Money from Thin Air : The Story of Craig McCaw, the Billionaire Who Invented the Cell Phone Industry and His Next Billion Dollar Idea

by Corr, O. Casey

• ISBN13: 9780812926972
• ISBN10: 0812926978
• Format: Hardcover
• Copyright: 2000-06-01
• Publisher: Crown Business

Summary

From Jay Gould to John D. Rockefeller to Bill Gates, the titans who change the world have set themselves apart by seizing the high ground before anyone else even knew it existed. Gutsy, shrewd, and ruthless, they were, above all, visionaries who saw whole new industries where others saw only chaos. Today, another visionary is seizing control of the vast new world of telecommunications, an elusive entrepreneur named Craig McCaw.Money from Thin Airis the story of how he created a new industry literally from thin air, and how he will do it again. Journalist O. Casey Corr vividly portrays here for the first time how McCaw created a cellular communications empire from the disarray of his father's failed cable business and went on to sell it to AT&T in 1993 for a stunning $12.6 billion. And he shows how McCaw is now creating another new industry that could dwarf the accomplishments of Gates and Rockefeller put together, an "Internet in the Sky" that will provide high-speed data access to any point in the world. Most of all, Corr captures the heart of a new kind of executive -- mercurial, brilliant, extremely flexible, always entreprenurial -- who is changing the way business works forever. A Leadership Style for the Twenty-first Century: McCaw's radically different approach to management--based on hard-nosed negotiation, shrewd borrowing, and a rare willingness to change business plans on a dime--is the new model for anyone who wants to survive, let alone thrive, in the new economy. This book shows how McCaw's unique management style evolved by instinct and from periods of intense personal reflection and self-scrutiny. Insight into the Emerging New Media Landscape: Today, the telecom world is in turmoil. Giant companies are vulnerable because of their entrenchment in old technology and high cost. So they merge; bigger must be better. At a different level, start-ups tap new pools of capital and maneuver to exploit opportunities created by stumbling giants and collapsing regulation. Increasingly, it's a game for the nimble and the daring. The telecommunications world has come around to Craig McCaw's way of business. An Amazing Life: Rarely does a family make and remake a fortune. Craig McCaw's father literally ran his multimillion-dollar radio and television business out of his hat, and when he died suddenly at an early age, the family's bank declared the estate insolvent. McCaw, then only twenty years old, rejected the advice of more experienced businessmen and began investing the money he got from his father's life insurance in a series of businesses most thought worthless, or at best, extremely risky. His career since then has been a series of increasingly large-scale ventures based on a unique personal vision of an emerging human society in which all of us will be freed by technology. The Next Big Thing: McCaw made one fortune in cable TV and another in cellular telephones. Now he's building a telecommunications empire of staggering potential through a collection of companies he controls: Teledesic, a satellite partnership with Microsoft's Bill Gates that is building a global "Internet in the Sky"; Nextlink, a company positioning itself to rival the Baby Bells with its own vast network of fiber-optic cable and switching systems; CablePlus, a company that provides voice service, Internet access, and TV signals through coaxial cable; and Nextel, an international wireless-telephone company with an expanding role in data services. Each company alone is breathtaking in its ambition, hunger for capital, and risk-taking management style. Together, they provide a glimpse at the depth of McCaw's ambition: one company capable of providing high-speed data access to any point in the world. Odd, mysterious, yet public-spirited, McCaw is a technological visionary who sees profit where others see thin air. His amazing, ongoing story is required reading for anyon

Author Biography

O. Casey Corr, a business and technology writer with the <i>Seattle Times</i>, is the author previously of <b>KING: The Bullitts of Seattle and Their Communications Empire</b>, and has contributed reporting and commentary to, among other publications, the <i>Seattle Post-Intelligencer</i> and <i>The Washington Post</i>. He lives in Seattle with his wife, Sally Tonkin, and their two children, Evan and Michaela.

