & Noble.com's core business," said Steve Riggio, vice chairman of Barnes & Noble.com. "The Internet is clearly a very large commercial medium but its great promise is to become a portal for the sharing of knowledge and content. Our plan is to create an exciting learning environment where many courses will be based upon the best books in the field. We additionally intend to invite the authors of those books to become instructors, offering them the ability to publish additional content in both electronic form as well as through print on demand technology. By partnering with notHarvard.com to create Barnes & Noble University, we bring together the recognized expert in eduCommerce and the best online bookseller to provide a completely new and unique learning opportunity to Barnes & Noble.com's millions of customers." "Barnes & Noble.com is not only a key strategic corporate investor but also shares notHarvard.com's vision for the expansion and enhancement of eduCommerce," said Judith Bitterli, chief executive officer of notHarvard.com. "We believe the focus, reach and the power of the Barnes & Noble network combined with notHarvard.com's leadership in the creation of online universities will provide a powerful catalyst for exciting developments in online education." About notHarvard.com notHarvard.com is the pioneer in developing online branded universities and the concept of eduCommerce - the use of free, online education as a sales and marketing weapon. Based in Austin, Texas, notHarvard.com's client list includes Barnes & Noble.com (NASDAQ: BNBN), jobs.com, Pervasive Software (NASDAQ: PVSW), Motorola/Metrowerks, and TalkCity (NASDAQ: TALK), among others. Through its private-labeled network of universities, notHarvard.com has access to millions of prospective students. The company, founded in July 1999, has attracted more than $34 million in financing from a number of marquee venture capitalist firms (Austin Ventures, TL Ventures, Adam Dell's Impact Venture Partners, CenterPoint Ventures and Sanchez Capital Partners), investment banks (Merrill Lynch KECALP), and Internet angels. For more information, visit www.notHarvard.com. About Barnes & Noble.com Since launching its online business in May 1997, Barnes & Noble.com (Nasdaq: BNBN) has become one of the world's largest Web sites and the sixth largest e-commerce site, according to Media Metrix. Focused largely on the sale of books, music, software, magazines, prints, posters and related products, the company has become one of the fastest growing online distributors of books. Customers can choose from millions of new and out-of-print titles and enjoy a variety of related content such as author chats, book synopses and reader reviews. The site also offers thousands of bargain books discounted up to 91 percent, the most popular software and magazine titles, as well as gift items for every occasion. The company recently launched its Prints & Posters Gallery, a unique collection of images that can be produced on demand on museum-quality canvas or high-quality paper, and its eCards service, an exclusive selection of greeting card images that can be personalized and enhanced with animation and music. With access to more than 800,000 in-stock titles, Barnes & Noble.com has the largest standing inventory of any online bookseller ready for immediate delivery. The URL http://www.bn.com makes the site easy to find. The Barnes & Noble.com affiliate network has more than 360,000 members and the company maintains strategic alliances with major Web portals and content sites, such as AOL, Lycos and MSN. The company is also a leader in business-to-business e-commerce with its unique Business Solutions program.