The New Entrepreneurial Elite

Lured by enormous compensation packages and the excitement of fast growth, many big-company executives are leaving cushy positions to run start-ups.

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Top Fortune 500 execs are jumping ship to run start-ups. Can they cut it in a world without limos?

Stranded at Newark Airport on a Friday night, sandwiched among the dronelike business travelers and souvenir-shop kitsch, Alex Mandl came face-to-face with a horrifying reality.

That night, for the first time, there would be no plush corporate jet to wing him away.

Mandl, lately the president and chief operating officer of AT&T Corp., had just assumed the reins of a pint-sized wireless company in northern Virginia. By resigning from the number two spot at $52-billion AT&T to join a start-up that at the time didn't even have a name--it's now called Teligent Corp.--Mandl had become the most visible icon of an unlikely phenomenon.

Executive defectors, you might call them: blue-chip corporate chieftains who kiss the security of the executive suite good-bye, descending from their powerful posts to head up little-known growth companies. Such defections are still few in number, but they're occurring at a pace that would have been unthinkable only a few years back--and they've captured the imagination of the business world.

"I had a pretty good job," Mandl says in grandiose understatement. Namely, he was widely considered the heir apparent to one of the world's largest corporations. "The odds were, I would succeed [AT&T chairman and CEO] Bob Allen," he says. "But I basically woke up one morning and said, 'This opportunity is so attractive that if I don't take it, I probably will never do this kind of thing."

On his first day of work, a year ago September, Mandl showed up to vacant offices and went about hiring the company's first employee, a secretary. He spent the following week working on telecom issues, just as he had at AT&T--only at a slightly less elevated level: the office phone system he had installed didn't work and had to be ripped out.

A charming thought, that: Alex Mandl, master of the telecom universe, struggling to fix the damn phone.

But truth be told, visitors hoping to see the former president of AT&T sweating it out in gritty start-up digs, with his sleeves rolled up, will be disappointed.

At Teligent's tony headquarters there are no cinder-block desks in the hallways, no empty pizza boxes. Instead, we're sitting in Mandl's palatial, leather-filled office, enjoying the wide-angle view of the Potomac River as it flows past Washington, D.C. A public-relations handler is present throughout my interview with him.

There are other telltale signs that one is not dealing with a dyed-in-the-wool entrepreneur. Instead of the usual rough edges, the shoot-from-the-hip scrappiness, Mandl exudes a certain gravitas. His gestures are deliberate, his words chosen coolly, creating a sense of distance between him and whomever he is speaking to. Even his eyelids, when they fall, lift lazily. A big-company man.

"Alex was our number one draft pick," says Bill Berkman, a member of the wealthy Pittsburgh clan that quietly laid the groundwork for Teligent during the 1990s, amassing the Federal Communications Commission licenses for a swath of the microwave spectrum. To lasso Mandl, the Berkmans provided a healthy--no, a shocking--compensation package: $20 million to sign, plus an 18% equity stake in the company.

Now, here's the $20-million man, gesturing through the wall of glass toward the barely visible tower of the National Press Club across the river. "It's over there, between the Capitol and the Washington Monument," Mandl is saying. Atop that tower, I'm told, are several featureless devices about the size of a shoe box. Most of Teligent's communications--its local and long-distance calls, its Internet use--are conducted through the air between one of those small boxes (an antenna, actually) and another antenna on its office building's roof.

It is this so-called "fixed wireless" technology (like a cellular telephone, except the user doesn't move) that Teligent will be peddling to customers--mostly small businesses in large cities--when it goes operational, this month. In essence, Mandl is wagering that beaming microwaves to and fro will be cheaper, and will provide wider bandwidth, than tearing up streets to lay fiber-optic cable. It's an audacious gamble, surely. Not only must a customer's antenna have a direct "line of sight" with the receiving antenna, but the microwave signals have an unfortunate tendency to get lost when it rains.

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