The Rise of Seattle’s High-Tech Cluster, As Told By Madrona’s Tom Alberg (Part 1)

5/7/09Follow @gthuang

One of the great pleasures of being a journalist is listening to influential leaders discuss where they come from and how it affects their strategy. Luke and I recently sat down with Tom Alberg, co-founder and managing director of Seattle-based Madrona Venture Group. In addition to sharing his thoughts on the future of newspapers and online media, Alberg spoke extensively about his career and how he has witnessed, and participated in, the rise of the technology industry in Seattle.

Let’s take a big step back here. At Xconomy, we’re about delivering the most important breaking news and in-depth analysis of tech and life sciences innovation. But it’s hard to fully appreciate all the latest trends unless you understand the perspectives of the top players. In our interview, Alberg touched on the early days of his career as a lawyer at Perkins Coie in the late ’60s, his later stints as president of LIN Broadcasting and executive vice president of McCaw Cellular, and the birth of Madrona in the mid ’90s. Along the way, he built notable relationships with leaders in wireless, medical devices, and e-commerce—people like Craig McCaw, Jeff Bezos, and Gordon Kuenster of ATL (and more recently, Asemblon).

Maybe you know all the history already, maybe you don’t. Certainly the story of Madrona’s involvement with Amazon has been told many times. But I bet the broader story of Alberg’s career and his observations from the local scene will give people a deeper understanding of Seattle-area innovation and Madrona’s role in the business community.

Here is an edited account of our conversation:

Xconomy: So tell us about your early days in Seattle.

Tom Alberg: My career has paralleled, a little bit, the growth of the technology industry. I started off as a young lawyer in 1967. In those days, there were a few high-tech companies. There was Fluke Manufacturing, and Physio-Control was about to start. There wasn’t much. Seattle had Boeing, and it would go through phases of being less about airplanes, more about computer services and other things. But there were little companies, and there was starting to be more entrepreneurship. When I joined Perkins, I’d been in New York a couple of years, so I was an expert, I thought, in securities law and raising money. But I’d been dealing with hundreds-of-millions-of-dollar deals, not startups. For some reason, I always had a technology interest.

One of the early things that happened was a guy came in named Gordon Kuenster. He’d been a Boeing executive and had been hired to run this startup called ATL [Advanced Technology Laboratories], an ultrasound company out of the University of Washington. He comes into Perkins because Perkins handles The Boeing Company. I’m the low man on the totem pole, so the partner in charge of Boeing has me come and meet with this guy. The partner said, ‘I don’t know, we don’t really do startups.’ I had to plead, ‘Let’s try it!’

X: How did ATL play a role in the rise of the Seattle tech scene?

TA: ATL became a major success at the same time as Physio-Control. Physio went public, and ATL got bought by Squibb for $60 million—big money in those days [1979]. And then what happened was, Hunter Simpson at Physio-Control and Gordon Kuenster at ATL, they invested in some other companies. People who made money in those companies invested in some companies. And then the biotech thing started. I represented Immunex when it first started [in 1981]. It went public, the stock crashed, it survived all those years somehow. So on the biotech side, a bunch of stuff started happening. There was quite a bit of activity, but nothing like it is today.

And then, of course, there was Microsoft. So in 1990, I was still at Perkins. It was a good technology practice. I went over to McCaw Cellular, partly because I was interested in technology. McCaw was sort of a secret company in Seattle. It was in the cell phone business; nobody had cell phones. There was that phone in some people’s cars, sort of like a radio phone or something. Nobody knew much … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • Nikesh Parekh

    This is a great and very insightful article.

  • Pingback: Weekly Wisdom Roundup #27 (Links You Don’t Want To Miss) | Simoleon Sense

  • http://www.keiretsuforum.com Todd Dean

    Tom,

    Thank you for sharing you wisdom, experience, and thoughts. You have clearly made a dramatic impact with your leadership and taking risks in the Seattl/NW community. I just want to say thank you.

    Todd Dean