Neither Sheena nor Vijay Vaidyanathan anticipated the demands of starting their own company on the Information Superhighway. Timing and luck, they say, made all the difference.

In 1994, Vijay and Sheena Vaidyanathan were living an Internet start-up nightmare after moving to California’s Silicon Valley in pursuit of a digital gold rush dream.

The Vaidyanathans, who had both earned master’s degrees in computer science from the University at Albany four years earlier, were now both 30 years old and unemployed in California’s Bay Area. Vijay was burned out in his work after three years and quit his job at Zycad, an Internet firm. Sheena was laid off after Metaphor, an Internet start-up, went bust. Their daughter, Trisha, was two years old, and Sheena was seven months pregnant. The couple worried about where they’d get next month’s rent.

During the liquidation of her company, Sheena purchased a UNIX computer workstation for the bargain-basement price of $100. With that piece of powerful computer hardware, a bedroom turned into an office, and a feeling that things couldn’t get any worse, the Vaidyanathans (pronounced Vahd’ yah nay’ thans) embarked on a long, arduous business experiment they hoped might yet succeed.

Neither of them, however, anticipated the demands of starting their own company with no employees and no capital in a cyberspace medium that was in its infancy and had only recently been dubbed “the information superhighway.” The Internet in 1994 was just emerging as something with commercial promise beyond a little-known province of academics. The Vaidyanathans called their business Paralogic Corp. “That was kind of an Albany touch,” Sheena explained. “We came to the University, transferring from Binghamton University after one semester, because Albany had a very strong program in logic and parallel computing.”

The impressive name of their Internet firm belied a shoestring operation. “It was Vijay, me and two computers in our bedroom,” recalled Sheena, whose second child, Kyle, was born just as Paralogic was launching. The couple set out rendering into computer code an idea that was evolving as they went along.

Sheena struck upon the notion of using Paralogic to put on line The Hindu, the leading newspaper in the south of India — a notion rare at the time for the newspaper industry and downright revolutionary for their homeland. But Sheena figured that legions of Indian expatriates like themselves living in the U.S. — from physicians to graduate students — had a hankering for cricket scores, recipes and news from back home. It wasn’t long before 500 e-mails a day were pouring into the Vaidyanathans’ makeshift bedroom setup.

“I was uploading the on-line newspaper with a baby in my arms and my three-year-old daughter at my side,” Sheena recalled.

The entrepreneurial Vijay envisioned major potential for an Internet community — free from the confines of geography, with simultaneous messaging among multiple users who shared a certain interest or hobby — and he created an application that allowed Paralogic users to set up chat rooms instantly on their own web pages.

“At the time, we didn’t even have the terminology for what were doing,” said Vijay, whose innovation today is known as an application service provider. “We weren’t actually the first ones doing this, but we did it better. We soon got the reputation as offering some of the only chat rooms that stayed up and didn’t crash all the time.”

From out of nowhere, with only a virtual company (two employees, two computers and a bedroom), Paralogic vaulted into one of the top 100 most visited web sites in the booming cyber universe. Chat was huge. And so were the cricket scores from India. “We were lucky in that we were in the right place at the right time, but it wasn’t easy,” Vijay said. “We put our lives on hold for four years. It put a lot of stress on our marriage and everything else. There was no balance. Only work.”

“It was awful,’’ Sheena said. “I slept very little. We had a baby, a preschooler and we were up often at 3 a.m. because our server had just crashed.”

It was the heady days of the Internet revolution, and Vijay and Sheena’s dream was moving at warp speed. Vijay rented office space in the Bay Area and tooled up with a Paralogic staff that peaked at about eight, including his brother Rajiv and friends he drafted into the venture.

It wasn’t long before the corporate raiders took notice of Paralogic’s surprising performance. In 1998, Vijay and Sheena weighed competing buyout offers. The choice was basically cash in the pocket or stock on paper. “It was tough to give up real cash after we’d struggled without much money for so long,” Sheena said. The couple rejected the advice of friends and sold Paralogic two years ago to XOOM.com for enough shares of XOOM.com stock to make the couple very wealthy overnight.

Vijay joined Xoom.com as their chief technology officer, leading the company’s growth to several million users and to its Initial Public Offering in December of 1998. Sheena launched another Internet startup, anexa.com, which allows friends and families to create on-line communities. This company was also sold in 1999.

“It’s all funny money because the stock price changes every day,” Vijay said. They sold enough of the XOOM.com stock to purchase a new house. “It’s a modest house and we’re careful not to change our lifestyle for the sake of our kids,” said Vijay. Sheena, now 36, and Vijay, now 35, live in Los Altos Hills, Calif., with Trisha, 7, and Kyle, 5. On top of growing their own company, Vijay, dissatisfied with the schools in his area, co-founded in 1995 an alternative school, Cedarwood Sudbury School.

Vijay said the school’s guiding principles grew out of the teaching philosophy he absorbed at the University, particularly from his computer science faculty mentor, Neil V. Murray, with whom Vijay still keeps up an e-mail correspondence. “Our school is based on looking beyond traditional models and fostering a love of learning, an adventurous spirit and taking responsibility for your own actions,” Vijay said. “The secret I learned at Albany is that if you figure out what you love to do and pursue that, you’ll end up being good at it and succeeding.”

They learned this lesson while sharing an office in the computer science department and attending many of the same classes together at the University. Sheena received a presidential fellowship that provided her free tuition and a monthly stipend. Vijay also had a stipend. They rented an apartment in north Albany, which became a gathering place for computer science graduate students. “Albany was some of the best years of our lives,” Vijay said. His wife concurred. “Yeah, no kids and no companies.”

Vijay described UAlbany as “home to the ‘Einsteins’ of the computer science field — the ones who helped define the underlying theory of computer science.” Unfortunately, he said, “computer science is still too young a field for us to realize the contributions of these founders. It’s hard to describe the excitement of learning ‘Automata Theory’ from its actual founder. It’s like learning the Laws of Motion from Newton himself.”

As undergraduates, Vijay and Sheena both attended the Birla Institute of Technology and Science, modeled upon the Massachusetts Institute of Technology, 100 miles from New Delhi, the capital, in the north of India.

After graduation, Vijay and Sheena were married in 1988 and both landed high-tech jobs in India. The couple soon set their sights on the States. Vijay enrolled in the graduate program at Binghamton and Sheena worked as a software consultant for McDonnell Douglas in St. Louis. Sheena joined Vijay at Binghamton and they quickly transferred to Albany.

Last February, the Vaidyanathans returned to Albany, where Vijay was a featured speaker at a symposium co-sponsored by the University and its School of Business, “Building Brands and Business on the Web.” Vijay, based in San Francisco, is now chief strategy officer for NBC Internet (NBCi), which recently acquired XOOM.com. NBCi, a top 10 Internet property with a 24 percent reach, is the fastest-growing Internet portal and the first to launch a broadband service, which delivers information much faster and without interruption via cable TV wires instead of slower-speed telephone modems.

In front of a standing-room-only crowd of more than 300 symposium attendees in business suits at the Marriott Hotel, Vijay, tie-less, wearing jeans and a sweater, ran through a Powerpoint presentation and demystified e-commerce with candor, confidence and self-deprecating humor. He predicted that broadband is the next big thing on the Internet horizon. “The broadband tidal wave is starting, and if your business isn’t on it, you’re done,” he said. “It will destroy industries in its path.”

Vijay left his audience with the Internet’s good news/bad news scenario. “The good news is that the rules have all changed,” he said. “The bad news is that the rules have all changed.”