Starwave Takes the Web ... (Seriously)

Slade has come by his skepticism the old-fashioned way -- he's earned it. Under Slade's leadership, Starwave has gone from 8 people to more than 280, including 55 top-flight software engineers. It has created some of the best-known and most-visited programming on the Web : ESPNET SportsZone, Mr. Showbiz, Outside Online, Family Planet. It has also reportedly spent something on the order of $60 million. The only way Slade and his colleagues can make sense of all this red ink is to treat the entire Web as an R&D laboratory.

"What we have right now is a kind of access schizophrenia," says Slade. "There's a lot of sound and fury targeted at people who aren't especially good customers while everybody waits for the real customers to catch up."

Slade has a big advantage in this R&D waiting game. Sitting behind him is Starwave's main investor, Microsoft cofounder Paul Allen. Having access to Allen's patient money has enabled the company to develop a long-term strategy that's otherwise impossible in a hyperpaced, Web-based IPO market that expects a company to go public within 18 months of its founding.

"Paul understands that you have to seek risk -- that a new medium plus big risk equals a big reward. And because of that he's allowed us to run this company like the new media operation of a big company rather than like a startup," says Slade.

Allen has also given Slade the chance to change his mind -- and the company's fundamental direction. When Slade joined Starwave, the company had no content or product focus -- it was trying to make something happen in interactive media, possibly as a tools company, possibly as a content company. Slade focused Starwave on opportunities in sports, entertainment, kids, and families -- and identified a three-pronged strategy of online services, CD-ROMs, and broadcast. Then, one year later, Starwave did a sharp turn onto the Net. The credit for the strategy, says Allen, goes to Slade.

"It was Mike who really restarted this company," Allen says. "He was excited about Net-based vehicles for things like sports and family information. I was anticipating the birth of something -- we placed our bets in a number of different areas, not knowing exactly which would mature. It turned out to be the instantiation of those opportunities Mike had identified."

Most startups wouldn't have survived such a wrenching reinvention. But Slade could afford to take his time and get it right -- and that freedom has made him an uncommonly egoless executive. "It's been quite an education," he says. "When I joined Starwave, I viewed it as a software-company type of management challenge. As I've gotten educated, mostly by the people I've hired, I've realized that Starwave is really a next-generation media company."

The promise of new media has always been about convergence : the digitization of everything that makes possible a combining of text, graphics, video, audio -- delivered through another convergence that combines television and computing. If Slade's experience is any indication, convergence is still at the heart of new media -- but not technological convergence. What really matters is human convergence : melding talents from a wide variety of existing media -- every medium, in fact, that predates the Web, from radio to film - and existing industries -- from software to entertainment.

The management challenge associated with convergence, he says, is to blend people's experiences into a shared vision. "Try asking a Hollywood person and a Microsoft employee to define 'development,'" Slade suggests. "Or try to get publishing people to think about interactive media instead of linear media. It's like night and day. Managing expectations and uncertainty is a basic job description."

But if the management challenge is new, Slade sees the competitive challenge as not particularly different from other media. "In theory," he says, "the Web is this big, wide-open field where a thousand flowers can bloom and anyone can prosper. That's bull. The Web is already dominated by big, well-funded media entities that are seeking to 'aggregate' and 'brand' and 'lock out' competitors. The marketing challenges are the same as in any other type of media. In most large categories on the Web there will be only one, two, or three winners. So the race to get ahead or to catch up is furious."

It's a race Slade enjoys running. "This is the coolest and funnest thing I've seen since the Apple Macintosh," he says. "We're a proud bunch. We try to do things in a super-excellent, super-high-quality, blow-away-the-competition manner. That's not always the right approach, but when it works, it shows."