This New Internet Thing, Chapter 28

I wrote a book. The publication date is May 29, 2024 (if you’d rather not deal with Amazon, your bookstore can also order it from the distributor Ingram Spark, or print-on-demand if they have the equipment). You can read it for free here, although it’ll be in serial form. My fond hope is that you’ll find it so compelling that you just buy the book instead of waiting 8 months to see what happens. There will be a chapter each week, 33 in all.

In Chapter 27 (notes), Len has his big break! He gets an interview with a Sand Hill Road venture capital firm, to be a contract manager, as it were. We also see how clueless the big companies were about the impending explosion of the Internet.

We also see the genesis of Netscape!

It was there for anyone to see, but lots of supposedly smart people ignored it. Meantime, Palm has a great product (eventually called the Pilot), but no money to launch it. Len gets to see what the Internet was like, before everyone knew about it.

Reading in serial form has a long and honorable history. My cover artist sent me this “Read Like a Victorian” website. Enjoy.

====================================================

Janet was dying to hear how Dad’s day with the VC’s went.

“Did they take you to Buck’s?”

“Buck’s? What’s that?”

“Oh, it’s a restaurant in Woodside where all the deals get done, supposedly. I guess not.”

“No, we just had sandwiches in the conference room. Real down to earth, those guys.”

“Yeah, I bet. With their BMW’s and their houses in Los Altos Hills.”

“Anyhow, now you’re not the only one in the family who can’t talk about what they’re doing at work!”

Walt said, “Whoa, jump back! Really?” She laughed.

“Yes sir, now I’m a card-carrying Vulture Capitalist Assistant!”

“Did they teach you the secret handshake, too?”

“They said after I finish the first job, they might show me that. Plus I’ll get the decoder ring.”

Len told them what he was going to be doing first, although he couldn’t say what company it was. He couldn’t resist telling them how much they were going to pay him for that, just to see their reaction. It was gratifying. Walt said, “I could almost build a wing on this house for that!”

Janet got nostalgic. He was not the old retired guy whom she had to worry about anymore. Now it was like he was her Dad again, with a real job. He told them he was taking them out to dinner, for a change.

Over dinner, Janet felt funny asking him about Silicon Valley instead of the other way around, but she went ahead anyway,

“So Dad, did any of your new vulture capitalist friends mention this company that Jim Clark started?”

“Jim Clark? No, I don’t think so. Isn’t he the guy who started Silicon Graphics?”

“That’s him. Supposedly he’s hired the guys who built Mosaic, and they’re doing something with the Internet. John Doerr from Kleiner, Perkins is behind them.”

Len perked up at that name.

“John Doerr? See, that’s a name I do know!”

Len went on. “Mosaic, huh? You showed me that program. It seemed interesting, but it was free. How can they make a company out of that?”

“I don’t know. Maybe you can find out.”

Len laughed. “That’s a new one: I find out something about Silicon Valley for you.”

They didn’t talk any more business that weekend.

* * *

Cassie was living with danger every day at Palm. It felt like they had a construction site on a river in the jungle, and any time now a lion pride might decide to have them for dinner. But for now, they kept on building that tourist resort that might someday make them all rich. Or not.

They had a great idea for a product, which they called the Touchdown, but they were running out of money. In a company that small, it was impossible to keep any secrets, and everyone knew that Jeff and Donna were calling every VC firm and every large company trying to raise more. The problem was that “handhelds” were a tainted product category; every VC firm had either lost money on it already, or if they hadn’t, they were thanking their lucky stars.

VC’s were a herd: they followed each other’s direction. Their public image of being like John Wayne, the lone cowboy on the frontier, was a myth. They were more like the sheep.

“I’m not going to invest until he invests!” one would say, and then that guy would say,

“Well, I’m not investing unless he invests!”

And then the third guy would want to see a big corporate partner put up the marketing and manufacturing money that Palm needed. So Jeff and Donna would go off, hat in hand, to every big company they knew. For these people, there was never just one decision-maker; you’d have to meet with one group of middle managers, and then they’d pass you off to a different group. It was exhausting and dispiriting for Donna. Jeff had to stay relentlessly positive just to keep her in the game. Cassie really appreciated what those two were doing for everyone, more than she ever had with the top managers at 3Com.

Now that Matt’s divorce was final, he was calling her more often. She liked him, but somehow, he just didn’t do it for her. Although she didn’t know what “it” was anymore. Were there any guys she could stand being with all the time? It didn’t seem that way. Anyhow, Matt had been married for a long time, and he seemed like one of those guys who were just terrified of being single.

Adopting a kid: that prospect was always there in her head. Every time she did anything normal, she’d think, “How would this work if I had a child?” There weren’t any good answers. Maybe she wanted to do it. Maybe she didn’t. She wished she could decide.

* * *

Grant and Janet went to the weekly lunch at Gordon-Biersch most weeks. The first time, it was strange for Grant — he hadn’t seen all these people in fifteen years or so. Most of them seemed to be at one of the DEC research labs that had sprung up in Palo Alto with the demise of PARC.

