Incubator opens door for game company Couple's venture aids Digital Addiction with office, Internet access

May 04, 1998|By Melinda Rice | Melinda Rice,SPECIAL TO THE SUN

Jamey Harvey is in the business of high-tech fairy tales, and Howard County businesswoman Lisa Losito is acting as his fairy godmother.

Harvey is president and chief executive officer of a new company called Digital Addiction, which is developing an interactive swords-and-sorcery type of game for the Internet. Losito and her husband, Internet pioneer Doug Humphrey, are giving the company a boost, providing Harvey's company with office space, equipment, advice and unlimited Internet access.

Digital Addiction, based in Laurel, is one of four embryonic companies chosen by Losito and Humphrey for their newest business venture, an incubator called Phase I that Losito runs. It seeks to help Internet businesses, in return for stock -- usually 5 percent to 10 percent of the start-up.

Humphrey and Losito provide professional services as well as infrastructure.

"We've had access to an accountant. We've had access to [human resources] systems and payroll. It's been great," said Harvey.

To get into the incubator, the Internet must be an integral part of the company's business; just having a Web site won't do.

Losito and Humphrey look for people and ideas they think will work. "A good team of people with a mediocre idea will do better than a mediocre team with a great idea," Losito said.

The businesses have a limit of two years in the incubator to start turning a profit. Then, they are on their own.

"If you haven't succeeded in two years, you're not going to in this industry," Humphrey said. He should know.

In 1991, he started Digital Express Group, one of the first Internet service providers, with his friend Mike Doughney and a used Sun in the basement of his Greenbelt townhouse. The company's name was later changed to Digex Inc.

Digex went public in 1996, and last year a Florida-based telecommunications company, Intermedia Communications Inc., acquired Digex for $150 million. By then, Digex employed more than 420 people and was posting annual revenues of about $50 million.

Humphrey's newest venture, SkyCache Inc., just moved out of the incubator into an office building along U.S. 1 in Howard County.

L "SkyCache is the incubator's first graduate," Humphrey said.

A cache minimizes the number of times an Internet service provider has to transmit the same information. Humphrey's new company is developing technology to make caches work faster and more efficiently.

He and Losito are multimillionaires. They did not have to start either the incubator or SkyCache businesses, but they said they feel it is important to give back to the community and the industry. Humphrey said the way to build a healthy Internet industry is to invest in it.

That is what happened in California's Silicon Valley, and Humphrey would like to see that success repeated.

"The Washington-Virginia-Maryland area is very successful," he said. "And it can be more successful."

Digital Addiction hopes to be part of that success with Sanctum, an interactive game played on the Internet.

The company will make its money by selling tools players use in the game.

Harvey, the company founder, is new to Maryland. He grew up in Arlington, Va., and later worked in Silicon Valley. He founded an Internet interactive comic book company and later sold it, then went to Italy where he wrote the business plan for Digital Addiction.

He met Humphrey and Losito through Lee Moyer, the artist he employs at Digital Addiction. Humphrey is a fan of Moyer's work, and Moyer suggested Harvey contact Humphrey.

"It's the best piece of advice anyone's ever given me," Harvey said.

Pub Date: 5/05/98

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