The Innovators

by Walter Isaacson

  The next step came when, a headstrong Texas cowboy won, after a twelve-year legal battle he financed by selling off his cattle, the right for his customers to use a radio-enabled extension phone he had invented. It took a few years for all of the regulations to be worked out, but by 1975 the Federal Communications Commission opened the way for consumers to attach electronic devices to the network.

  The rules were stringent, due to AT&T lobbying, so electronic modems were initially expensive. But in 1981 the Hayes Smartmodem came on the market. It could be plugged directly into a phone line and connected to a computer, with no need for a clunky acoustic coupler. Pioneering hobbyists and cyberpunks, along with ordinary home computer users, could type in the phone number of an online service provider, hold their breath while they waited for the staticky screech that indicated a data connection had been made, and then tap into the virtual communities that formed around bulletin boards, newsgroups, mailing lists, and other online hangouts.

  THE WELL

  In almost every decade of the Digital Revolution, the amused and amusing Stewart Brand found a way to stand at the locus where technology overlapped with community and the counterculture. He had produced the techno-psychedelic show at Ken Kesey’s Trips Festival, reported on Spacewar and Xerox PARC for Rolling Stone, aided and abetted Doug Engelbart’s Mother of All Demos, and founded the Whole Earth Catalog. So in the fall of 1984, just as modems were becoming easily available and personal computers were becoming user-friendly, it was not surprising that Brand helped to conjure up the idea for the prototypic online community, The WELL.

  It began when Brand was visited by another of the playfully earnest and creative denizens of the idealistic techno-counterculture, Larry Brilliant. A physician and epidemiologist, Brilliant had a compulsion to change the world and have fun while doing so. He had served as the doctor for an American Indian occupation of Alcatraz, sought enlightenment at a Himalayan ashram with the famed guru Neem Karoli Baba (where he first crossed paths with Steve Jobs), enlisted in the World Health Organization’s campaign to eliminate smallpox, and with support from Jobs and the counterculture luminaries Ram Dass and Wavy Gravy founded the Seva Foundation, which focused on curing blindness in poor communities around the world.

  When one of the helicopters used by the Seva Foundation in Nepal had mechanical problems, Brilliant used a computer conferencing system and an Apple II that Jobs had donated to organize online a repair mission. The potential power of online discussion groups impressed him. When he went to teach at the University of Michigan, he helped to build a company around a computer conferencing system that had been created on the university’s network. Known as PicoSpan, it allowed users to post comments on different topics and strung them into threads for all to read. Brilliant’s idealism, techno-utopianism, and entrepreneurialism flowed together. He used the conferencing system to bring medical expertise to Asian hamlets and organize missions when something went wrong.

  When Brilliant went to a conference in San Diego, he called his old friend Stewart Brand for lunch. They met at a beachside restaurant near where Brand planned to spend the day skinny-dipping. Brilliant had two interwoven goals: to popularize the PicoSpan conferencing software and to create an online intellectual commune. He pitched Brand on a partnership in which Brilliant would put up $200,000 in capital, buy a computer, and provide the software. “Stewart would then manage the system and extend it throughout his network of smart, interesting people,” Brilliant explained.3 “My idea was to use this new technology as a way of discussing everything in the Whole Earth Catalog. There can be a social network around Swiss Army knives or solar stoves or anything.”4

  Brand turned the idea into something grander: creating the world’s most stimulating online community where people could discuss anything they wanted. “Let’s just have a conversation and get the smartest people in the world,” he suggested, “and let them figure out whatever they want to talk about.”5 Brand came up with a name, The WELL, and reverse-engineered an acronym for it: the Whole Earth ’Lectronic Link. A playful apostrophe, he later said, was “always worth having in a name.”6

  Brand championed a concept, abandoned by many later virtual communities, that was critical to making The WELL a seminal service. The participants could not be totally anonymous; they could use a handle or pseudonym, but they had to provide their real name when they joined, and other members could know who they were. Brand’s credo, which popped up on the opening screen, was “You own your own words.” You were accountable for what you posted.

