The Exchanges

Q And what were you going to do? What was your product? What were you selling?

A Well, we realized then, this was still the early days of personal computers, but there were different manufacturers offering different kinds of computers, and we just said, well, instead of trying to do it on our own, why don't we create essentially custom Private label online services with each of those companies. So our deals with all these companies would be Commodore or Apple or IBM was we'll create the service and you market it. You'll bundle our software with your modems or with your computers or whatever you choose to do. And then we'll essentially share the revenue. And so we created something called Q-Link for Commodore. We created something called PC-Link for RadioShack. We created something called Promenade for IBM. We created something called Apple-Link for Apple.

AI assessment note: “create essentially custom Private label online services with each of those companies”

Q I think anybody, uh, who's over the age of, like, 35 probably remembers having an AOL account, right? Like, you would log on and you would hear, welcome, you've got mail. How did that, how did that come about?

A The voices? Well, we were, in that early nineties, we were trying to figure out a way to make the internet more accessible, more something that people could relate to. So we're trying to humanize the internet, put a friendly face on it. One way to make it seem more friendly, more human, was actually have a person welcoming you to the service. And so I was talking about that, ah, one day with our customer service department. A woman there basically said, well, my husband does voiceover kind of thing, so he'd be happy to tape some messages, and so I, you know, got my little pen down, little post-it note, and wrote a bunch of different things, like, you've got mail, and, and that guy, Elwood Edwards, recorded him that night, and, you know, brought in the next day a little cassette tape, and he said, well, that sounds pretty good, let's stick it on the software, and then became one of the most recognizable voices of that generation.

AI assessment note: “that guy, Elwood Edwards, recorded him that night, and, you know, brought in”

Q I guess once you really started to take off in the mid nineties, um, All of a sudden, Microsoft says, we want to get into this business. We want to have our own portal to the internet. Bill Gates summons you to Seattle to meet with him, and, and what makes, makes an offer to buy you guys out?

A They basically said they've decided this internet world, this online world was now a strategic priority for them. They're going to take it very seriously. They're planning to create their own service. They're planning to bundle it with every copy of Windows, but they respected what we were doing, and if we had a Willingness to sell our company to them, then instead of building their own thing, they would, you know, be happy to indeed prefer kind of going with us. And so it was a little scary because, you know, we knew the threat of Microsoft was pretty serious, and some of our investors, some of our board members did feel like we should quit while we're ahead. Maybe we can't compete in this new era with Microsoft. So it came down to a close vote, but eventually the board decided not to sell to Microsoft. Microsoft did, in fact, launch their own, you know, service.

AI assessment note: “eventually the board decided not to sell to Microsoft.”

Q for most people to connect to the internet. At the time, it was a network of computers used by research universities and the Department of Defense. So, so explain how AOL then really started to take off. I mean, it becomes AOL. You say Congress passes legislation that allowed the internet to become commercialized, which obviously was a huge turning point for you guys. And was that it? Was it?

A That was it, as well as by then we had convinced PC manufacturers I wanted to build modems in, so suddenly it was a standard part of a computer and not a peripheral. World Wide Web was also, you know, created in that ninety-three-ish time frame, and so all these things really kind of came together. But when we went public, took AOL public in 1992, it was the first internet company to go public, and we had less than 200,000 customers. Been at it for seven years. The first decade was slow and hard, and two steps forward, one step back. Uh, it's the second decade, you know, that things really kicked in, and thankfully, we did stick with it.

AI assessment note: “That was it, as well as by then we had convinced PC manufacturers”

Q So, I mean, what, what could you do with it?

A Uh, do a lot of things. I mean, we basically, the core was allow you to download software, because at the time that was interesting, but you also could do things like email and, uh, participate in message boards, and, you know, we created chat rooms and other ways. We always believed that the, the killer app of the internet was people. Some thought it would be content, particularly the media companies. Some thought it would be commerce, particularly the retail companies. Uh, we thought content and commerce would be important, but that community was really going to be the most important. So we always focused on people interacting with each other, even to this day with social media, Facebook and Twitter and Snapchat. Essentially that idea of community, you know, continues to carry forward.

AI assessment note: “allow you to download software... email and, uh, participate in message boards”

Q Do you remember the moment when you realized that this was going to be a huge, like, consumer product, not just for three percent of Americans, but for most people, like when it was going to be huge?

A Well, to be honest, the moment I thought that was 1980, when I first started focusing on, I just, in my heart of hearts, believe that the day where it became clear that that was actually happening, it wasn't just sort of a crazy pipe dream. I think the year was 1996, and we had moved to unlimited pricing, and we had system problems, or our system actually was down for 23 hours, nobody could log in, and it was a national news story. It led the network TV news, was the lead article in most newspapers, and suddenly the fact that we're down for 23 hours was a national crisis. That's when I knew that This idea of the internet had arrived. It was frustrating because obviously we were down and, you know, a lot of people had been counting on us and we let them down. But it also was just a, a sign that this really was becoming real and this, you know, the idea of the internet was becoming part of, ah, everyday life and had gone from something when we got started in 1905 that nobody knew about or cared about to suddenly something that people needed and couldn't live without.

AI assessment note: “That's when I knew that This idea of the internet had arrived.”

Q Yeah, I mean, I, I, you know, we've been hearing about these shifts for a while, and, and look, it'll be interesting to see what happens. I, I'm, I'm curious to get your take on, what do you think it takes today to start a tech company? I mean, how, and how does that compare to when you first started?