He remembered Porter Berwick from that time at The Goose. The two had hit it off over cars, working on them and driving them fast.

Porter had squinted at him when he arrived.

“Grant Avery! Can it be? We thought you were dead!”

“Close! Living in Japan. But now I’m back.”

Everyone from the old Xerox days knew about Fuji Xerox, of course. They were all dying to hear how the Japanese language features of Star had been received over there (‘politely,’ Grant said). Back in the 70’s, being able to type Kanji characters had seemed like a real game changer, and Fuji had sent over five or six of their engineers to help with the effort. It turned out that the Star was so expensive that it never really took off in Japan, either.

However, the laser printers had been a big, big hit, and that was what kept Grant over there for so long. As the American who knew all about these things, and who spoke Japanese besides, he was a big cheese there.

Grant got to hear what they were all doing. Porter wasn’t at Oracle anymore, which somehow didn’t surprise him. He didn’t seem like the Oracle type. Supposedly he was thinking of running for Palo Alto City Council.

Porter said, “So I gather you’re not at Mother Xerox anymore?”

“No, now I’m at Taligent. Maybe you’ve heard of it?”

Charles Green, another Palo Alto guy whom Grant vaguely remembered, said,

“Taligent! Are they still around?”

Grant remembered that this sort of good-natured ribbing was standard up here. No one in Japan would ever be that rude.

“Not only still around, but picking up partners right and left!”

This was too easy a target, so no one said anything overt. The conversation reverted to DEC’s processor chips, bike-riding, sushi, what the old Xeroids were doing, and other perennial topics. All of them had been on the Internet for years and knew how to find everything they wanted on it, so they weren’t too interested in whether the general public adopted it or not. Actually, they found the prospect amusing. Ordinary, non-computer people using the Internet? Yuck.

Janet asked the group,

“Does anyone know anything about Jim Clark and all those guys from Mosaic?”

Some of them knew the name from Silicon Graphics. They knew he hadn’t left SGI on the friendliest of terms. The press had been all over it for a while, but that seemed to have tailed off.

Porter said, “No. They’re over on Castro Street, right?”

“Supposedly. Do you think they’re redoing it as a proprietary thing?”

Charles said, “I don’t see how that would work. I mean, Mosaic is there, it works, it’s free, who’s going to pay for another one?”

No one had any good answer for that.

Porter said, “Besides, if they do, Bill Gates will just swoop in and clone it.”

That was the end of that topic. “Get the general public with their stupid Windows machines on the Internet, and Microsoft will just take it over and ruin it, like they do everything else” pretty well summed up their attitude.

* * *

Len was working harder than he had since his very first days at Arthur Andersen. Brad at the VC firm spent a couple days tutoring him on the company he was going to babysit, especially all their financials. Brad was incredibly patient with him, but Len had to thank his lucky stars he’d spent so much time researching investments in these companies. Before he retired, he’d have had zero chance of understanding any of it. This was a company that was very early into the Internet; they’d been a for-profit company almost before anyone! They were an Internet Service Provider when no one even knew what that was. Their traffic was doubling every month, they claimed. The VC’s were pleased, of course, but they were also a tad suspicious. “With great growth comes great opportunity for fuckups,” Brad told him.

Finally, Brad took him to meet the folks at the company, NetsForAll. He introduced Len as his stand-in, with decades of financial experience and a director of a private mutual fund, all of which was true, more or less. The fact that Len had been on Computers This Week was a huge plus for him. They gave him a desk near the CFO, and his stories about the bingo embezzlement ring and his brave dog Gretchen made him an instant hit with the folks there. Len felt like he really had a second career now! He was old enough to be a grandfather to some of these folks, and it was so fun to be working with them.

The company, though: it lost money, and always had. They were focused on growth, which they were certainly getting, but not on profitability. Their leader Charlie Messner was a charismatic guy who’d been involved with the Internet for years and years, and had a vision of how big it was going to be. It almost seemed like a cult to Len. Everyone there had bought into the vision. When they had a company meeting, quite often the crowd chanted, “Char-LEE!  Char-LEE!”

They had a thriving business selling Internet access to individuals, but that didn’t “scale well,” as they liked to say in Silicon Valley. If you wanted more customers, you needed more telephone lines, modems, and other equipment, and you needed more people to service them. Whereas selling to businesses — now that was a winner! Corporations paid their bills on time, and often didn’t bat an eye if you raised prices. And if you had more expensive products to offer them, they were willing to listen. Business customers were where it was at. They had plans to sell off their individual customer division and just concentrate on the businesses.

Brad at the VC firm knew all this, of course. Len’s job was to dig into it a little further and see if there were any skeletons in the closets. And also, just to be helpful and do what Brad would do if he were there.

This took some subtlety, which he hadn’t needed when he was an auditor. He couldn’t just demand to see every piece of paper. So he started by asking the CFO, David, what he could do to help out. That was a winner! Every CFO is, by nature, detail-oriented to a fault, and David could never get enough facts about his business. He also asked the VP of Marketing, Doreen, what she wished she could do more of, and “Customer Sat” (for “satisfaction”) was something she was deeply curious about. They could get businesses who paid for Internet services, but maybe there was something holding them back from buying even more! Len could find out for her. Perfect! Len could visit the biggest customers, which was exactly what he wanted.

