Rumor: Management Shake-Up at Broadweave

Word around the campfire is that EsNet isn’t very happy with how Broadweave is doing and plans to find a new operations manager as part of taking a more active role in the company. I’ve confirmed with with two sources, so it seems pretty solid. One of the sources claims that CEO Steve Christensen may be out of a job as part of the reorganization. It’s good to hear that EsNet is trying to fix what’s broken but will it be enough to right the ship? There haven’t been any reports of it so far, but I’m willing to bet that Broadweave made their bond payment from the reserve fund yet again and is on-track to do so next month.

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15 Responses to Rumor: Management Shake-Up at Broadweave

  1. Robert says:

    I guess this may be just one of the unforeseen consequences of using the line of credit to cover the bond payments. Maybe not such a good idea.

  2. Jarrod says:

    Ever since working closely with Broadweave I’ve thought they really needed to put someone into a COO role to do hands-on, make it work operations management. Maybe Esnet will make that happen.

  3. Jesse says:

    Word on the street is that Broadweave is hiring a COO.

  4. Jarrod says:

    I hope that’s true and that they find someone good. I don’t know how they’re sitting financially right now, but if they can deliver operationally they’re in a good place to be successful.

    I was concerned about this way back in June, when the Broadweave/Veracity merger was still on. It seemed to me that Broadweave needed to push a strong vision of the new combined company and needed a detailed plan that brought operations through the transition and facilitated cooperation and communication between departments and between employees of the two companies. From what I saw that just wasn’t happening. A COO would have been a good driving position to make those things happen and work. I suggested as much to Steve, but I don’t think my suggestions got much farther than a “Thanks for the input.”

    I’m curious to see where things go if the rumor is true – though most of what I was concerned about in June has long since unraveled.

  5. Capt. Video says:

    I’ve suggested a few times on this blog that an “on site experienced hands on manager” was what they needed.

    I hope the rumors of Steve leaving are NOT correct. I would hate to see the man that started the company, and has his heart, soul and money in it lose control.

    Steve can hire a “General Manager” and make the changes needed to make them profitable.

    The “secret” is for companies like Broadweave (MStar, Prime Time and others) is to be like a small cable or phone operator. Focused on the customer and running lean. Paying employees a fair wage and not have any highly paid people.

    Less chief’s and more Indian’s (if needed)…no one making more than about $70-$75k (perhaps less). No small cable operation or small phone company pays people $100k or more. Companies of that size, with limited revenues cannot afford to pay people $100k or more….or even $75K?

    Hire a former phone company or cable system managers. Someone that has experience operating outside plant and running installs, construction and service crews, including marketing. Someone that has been in the trenches.

  6. Jarrod says:

    I agree that it would be bad to see Steve leave Broadweave. But from what I’ve seen he’s a dealmaker and a visionary, not an operational manager. If you can have both, great, but I would think Broadweave needs the COO more right now.

    I agree with the lean and mean concept. It seems to me the failures are coming when companies try to use initial capital to grow fast, get top heavy, don’t focus on the customer, and run out of capital.

    Like I said, it will be interesting to see where this goes. It might work, it might not change anything.

  7. Capt. Video says:

    The INSIDE Scoop…from a reliable, well placed inside source.

    The only truth to the rumor is that Broadweave’s Steve Christensen will be hiring a COO.

    While he is currently on vacation, he will return next week and will move forward on hiring someone to manage the day to day operations.

    There is no truth to the rumor that Mr. Christensen is being replaced or losing control of his company. (Which I personally believe to be good news!)

    As I’ve said many times before, my own personal belief is that Broadweave CAN be successful. I would doubt anyone expected the company to buy the network and be profitable in the short time they have had to turn this ship around. (about 6 months)

    It will not be easy but it CAN be done. I wish them well!

  8. Jarrod says:

    Good to hear.

    I wonder about the other part of Jesse’s original post – is this due to pressure from Esnet and is Esnet unhappy with Broadweave?

  9. SalaryWasAnMStarProblemToo says:

    Salary was a problem at MStar. I know of several people (Guaranteed) who were over the $100k mark. Friends of the boss you know. But they paid the people doing the work scraps from the table.

  10. Robert says:

    I’ve had some confirmation from someone who actually knows that Esnet is taking the reins and are taking steps to ensure financial accountability during the re-tooling of Broadweave management as we speak.

  11. Robert says:

    They need a COO who understands the stupidity of using borrowed money to pay the bond. Of course that would be requirement #1 since Esnet has been hurt the most by that action.

  12. Jarrod says:

    It’s hard to gauge the stupidity vs non-stupidity of using the capital draw through the city. If Broadweave doesn’t have the cash to pay the bond, it’s smarter for Broadweave to have the city pull the cash through the letters of credit rather than get the money from investors outside of the letters of credit. This way they start reducing Esnet’s potential liability from those letters of credit.

    It sucks from the city’s point of view, though.

  13. Jarrod says:

    In fact, if you’re Esnet and Broadweave, you may want to do this even without a cash shortfall, just to reduce the liability. There’s no reason Broadweave couldn’t pay the city bond payment through the letters of credit, then turn around and buy back equity from Esnet using cash from operations.

    Not that I think that’s happening. I’m just trying to say it wouldn’t be stupid.

  14. Robert says:

    Insiders say that David Moon of Esnet now runs Broadweave and Steve Christensen has been re-assigned to official figurehead. This strategy is probably designed to keep the media dogs at bay.

  15. Robert says:

    More news from the campfire: There has been some major reorganizing at Broadweave including the elimination of some high level personnel. This happening with Esnet in control.

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