1/ In early 2000 Paul Allen asked Craig McCaw if he wanted to assume control of Metricom's wireless Ricochet service. Paul wanted to make the service a success and was willing to pay Craig to assume control (the price would be negative). Craig and I met with Paul in his office.
2/ Paul Allen's office was straight up out of a James Bond Movie. For example, a glass exterior wall with shades that dropped down to darken the room when a button on his desk was pushed.
We reviewed the pitch deck, talked about it and were given the financials and other data.
We reviewed the pitch deck, talked about it and were given the financials and other data.
3/ Even with a negative purchase price we concluded the business couldn't be saved. A combination of physics and nonstandard hardware/software created unsolvable problems. The service worked technically in certain locations but it would never scale to create shareholder value.
4/ Fixed wireless isn't new.
For example, Project Angel created by McCaw Cellular used 10 megahertz of spectrum at 1900 MHz in the early 1990s - "two 64-kilobit lines and an Internet access line that allows transmission speeds of 128 kilobits per second."google.com/amp/s/www.rcrw…
For example, Project Angel created by McCaw Cellular used 10 megahertz of spectrum at 1900 MHz in the early 1990s - "two 64-kilobit lines and an Internet access line that allows transmission speeds of 128 kilobits per second."google.com/amp/s/www.rcrw…
5/ Overbuilds of other operators are fundamentally hard unless you provide new value like mobility the legacy operator can't match. "Our service is cheaper" is a death wish thesis for an over builder since the incumbent cuts price to marginal cost.
Yes, I had a phone like this.
Yes, I had a phone like this.
6/ The previous photo depicts what McKinsey incorrectly assumed in its famously botched report for AT&T. McKinsey assumed people would rather use that pay phone in the picture than a mobile phone. Oops! google.com/amp/s/25iq.com…
7/ Another Paul Allen story about a network overbuild gone bad involved RCN. Craig McCaw and I met with Paul in the art gallery/ conference room at his Mercer Island compound. We talked about RCN unit economics. Paul would eventually lose a few billion dollars in RCN and Charter.
8/ To be an over-builder in cable won't ever make anyone popular with incumbents. "Overbuilders have long been shunned in the industry as cannibals..."
There were two kinds of losses during the telecom bubble- paper wealth and cash. Paul lost real cash. wsj.com/articles/SB942…
There were two kinds of losses during the telecom bubble- paper wealth and cash. Paul lost real cash. wsj.com/articles/SB942…
9/ "Wait! Don't you mean the Internet bubble?" someone may ask? No. There was an Internet bubble and a Telecom bubble. They started and ended at different times. They did overlap, but not completely. If someone doesn't know this, they weren't involved then.25iq.com/2017/05/12/the…
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