Burn Rate

by Michael Wolff

  To talk about Rolling Stone in the context of creating and planning a new magazine was as real as assuming you would finance it with lottery winnings. Rolling Stone, an unlikely crystallization of the commercial and cultural, happened by chance, by fluke, by mistake. Playboy was like that, too.

  Which would therefore have to mean that Louis Rossetto, this middle-aged man living his expatriate life while fantasizing about how he could be at the center of a new American era, would have to turn himself into Jann Wenner or Hugh Hefner and do for computers what Wenner did for rock and roll and Hefner did for sex to realize his dream. One might as well set out to be Gandhi.

  It was 1990. As tanks rolled across Kuwait, the office where I rented space on lower Fifth Avenue in Manhattan was home to the death screams of some of the hottest media success stories of the 1980s.

  On several cavernous open floors (a work style that would become de rigueur when this neighborhood turned into Silicon Alley) you could find offices of the magazines Psychology Today, Mother Earth News, and Smart—all getting ready to go out of business.

  These magazines—this old media—collapsed over a period of two or three months, first with cleaning and bathroom supplies eliminated, then outgoing service on the telephones suspended, then elevator access curtailed, then lights cut off. Total demise was signaled by the arrival of the repo man, who in an on-the-spot transaction sold me enough Macintoshes to put me into the desktop publishing business.

  For me, the urgency was not the future and what it would look like and who would lead us to it but what could I do with these Macintoshes?

  Now, it didn’t take much for me to realize that information was flowing at a new speed. My idea was that with the Macintosh and its preternatural page design capabilities, you could repackage lots of this overflow of data for the ordinary reader. The charts, graphs, maps, and other tools to display quantitative information visually had always been expensive treats in books. Suddenly, it was a cinch to make ugly data pretty. I had lots of ideas for how to take this explosion of data and make a spiffy new kind of book with a Macintosh.

  Even though it was true that the world was awash in this massive new Niagara of data, the cost of getting to this data was still large, still a luxury of wealthy corporations. The monopoly held by the data giants—Lexis/Nexis, Dialog—was a bitter pill for the information hungry. You knew the information was out there; you knew that database technology rendered it retrievable, sortable, and searchable. Too bad you couldn’t afford it.

  But I had a friend: Stanley. Stan the man. Weird Stan. We had gone to high school together. He had taken the scenic route, through Morocco and India to end up as a data guru in the health care industry. Having achieved a high level of corporate responsibility and anxiety, Stan was now on his second round of dropping out and had retreated to an isolated northern island, from which he consulted on complex data algorithms.

  To my complaint in late ’91 about the high cost of information, he had said, “The Internet, man.”

  “The—?”

  “You’ll be able to get a lot of what you’re looking for, free.”

  “Free?”

  “I jack into a community college with a password I got from a waitress who’s taking a few courses.”

  “Free?”

  “Dig it. You’ll see. I’ll get you in.”

  My introduction, at this moment, was part of a critical mass matrix then in progress. How many people knew about the Internet in late 1991? More than five thousand but possibly less than twenty-five thousand. Possibly less than ten thousand! Now how many people have to know about something for it to be in the New York Times, mentioned by Jay Leno, understood by my mother? What is the process of going from the arcane to the commonplace?

  It begins with the sudden sense on the part of people who know (even if it was just yesterday that they found out) that they have a piece of knowledge before others and that simply possessing this knowledge is worth something—bragging rights, business opportunities, new erotic possibilities—and grows because even if you’re the millionth or the ten millionth person to learn, you know that there are millions behind you who will have to make the arduous climb up the curve. And it feels so very good to have already gone over the top, to know what others do not yet know.

  It took me a while to realize that the Internet could possibly be a professional opportunity. It was hard to make the conceptual leap from simple data communication, in which one computer communicates with another computer via modem (a relationship that almost always ended in breakup and despair), to a network wherein a modem connected you to unlimited numbers of other machines and other users and nearly infinite data resources. It was not so apparent that this was not only an information and communications technology but, potentially, a new kind of media. This would be the conceptual leap that virtually everyone would stumble over.

  Some, however, would stumble sooner and get up faster.

  Louis Rossetto and Jane Metcalfe arrived in our offices on lower Fifth Avenue. Louis brooded while Jane collected telephone numbers and worked the phones.

  “There’s something wrong with him,” said my wife, Alison, after a dinner at our house that continued on long after a reasonable bedtime—not because we were so engaged but simply because Louis wouldn’t get up and go home.

  “He’s a little impacted,” I allowed.

  “He doesn’t even listen.”

  “A different drummer.”

  “No. Really. It’s odd. You seem to find him interesting but—”

  “Not interesting. Unusual.”

  “He’s not unusual. He’s out to lunch. You can’t introduce him to anybody. What will they think?”

  “You don’t think it’s sort of an interesting idea?”

  “You have to express an idea before it can be interesting.”