A Well, it's obviously, as you say, kind of very different. When we first started, uh, only three percent of people were online, and those three percent were online an average of one hour a week. So for us, it was about- Evangelizing the idea of being online, the idea of the internet. Uh, and it took us, frankly, a decade before we finally broke through. And so I'm, I'm sympathetic, empathetic to the entrepreneurs who are fighting that battle. I think that the good news now is that everybody's connected. The bad news is everybody's connected and everybody's able to launch businesses. So it becomes more challenging to win the battle for attention. And the early days was, can you build it? Now it's really much more, can you commercialize it? Can you, can you break Through. And for a growing number of companies, also, can you navigate some of the policy challenges, some of the regulatory issues in areas like healthcare or food and agriculture or financial services? That's another aspect that is different now than it was back then.

AI assessment note: “The early days was, can you build it? Now it's really much more, can you commercialize it”

Q um, I, you're on the road a lot, and I, I think, I imagine your wife Jean is on the road a lot. You guys have a foundation, a lot going on. You probably have a way to coordinate your calendars, I imagine, or people who can tell you where the other person is. But, uh, I don't know. What, what do you think? What do you make of this?

A I think it's a great idea. Actually, it's something we probably could use. We do, we do coordinate our calendar. We do a lot of tech Texting and, you know, I have assistants and others, but it, but it's, it's, you know, it's busy and hectic, and I think it gets more complicated when, in our case, you have kids and grandkids. That's one of my questions. Is this really for couples or, you know, a way to, you know, for two people to, to share things, or is it lend itself also to some group applications in sort of an extended family, maybe even for divorced parents in terms of coordinating anything? I'd be curious what some of the initial Users are doing. What, what are they doing that maybe were different than what you were expecting going in? Cause that might lead to the insight of which particular target group to go after in a, in a more focused way.

AI assessment note: “I think it's a great idea. Actually, it's something we probably could use.”

Q What do you think is the most important quality or characteristic that you've, that you either have or you've developed over time that's allowed you to be successful as an entrepreneur?

A I think it's a mix of skills. Some of it is, you know, goes back to the idea, the vision side of it, and being pretty good at seeing around corners, pretty good at pattern recognition, getting a sense of what might be happening. I think perseverance, I think being willing to take a long-term view as we discussed the The ABLE journey was a decade in the making overnight sensation, and so recognizing that revolutions sometimes happen in evolutionary ways, and you've got to have to take a long-term view and be steady there. And the other is a respect for the role of government and the role of policy that I have an appreciation that I've developed over the years of, of that role, partly because the internet wouldn't exist without the government. You know, it was the government 50 years ago that funded DARPA that created the internet. It was the government Through the judicial system that broke up the phone company, you know, Ma Bell, which unleashed competition and lowered prices in telecommunication with the government that then commercialized the internet with the telecom act. So I just understand the role of policy. I think when you are trying to figure out ways to innovate, these are going to be tough challenges to take on.

AI assessment note: “I think it's a mix of skills. Some of it is, you know, vision”

Q So, I mean, at that time in 1985, did you just think to yourself, well, you know, this Internet thing is going to be so huge. We're going to I'll make money off of it. Doesn't really matter how we structure this deal?

A It's a mix. I actually, I did believe that, obviously, in the idea of the internet, did believe that, you know, huge companies were going to be built on the back of the internet. But I was driven, as I think a lot of entrepreneurs are, not just by the economic reward side of it, but really the idea that you could change the world. And so I wanted to figure out some way to take this idea that I was so fascinated with it and make it more Mainstream. So it frankly mattered less, you know, what I was paid, which wasn't much, or how much stock I got, which was not that much in the grand scheme of things. I wanted to pursue this idea, this, this passion, this dream.

AI assessment note: “So it frankly mattered less, you know, what I was paid”

Q Was it you couldn't convince people of what you wanted to do, or that, um, you just saw the world in different ways?

A It's a mix of things. Some of it was, you know, the market itself, right after we did the merger, you know, the stock market generally went into decline. The internet sector went into kind of a free fall, so that was unhelpful timing. Also, as part of the merger, to get the merger done, I stepped aside as CEO, so I didn't have direct control of any of the businesses, including AOL. I was just, you know, overseeing the board itself. Some of it was the fights within the company. Time Warner historically had been organized as a lot of independent companies, so part of the idea of the merger was to run it in a more integrated way, but that really never, never happened. So it was a mix of different factors, but at the end of the day, it really was about execution, and, you know, one of the, you know, the key lessons is that it really does come down to people. You know, how do you take these ideas and make them real, and it's about people, and it's about teams.

AI assessment note: “It's a mix of things. Some of it was, you know, the market itself”

Q yeah. So, I mean, I think as kind of circling back to my first question, I mean, it is a, on the one hand, the barrier to entry is, is lower, right? You can, every, a lot of people can start web businesses, app businesses, but it's a lot harder to get attention. It's just a lot harder to get the eyeballs on what you're trying to, you know, sell.

A Yeah, no, it just forces you to be a little more unique, a little more differentiated, and the best way to create a big business is to create a very small, successful, passionate, small business where you've got some real loyal, fanatic customers who, you know, love your product, love your service, tell their friends, and from there you can launch into something bigger, but often entrepreneurs try to go too big, too fast, kind of, you know, spread their, their, uh, marketing dollars too, too broadly, and, and, and almost always it's better to sharpen your focus on a particular target market and the Particular, uh, you know, kind of niche. But I should also say, guys, it said, you reminded me that I did one of your first shows. Before you launched the show, we weren't even sure whether it'd be successful. There's this concept called how I built this.

AI assessment note: “it just forces you to be a little more unique, a little more differentiated”