Текст книги "The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution"

Автор книги: Walter Isaacson

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Текущая страница: 29 (всего у книги 42 страниц)

Von Meister was one of the original breed of media entrepreneurs—think Ted Turner rather than Mark Zuckerberg—who lived larger than life and mixed craziness with shrewdness so thoroughly that they became almost indistinguishable. He had a taste for flashy women and fine red wine, race cars and private planes, single-malt Scotch and contraband cigars. “Bill von Meister was not just a serial entrepreneur, he was a pathological entrepreneur,” according to Michael Schrage, who covered him for the Washington Post. “Bill von Meister’s ideas, on average, when you look back at them, don’t seem stupid. But at the time they seemed outlandish. The big risk was he was such a loon that his looniness would get confused with the idea, because they’re so intertwined.”¹²

Von Meister continued to prove adept at coming up with new notions and raising money from venture capitalists, though not at running anything. Among his startups: a bulk telephone routing service for businesses, a restaurant in suburban Washington called McLean Lunch and Radiator that allowed customers to make free long-distance calls from phones at their table, and a service called Infocast that sent information to computers by piggybacking digital data on FM radio signals. Then in 1978, when he had become bored or unwelcome at these ventures, he combined his interests in phones, computers, and information networks to create a service that he called The Source.

The Source linked home computers via telephone lines into a network that offered bulletin boards, message exchanges, news stories, horoscopes, restaurant guides, wine rankings, shopping, weather, airline schedules, and stock quotes. In other words, it was one of the first consumer-oriented online services. (The other was CompuServe, a business-oriented time-sharing network that in 1979 was just venturing into the consumer dial-up market.) “It can take your personal computer anywhere in the world,” proclaimed an early marketing brochure. Von Meister told the Washington Post that it would become a “utility” that would provide information “like water comes out of a faucet.” In addition to piping information into the home, The Source focused on creating community: forums and chat rooms and private file-sharing areas where users could post their own writings for others to download. At the official launch of the service in July 1979 at Manhattan’s Plaza Hotel, the sci-fi writer and pitchman Isaac Asimov proclaimed, “This is the beginning of the Information Age!”¹³

As usual, von Meister was soon mismanaging the company and squandering money, causing him to be ousted after a year by his principal funder, who said, “Billy von Meister is a terrific entrepreneur but he didn’t know how to stop entrepreneuring.” The Source was eventually sold to Reader’s Digest, which later sold it to CompuServe. But despite being short-lived, it pioneered the online era by showing that consumers wanted not just information piped to them but also the chance to connect with friends and generate their own content to be shared.

Von Meister’s next idea, also slightly ahead of its time, was a home music store that would sell streaming music through cable TV networks. Record stores and recording companies ganged up to block his access to songs, so the idea-a-minute von Meister switched his focus to video games. It was an even riper target; at the time, there were 14 million Atari home game consoles. Thus was born Control Video Corporation (CVC). Von Meister’s new service allowed users to download games for purchase or rent. He dubbed the service GameLine, and he began to bundle with it some of the information services that had been in The Source. “We’re going to turn the videogame jockey into an information junkie,” he proclaimed.¹⁴

GameLine and CVC set up shop in a strip mall on the way to Washington’s Dulles Airport. Von Meister selected a board of directors that symbolized the official passing of the torch to a new breed of Internet pioneers. Among its members were Larry Roberts and Len Kleinrock, architects of the original ARPANET. Another was the pathbreaking venture capitalist Frank Caufield of what had become Silicon Valley’s most influential financial firm, Kleiner Perkins Caufield & Byers. Representing the investment bank Hambrecht & Quist was Dan Case, a smooth and energetic young Rhodes Scholar from Hawaii and Princeton.

Dan Case joined von Meister in Las Vegas for the January 1983 Consumer Electronics Show, where CVC’s GameLine was hoping to make a splash. Von Meister, ever the showman, paid for a hot air balloon shaped like a joystick and emblazoned with the name GameLine to float above the town, and he rented a sprawling suite at the Tropicana Hotel, which he festooned with hired showgirls.¹⁵ Case relished the scene. Hovering in the corner was his younger brother, Steve, who was more reticent and, with his enigmatic smile and equable face, harder to read.