One of them, The Nerd Shop, sold computer and electronic components. They had a physical store near Fry’s in Sunnyvale, which was where they made most of their money, but they were finding more and more that their customers demanded Internet shopping. The Nerd Shop shipped things all over the world, to people in locations with no access to most of their products. Once someone got on their “website” (he was learning the lingo), they could just search for what they wanted, provide their address and credit card information, and bingo, it was on its way! So The Nerd Shop was quite happy to pay a hefty monthly fee for a dedicated line that was up twenty-four hours a day.

Len found out that they got quite upset at any interruption in their service, and spent some time haranguing him on that. Once he got that issue out of the way, he started talking about what else they needed. He asked about advertising, and wow, did that ever get them talking. They knew there were a lot of businesses on the Web that could send them customers, and vice versa. And what if they could advertise specific products available on The Nerd Shop?  Len thought there had to be a gold mine there.

He found a guy in Palo Alto who had two T-1 lines to his apartment, and he was running a travel site! You could book plane flights and hotel reservations. Amazing. This guy was getting calls from the phone company, asking why in God’s name anyone needed two T-1 lines! He was getting free links from the various universities and research institutes who’d been on the Internet forever, but how big could that get? There were only just so many of them, and it seemed like every day, one of them got some new manager who clamped down on the free links.

He knew Charley was hoping to get rid of their individual users, but for now they still provided the bulk of the revenue, so he wanted to meet some of those. This had to be costing them a fortune compared to just using AOL or Prodigy, so what was in it for them?

One of them, Steve, used to be a student at Stanford and had gotten used to free Internet, and now he was marketing himself as an expert on it! He was making a decent income selling contracting services to businesses who wanted to get on the Web. Steve had skills that were pretty rare; he could show you how to get a domain, put up a website, and connect it to your database. He really needed to be on the Internet to demonstrate that he knew how to do this. So paying a monthly fee was just a cost of doing business.

Len was becoming an Internet evangelist!. He found that Janet was fairly blasé about it, since she’d had it for so long. When he talked about what it would be like if everyone was on it, she just laughed. Even most businesses didn’t use TCP/IP, the Internet protocol, on their internal networks. How was that ever going to happen?

He found that the people at NetsForAll were true believers and didn’t need any convincing. They were used to being looked down on by the old guard of the computer companies, who were too jaded and beaten down, they thought, and couldn’t see a giant opportunity when it was staring them right in the face. As he walked around the offices, he noticed that almost everyone was using Mosaic Netscape all the time. There was a new company called Yahoo! that had a webpage they all used, which gave you a directory of the Web. If you wanted to find out who had travel information, they gave you a list of those, including that guy in Palo Alto whom Len had visited. You could just click your way to anything.

“Yahoo!” he thought. “What real business would ever call themselves that?” Still, it reminded him of the early days of cars in Detroit: lots of crazy people setting up shop in a brand new territory. Most of them were going to fail, of course, but that was just the nature of things. Why the hell wasn’t Janet in on this?

Back at the VC firm, Brad was bemused by Len’s enthusiasm. It seemed to him that everyone who looked at the Internet business was either unimpressed, or absolutely bedazzled. Len was definitely in the latter camp. He had to remind Len that he was supposed to help manage the natives, not marry them. So far, NetsForAll was growing like gangbusters, but they weren’t making any money. This was not what he wanted to sell to Wall Street: “OK, it’s not profitable, but look at those growth numbers!”

When Len told him that Charley was seriously looking at acquiring another little Internet Service Provider to expand his geographical reach, Brad got really concerned. He thought that, all by itself, justified having Len there. He fired off a note to Charley saying, “Let’s talk.” Brad wanted Charley to turn NetsForAll profitable, not lose even more money.

Len was conflicted. Everything he’d ever done in his career was about profit and cash flow. Those words didn’t even appear in Charley’s vocabulary! All he seemed to care about was getting bigger. Was Charley nuts, or was Len?

One day he was back at the office, and the CFO’s phone rang. Len couldn’t help overhearing, and he could tell it was someone important by the way David acted. David was elaborately polite to the caller, saying, “I’m sorry, but I can’t give you that information” and referring him to Brad if he wanted to talk further. Len was dying to ask David who it was, but he didn’t want to be impertinent.

David turned to him and said, “Another big telecom sniffing around!” Len thought he could ask questions, but maybe David would just tell him, and later that day, he did.

“So that call this morning?” he began.

“The ‘big telecom’ call?” 

“That one. Almost every week someone calls, hinting they might want to acquire us.”

“Oh, yeah? Are they serious?”

“Well, who can tell? When I bring it up with Charley, he won’t even talk about it. ‘We’re not for sale!’ he always says.”

“I can’t say I’m surprised to hear that. He seems to be a man on a mission.”

David didn’t say any more. Len wondered what Brad thought about all this, if he even knew it all.