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Building, Vbrick by Vbrick
This innovative company is bringing full motion video to the desktop
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Business New Haven
1/21/2002
By:
Lori Green
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The eminent historian of science, Thomas Kuhn, argued that paradigms change most readily when a discipline attracts original minds. Recent scholars have observed that these innovators tend to be motivated by the intrinsic enjoyment of their work - propelled by the sense of “flow” they derive from making discoveries or solving problems.
And for highly fortunate innovators whose discoveries happen to fulfill the prevailing demands of the marketplace, financial rewards, professional advancement and public recognition swiftly become part of that flow.
Does this mean that Rich Mavrogeanes - founder, president and chairman of Vbrick Systems Inc. - is your classic innovator? Certainly. Not only is he passionately engaged in what he does, but he has also realized the secret longing of every innovator: to defy convention.
While Mavrogeanes with his quick wit and mellifluous FM-deejay voice doesn't seem like the defiant type, he's made a stunning success of hurling his V-bricks through the windows of conventional video communications.
The result: Video users of all kinds are thanking him for it. After all, plugging in a Vbrick delivers live, real-time, full-motion TV. That's what you need for one or two-way DVD-quality broadcasting, video conferencing or accurate security monitoring. A Vbrick is versatile, uses the existing bandwidth of local area networks (LANs), and is two to 10 times less expensive than other video transmission devices. And the image quality is awesome.
Mavrogeanes developed the Vbrick while other high-tech start-ups were trying to figure out if maybe adding bricks (and mortar) to their “clicks” would help generate actual sales.
Born smack in the middle of the Baby Boom generation, Mavrogeanes was raised in Wallingford, not far from where Vbrick Systems Inc. is based today. Having grown up as part of the first “born-with-TV” generation, Mavrogeanes, like most of us, was entranced. First by the early black and white screens and then by the dazzle of color TV. As he watched, Mavrogeanes wasn't merely reveling in the sensory pops of Saturday morning cartoons. Instead, he was pondering the power of the video experience.
But he didn't merely ponder. The man is the very embodiment of full-throttle activity and continuous achievement. Take 2001, for example. In addition to receiving BNH's “Innovator of the Year” award, Vbrick won the “Product of the Year” award presented by Internet Telephony magazine. Telecom Magazine named Mavrogeanes an “A List” executive, and he was a 2001 Ernst & Young's “Entrepreneur of the Year” finalist.
But wait - there's more: Vbrick Systems is featured on the cover of the latest issue of Security World. Which leads us to next month, when Mavrogeanes goes off to New York to address officials at the United Nations on the latest technological innovations for homeland security purposes.
He's in demand, all right. But Rich Mavrogeanes is no overnight sensation. Rewind to the early years.
After studying electronic engineering at Boston University and the University of Maryland, Mavrogeanes joined the Air Force and for five years was stationed in Wiesbaden, Germany. Then it was off to East Africa - not on an engineering gig, but to make documentary films.
When he ran out of money, Mavrogeanes returned to Wallingford and went to work for Data Products Inc., a defense contractor that manufactured high-security communications equipment. His mission in returning to Connecticut at that time was simple: Raise enough cash to continue traveling. Instead, he ended up working at Data Products for the next 15 years.
“I worked in nearly every position there,” recalls Mavrogeanes. “From bench technician to design engineer, quality assurance, product manager and salesman in Washington D.C.”
Following his career at Data Products, Mavrogeanes worked for a short time at General DataComm in Middlebury. That's when he caught “entrepreneur fever” and started up Avidia Systems, which built ATM (asynchronous transfer mode) high-speed communications equipment.
The high-speed communications industry was moving fast enough for Mavrogeanes to cash out after 17 months, when Avidia was acquired by PairGain for $95 million. Not bad for start-up venture No. 1.
Start-up No. 2 was right around the corner: Switch Network Technologies (SNT), where Mavrogeanes worked closely with Microsoft to develop its NetShow Theater server for video-on-demand. Microsoft soon dropped the low-speed product, but SNT was profitably sold to Tellabs of Chicago.
Explains Mavrogeanes: “High-speed data connections make more sense for sending video than do cable systems. The digital infrastructure lets video move two ways, whereas cable TV is a closed-circuit system that moves only one way.”
Since there were already 25 million LANs, or broadband local area networks, across the U.S., Mavrogeanes and his engineers set out to build an appliance that would deliver superlative video quality. This appliance had to be easy to use and operate over networks to which users were already connected. And it had to be affordable for all types of organizations. Thus was the Vbrick - or video brick - born.
So Mavrogeanes set up shop in his Wallingford basement. It was late 1997, when investors were stampeding to be the first to finance online pet food companies and virtual grocery stores.
“It was painful,” recalls Mavrogeanes. “I had nine full-time engineers building our first Vbrick, which we sold to Sprint in early 1998, and investors were still turning us down in order to invest in Ponzi schemes.”
However, once sales began to multiply for Vbrick and the cyber bubble burst, investors wanted in on the broadband network TV business. By that point, Mavrogeanes was gleefully able to turn some of them away.
Today Vbrick is housed in a 25,000-square-foot facility that is still under expansion. The company is one of the leading commercial residents along Route 15, a/k/a Connecticut's emerging “Silicon Parkway.” Mavrogeanes' affection and vision for the parkway is enshrined on the Web site he's building, siliconparkway.com.