Born in 1958 and raised in Hawaii, with a placid temperament that made it seem as if he had been nurtured by dolphins, Steve Case had a pacific façade. Called by some “the Wall” because his face rarely flickered with emotion, he was shy but not insecure. To some people who didn’t really know him, that made him appear aloof or arrogant, which he wasn’t. As he grew up, he taught himself to joke and trade friendly insults in a flat and nasal tone, like a newbie at a fraternity. But beneath the banter he was deeply thoughtful and earnest.

In high school, Dan and Steve turned their bedrooms into offices from which they ran a series of businesses that, among other things, sold greeting cards and distributed magazines. “The first lesson of Case entrepreneurship,” Steve recalled, “was I came up with the idea and he provided the funding and then owned half the company.”¹⁶

Steve went to Williams College, where the famed historian James MacGregor Burns drily noted, “He was among my median students.”¹⁷ He spent more time thinking about starting businesses than studying for class. “I remember a professor pulling me aside and suggesting I should defer my business interests and focus on my studies as college represented a once-in-a-lifetime opportunity,” Case recalled. “Needless to say, I disagreed.” He took only one computer class and hated it “because this was the punch-card era and you’d write a program and then have to wait hours to get the results.”¹⁸ The lesson he learned was that computers needed to be made more accessible and interactive.

One aspect of computers he liked was the notion of using them to tap into networks. “The far-away connections seemed magical,” he told the journalist Kara Swisher. “It struck me as the most completely obvious use for them, and the rest was just for computer wonks.”¹⁹ After reading The Third Wave by the futurist Alvin Toffler, he became riveted by the concept of “the electronic frontier,” in which technology would connect people to each other and all of the world’s information.²⁰

In early 1980 he applied for a job at the J. Walter Thompson advertising agency. “I firmly believe that technological advances in communications are on the verge of significantly altering our way of life,” he wrote in his application letter. “Innovations in telecommunications (especially two-way cable systems) will result in our television sets (big-screen, of course!) becoming an information line, newspaper, school, computer, referendum machine, and catalog.”²¹ He didn’t get the job, and he was also initially turned down by Proctor & Gamble. But he talked his way into having a second interview at P&G, traveling to Cincinnati at his own expense, and ended up as a junior brand manager in a group that handled a soon-defunct hair conditioner towelette called Abound. There Case learned the trick of giving away free samples in order to launch a new product. “That was in part the inspiration behind AOL’s free disk trial strategy a decade later,” he said.²² After two years he left to work at PepsiCo’s Pizza Hut division. “The reason I did that was because it was highly entrepreneurial. It was a company run by the franchisees, almost the opposite of Procter & Gamble, which is more of a top-down, process-oriented company where all the key decisions were made in Cincinnati.”²³

As a young bachelor based in Wichita, Kansas, where there was not a whole lot to do in the evenings, he became a fan of The Source. It was a perfect refuge for someone with his mix of shyness and desire for connection. He learned two lessons: that people like to be part of communities and that technology needs to be simple if it is going to appeal to the masses. When he first tried to log on to The Source, he had trouble getting his Kaypro portable computer configured. “It was like climbing Mount Everest, and my first thought was to figure out why it had to be so hard,” he recalled. “But when I finally logged in and found myself linked to all over the country from this sorry little apartment in Wichita, it was exhilarating.”²⁴

On the side, Case formed his own small marketing company. He was at heart an entrepreneur in an era when most other college kids sought jobs at big companies. He rented a maildrop with an upscale address in San Francisco, got it printed on stationery, and had his business correspondence forwarded to his little apartment in Wichita. His passion was to help companies that wanted to pioneer the electronic frontier, so when his brother Dan joined Hambrecht & Quist in 1981, he began sending Steve business plans for interesting companies. One of them was for von Meister’s Control Video Corporation. During a Colorado ski vacation in December 1982, they discussed whether Dan should invest, and they also decided to go together to the Consumer Electronics Show in Las Vegas the following month.²⁵

The irrepressible von Meister and the repressible Steve spent a long dinner in Las Vegas talking about ways to market GameLine. Perhaps because they had shared interests but different personalities, they hit it off. During a drunken conversation in the bathroom halfway through the dinner, von Meister asked Dan whether it would be all right for him to hire young Steve. Dan allowed that it would be just fine. Steve started at CVC as a part-time consultant, then was hired full-time in September 1983 and moved to Washington, DC. “I thought the GameLine idea had real promise,” Case said. “But I also felt that even if it failed, the lessons I’d learn by working alongside Bill would be a valuable education. And that certainly proved to be accurate.”²⁶

