The Aspiring VC

I'm trying to learn how to be more of an asshole,” said Stewart Alsop, general partner at New Enterprise Associates, the country's largest venture capital firm. The way he sees it, VCs turn away 99.9% of the entrepreneurs who pitch ideas to them. And to deal out wholesale rejection in that volume, you have to disconnect from your more compassionate instincts.

“To say no that much, you basically have to enjoy it,” he said. “I have to teach myself to enjoy it.”

He might be getting there. For example, on the same October day he spoke to Wireless Review, Alsop informed a visiting Nokia executive that N-Gage, the phone-enabled portable game player in which Nokia has invested a considerable marketing effort, is “a joke.”

“He took that really well, I have to give him credit,” Alsop said. “[The Nokia executive] said, ‘This is optimized as a gaming device.’ And I said, ‘But it's not. If it was optimized, it wouldn't have a cell phone.’”

Therein lies one of Alsop's recurring complaints against the wireless industry, one he's referred to often in the pursuit of his, um, goal. People buy phones because they want to make calls and talk, he said. The other stuff — games, cameras, e-mail — they don't discover until later, like their car's cruise control. It's an odd thing to hear from a guy who sits on the board of a company that manages cell phone e-mail (it's called Visto). And it's odder still when you consider that camera phones are now outselling digital cameras, which seems to contradict him.

But Alsop's argument is that carriers are adding more and more tangential data apps for customers who would really prefer their carrier just stop dropping their calls. And while call reliability won't be remedied by fancy new data apps, Alsop wants to know why carriers don't use data to improve the voice experience, the most important aspect of the product. For instance, why do users have to dial 411 to look up a phone number when they could use the Internet to search a white-pages directory and call numbers just by highlighting and selecting them on their handset screens?

“I think it's because the cellular industry [comprises] basically voice people, and they don't understand how to use the data infrastructure to enhance that voice,” Alsop said. (Remember: He's trying to be like that.)

The Wi-Fi phenomenon opened the floodgates for eager entrepreneurs with misapplications of wireless data, thus increasing the demand for the resolutely dismissive VC Alsop hopes to be. Although he successfully begged close friend Sky Dayton for a seat on the Boingo Wireless board after NEA invested in the company, Alsop and NEA have rejected every single one of the 100-plus Wi-Fi equipment company plans that were pitched to them since.

“A very high percentage of them just fail to recognize that wireless networks have to be integrated with wired networks,” Alsop said. “Most people look at this and say, ‘Wow, it's wireless; it must be different.’ But there's also huge infrastructure around wireline networks, and many of the problems are the same. You can't pretend wired networks don't exist in order to create differentiation for a wireless solution.”

Alsop wasn't always a venture capitalist. He graduated from Occidental College with an English degree, and he spent much of his career writing and publishing technology magazines such as InfoWorld before landing his esteemed current gig writing the monthly Infotech column for Fortune magazine. Writing a column can be a good exercise for someone who aspires to be an asshole, as it rewards contentious, provocative language. For example, in the April 2003 issue of Fortune, Alsop compared a Verizon Wireless attorney with Saddam Hussein's famously mendacious information minister.

“What do Andrew McBride and Muhammad Saeed al-Sahaf have in common?” he wrote. “They're both loyal lackeys of corrupt administrations willing to say anything in order to justify their existence.” Specifically, Alsop was protesting McBride's public skepticism that wireless number portability offers any consumer benefits. “I consider that the equivalent of insisting that there are no American soldiers in Baghdad, just as the bullets are flying,” he wrote. Verizon Wireless has since flipped like a handset on the issue, vowing to become the only major wireless carrier ready for number portability and pledging assistance to customers who want to jump ship. Alsop is abjectly impressed at the change of heart but hasn't entirely let go of his animosity. “While I was writing my column, they must have already been working on this, which means they knew more than I did, which really pisses me off,” he joked.

Tenacious public writing is in Alsop's blood and in his name. His father (and namesake), a vastly influential political journalist, co-wrote a hawkish syndicated column with Stewart's uncle Joseph in the decade following World War II. Stewart Alsop Sr. went on to write for the Saturday Evening Post and Newsweek when he and his brother could no longer tolerate each other's dissonant points of view.

“My uncle was an intellectual troublemaker, and my dad was more of a pragmatist, focused on the here and now,” Alsop said. “If they were focusing on, say, the balance of power between the U.S. and the Soviet Union, my uncle would look at the big picture, doing more of an intellectual analysis, whereas my dad would study the number of warheads each side had and do a practical assessment of the likelihood of either side pushing the button and what would happen after that. He tried to put it in real terms. That's one of the reasons people liked to read his columns.”

Alsop likes to think he embodies the traits of both men, combining in his columns and in his outlook a mix of gadfly and geek that can chastise the superpowers and count their warheads at the same time. But as a venture capitalist, Alsop spends most of his time trying to predict the consequences of people pushing buttons, which may be no easier in technology ventures than it is in thermonuclear war.

Alsop has an admirable track record of investment, snaring such gems as TiVo and Sorrent. But he is also an incurable gadget nerd, and as such, he is often susceptible to falling in love with technology that the rest of the world will not. In December 2001, he called Handspring's personal digital assistant Treo “so terrific that I think Handspring could unseat Nokia as the number one manufacturer of cellular handsets by 2005.”

“I went a little overboard there,” Alsop admits now, recognizing that what he considers the device's coolest features (e.g., its ability to store a speed-dial list of thousands) “probably don't appeal to 80% of the users out there.” He may have learned his lesson, given that he later hailed Danger's Hiptop as a cool handheld created by talented people with an innovative business model that will probably fail anyway.

Like his father, Alsop has also placed some bets on global domination. A year ago, he predicted by 2010 CDMA would be the world's most prevalent wireless technology by virtue of its easy upgrades and its performance in the data world. He still has faith in that opinion, but he acknowledges that much of the question depends on the extent to which wireless users embrace data and wireless carriers apply it effectively. That visiting Nokia executive told Alsop that CDMA's grip should slip from 30% of the world's wireless subscribers to 20% over the next five years. Alsop didn't mention that he'd predicted the opposite, quietly thankful that the Nokia executive, if he knew, wasn't an asshole about it.