Getting down to nuts & bolts

Fresh from reading Mark Anderson's latest newsletter, questioning the value of ad-driven Web 2.0 businesses, I found myself listening to entrepreneurs building real stuff you can put your hands on.

Anderson pointed out that ads, not customers, are paying for things like social networking. People actually buy products such as software applications, operating systems and security services. "What does that say for today's entrepreneurs? They are either good at monetizing eyeballs, or they're good at selling out to those who can. What a low-end game!" the Friday Harbor technology pundit wrote last week. "No wonder all the Valley VCs have moved into alternative energy sources: these are real things that people will spend real money (their own) to have."

Anderson might have felt better if he had attended the Early Stage Investor Forum that the Northwest Entrepreneurial Network held last week in Seattle.

A parade of startups pitched themselves to about 100 investors, including venture capitalists and "angels." Some were ad-supported Web ventures, but they were outnumbered by companies building applications, business services, consumer goods and hardware.

Take Metron Systems, a Snoqualmie company that builds laser scanners that map the shape of pistons, airplane components and other fabricated parts.

Chief Executive Ron Ho, a University of Washington graduate previously with Siemens Medical, came to raise $1.5 million. He'll spend the money on demonstration systems and engineers that are loaned out to potential customers.

The 10-year-old company expects to have $7 million in sales and reach profitability this year.

If you own a Ford or a Toyota, you've indirectly put a little money into Metron. One major customer is Mahle Pistons, which makes pistons for the automakers.

The systems, which cost $150,000 to $300,000, measure and inspect a part in about five minutes, compared with the hour it takes using a traditional coordinate measuring machine.

The technology was initially developed on contract for Boeing, but Metron now has exclusive rights to sell it and holds six patents.

Investors didn't seem to question the underlying business; they mostly wanted to know whether it was efficient to loan demo systems.

Cameron Fisher pitched Mobile Semiconductor, his Bainbridge Island startup developing a new memory architecture for advanced mobile phones. He said demand for higher performance memory will grow as more phones connect to the Internet and play games, movies and TV content.

Fisher came from Virage Logic, a Seattle design group, where he developed the embedded memory used in the Motorola Razr.

He's trying to raise $2.5 million to hire an engineering team of 10 and start marketing products.

It's a hypercompetitive business, several investors noted. They asked about the secret sauce that could give tiny Mobile Semi an edge over giants like Samsung and Toshiba.

Fisher said Mobile Semi already has a patent pending on its unique memory architecture.

The company also has engineering talent. Joining Fisher as Mobile Semi's chief technology officer is Stephen Hellriegel, a senior principal engineer at Cray.

But Fisher's biggest selling point is that he's building a product people will want so much, they might actually pay for it.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.