Within a few months, CVC was on the brink of bankruptcy. Von Meister had still not learned to be a prudent manager, and the Atari game market had deflated. When told the sales numbers at a board meeting that year, the venture capitalist Frank Caufield responded, “You would’ve thought they would’ve shoplifted more than that.” So Caufield insisted that a disciplined manager be brought in. The person he tapped was a close friend and classmate from West Point, Jim Kimsey, who had the gruff exterior of a Special Forces commando cloaking the personable heart of a bartender.

Kimsey was not the obvious person to whip into shape an interactive digital service; he was far more familiar with guns and whiskey glasses than keyboards. But he had the mix of tenacity and rebelliousness that makes for a good entrepreneur. Born in 1939, he grew up in Washington, DC, and in his senior year was kicked out of the town’s top Catholic school, Gonzaga High, for being disruptive. Nevertheless, he was eventually able to wrangle an appointment to West Point, where he was suited to an atmosphere that celebrated, channeled, and controlled aggression. Upon graduation, he was deployed to the Dominican Republic, then served two tours in Vietnam in the late 1960s. While there as a major with the Airborne Rangers, he took charge of building an orphanage for a hundred Vietnamese kids. Had it not been for his tendency to mouth off to those higher in the chain of command, he may have made the military a career.²⁷

Instead he went back to Washington in 1970, bought an office building downtown, rented out much of it to brokerage firms, and on the ground floor opened a bar called The Exchange that had a working ticker-tape machine. He soon opened other popular singles bars, with names like Madhatter and Bullfeathers, while embarking on additional real estate ventures. Part of his routine was going on adventure trips with his West Point pal Frank Caufield and their sons. It was on a 1983 rafting trip that Caufield recruited him to CVC as a minder for von Meister and, eventually, as CEO.

Faced with sluggish sales, Kimsey fired most of the staff except for Steve Case, whom he promoted to vice president of marketing. Kimsey had a colorful saloonkeeper’s way with words, especially scatological ones. “My job is to make chicken salad out of chicken shit,” he declared. And he was fond of the old joke about a young boy who merrily digs through a pile of horse manure and, when asked why, declares, “There must be a pony somewhere in this shit.”

It was an odd triumvirate: the undisciplined idea generator von Meister, the coolly strategic Case, and the rough-edged commando Kimsey. While von Meister played showman and Kimsey played backslapping barkeep, Case hovered in the corner observing and coming up with new ideas. Together they showed once again how a diverse team can promote innovation. Ken Novack, an outside counsel, later observed, “It was no accident that they created this business together.”²⁸

Case and von Meister had long been interested in building computer networks that could connect ordinary users. When CBS, Sears, and IBM joined forces in 1984 to launch such a service that became known as Prodigy, other computer makers realized that there might be a real market. Commodore came to CVC and asked it to create an online service. So Kimsey reconfigured CVC into a company called Quantum, which launched a service named Q-Link for Commodore users in November 1985.

For $10 a month, Q-Link had everything that von Meister—who was then being eased out of the company—and Case had envisioned: news, games, weather, horoscopes, reviews, stocks, soap opera updates, a shopping mall, and more, along with the regular crashes and downtime that became endemic in the online world. But most important, Q-Link had an area filled with active bulletin boards and live chat rooms, dubbed People Connection, which enabled members to form communities.

Within two months, by the beginning of 1986, Q-Link had ten thousand members. But growth began to taper off, largely because Commodore’s computer sales were slumping in the face of new competition from Apple and others. “We have to take control of our destiny,” Kimsey told Case.²⁹ It was clear that for Quantum to succeed, it had to create its Link online services for other computer makers, most notably Apple.

With the tenacity that came with his patient personality, Case targeted the executives at Apple. Even after its brilliantly controlling cofounder Steve Jobs had been forced out of the company, at least for the time being, Apple was difficult to partner with. So Case moved across the country to Cupertino and took an apartment near Apple’s headquarters. From there he waged his siege. There were many possible units within Apple he could try to conquer, and he was eventually able to get a little desk inside the company. Despite his reputation for being aloof, he had a whimsical sense of humor; on his desk, he put up a sign that said “Steve Held Hostage”^III along with the number of days he had been there.³⁰ In 1987, after three months of daily campaigning, he was successful: Apple’s customer service department agreed to strike a deal with Quantum for a service called AppleLink. When it launched a year later, the first live chat forum featured Apple’s lovable cofounder Steve Wozniak.