  “It’s sort of a fuck-you idea. Fuck the media. Fuck the technology industry. Fuck computer magazines. Fuck everybody.”

  “Well, that comes through.”

  “Too much?”

  If against all odds, and all signals to the contrary, a person maintains, without any waffling, an unproductive stance, perhaps it’s inevitable that they begin to earn a begrudging respect.

  Louis had a frighteningly singular point of view, which, in the face of a variety of social and economic pressures, he kept.

  He continued revising his business plan. And he kept calling people. If you didn’t want to help him or speak further to him, you had to give him another name to get him to let go of you. The little humiliations that dissuade most people from pressing on did not affect or even register with him. It was eerie.

  Rejection, in fact, did something beneficial for Louis. Instead of being diminished by it, it somehow ennobled him. It stiffened his carriage, extended his neck, focused his eyes. He became handsome. Extraordinary-looking, in a way.

  And he—or Jane, at his instruction—kept dialing.

  They began to find themselves in two parallel discussions: one with a disparate group of technologists in Boston and on the West Coast and the other with traditional New York media types. The first group (many of whom had been slavishly profiled in Louis’s magazine Electric Word)—including Mitch Kapor, who created Lotus; Nicholas Negroponte, from the Media Lab; and John Perry Barlow, former Grateful Dead crony and technology sage—greeted Louis’s plan for a magazine about the new digital culture with respect and incremental support (one introduction begat another). What did they have to lose? They had all been, to some degree, shut out of the mainstream media, which was New York centered and which did not understand technology. What’s more, many of them had been shut out of the main currents of the technology industry, which, more and more, was coalescing around a few companies. On the other hand, they were wealthy, entrepreneurial, and flattered by the notion of a magazine that would express their point of view—that technology was not merely business but a kind of salvation, too!

  The second group, the media professionals, was much
less open to Louis Rossetto and his idea for what he was now calling, without apparent irony, “the least boring computer magazine.” The New York pros were embarrassed for him—not even for him but for their colleagues and friends who introduced Louis to them.

  I certainly cringed.

  Louis held his business plan as a kind of grail. It didn’t matter to him that his estimates of advertising pages or of newsstand sell-through or of circulation expectations were wildly out of line with anything magazine professionals had ever experienced with a new publication.

  He continued to deliver his intense, heated rationale and justification for this new magazine about the culture and the meaning of technology and filtered all possible objections and impediments to his plans.

  Louis didn’t smile.

  He didn’t dress appropriately.

  He would have seemed disturbed were it not for Jane’s enthusiasm and wholesomeness and constant presence at his side.

  It was a hard sell:

  Technology is cool. Technology is at the forefront of a cultural revolution. Technology is a key component of entertainment. There are personalities associated with technology who are sexy, compelling, fashionable. Technology is a business opportunity not just for the mathematically inclined but for us all. The fact that these ideas seem obvious now is the Wired magazine monument. Then, in ’90, ’91, and ’92, when Louis was wandering around New York, they were ludicrous.

  Louis and Jane left the unmoved media community in New York and relocated to San Francisco. With a Macintosh, access to a color copier, and the aid of an art director who specialized in corporate annual reports (the magazine’s first issue would bear a striking resemblance to the first postmerger Time Warner annual report), they created their prototype of a magazine celebrating synergy, technology, globalization, media, and smart people who recognize the future before others. With a dangerously small amount of money, all of it garnered from outside traditional media circles, they went to work on the first issue.

  Back in New York, their acquaintances spoke with concern about this extreme behavior. At the same time, we all took solace in knowing that new parameters of failure were being established. It certainly seemed fair to conclude that while you might fail, you would never fail as bizarrely as Louis was in the process of failing.

  The parallel development then in progress was an effort by the National Science Foundation (NSF), a federal agency, to get out of the increasingly costly business of subsidizing an academic computing infrastructure growing like kudzu. In 1990 an understanding was put in place among the NSF, private carriers maintaining the system’s fiber-optic backbone (including the regional Bell companies and certain of the long distance carriers), key academic facilities, and the ad hoc associations that had grown up around the network. The deal? The NSF would withdraw funding over a two-year period and allow commercial use of the infrastructure. The com domain was added to org and gov and edu. The network was ready to be opened to the general population.

  It was not clear to anyone, even the digitally advanced, what this meant. It was a policymaker’s administrative tinkering. It could easily have meant nothing. It didn’t change the network per se. It didn’t enhance the technology. It was, however, one of those things, those moments, those convergences that change everything. It gave focus and form and purpose to the digital revolution.

  Louis foresaw the digital revolution without foreseeing the growth of the Internet, just as Hugh Hefner foresaw the sexual revolution without foreseeing the Pill. Each saw the desire without seeing the invention. They were the beneficiaries, you might say, of smart luck rather than dumb luck.

