Leaving Reality Behind: Inside the Battle for the Soul of the Internet. Regula Bochsler
to the world’s problems in the form of snazzy new business ideas. It made him wonder: if pictures of all the city’s barber shops were accessible on the Internet, surely he could have been saved the fruitless journey. In contrast to many of the virtual-reality concepts that were the currency of the moment, Gross’s plan was to use the Internet as a means to help real people in the real world. The trouble was that he didn’t have the time to focus on a new project himself, so he persuaded his old friend Charles Conn, a partner at the management consultancy McKinsey, to look at the idea. Conn didn’t care much for Gross’s initial and limited concept of a photographic directory, but he did think it could be the starting point of a much larger idea. And so, in the summer of 1995, Bill Gross managed to persuade his friend to start an online city-directory company, CitySearch. As Gross said: ‘What lured him there was the opportunity to direct his own drama, to own his own destiny.’
Gross may have been busy with other businesses, but he did help Conn by finding high-profile investors like Steven Spielberg and Michael Douglas for the venture. He also assisted in making the Web site easy to use. Conn remembers, Gross was ‘a sort of strange combination of geek, technologist and a huckster marketer all rolled into one.’ Gross’s other role was to entertain and cajole potential employees, persuading them to jump ship from their steady careers and join the risky world of a new company and a new frontier. At the time, nobody really imagined that the Internet was going to make them huge amounts of money, but it did seem to be exciting and to have the potential to change the way the world worked.
CitySearch’s emerging success placed Bill Gross at the vanguard of the Internet revolution, and demonstrated that he had a Midas touch in this new arena too. He was now beautifully poised to benefit from the coming boom with the absolute belief that he had seen the future. He enthused, ‘I’m unbelievably bullish on the Internet. I think the Internet is going to be in everybody’s home, on everybody’s watch, in everybody’s pocket, pretty much by the end of this century.’ Soon he had set up more than twenty different Internet businesses – among them a toy company. And in due course he would be catching private planes, being driven in limousines and chased by groupies, as well as being hailed as the most important entrepreneur since J. D. Rockefeller. Not bad for a man well into his thirties who gave the impression – perhaps because he was short, wore simple clothes and scurried around with his gaze fixed on the floor – that he could still be a teenager. Whatever, in the midst of a world of inexperienced entrepreneurs, Bill Gross’s unique asset was that he had a history.
Gross enjoyed telling journalists his perfect entrepreneurial-creation myth. The son of an orthodontist in Encino, California, he had become a candy salesman (a start like that of both Rockefeller and Thomas Edison) at the age of twelve, buying confectionery in bulk and undercutting the local drug store. By the time he reached high school, Gross had employed a few salesmen to work for him.
His next venture, at high school, saw him enter the world of engineering – selling, via adverts he placed in the back of Popular Electronics magazine, hundreds of kits of tin foil and cardboard along with instructions on how to make parabolic dishes for solar energy. This venture paid for his tuition at the California Institute of Technology, where he sold stereo loudspeakers to his classmates. Upon his graduation, in 1981, he started his own audio shop in Pasadena, vaingloriously called Gross National Products.
However, when it came to convincing potential investors and a hungry media that he was a substantial force in the Internet boom, Bill Gross’s real asset was the fact that he’d previously built two multi-million-dollar software businesses. And both had been exactly in sync with two fundamental shifts within the computer business over the precious decade.
The first of these shifts began in August 1981 with the launch of IBM’s personal computer, marketed as their ‘smallest, lowest-priced computer system, designed for business, school and home’. Until then, PCs had been thought of as hobby machines and were only properly used by esoteric academics; IBM’s endorsement jump-started the micro-computer market for business. The computer even became Time’s ‘Man of the Year’.
Bill Gross soon bought a PC for his audio shop. At first the small and not very powerful desktop computer sat unused in the basement – under a blanket, to protect it from the sawdust of the shop floor. ‘You couldn’t do anything with it,’ Bill Gross recalled. The PC was anaemically powered and also lacked a suite of software programs that would make it useful for everyday business. Back then, applications for it were often slow to run and cumbersome to use, having been designed for different kinds of machines and hastily translated to work on the IBM PC.
The lack of software programs was seen as an opportunity by Mitch Kapor (later he co-founded the Electronic Frontier Foundation with John Perry Barlow). A self-confessed dilettante, he was known for wearing Hawaiian shirts and had been both a DJ and a mental-health worker. Having made some money from a graphical software program he was as much a veteran as there was in the tiny software industry. More than anything else, though, he was a ‘hacker’ – not in the criminal sense but as defined by journalist Steven Levy: ‘adventurers, visionaries, risk-takers, artists … And the ones who most clearly saw why the computer was a truly revolutionary tool.’
Kapor’s idea was to make an existing computer program – Visicalc, the first spreadsheet software – work on the new IBM PC. Before Visicalc, budding entrepreneurs had planned their business on squared paper or huge blackboards, divided into matrices of rows and columns; each space was filled with scribbles, some cells related via complex calculations. Visicalc mimicked and automated this cumbersome process. Now, just by inputting a list of figures – the set of assumptions – one could easily speculate how to run one’s business by allowing the spreadsheet to calculate future profit or loss. The strange and bizarre ‘business models’ of the Internet revolution could only have come about with this capacity to imagine and balance the impossible.
Mitch Kapor set up a new company, which he called Lotus (because he was a follower of transcendental meditation), and created a spreadsheet program for the PC that was faster than any other and included an onscreen-help application. On 23 January 1983, Lotus 1–2–3 was launched on the back of an unprecedented marketing campaign that cost more than a million dollars. As a result, business adoption of the IBM PC went into overdrive and sales quadrupled in the first few months following the launch. Just one year later, Lotus had $157 million worth of annual sales, were employing 700 people and had become the largest software company in the world.
Bill Gross was on holiday when his brother and business partner Larry installed Lotus 1–2–3 on to their basement PC. When he returned, Bill began to use it to computerise the shop’s accounts. The brothers soon found that their customers were coming to them for advice about how to use 1–2–3; despite the benefits of the program, it was still difficult to use. A complex line of code was required to instruct the computer to perform even simple tasks. Printing out a section of grid, for example, necessitated the input of ‘/ppral..f17-om14-escagq’. One mistyped character and the command would fail to execute. So the brothers guided their customers in installing applications and computerising their businesses. As Bill recalled, ‘Everyone trusted us and wanted our advice on computers and software.’
Bill Gross loved tinkering with the software. He worked long hours, had fun, hacked code. As he told one journalist, ‘We do our best work after midnight, sitting around with pizzas and computers, being creative.’ Gross, like Mitch Kapor, was part of a new generation of businessmen who came from a culture of hacking. According to the Finnish academic Pekka Himanen, the ‘hacker ethic is a new work ethic that challenges the attitude toward work that has held us in its thrall for so long, the Protestant work ethic’. In this new mode of work, it was not money that was the motivating force; it was the desire to create something better and smarter than one’s peers. The ethic meant that work was characterised not as a drudgery, carried out within rigid hours set by employers, but as a joyful pursuit, eroding the distinction between work and play. The ever cool Mitch Kapor became one of the very first poster boys to this new generation of hackers, as well as being one of the first software millionaires. Eventually, Bill Gross would follow suit.
The Gross brothers soon began writing and selling their own programs. Their first attempt was something called CPA+, an easy-to-use accounting template using Lotus