How to Stay on the Move ... When the World Is Slowing Down

The challenge: Persuade investors to commit $540 million to the idea as the resuscitated Iridium struggles to attract customers, as Globalstar and Orbcomm try to stay solvent, and as Craig McCaw works to retool ICO Global Communications by combining it with his own LEO company, Teledesic LLC. "A lot of the investors we've talked to had money in one of those companies, and they don't have much hope of recouping it," Farrell says. "Either that or they know someone who invested. And most of the nonsatellite investors we talk to lump us in with Iridium and the other LEO systems."

From 1984 to 1997, Farrell was responsible for Hughes's Galaxy Satellite System, which would eventually merge with PanAmSat Corp. to create the world's largest satellite-operating company. He was semiretired, doing some consulting in the industry in early 1998, when he began brainstorming with both Mark Fowler, a former chairman of the Federal Communications Commission, and with Bruce Lederman, an attorney who had been outside counsel for Hughes when Farrell was president.

The trio refined the idea for AssureSat, and after garnering some seed capital, they set out to raise $540 million. "It has been quite a learning process for me," Farrell says. "We totally missed how long it would take to raise money, even though we have a business plan that is rational, that earns money, and that is as solid as anything I've done before."

But Farrell has become a pro at addressing investors' concerns. "You need to find out what worries them and then walk them through it. You can't wipe away the risk, but you can explain, in plenty of detail, why and how this will work."

Farrell can deliver an oral dissertation on how AssureSat is different from Iridium and Globalstar: "We plan to have only 3 satellites, not 60-some. We have 40 potential customers, not 40 million, like Iridium." And while the startup capital is high, the organization that AssureSat is building is remarkably lean: 25 employees, at most. "The simplicity is attractive," he says. "You've got five marketing guys, and each one of them takes 8 of those 40 customers. It's an easily manageable business."

Assembling the company, Farrell says, has been gratifying. He has had the chance to handpick onetime colleagues whom he most enjoyed working with, and he says that "it's incredibly fun to do something new." The not-so-fun part has been convincing investors of AssureSat's viability -- and persuading satellite operators to sign up for the service before he has the money in hand to begin actual work on the satellites.

As of April, Farrell, Fowler, and Lederman had secured commitments for $420 million of the $540 million they need, but they were still sweating the final $120 million. "We've made a commitment to the people who work for us that we're going to see this through," Farrell says. "So we're not going to get frustrated and go home. I have faith in their ability to do this, and they have faith in me. I have no intention of quitting."

From Superstar to Fallen Star to What?

E-commerce teams inside big companies enjoyed a stretch of stardom in the late 1990s. Chief executives didn't want to be "Amazon.commed" out of existence, and it was up to the members of the Internet team to be the first line of defense against startups. In many cases, those teams worked with loose budget guidelines, reported to the top of the company, and could brush off any strictures that didn't suit them. They were, after all, inventing the future.

But as the pure-play dotcoms began to falter and online marketplaces failed to attract sufficient transaction volume, the blaze of the Internet team's star began to dim. What happens when the hotshot becomes just another department competing with everyone else for resources and management attention -- and facing the same expectations for short-term performance and tangible return on investment?

Barb Claitman, 48, director of e-business within Boeing's commercial-aircraft group, and Cathy David, 37, general manager of Target.com, both stress the importance of having a clear message about the real work of e-commerce change agents: Learn from the travails of others. E-business can really pay off. You can't build for the future by scaling back your commitment to the Internet.

At Boeing, experiments in e-commerce were conducted as far back as 1996, when the company began selling spare parts online. Last year, the company built a customizable portal for its customers called MyBoeingFleet.com, which enables airlines to view reports on the reliability, flight hours, and landings of their Boeing aircraft; to analyze fleet trends; and to access a database of flight manuals and engineering drawings.