Why I think the Internet is passé

Throw away your PCs: we'll soon be getting the same services via mobile phones, says radical entrepreneur Thomas Höegh

It hasn't exactly been the shortest distance between two points: from creating multimedia experiences for reindeer to founding one of the UK's few Internet venture capital funds. In fact, Norwegian-born Thomas Höegh, managing director of Arts Alliance, has changed jobs more often than you've had hot dinners.

It hasn't exactly been the shortest distance between two points: from creating multimedia experiences for reindeer to founding one of the UK's few Internet venture capital funds. In fact, Norwegian-born Thomas Höegh, managing director of Arts Alliance, has changed jobs more often than you've had hot dinners.

Höegh, born in Oslo, served for two years on a "fast patrol boat, more explicitly called a missile attack craft", where he did his national service. "It's a small coastal vessel designed to defend the fjords. You can't really navigate big boats in there, so we have these small, very fast, very powerful boats with heavy firepower."

After his naval stint, he did a bachelor's degree in theatre direction at Northwestern University in Chicago, returning to Oslo in 1991. "I was actually going to Amsterdam, to work in the national theatre there, but they didn't want to give me a work permit. They claimed there were too many unemployed directors in Holland. I came home to Norway: no job, no nothing."

Working in radio and TV drama, Höegh met the man who had just been appointed artistic director for the opening and closing ceremonies of the 1994 Olympics in Lillehammer, and became principle director for the ceremonies.

"I have fond memories of what it's like to educate reindeer in the middle of winter," says Höegh. He worked in Kautokeino, in the northernmost part of Norway. "I spent a lot of time up there in a field, where we rigged up loudspeakers and all kinds of flashers and things - we were simulating audience noise to train these reindeer not to be afraid in a stadium of 40,000 people."

Work on the Olympic ceremonies meant he could "do some pet projects of my own, because I had the clout: weird experimental stuff in lighthouses, sealing off whole towns". Höegh organised the Oslo Treaty celebrations, where both Israeli and Palestinian leaders, poets and bands would be present. "Mossad was checking the lyrics for the Palestinian songs," he says.

After working briefly in Prague, he applied to business school. "I wanted to be artistic director of one of the larger cultural institutions in Norway or elsewhere, the national theatre or the national film theatre. At these institutions, the art or managing director is effectively the CEO."

Höegh did his MBA at Harvard. "When I arrived, there was a wall of consultants and bankers. I didn't really fit in - I had hair down to my elbows." Instead, Höegh hid away in the Media Lab, where he made friends who were playing around with the Internet. "Mosaic was still in beta then; no one was talking about the Net. I began working on what was later to become Firefly [an online music community]. I pooled money with my cousins and we invested in the company, and I also worked there, became the site's content editor." The site was sold to Microsoft in 1998.

During Höegh's two years at business school, he also raised his first venture capital fund, though his Harvard professors knew nothing of these extracurricular activities. "It was a bit of a juggling act, but I was used to working seven days a week," he says. Höegh had steadily been investing small amounts, totalling $20m; in June 1997, he and his two partners incorporated these into Arts Alliance. That summer, Höegh moved to the UK, for two reasons.

"Long term, it made sense to be the springboard between Europe and America," he says. "We had a good grasp on America, and we wanted to be early here and immediately differentiate ourselves by being European investors in America." In addition, he says, "London's a much nicer place. America's a great place to get educated, but I wouldn't live there."

Arts Alliance seeks out projects that will "conquer big markets... change people's lives". Interactive Investor, a personal financial site and one of the fund's first investments, "empowers the consumer with information". The Arts Alliance investment of which he seems most fond is Atom Films. "We've partnered film-makers to distribute short films both offline and online, and give them advances. It gives access to films that would otherwise be very hard to find. Outside the cinema or film festivals, short films are very scarce".

He sees a clear parallel between his entertainment background and the Net, "between theatrical and online productions. There's an immediacy to the consumer that demands you take on the role of the user, just like the director takes on the role of an audience member in a production." Which is precisely what Arts Alliance does. "We're a talent agency for management, technical and creative people."

Arts Alliance's start-ups sell to big names: in addition to Firefly, the fund has sold the electronic address book service PlanetAll to Amazon, and online music site Spinner to AOL; and interactive entertainment company Launch recently went public. "We've repaid our investors a few times," says Höegh, "but we still have 12 companies in our portfolio." Arts Alliance has just raised its second fund, Digital Ventures II, of $92m. Höegh is fairly scathing about venture capital in the UK. "There are very few venture capitalists in the country," he says, "just lots of providers of capital who have made the analysis you can make money off the Net.

"A venture capitalist is a schizophrenic entrepreneur who can jump from situation to situation and who can help from operational experience: be mentors, find talent. There hasn't been a history of venture capital here. There's been a history of providing capital in later stages, in the 'angry uncle' style, where you come and thump on the boardroom table once a month but you're not willing to roll up your sleeves and be part of the company.

"Hi-tech venture capitalists have rarely managed to port over and become successful Internet or media venture capitalists. As soon as you start talking dynamic or information-based products, or user interface, the typical technical PhD is a fish out of water."

He's equally scathing about British education. "The UK has an acute shortage of technological and management talent, and particularly people who can speak to each other. Business, technical and creative colleges need to intermingle much more. It's considered almost impure to be business-oriented if you're a techie, and it's worse for creatives - business is the devil.

"There's a lack of exposure to other faculties both in and out of the classroom," he says, but he concedes "there are things you can do that don't involve revamping the whole system. You can put them together physically." He points to interaction between the London Business School and Imperial College.

"The most impressive programme in the country," he says, "is Artec, which educates lots of talented students with a lot of crossover between skill sets and socio-economic backgrounds." Höegh puts his fund's money where his mouth is; Arts Alliance has a scholarship programme offering funds and expertise to students at Harvard and LBS who want to develop their own online businesses.

Höegh, who is bullish about the development of handheld devices, rocked this year's Silicon Alley conference with the words, "The Internet is passé." Soon we will have the same services delivered via mobile phones. According to Höegh, it's already here. "I go to football and sit at the shed end of the stadium, guys with skinheads and tattoos and ear-rings everywhere. As soon as the match begins, up come the mobile phones to check the football scores - then they call their mates."

http://www.artsalliance.co.uk/