Marla Malcolm has a beautiful new business.

She's about to launch bluemercury inc., a Web site that will sell lotions, soaps, cosmetics and other beauty supplies. Sound familiar? That's because there are dozens of other online sites targeting busy women who want to look good.

Malcolm, 29, though, is doing things a bit differently.

She has bought two real-world beauty stores--both named EFX--in Georgetown and Dupont Circle. She plans to rename them bluemercury and use them as "labs" to test new products and figure out what customers want.

"I do believe a lot in the clicks and bricks strategy," says Malcolm, chief executive of bluemercury. "In order to translate the right shopping environment, you have to see customers in the physical world."

She also believes in combining beauty and brains. A graduate of Harvard Business School and a McKinsey & Co. consulting alum, she has surrounded herself with 30 highly educated employees.

Kristen Fechner, for example, the resident geek, is also Harvard Business School- and McKinsey-trained, as well as a former co-president of the engineering society at Cornell University.

Malcolm financed the stores herself but E2Enet, a Washington investment firm headed by former America Online Inc. executive Robert J. Smith, is providing an undisclosed amount of initial funding for the Web site. She knows E2E through one of its backers, former boss and roll-up king Jonathan Ledecky.

When Malcolm was in business school she read about Ledecky and cold-called his company until someone there gave her a job. She became an assistant vice president at U.S. Office Products and a vice president at Consolidation Capital. She's not lacking for confidence. "I thought it was a company that needed my help," she says. "I added money to the bottom line."

Malcolm likes beauty products and shows off the items for sale on the site like a true cosmetics expert. Although "I always knew I'd start a company," she says, she didn't always have beauty supplies in mind.

Her target audience is, well, people like her. "Busy women don't have time to buy products that make them feel good," Malcolm says. "Our needs weren't being met." The name bluemercury, she says, should reflect calmness and speed.

And just in case the site doesn't pull in the bucks right away, the storefronts are profitable. The Georgetown store is doing even better now that there's another beauty store, Sephora, a few doors away, because shoppers stop into both, Malcolm says. She expects her two stores' annual revenue to top $3 million in 2000.

Both the stores and the Web site (which this week started selling a limited number of holiday gifts and will be completely up by mid-December) offer hard-to-find, luxurious supplies such as Shu Uemura, Nars and Acqua di Parma. Bluemercury will be competing against the likes of, and

Strategy chief Heidi Manheimer, former vice president of cosmetics, fragrance and apothecary at Barneys New York, is bluemercury's scout for new lines of products. As area venture capitalists are looking for the next AOL, she's looking for the next La Mer or stila. Anybody out there mixing lip gloss in their basement?

For those driving on Sunrise Valley Drive, just off the Dulles Toll Road, the criss-crossing searchlights in the distance were an early warning that this was not going to be your typical technology party.

Everyone in the tech community was there--well, at least 1,300 of them--turning out last Wednesday to celebrate the grand opening of 11600 Sunrise, a high-tech hothouse in Reston.

Despite the official name, this building, which houses technology companies, venture firms and tech-minded banks, has become better known as "Mario's Building," after its founder, Mario Morino, who is also a local investor and philanthropist.

There are 19 tenants at the address, with Proxicom Inc. the largest. In all, about 500 people work in the building, where office space is separate but areas such as a basketball court, "chill-out room" and cafeteria encourage a community-like atmosphere.

The schmoozefest took different turns in each part of the building: quiet deal-making discussions in some corners and raucous dancing to '50s music in others. Party-goers could get seated massages in Proxicom's offices (an actual employee perk), eat Mexican food at venture fund FBR Technology Partners suite, or gamble with "funny money" at Engenia Software's casino night soiree. Winnings could be cashed in for prizes at tenant Silicon Valley Bank.

Even the invitation to Mario's bash was high-tech. He used, a service of Alexandria's Ideas to Reality Inc., which lets people respond and get directions via e-mail. Much easier than 1,300 phone calls or snail-mail postcards.

The Washington area is home to such world-class tech stars as America Online, PSINet and . . . Entropic.


Last week Microsoft Corp. said it would buy Entropic, "a worldwide leader of software and toolkits for speech recognition," for an undisclosed amount. So it seemed we had a little-known gem in our backyard.

But it was tough to discover much more about the company. Its Web site seemed hastily erected just to announce the deal. Asking for more information sent you to Microsoft's own site. And clicking on the link to a press contact gave you an e-mail address to a person at Waggener Edstrom (Microsoft's PR agency) who could not immediately answer basic questions such as when and where the company was founded.

Turns out Entropic, though officially headquartered in Washington, had more employees in Cambridge, England. Microsoft plans to use Entropic's software and engineering team expertise to expand its voice-enabled applications. Over the past few years Microsoft has been working on speech recognition projects, forming relationships with other companies such as Entropic, including Lernout & Hauspie.

An informal poll of local techies found that Entropic wasn't exactly a household name here. "I've never heard of it," said D.C. Technology Council President Jay Young. "And I'm bird-dogging every nook and cranny."

Microsoft is keeping the Cambridge office, but closing the Washington one.

Entropic, we hardly knew ye.

Marc Andreessen moves a little further away from America Online every month. In August the 28-year-old Netscape co-founder sold 940,000 common shares of AOL for more than $90 million.

Then in September, he stepped down as AOL's chief technology officer, saying he'll stay on in a part-time consulting role.

Now, in late October, around the same time he announced he's founding a new Silicon Valley software company, Loudcloud Inc., Andreessen has filed with the Securities and Exchange Commission to sell an additional 80,000 shares of AOL for $9.44 million.

Send tips and tales of the digital capital's local people, deals and events to Shannon Henry at

CAPTION: "Busy women don't have time to buy products that make them feel good," Marla Malcolm says. "Our needs weren't being met."

CAPTION: Bluemercury inc. chief executive Marla Malcolm, reflected in the mirror, and the staff at her Georgetown EFX store are doing sales "lab" work before products are sold at the company's Web site.