  Like the Internet itself, The WELL became a system designed by its users. By 1987 the topics of its online forums, known as conferences, ranged from the Grateful Dead (the most popular) to UNIX programming, from art to parenting, aliens to software design. There was minimal hierarchy or control, so it evolved in a collaborative way. That made it both an addictive experience and a fascinating social experiment. Whole books were written about it, including ones by the influential tech chroniclers Howard Rheingold and Katie Hafner. “Just being on The Well, talking with people you might not consider befriending in any other context, was its own seduction,” Hafner wrote.7 In his book Rheingold explained, “It’s like having the corner bar, complete with old buddies and delightful newcomers and new tools waiting to take home and fresh graffiti and letters, except instead of putting on my coat, shutting down the computer, and walking down to the corner, I just invoke my telecom program and there they are.”8 When Rheingold discovered that his two-year-old daughter had a tick in her scalp, he found out how to treat it from a doctor on The WELL before his own physician had called him back.

  Online conversations could be intense. A discussion leader named Tom Mandel, who became a central character in Hafner’s book and also helped me and my colleagues at Time manage our online forums, regularly engaged in fiery exchanges, known as flame wars, with other members. “I expressed opinions about everything,” he recalled. “I even started an altercation that dragged half of West Coast cyberspace into an electronic brawl and got myself banished from the WELL.”9 But when he revealed he was dying of cancer, they rallied around him emotionally. “I’m sad, terribly sad, I cannot tell you how sad and grief stricken I am that I cannot stay to play and argue with you much longer,” he wrote in one of his last posts.10

  The WELL was a model of the type of intimate, thoughtful community that the Internet used to feature. It still remains, after three decades, a tight-knit community, but it was long ago overtaken in popularity by more commercial online services and then by less communal discussion venues. The widespread retreat into anonymity online has undermined Brand’s creed that people should be accountable for what they say, thus making many online comments less thoughtful and discussions less intimate. As the Internet goes through different cycles—it has been a platform for time-sharing, community, publishing, blogging, and social networking—there may come a time when the natural yearning that humans have for forging trusted communities, akin to corner bars, will reassert itself, and The WELL or startups that replicate its spirit will become the next hot innovation. Sometimes innovation involves recovering what has been lost.

  AMERICA ONLINE

  William von Meister was an early example of the new frontiersmen who would drive digital innovation beginning in the late 1970s. Like Ed Roberts of Altair, von Meister was a supercharged serial entrepreneur. Fueled by the proliferation of venture capitalists, this breed of innovators threw off ideas like sparks, got an adrenaline rush from risk taking, and touted new technologies with the zeal of evangelists. Von Meister was both an exemplar and a caricature. Unlike Noyce and Gates and Jobs, he did not set out to build companies but instead to launch them and see where they landed. Rather than being afraid of failure, he was energized by it, and his ilk made forgiving failure a feature of the Internet age. A magnificent rogue, he started nine companies in ten years, most of which either crashed or ejected him. But through his serial failures, he helped to define the archetype of the Internet
entrepreneur and, in the process, invent the online business.11

  Von Meister’s mother was an Austrian countess and his father, a godson of Kaiser Wilhelm II, ran the U.S. division of the German zeppelin company that operated the Hindenburg until its 1937 explosion, and then ran a division of a chemical company until he was indicted for fraud. His style rubbed off on young Bill, born in 1942, who seemed hell-bent on matching his father’s flameouts in flamboyance if not in severity. Growing up in a whitewashed brick mansion known as Blue Chimneys on a twenty-eight-acre estate in New Jersey, he loved escaping to the attic to operate his ham radio and build electronic gadgets. Among the devices he made was a radio transmitter that his father kept in his car and used to signal when he was nearing home from work so that the household staff could prepare his tea.

  After a desultory academic career that consisted of dropping into and out of colleges in Washington, DC, von Meister joined Western Union. He made money with a bunch of side ventures, including salvaging some of the company’s discarded equipment, and then launched a service that allowed people to dictate important letters to call centers for overnight delivery. It was successful, but in what became a pattern, von Meister was forced out for spending wildly and not paying any attention to operations.II

  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 lette
r. “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