Case went on to make a similar deal with Tandy to launch PC-Link. But he soon realized that his strategy of creating separate private-label services for different computer makers needed to be revised. Users of one service could not connect with those on another. In addition, the computer makers were controlling Quantum’s products, marketing, and future. “Look, we can no longer rely on these partnerships,” Case told his team. “We really need to stand on our own two feet and kind of have our own brand.”³¹

This became a more urgent problem—but also an opportunity—when relations with Apple frayed. “The powers that be at Apple decided they were uncomfortable with a third-party company using the Apple brand name,” Case said. “Apple’s decision to pull the rug out on us led to the need to rebrand.”³² Case and Kimsey decided to combine the users of all three of their services into one integrated online service with a brand name all its own. The software approach pioneered by Bill Gates would apply to the online realm as well: online services would be unbundled from the hardware and would work on all computer platforms.

Now they needed to come up with a name. There were many suggestions, such as Crossroads and Quantum 2000, but they all sounded like religious retreats or mutual funds. Case came up with America Online, which caused many of his colleagues to gag. It was hokey and awkwardly patriotic. But Case liked it. He knew, just as Jobs had when he named his company Apple, that it was important to be, as he later said, “simple, unintimidating, and even a bit sappy.”³³ With no marketing dollars, Case needed a name that clearly described what the service did. And the name America Online accomplished that.

AOL, as it became known, was like going online with training wheels. It was unintimidating and easy to use. Case applied the two lessons he had learned at Proctor & Gamble: make a product simple and launch it with free samples. America was carpet-bombed with software disks offering two months of free service. A voice-over actor named Elwood Edwards, who was the husband of an early employee of AOL, recorded perky greetings—“Welcome!” and “You’ve got mail!”—that made the service seem friendly. So America went online.

As Case understood, the secret sauce was not games or published content; it was a yearning for connection. “Our big bet, even back in 1985, was what we called community,” he recounted. “Now people refer to it as social media. We thought the killer app of the Internet was going to be people. People interacting with people they already knew in new ways that were more convenient, but also people interacting with people they didn’t yet know, but should know because they had some kind of shared interest.”³⁴ Among AOL’s primary offerings were chat rooms, instant messaging, buddy lists, and text messaging. As on The Source, there was news, sports, weather, and horoscopes. But social networking was the focus. “Everything else—commerce and entertainment and financial services—was secondary,” Case said. “We thought community trumped content.”³⁵

Particularly popular were the chat rooms, where people with similar interests—computers, sex, soap operas—could gather. They could even go off into “private rooms” to talk by mutual consent or, at the other extreme, visit one of the “auditoriums” that might feature a session with a celebrity. AOL’s users were not called customers or subscribers; they were members. AOL thrived because it helped to create a social network. CompuServe and Prodigy, which began primarily as information and shopping services, did the same with tools such as CompuServe’s CB Simulator, which replicated in text the wacky pleasure of talking on a citizens-band radio.

Kimsey the bar owner could never quite get why healthy people would spend their Saturday nights in chat rooms and on bulletin boards. “Admit it, don’t you think it’s all horseshit?” he would ask Case half jokingly.³⁶ Case would shake his head. He knew that there was a pony in it.

AL GORE AND THE ETERNAL SEPTEMBER

Online services such as AOL developed independently of the Internet. An entanglement of laws, regulations, traditions, and practices made it impossible for commercial companies to offer direct Internet access to ordinary folks who were not connected to an educational or research institution. “It now seems really silly, but up until 1992, it was illegal to connect a commercial service like AOL to the Internet,” Steve Case said.³⁷

But beginning in 1993, the barrier was lowered and the Internet was made accessible to everyone. This disrupted the online services, which until then had been walled gardens where members were coddled in a controlled environment. It also transformed the Internet by producing a flood of new users. But most important was that it began to connect the strands of the Digital Revolution in the way that Bush, Licklider, and Engelbart had envisioned. Computers and communications networks and repositories of digital information were woven together and put at the fingertips of every individual.

