BUSINESSWEEK ONLINE : AUGUST 30, 1999 ISSUE
INFORMATION TECHNOLOGY

Why MCI's Brat Pack Is All Over the Beltway


When K. Paul Singh left MCI Communications Corp. (WCOM) in 1994 to launch Primus Telecommunications Group Inc. (PRTL), he brought the feisty long-distance carrier's iconoclastic culture to his McLean (Va.) startup. Singh, MCI's former vice-president of global product marketing, decreed any Primus employee could E-mail suggestions to top managers and get a response within 24 hours. Primus executives quickly cottoned to the idea, as well they might: Five of Primus' six top officers are MCI alums.

Primus is hardly the only example of the MCI old-boy network at work: the Washington area is rife with tech highflyers piloted by executives who cut their teeth there. Indeed, MCI has been the very wellspring of the area, a pool of talent and ideas that has been as crucial to Washington's tech scene as Hewlett-Packard Co. (HWP) was to Silicon Valley's birth. ''Just as there are six degrees of separation between any two people on the globe, almost all of the telecom firms here can trace their roots back to MCI,'' says James B. Murray Jr., managing director of Columbia Capital Corp., an Alexandria (Va.) venture firm. Daniel F. Akerson, a former MCI president who is chairman of Nextel Communications Inc., puts it more bluntly. ''Without MCI, there would be no Nextel (NXTL) or Teligent (TGNT).''

RISK-TAKERS. And Akerson names only two of MCI's spiritual heirs. At Pathnet Inc., a Washington carrier, Chief Financial Officer James M. Craig, Communications Services President Kevin J. Bennis, and Network Services President Robert A. Rouse are MCI grads. Another is H. Brian Thompson, chairman of Global Telesystems Group (GTSG), which provides phone, data, and Internet service in Europe. Todd Ruelle is president of data carrier Sonic Telecom Ltd. in Chantilly, Va.

There's not much mystery to how MCI became the center of D.C.'s startup scene: Founder William G. McGowan built an organization of risk-takers. He promoted star performers about every 18 months to learn different sides of the business. And McGowan created a divisional structure in the '80s that let senior managers run their own shows.

As competition heated up, MCI became a prime hunting ground for telecom startups in search of talent. ''We know how to take market share from market leaders,'' says Primus' Singh. The exodus accelerated after McGowan's heart attack in 1986 and his 1992 death.

However, some ex-MCIers think the upstart-turned-behemoth's days as a spawning ground for entrepreneurial talent are about over. The region's next generation of high-tech executives is likely to come from America Online Inc. (AOL), many say. ''They have a missionary zeal about them that MCI did,'' says Akerson. He sounds almost wistful.

By Amy Borrus in Washington

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