Who's News
Wired Reflects the Quirks of Its Founder
By Joan Indiana Rigdon10/28/1996
The Wall Street Journal
Page B1
(Copyright (c) 1996, Dow Jones & Company, Inc.)
With the prospect of a Wired Ventures Ltd. stock offering over for now,
Louis Rossetto Jr. is turning his attention back to fixing his company.The 47-year-old publisher announced last week that the market was too
weak to support a proper value for what has become the labor of his life:
Wired Ventures, the holding company for the hugely profitable Wired
magazine. It was the second time a Wired IPO had fallen through.In another embarrassing twist, a memo touting the company, which Wired
says it intended for employees only, found its way onto an on-line service
last week -- a possible violation of the Securities and Exchange
Commission's "quiet period" before an offering. Gerard Van der Leun, a
senior editor for Penthouse magazine who once contributed to Wired, said
Friday that he had posted the memo, but it remains unclear who sent it to
him. Mr. Rossetto said Sunday that Wired didn't send the memo to Mr.
Van der Leun. "This whole e-mail flap is stupid," he said.Now he must find a new source for the $272 million he was counting on
from the IPO. He says he is pursuing a private placement. But if he doesn't
succeed quickly, Mr. Rossetto will have to cut costs at the media empire he
had hoped to build on the Wired name. The magazine's profits have been
more than offset by delays and start-up costs at other units. The company's
TV show, "Netizen," is finally scheduled to air next month, three months
later than the original broadcast date. HotWired, an Internet business that
was once viewed as the sexiest part of the Wired Ventures offering, is
losing more than $2 million a quarter.On a more personal level, Mr. Rossetto's authoritarian management style
has alienated members of his staff. The people who work with him say he
is a fanatic about company loyalty, and often responds to employee
complaints with accusations of ingratitude and threats of firing. Will Kreth,
Wired's first hire, says Mr. Rossetto once threatened to fire him after he
distributed an e-mail poking fun at Wired for not offering health benefits in
the company's early days. Mr. Rossetto says that he found the e-mail
disturbing because Wired was trying to solve the benefits problem, and the
e-mail sounded sarcastic rather than helpful. Mr. Rossetto also said he
didn't threaten to fire Mr. Kreth.The man behind the temper is a self-described contrarian. He graduated
from Columbia University twice, once with an undergraduate degree in
political science and once with a graduate degree in business. Over the
years he has played the part of the right-winger, the libertarian and the
hard-nosed businessman.These days, he seems most like a New Age member of the "digerati," the
elite that ponders how digital technology will affect society. Generally
soft-spoken, he sports wavy gray hair down to his shoulders and always
wears sneakers, even to weddings. He often speaks of his days as an
anarchist at Columbia University in the late 1960s and partly subsidizes
vegetarian meals and massages for his workers. He also hosts
management retreats at spiritual centers.His magazine reflects his view of the future. It features anti-authoritarian
articles alongside write-ups of expensive toys, including a $3,900 phone that
analyzes stress in callers' voices to see if the callers are lying. High-profile
technology thinkers like Nicholas Negroponte and Stewart Brand -- both of
the MIT Media Lab -- expound, and the ads hawk hardware, software and
hip paraphernalia, like purple suede Hush Puppies. The September issue
decried the U.S. as "government by hallucinating mob."Yet this image belies a very different past, which Mr. Rossetto seldom
mentions. He was indeed an activist in college, fellow classmates say, but a
right-wing one. He headed several conservative clubs and was among 12
students who unsuccessfully sued the university in 1969 for allowing
antiwar protesters to disrupt classes. In 1971, Mr. Rossetto and his
roommate, Stan Lehr, another plaintiff in the lawsuit, wrote a New York
Times article called "The New Right Credo: Libertarianism." In it they
pointed to libertarianism as a safe haven for conservatives who don't
support regulating individual morality.Mr. Rossetto said that he has left those days behind, and in any case, "a lot
of what I was doing was trying to be contrarian." But he hasn't left Mr.
Lehr behind. He hired him this month to help shape political content for
Netizen.After Mr. Rossetto got his business degree from Columbia, he went on to
write a novel about the Nixon administration and a book about the making
of the racy movie "Caligula." He spent most of his thirties in Paris and
Amsterdam working on various publications. Then, in 1986, he founded
Electric Word, a magazine about publishing that attracted the attention of
Wired's original backers.After attending several seminars on new media, Mr. Rossetto and his
domestic partner, Jane Metcalfe, set out to found Wired. They found little
interest in New York, and instead set up shop in San Francisco in a
warehouse.Behind the walls of Wired, which brings in 93% of the company's revenue,
Mr. Rossetto is definitely more the Columbia M.B.A. than the New Age
guru. He prides himself on often being the last one to turn out the lights and
lectures employees on the need to build the Wired brand. He also demands
absolute loyalty: The company's employment contract forbids any workers
from doing paid work for anyone else while they are employed by Wired.To promote self-reliance, Mr. Rossetto requires all Wired staffers to supply
their own pens and insists that employees clean their own dishes and office
bathrooms. Until this month, when Mr. Rossetto phased out the policy,
even senior editors had to take turns signing up for kitchen duty. Mr.
Rossetto also used to require that employees empty their own trash cans,
but abandoned the policy when employees balked. Workers' workstations
are spare: Each desk is an old door propped up by a filing cabinet and a
sawhorse.Mr. Rossetto also keeps tight control over his creation. He writes every
headline and helps select paper stocks and inks. Sometimes he yanks
finished articles just before publication, saying they aren't good enough.
Wired's managing editor, Katrina Heron, compares Mr. Rossetto to Tina
Brown, her former boss at Vanity Fair. "They are both very passionate and
determined and demanding," Ms. Heron says.Meanwhile, Wired Ventures' founder makes no apologies for his
management style. "We're not a charitable institution," Mr. Rossetto says.
"We're a business."
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