On his little piece of the parkway, Mavrogeanes is busy building bridges between two historically opposing schools of thought in the broadband video world.
“There are the television and multi-media producers - the video guys - in one camp, and the network engineers in the other,” he explains. “The video guys want to sell you an ISDN video-conferencing unit. But it doesn't provide full-motion video. These people don't know anything about Internet protocols (IP). On the networking side, they speak the language of routers, switches and IP, but the networking guys don't know anything about video. To them, it's just another type of data.”
That was the problem - and Mavrogeanes created Vbrick to solve it. Today he employees 83 people and expects to increase that to 120 over the next six months.
But why not one of those ubiquitous “PC solutions”? What about an enhanced video card or better software to deliver DVD-quality, real-time video to desktops and TV monitors?
Please. Don't even get Mavrogeanes going on that one.
“I'm not interested in the Microsoft blue screen of death. I look at it and say: 'I've never had to reboot my telephone. So let's build a video device that's like a telephone - that you never have to reboot.'” Mavrogeanes shudders at thought of basing a video technology on Windows. “We like this business model. Vbrick is a stand-alone appliance. It's the size of a brick, reliable as a brick - and doesn't cost much more,” he says.
Turn the Vbrick around, and it looks like the back of your VCR. Video in, audio in, video out, audio out. Plus there's a network connection. You can hook up a Vbrick to any video source - cable TV or a video-camera - and can have as many destination sites as there are in the LAN you're connected to. Techies know this as “IP multi-cast technology.”
So Mavrogeanes and his team continue to build out the broadband video infrastructure one Vbrick at a time. Except that sometimes, customers order dozens of bricks at once.
And they do come in handy.
Anyone lucky enough not to have been in lower Manhattan during the morning rush hour on September 11 was scrambling to get in front of any TV they could find. That included government leaders such as Vice President Dick Cheney. Fortunately, Mavrogeanes had recently installed Vbricks throughout the White House, enabling the reception of live, secure, DVD-quality, broadcast and security video feeds to hundreds of networked desktops and TV monitors.
Watching in real-time as the horrific events unfolded, it didn't take Cheney and his advisors long to decide to move the vice president to his now famous “undisclosed location.” The rest of us stayed where we were, remaining riveted to TV screens.
Clearly, the unifying power of live video could not be matched that day by other forms of mass media.
True, the Internet tried to stay on top of the story. But CNN's site, for example, was swamped with hits, and often couldn't be accessed during the peak of the terrorist attacks. Not to mention, the poor quality of the taped, slow-speed video streams available via the Net.
Indeed, Mavrogeanes doesn't believe in the Internet's capacity to provide superior quality at all. Certainly not the type that businesses require to facilitate corporate communications.
Mavrogeanes doesn't see the Internet delivering DVD-quality, real-time video any time soon - if ever. “Streaming video over the Internet is not a useful business tool because of poor quality,” he says. “Video has to have great quality, be easy to use and operate of the networks that people are using today. A Vbrick is indistinguishable from DVD and moves images at 30 seconds per frame.”
But what's holding up the show on the Internet? Why haven't the RealPlayer or Microsoft people figured this one out yet?
The answer lies in the realm of the ongoing “open vs. closed systems” debate raging among technophiles. Says Mavrogeanes: “Real and Microsoft are going for the lowest common denominator. They want to reach the most people possible, and most people are still using low-speed pipes to the Internet. And they want to do that using proprietary systems. All of our television is real-time, live, using multi-vendor standards such as MPEG. My view has always been that open standards will prevail.”
However, as a serial entrepreneur (this is his third start-up, remember), Mavrogeanes is not the type to kick sand in the faces of the playground bullies. Vbrick also sells a product, known as VBX, which allows users who are not connected to a network but have Internet access to view DVD-quality video.
VBX is a transcoder that listens to any video and transcodes it into Microsoft or RealPlayer format. The cost for a VBX is about the same as the company's Vbricks, about $3,000 per unit. It's a powerful gadget, supporting hundreds of simultaneous viewers over the Internet.
According to Mavrogeanes, the Internet essentially isn't geared for providing real-time, DVD-quality video.
“Because nobody owns the Internet, you can't provide quality controls,” he says. There are no control delay links and therefore you can't support live video. The Internet just doesn't do that. On the other hand, the number of LANs is increasing - not as fast as before, but there could be an infinite number of LANs, with everyone having their own IP (Internet protocol) address just like you have a Social Security number. Everybody will be connected to a network in some fashion.”
If the prestigious early adopters of Vbricks are any indication, we all will pack a Vbrick in our arsenals of video equipment. Gilt-edged customers such as Morgan Stanley and Goldman Sachs are among the company's end-users. Customers also include huge organizations deploying dozens of Vbricks, such as the Michigan Department of Transportation, the Utah public school system, numerous colleges, prisons, private companies and, not least, the White House.
Mavrogeanes' most recent business-development travels have taken him to Brazil, the UK, Germany, China and Japan. He predicts that as much as half of the company's future sales will originate overseas.
His true destination, however, is that once-verdant shire, “The Land of the IPO.” A place that has grown barren and dark but to which daring torchbearers leading robust companies are expected, some day, to return.
Says Mavrogeanes: “We're still very much in growth mode. We've had ten consecutive quarters of 50 percent quarter-to-quarter revenue growth. But we could do much better with more of a tailwind in the market.”
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