It began in earnest when AOL, following the lead of a smaller competitor named Delphi, opened a portal in September 1993 to allow its members access to the newsgroups and bulletin boards of the Internet. In Internet lore, the deluge was called, especially by contemptuous veteran netizens, the Eternal September. The name referred to the fact that every September a new wave of freshmen would enter universities and, from their campus networks, get access to the Internet. Their postings tended to be annoying at first, but within weeks most had acquired enough netiquette to assimilate into the Internet culture. The opened floodgates of 1993, however, produced a never-ending flow of newbies, overwhelming the social norms and clubbiness of the net. “September 1993 will go down in net.history as the September that never ended,” an Internet hand named Dave Fischer posted in January 1994.³⁸ A newsgroup sprang up named alt.aol-sucks, where old-timers posted their diatribes. The AOL interlopers, read one, “couldn’t get a clue if they stood in a clue field in clue mating season, dressed as a clue, and drenched with clue pheromones.”³⁹ In fact, the Eternal September’s democratization of the Internet was a good thing, but it took a while for veterans to appreciate this.

This opening up of the Internet, which paved the way for an astonishing era of innovation, did not happen by chance. It was the result of government policies, carefully crafted in a thoughtful and bipartisan atmosphere, that assured America’s lead in building an information-age economy. The most influential person in this process, which may come as a surprise to those who know of his role only as a punch line to jokes, was Senator Al Gore Jr. of Tennessee.

Gore’s father was also a senator. “I remember driving with my dad from Carthage to Nashville listening to him say how we needed better than these two-lane roads,” the younger Gore recalled. “They won’t handle our needs.”⁴⁰ Gore Sr. helped craft the bipartisan legislation for the interstate highway program, and his son took that as an inspiration for helping to promote what he dubbed the “Information Superhighway.”

In 1986 Gore launched a congressional study that looked at a variety of topics, including creating supercomputer centers, interconnecting the various research networks, increasing their bandwidth, and opening them up to more users. It was chaired by the ARPANET pioneer Len Kleinrock. Gore followed up with detailed hearings that led to the High Performance Computing Act of 1991, known as the Gore Act, and the Scientific and Advanced Technology Act of 1992. These allowed commercial networks, such as AOL, to connect with the research network run by the National Science Foundation, and hence to the Internet itself. After he was elected vice president in 1992, Gore pushed the National Information Infrastructure Act of 1993, which made the Internet widely available to the general public and moved it into the commercial sphere so that its growth could be funded by private as well as government investment.

When I told people I was writing a book about the people who helped invent computers and the Internet, the most predictable quip I got, especially from those who knew little about Internet history, was “Oh, you mean Al Gore?” Then they would laugh. It’s a mark of our political discourse that one of the significant nonpartisan achievements on behalf of American innovation got turned into a punch line because of something that Gore never quite said—that he “invented” the Internet. When he was asked by CNN’s Wolf Blitzer in March 1999 to list his qualifications to be a candidate for president, he cited, among other things, “During my service in the United States Congress, I took the initiative in creating the Internet.”⁴¹ It was inelegantly phrased, as answers on cable news shows often are, but he never used the word invented.

Vint Cerf and Bob Kahn, two of the people who did in fact invent the Internet’s protocols, spoke up on Gore’s behalf. “No one in public life has been more intellectually engaged in helping to create the climate for a thriving Internet than the Vice President,” they wrote.⁴² Even Republican Newt Gingrich defended him, observing, “It’s something Gore had worked on a long time. . . . Gore is not the Father of the Internet, but in all fairness, Gore is the person who, in the Congress, most systematically worked to make sure that we got to an Internet.”⁴³

The takedown of Gore was the harbinger of a new era of rising partisanship accompanied by a lack of faith in what government could do. That’s why it’s useful to reflect on what led to the Eternal September of 1993. Over the course of more than three decades, the federal government, working with private industry and research universities, had designed and built a massive infrastructure project, like the interstate highway system but vastly more complex, and then threw it open to ordinary citizens and commercial enterprises. It was funded primarily by public dollars, but it paid off thousands of times over by seeding a new economy and an era of economic growth.

I. An Ethernet or WiFi today can transmit data at a billion bps, which is more than 3million times faster.

II. Western Union later bought the business and turned it into its Mailgram service.

III. A reference to the phrase used during the 1980 drama in which Americans were held hostage in Iran.