Things were looking up for New Mexico Broadcasting Company, but off in the future were some scary dragons to slay. The company was literally the last family owned broadcasting company left in America and by far the smallest. Virtually all those pioneers in the business were now subsidiaries to large media corporations that owned TV, radio, newspapers, magazines and other assets. In the event of economic down turns or changes in the broadcasting business, they were structured to go with the flow. A small family business could find itself, down the line, facing large expenditures in the face of stiffer competition and in a weak position to negotiate resolutions. On the horizon, the FCC was predicting that High Definition TV would be a reality by 1994, just a couple of years away. At that time estimates of the transition costs to HD for a medium market station was around 14 million dollars. Cable TV had seen a windfall when satellites became available to bring in as many channels of programming as could be produced. Cable was no longer a terrestrial service that simply delivered better pictures to small communities for a fee. It was now able to deliver multiple channels. There was a guy, named Ted Turner, who was selling off his TV stations in an obsessive push to build a whole new kind of news service. It was called Cable News Network or CNN. Cable was now starting to sell advertising. Andrew himself had worked for awhile in the start up phase of a cable business called Financial News Network. FNN was being courted by NBC, that acquisition soon became known as CNBC. Local cable stations were now selling advertising and there was also a new service on its way that could deliver hundreds of channels into any home via satellite. The internet was also on the verge of exploding.
The purchase of KBIM had not been an action of great optimism, but part of an exit strategy. As a station in the top 50 markets that was stronger competitively, KGGM and KBIM could now be sold at a higher premium.
Another accidental business….. Literally
Hebenstreit Communications Corporation began as a business that was very much different from what it became. Having a television business, it was not uncommon for various people to come to Andrew with new ideas. Some were looking for investors, others a media partner to advertise a new product or service. Almost all of these meetings did not end up coming to anything, but on a couple of occasions there was an opportunity.
In 1990, two entrepreneurs, Bob Jordon and Kevin Glad, asked for a meeting to demonstrate some technology and discuss a business plan. The idea for a “Talking Yellow Pages” business did not have a working business model. The station would promote the seven digit phone number people could use to find products or services in their area. It was a free call and the business would eventually make money by charging businesses to direct calls their way. It would not have worked and Hebensteit questioned the integrity of the premise. However, the technology which married PC’s together to work like a mainframe and the basic programming had potential. Hebenstreit agreed to be the media partner in the event something worked out. It was a case of, we don’t know what to do with it, but the technology is pretty cool.
Bob and Kevin tinkered with the idea and the program for several months. One of the ingenious aspects at that time, was the program married phone numbers, zip codes and SIC codes together. An SIC code is the identification the IRS uses to categorize every business. What this means is an operator can help a caller locate any business near the location he or she is in.
How to use it became apparent in a bang of inspiration. Actually, it was more of a crunch. Driving on I-40, Hebenstreit rear ended a truck while trying to dial an unfamiliar number from directory assistance. Why couldn’t they just connect the call? An idea for a business was launched, sort of, by accident. Hebenstreit took the question to the local cellular phone company. The idea was a natural for people using mobile phones. Connect the call so they don’t have to dial while driving. The manager of Metro Mobile in Albuquerque liked the idea but explained it couldn’t be done. There was no way to route the call away from the Bell information service, connect it to Hebenstreit’s company for the number and connection and then track it to a third party for billing based on the length of the call.
Many good ideas die when a significant obstacle is encountered. AR Hebenstreit said frequently that good ideas were a dime a dozen, “The man who can make it work is hard to find”. This would take Hebenstreit and a number of other people to make it work. An engineer from the phone company was needed to figure out the Central Office switch. Find a way to run a cell phone call from the C.O. through a call center to an operator and then deliver it back to the Telephone Company, Central Office while keeping track of the Mobile Identification Number of the cellular phone customer. Then find a way to marry the incoming and outgoing calls to keep track of the time so the mobile phone company can bill it to the customer. A way also had to be found to charge the caller for the service so the new company could get paid.
It took some time and effort but all the above was figured out and the technology was developed. The manager of the local Metro Mobile cellular company said “That is a good start”. Now came the hard part. Metro Mobile was a large company and someone with vision and the authority to make a decision would need to authorize trying it out in Albuquerque. In any company there are only a couple of people who can make a decision on something entirely new. In a large company it would be the CEO or the Chairman of the Board. If it is a private company it would be best to arrange an appointment with the owner. In such a situation the only really viable way to succeed was to go straight to the top. Unless you already know the CEO or Chairman, this can be tricky. These are busy people who don’t generally have the time to talk to strangers who call without introduction. The positive side is men and women at this level tend to entrepreneurial, understand the value of innovation and can make a decision without focus groups and other bureaucratic hindrances. The other thing that surprises many is people at this level are often accessible when approached in the right way. A mutual friend for introductions is ideal. A respectful and thoughtful approach directly is often successful. Just make sure, if you get a meeting you are organized and have the whole package together. Don’t waste these guys' time.
In this case a man who lived in Conneticut, George Lidamin, was the Chairman of the Board for Metro Mobile. He was also willing to take a call and was enough of an entrepreneur to allow a Beta Test of the enterprise in Albuquerque. The service was well accepted by cellular customers, demonstrated a measurable increase in usage and clearly offered a superior service over the Bell directory assistance services. Metro Mobile quickly approved opening HebCom’s “Direct Connect” service in Phoenix. In the meantime Bell Atlantic bought Metro Mobile which, after some misunderstandings, saw the value of the service. Hebenstreit continued networking and managed to sell the idea to some very large companies. The largest in the U.S., at that time, was McCaw Cellular (AKA Cellular One). Craig McCaw was the founder and CEO of the company and after a meeting with Hebenstreit assigned a product manager to try the service in Dallas. A meeting with Ralph Roberts, the founder and Chairmen of Comcast resulted in an operation in Philadelphia which covered four states. With Success under the company’s belt, it attracted additional business from Southwestern Bell in Baltimore, Washington, Chicago and Boston. Bell South agreed to roll the service out in Milwaukee with other markets scheduled to follow.
This put the company in the rapid growth stage. In other words, the only apparent way to raise the money, was to go public. As that process was underway, Comcast which was a partner in Philadelphia approached Hebenstreit with a proposal to buy Stock in HebCom and take over the day to day operations.
Often, when companies reach this critical stage, they fail because the original founder won’t get out of the way. The original entrepreneurs tend to run companies on their personalities, while larger corporations, like Comcast, have processes and systems in place. With advice from his mentor and largest shareholder, Burt Harris, Hebenstreit negotiated a large minor shareholder position for Comcast, but turned over the day to day operations. Three years later, Comcast bought out Hebenstreit and all the other shareholders.
Hebenstreit has run another business in Transportation since the Comcast deal in 2001 and has since partnered that company with a larger operation out of Salt Lake City.
As of this writing he is preparing to launch a new business he hopes will have some success back in the radio business. Andrew says he asked himself, “When was business really fun?” Radio is the answer to that question. It remains to be seen whether or not this new endeavor will succeed.
If this story seems a bit long, we apologize. In the next iteration of the Website history, we will take a shot at shortening it up.
-Andrew can be reached at: Andrew@hebenstreit.com