The antientrepreneur: how Chris Hassett blew the deal of the decade.
 

PointCast's failure to close the deal with Mr. Murdoch was much discussed. At the time, Red Herring heard rumors that the company's founder and initial CEO, Chris Hassett, had refused Mr. Murdoch and opposed his board's wishes out of a hubristic miscalculation that PointCast's value was closer to $600 million. The scuttlebutt was that he had also ignored the advice of Benchmark Capital, which had provided much of the $75 million poured into PointCast and yielded to Mr. Hassett's insistence that he be made a limited partner in the venture firm.
Thus began the rumors -- recently revived by PointCast's sale -- that although Benchmark's investment went down the drain thanks to Mr. Hassett, he became $80 million richer because of Benchmark's investment in eBay.

The rumors are exaggerated. PointCast's story is a provocative one. It even attained the imprimatur of a New Yorker feature, which compared the company to "other Silicon Valley meteors ... that once streaked across the sky." Mr. Hassett was that meteor's hapless leader. But because his name is so singularly associated with push technology -- a fad that now sits atop the garbage heap of Silicon Valley innovation--and because he came so tantalizingly close to Mr. Murdoch's riches, Red Herring names Mr. Hassett our antientrepreneur of the year.

In 1996, when push was the technology du jour, "Surreal" J. Neil Weintraut (then at Hambrecht & Quist, now at 21st Century Internet Venture Partners) hailed PointCast as "a breakthrough new metaphor on the order of the Web itself." Yet its technology -- streaming content and ads to desktop computers' screen savers -- was impractical for the average consumer; 72 percent of its audience relied on high-speed connections, which in 1996 usually were the privilege of corporate networks. PointCast proved such a bandwidth guzzler that companies like Hewlett-Packard and Intel banned it from their offices. As a result, the company had to give away its service and hope to make money some other way.

So Mr. Murdoch's buyout offer back in 1997 was for a company with no revenues and only 700,000 users. A month later -- after the Murdoch deal "just kind of went away," according to Benchmark partner Kevin Harvey -- Mr. Hassett's board deposed him.
As for the rampant rumors, Mr. Hassett convincingly denies them. James Murdoch, Rupert's son and the impetus behind News Corporation's interest in PointCast, is on record as saying that Mr. Hassett wanted the deal but that PointCast's board -- led by the venture capitalists -- had made unrealistic demands. Mr. Hassett told us, "I wanted to do the deal, and the board wanted to do the deal." He attributed the negotiations' failure to the stringent conditions the Murdochs attached to their offer. When asked about the $80 million he'd supposedly accrued as a Benchmark limited partner, Mr. Hassett sounded disbelieving. "Put it this way," he said. "I'm still going in to work at the office every day."

Our judgment is that though not gifted with charm, Mr. Hassett isn't the vainglorious clown that hearsay paints. He seems to want everybody involved to move on, as he has.

In February Mr. Hassett launched PrizePoint, offering online games in which players can collect points toward sweepstakes-style giveaways. Three months later the Web-based entertainment company Uproar acquired PrizePoint for $40 million in stock. Mr. Hassett is sitting on Uproar's board while he ponders his next company.

Source: Mark Williams, Red Herring, Sept. 1999