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Entrepreneur Behind Joojoo Has A Lot To Do

Published: 17 Dec 2009 18:32:59 PST

SAN JOSE, Calif. -- If there were a worst-case-scenario survival handbook for start-ups, Fusion Garage Chief Executive Chandrasekar Rathakrishnan's feud with tech blogger Michael Arrington would deserve a chapter of its own.

That's a shame, because Rathakrishnan, dressed casually in jeans and a polo shirt during a meeting at his PR firm, has a good story to tell--even if there are some pretty big plot holes right now. At the center of the tale is Fusion Garage's first product--a Web-friendly tablet computer with a 12.1-inch touch screen, a 9-second boot time and a price tag of $499--dubbed the Joojoo.

A demonstration by Rathakrishnan reveals a device that works as advertised. It boots up fast and allows users to flit about the Web with a finger flick. Surf over to YouTube and you can watch video in 1080p high definition. "The use case has shifted from the desktop to the Web," Rathakrishnan says. "We still don't have a device that reflects that."

The problem: While Fusion Garage is already taking orders, promising customers they will get their tablets by the end of February, Rathakrishnan doesn't have a lot of specifics. While Rathakrishnan says he has "ample funding" from big investors--in addition to $3 million raised by a group of angel investors in Singapore--he can't name his new investors yet. He also says he's working a big contract manufacturer, but won't say which one.

Being able to drop some big names could really help right now. For starters, Fusion Garage got a serious helping of hate earlier this month from Silicon Valley's most influential blogger, Arrington, the moment Rathakrishnan unveiled Fusion Garage's first product last week. Rathakrishnan, Arrington wrote, "isn't a good guy."

The blogging mini-mogul's problem? The pair had been working together to build a Web-friendly tablet computer Arrington dubbed the "CrunchPad." Then Fusion Garage decided to launch a tablet on its own. Arrington claims Rathakrishnan stole his ideas. Rathakrishnan says that's not so. The TechCrunch-FusionGarage relationship was simply a potential acquisition by Arrington's group that did not work out, Rathakrishnan says.

The result is more than just bad publicity, however. Arrington filed suit in federal court last week. Rathakrishnan wouldn’t say Wednesday who his lawyer was. Lean on his PR firm a little, however, and you'll get a name: Claude Stern of Quinn Emanuel. Naming a lawyer--cross that off the to-do list. Still left? Besides announcing a manufacturing partner and new investors, Fusion Garage is looking for offices in Silicon Valley and Bangalore. That's a lot to get done.

Yet there's little doubt what Rathakrishnan is proposing is doable, and Fusion Garage's demo unit represents a lot of real work. The software powering the device is built on the open-source Linux kernel and the open-source WebKit Web browser engine, Rathakrishnan says. The hardware is based on the kind of x86 processors found in most of the world's computers. This isn't science fiction.

Of course, if Rathakrishnan's team can do it, others, such as Apple ( AAPL - news - people ), can too. Investment analysts are already penciling in a new tablet computer into the computer and smart phone designer's product lineup.

Another challenge: netbooks. There are already plenty of the sub-$500 little netbooks available. Google's ( GOOG - news - people ) new Chrome OS, introduced last month, may even allow hardware makers to subsidize the sales of netbooks with ad revenue.

Rathakrishnan, however, says his product can stand out. Sure, Apple could introduce a tablet computer that taps into more than 100,000 apps, but "we have the largest app store in the world--we have the Internet."

And what about the prospect of competing with smart phones and netbooks subsidized by carriers selling broadband connections? Rathakrishnan won't rule out such an arrangement for Fusion Garage. "We are not going to discount the possibility of having a 3G connection to this device," he says.

That, of course, would require a relationship with a carrier. Yet another item for the to-do list.

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