Teledesic Seeks That Entrepreneurial Spirit

When David Twyver settled in as Teledesic's chief executive officer in the fall of 1996, he called together the company's 50 or so employees for a pizza party.

Twyver most recently had been president of Northern Telecom's giant wireless-manufacturing business. He was recruited by a corporate headhunter to lead Teledesic, the satellite communications company backed by Craig McCaw and Bill Gates.

The pizza party was a gesture to the tight-knit group in Kirkland that Twyver respected the culture of a start-up.

Last Thursday afternoon, as Teledesic Chairman Craig McCaw again gathered the employees, Twyver wasn't even in the room.

Above the whir of ventilation ducts and an ice cream machine in a Carillon Point cafeteria, McCaw announced that he and longtime associate Steve Hooper would take the helm as co-chief executives, leading the company's race to build and launch more than 300 satellites by 2002.

Twyver, the man who began the week leading Teledesic into the next century, spent the afternoon moving into his remodeled Montlake home. He still holds a seat on Teledesic's board and will serve on a special board advisory committee.

Back at the helm

Questions remain about exactly why McCaw, Teledesic's chairman and co-owner, replaced Twyver.

The employee cafeteria meeting was closed to the public. And Teledesic senior executives - including McCaw, Hooper and Twyver - declined to discuss the move.

Hooper, a McCaw Cellular veteran and former chief executive at AT&T Wireless, said he plans to read through volumes of Teledesic information before talking about where he wants to take the company.

Still, the move comes at a confluence of several key events in the lives of Teledesic and the executives running it.

McCaw made hundreds of millions of dollars when he built McCaw Cellular from scratch, eventually selling the company to AT&T in 1994 for $11.5 billion. He founded Teledesic the same year, after financing a group of engineers working on general designs for the satellites since 1990. The idea is to weave a high-speed computer system through the network of low-orbiting satellites, linking businesses and communities around the world.

Since hiring Twyver in 1996, McCaw, who has several major investments in wireless and wired telephone companies, had been keeping a more distant role as Teledesic's chairman.

Then, this fall, McCaw, 48, settled a contentious, time-consuming divorce from his wife of 21 years.

Teledesic, too, has had a busy year. The company secured regulatory clearance from both the Federal Communications Commission and the United Nations to operate its satellite network. The company hired Boeing to build and launch the satellites.

Now, though, Teledesic must lure billion-dollar investments from established telecommunications companies that eventually would offer Teledesic's service to customers.

All this has come as potential competitors - including Motorola and French-based Alcatel - try to speed along their plans to build satellite networks for high-speed computer access.

Some have speculated the move to replace Twyver at Teledesic is an attempt to shore up money-raising clout as the company increasingly turns to investors.

In a statement Thursday, McCaw said that as the stakes at Teledesic rise, he and Gates, Microsoft's chairman and co-owner of Teledesic, want to become more involved in the direct running of the company.

Bob Ratliffe, a Teledesic spokesman, said the key to the change is an emphasis on the lean, entrepreneurial spirit Teledesic hopes to nurture.

McCaw and Twyver differed over the best way to manage the company's growth, Ratliffe said. He would not elaborate.

"This has absolutely nothing to do with raising money, or with fear of the competition," Ratliffe said. "It has everything to do with making sure we're putting the right talent to work on the right things."

A new tack

David Twyver has been in the telecommunications equipment business for more than two decades. At the University of British Columbia, he worked with new ways to ship information over telephone networks - early technology then, now commonly used.

Twyver, 51, speaks softly, at a deliberate pace. In conversation, he drops phrases like "bridge taps" and "loading coils" - technical terms from his days at Northern Telecom.

When McCaw hired Twyver to lead Teledesic, he hailed Twyver's experience as critical to helping build a company that is part telecommunications provider, part space giant.

Twyver was in command when Teledesic hired John Wolf, a McDonnell Douglas veteran who is now the senior Teledesic executive in charge of designing and building the satellites. Twyver also oversaw the selection of Boeing in May as primary contractor on the satellite project.

But Twyver fundamentally comes from a big-company manufacturing background.

Now, it turns out, McCaw is looking for somebody more accustomed to building a company from the ground up.

He and Hooper have already done that. Hooper helped run divisions of McCaw Cellular as the company expanded during the late 1980s and early 1990s, eventually becoming the largest cellular phone company in the nation.

Then, after McCaw sold the company to AT&T, Hooper stayed on as chief executive of the new 11,000-employee division, AT&T Wireless Services.

Hooper, known as an aggressive, customer-oriented manager, quit AT&T Wireless to rejoin McCaw in another venture this summer. Hooper and Wayne Perry, another senior AT&T Wireless executive, took lead roles at Nextlink, the publicly traded Bellevue telephone company founded by McCaw.

Hooper, now Nextlink's chairman, will split his time with the Teledesic post.

Hooper is the most senior McCaw Cellular veteran to join Teledesic's management team.

Usually, McCaw seeds his investments, including Nextel, with familiar faces from his days of deal-making at McCaw Cellular.

Until now, though, the only other senior McCaw veteran involved with Teledesic has been Tom Alberg, who serves as vice chairman of Teledesic's board.

Other Teledesic executives have come primarily from satellite and manufacturing backgrounds.

Russ Daggatt, who will remain as Teledesic president, worked as an international attorney and executive with Flying Tigers and an adventure travel company. David Patterson, Teledesic's chief scientist, spent years at Sprint. David Montanero, in charge of striking partnership deals for Teledesic, came from Motorola, which is building satellites for another cellular telephone company.

In their new roles as co-chief executives, McCaw will focus on the big picture, Hooper will deal more with the day-to-day.

"Had these guys not worked together over the past 15 years, maybe I would question" the joint leadership, said Eric Weinstein, a stock analyst with Donaldson, Lufkin and Jenrette in New York.

Weinstein sees McCaw's increased role as a natural progression for the company, as do others.

With regulatory licenses in hand, and Boeing on board, analysts see this as the time McCaw buckles down to build the company over the next several years.

"Clearly, having a Craig McCaw step up and say I'm going to be CEO and make this happen, makes it easier" to sell the company to investors, said Tom Watts, a satellite industry analyst at Merrill Lynch, in New York.

The question remains exactly what role McCaw will play within Teledesic's office walls and in meeting with the broader business community.

McCaw, an intensely private person, will not likely step too far into the spotlight. When asked by an associate if he would speak to the media, McCaw deferred.

That is one chief executive task, McCaw said, that he will leave to Hooper.

Thomas W. Haines' phone message number is 206-464-2537. His e-mail address is: thai-new@seatimes.com