Table of Contents

Preface	ix
``That Man Behind the Curtain''	3	(10)
A Family Fortune Is Lost
``A Bit of a Loose Skipper''	13	(14)
The Elder McCaw and the Origins of an Empire
``Money Was Not the Issue''	27	(11)
A College Boy Takes Charge
``How Can We Build Our Dreams on This?''	38	(9)
The Small-Town Origins of a New Management Style
``There's This Crazy Kid...''	47	(14)
McCaw Becomes an Apostle of Debt
``Always Have a Back Door''	61	(20)
The First Major Partner Comes on Board
``What Would Be in Their Best Interest?''	81	(8)
McCaw Discovers a Revolutionary Telephone
``We Were Dreaming of Dick Tracy''	89	(14)
A Fraternity of Independents Takes on Ma Bell
``I Can't Go to Bed Owing Somebody a Billion Dollars''	103	(10)
McCaw Hangs On While Others Lose Their Nerve
``Like Negotiating with the Russians''	113	(9)
Financing Comes from an Unlikely Ally---AT&T
``What Do You Want for a Sacramento?''	122	(12)
A License Lottery Creates a Trading Frenzy
``You Went to Veterinarians When You Needed Brain Surgery''	134	(11)
An Audience with Michael Milken, the King of Junk
``It's Getting Awful Lonely''	145	(8)
McCaw Consolidates His Empire as Independents Fall
``Where Do I Sell My License?''	153	(11)
Speculation Reaches a Climax in an FCC Free-for-all
``The Mad Scientist''	164	(14)
His Company Goes Public, McCaw Stays Private
``Take Tarawa''	178	(15)
A Hostile Takeover Creates a Truly National Service
``The Spirit Within Us Must Burn''	193	(12)
The Bill Comes Due for a Leveraged Giant
``You're Marrying Off Your Daughter When She's Fourteen''	205	(11)
AT&T Makes an Offer That Can't Be Refused
``Like Porcupines Making Love''	216	(11)
The Billionaire Leaves Home
``Master of the Obvious''	227	(8)
An Ambitious New Vision Takes Shape
``The Michael Jordan of Telecommunications''	235	(14)
McCaw Strikes Gold in the Wreckage of Nextel
``The Potential to Change the World''	249	(20)
Enter Bill Gates and Teledesic's ``Internet in the Sky''
``Under the Radar''	269	(18)
McCaw Makes Billions in a Telecommunications Backwater
Epilogue The Billionaire and the Whale	279	(8)
Notes	287	(6)
Acknowledgments	293	(4)
Index	297

Excerpts

More than any other individual alive, Craig McCaw embodies the incredible transformation and likely future of the telecommunications industry. He is one of the most fascinating executives in business today, an acknowledged visionary in communications, the billionaire whom even other billionaires find interesting.

This book's title refers to McCaw's long-term business focus: invisible airwaves that carry high-profit voice and data services. But it also suggests a deeper theme -- the managerial magic he brings to business. McCaw is astonishingly good at finding value where others see obstacles, doom, or just plain nothing. He seems to make money from thin air.

Describing himself as the master of the obvious, McCaw has redefined the idea of the executive. This is one guy rarely found in a suit, in the office, at a desk. More likely, he's kayaking, waterskiing, or piloting his jet high above the islands of British Columbia. When he talks about the freedom that wireless communications brings to the mobile worker, he knows it because he lives it. Contacting subordinates by voice mail, he is the virtual executive, more felt than seen. He makes money the new-fashioned way.

For the first eighty years of the twentieth century, people like McCaw had no place in telecommunications. The industry revolved around men in blue suits, white shirts, and sensible shoes who spent their lives inside a single gigantic company, AT&T, which resisted ideas that threatened its monopoly. Creative thinkers and quirky personalities worked elsewhere. Bill McGowan's MCI provided the notable exception, but the universe remained Ma Bell's until AT&T was broken up in 1984.

Today the telecom world is in turmoil. Giant companies are vulnerable because of their entrenchment in old technology and high cost. So they merge: Bigger must be better. At a different level, start-ups tap new pools of capital and maneuver to exploit opportunities created by stumbling giants and collapsing regulation. Everyone wants a share of the profit created by huge demand from businesses and consumers tapping the Internet. Increasingly, it's a game for the nimble and the daring. The telecommunications world has come around to Craig McCaw's way of business.

McCaw made one fortune in cable TV and another in cellular telephones. Now he's building a telecommunications empire of staggering potential through a collection of companies he controls: Teledesic, a satellite partnership with Microsoft's Bill Gates that is building a global "Internet in the Sky"; NEXTLINK, a company positioning itself to rival the Baby Bells with its own vast network of fiber-optic cable, wireless transmission services, and switching systems; CablePlus, a company that provides voice service, Internet access, and TV signals through coaxial cable; and Nextel, an international wireless telephone company with an expanding role in data services.

Each company is breathtaking in its ambition, hunger for capital, and risk-taking management style. Together, they provide a glimpse of McCaw's possible goal: one company capable of providing high-speed access to any point in the world, be it a cabin in the Cascade Mountains or a remote village in Asia. On the ground, a Teledesic community could also be served by a wireless network. For the Third World, that's the telecommunications equivalent of jumping from the nineteenth century to the twenty-first century. The idea has enormous social implications, and the potential for equally enormous profits.

Though this book focuses on McCaw, his story represents how the entrepreneur has moved from the fringes of the telecommunications business to the forefront. People such as McCaw, not the executives of major companies, have emerged as the visionaries who can adapt to a rapidly changing competitive landscape. They are the hunters, not the hunted. The management style and values they used to reach this point will be crucial in the future as the Internet fuels huge demand for sophisticated data services.

This book shows how McCaw's unique management style evolved by instinct and from periods of intense personal reflection and self-scrutiny. His emergence as a remarkable presence in global communications began with a crucial event in his youth.

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Excerpted from Money from Thin Air: The Story of Craig McCaw, the Billionaire Who Invented the Cell Phone Industry and His Next Billion Dollar Idea by O. Casey Corr
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