  But after a while, they, the self-styled pioneers, “got it,” as Louis took to delineating. They understood what the opening of the network meant, as opposed to virtually all major media organizations and established technology companies, who did not get it.

  Getting it was no easy process.

  You had to understand the nature of a computer network, you had to understand that machines could exist in a community, and you had to understand the nature of a WAN (or wide area network), wherein the infrastructure had no geographic bounds.

  Then you had to appreciate that WANs had come into existence on a relatively ad hoc basis that allowed almost anyone to “jack” into them and therefore become part of this extended and extending community.

  This system allowed its users to communicate with any other individual on the network, store or retrieve large amounts of digital information, and get access to all or portions of any other computer attached to the network.

  It was nearly impossible to describe or explain the significance of this network to those who had not experienced it for themselves. But prior to 1992 the opportunities for having such an experience were almost nonexistent outside of academic or scientific circles.

  By 1992 the new NSF rules had begun to foster a bedroom industry in local ISPs (Internet Service Providers). Panix, one of two Internet providers in New York City, operated out of an apartment on Manhattan’s Upper West Side. The World (in Boston), one of the largest ISPs in the country, and The Well (in San Francisco), one of the seminal establishments in the digital culture, had little more than a few thousand members between them.

  The 1992 Internet experience was a hybrid between a closed bulletin board service (my modem calls your modem, which allows our two machines to communicate with each other) and access to the greater worldwide network. Access tended to be incremental. E-mail was the first step. Then the user might petition for access to the network’s other protocols, like telnet (the ability to work another computer on the network), FTP (the ability to move files across the network), IRC (the ability to join real-time conversations), and gopher (a way to search for information stored on various connected computers).

  Through most of 1992 and 1993, it would have been unlikely, if not impossible, for a consumer without arcane computer skills to arrange access to the Internet.

  That meant, among other things, that large portions of the business population that might otherwise take an interest in this technology could not. While the required skill sets were not especially complex, they were, nevertheless, eccentric. The system, or access to the system, tended to favor trial and error; it demanded a hobbyist’s interest and hours. If you were an executive who’d gotten wind of this network, it was unlikely that you’d know whom to call to try it. There would be no reason for your MIS director to have a clue. Later, in 1994 or 1995, if you were really trying, you’d find someone’s son, who, motivated by technical acumen and the possibilities of pornography, could hook you up.

  Several other forces in 1992, though, were helping to articulate the concept of information flow, personal computers, and an online world:

  The “information highway” metaphor was born. Uttered in 1991 by Al Gore, it had nothing to do, per se, with the Internet. It had to do with fiber optics, or the relatively cheap transmission of data over new fiber networks. Even this notion got mixed into something more tangible, the five-hundred-station cable dial.

  Then there was Prodigy, the online service owned by IBM and Sears. By spending millions on national advertising, Prodigy explained to America the concept of receiving certain information, services, and entertainment through a personal computer. Prodigy proved, albeit on an economically catastrophic basis, that there was, in 1992, a million-plus audience interested in such fare. Behind Prodigy, there was CompuServe, owned by H&R Block, with nearly 1 million members; then GEnie, owned by GE, with approximately 200,000 members; and then America Online, in the vicinity of 150,000, and Delphi, with something like 100,000 members.

  The online services had no relationship to the Internet—in fact, they represented the exact opposite model. Online services were closed networks. In 1992 and 1993, however, this was too subtle a point for executives of those companies and for investors, analysts, and most of the technology community.

  Out in San Francisco, Louis Rossetto and Jane Metcalfe launched the fir
st issue of their magazine, now called Wired, in January 1993. It would have been reasonable to expect this effort to go unnoticed. The venture did not have the necessary capital to promote itself. It did not have access to all-important distribution channels. Its management had scant publishing experience.

  What happened?

  How is it possible to achieve the exposure, the recognition, the understanding that producers of other products pay millions more to achieve?

  What siren song was sung?

  The country was coming out of a recession, the recovery being led by the technology sector, an industry made up of young men looking for a positive identity. Computer programmers were like bond salesman in the 1980s; they were looking to turn themselves into Masters of the Universe. Windows was spreading the Mac ethic—computers did cool things! What’s more, Wired magazine was a product designed as an artifact—it wasn’t just a magazine, it was a statement.

  The zeitgeist was in play.

  Climb on board.

  I had the advantage of being in New York, which at that moment was a dumb town technologically speaking. It had paltry few technology businesses, virtually no technology research facilities, and scant technology talent. The media industry—centered in New York and including magazine publishing, book publishing, television, newspapers, radio, and advertising—did not see itself as a technology-driven business. There was a software industry and a media industry. To the extent that they might someday intersect, the media industry believed itself to be sitting pretty because Content was King. The one technology bet (or new media bet) that was being made by the traditional media was on CD-ROMs. CD-ROMs were easy to understand for publishing companies. They were physical units sold through retail outlets or direct channels.