The History of Computing

This was a hard episode to do. Because telling the story of Instagram is different than explaining the meaning behind it. You see, on the face of it - Instagram is an app to share photos. But underneath that it’s much more. It’s a window into the soul of the Internet-powered culture of the world. Middle schoolers have always been stressed about what their friends think. It’s amplified on Instagram. People have always been obsessed with and copied celebrities - going back to the ages of kings. That too is on Instagram. We love dogs and cute little weird animals. So does Instagram. 

Before Instagram, we had photo sharing apps. Like Hipstamatic. Before Instagram, we had social networks - like Twitter and Facebook. How could Instagram do something different and yet, so similar? How could it offer that window into the world when the lens photos are snapped with are as though through rose colored glasses? Do they show us reality or what we want reality to be? Could it be that the food we throw away or the clothes we donate tell us more about us as humans than what we eat or keep? Is the illusion worth billions of dollars a year in advertising revenue while the reality represents our repressed shame?

Think about that as we go through this story.

If you build it, they will come. Everyone who builds an app just kinda’ automatically assumes that throngs of people will flock to the App Store, download the app, and they will be loved and adored and maybe even become rich. OK, not everyone thinks such things - and with the number of apps on the stores these days, the chances are probably getting closer to those that a high school quarterback will play in the NFL. But in todays story, that is exactly what happened. 

And Kevin Systrom had already seen it happen. He was offered a job as one of the first employees at Facebook while still going to Stanford. That’ll never be a thing. Then while on an internship he was asked to be one of the first Twitter employees. That’ll never be a thing either. But they were things, obviously!

So in 2010, Systrom started working on an app he called Burbn and within two years sold the company, then called Instagram for one billion dollars. In doing so he and his co-founder Mike Krieger helped forever changing the deal landscape for mergers and acquisitions of apps, and more profoundly giving humanity lenses with which to see a world we want to see - if not reality.

Systrom didn’t have a degree in computer science. In fact, he taught himself to code after working hours, then during working hours, and by osmosis through working with some well-known founders. 

Burbn was an app to check in and post plans and photos. It was written in HTML5 and in a Cinderella story, he was able to raise half a million dollars in funding from Baseline Ventures and Andreesen Horowitz, bringing in Mike Krieger as a co-founder. 

At the time, Hipstamatic was the top photo manipulation and filtering app. Given that the iPhone came with a camera on-par (if not better) than most digital point and shoots at the time, the pair re-evaluated the concept and instead leaned further into photo sharing, while still maintaining the location tagging.

The original idea was to swipe right and left, as we do in apps like Tinder. But instead they chose to show photos in chronological order and used a now iconic 1:1 aspect ratio, or the photos were square, so there was room on the screen to show metadata and a taste of the next photo - to keep us streaming. The camera was simple, like the Holga camera Systrom had been given while stying abroad when at Stanford. That camera made pictures a little blurry and in an almost filtered way made them loo almost artistic. 

After System graduated from Stanford in 2006, he worked at Google, then NextStop, and then got the bug to make his own app. And boy did he. One thing though, even his wife Nicole didn’t think she could take good photos having seen those from a friend of Systrom’s. He said the photos were so good because the filters. And so we got the first filter, X-Pro 2, so she could take great photos on the iPhone 3G. 

Krieger shared the first post on Instagram on July 16, 2010 and Systrom followed up within a few hours with a picture of a dog. The first of probably a billion dog photos (including a few of my own). And they officially published Instagram on the App Store in October of 2010.

After adding more and more filters, Systrom and Krieger closed in on one of the greatest growth hacks of any app: they integrated with Facebook, Twitter, and Foursquare so you could take the photo in Instagram and shoot it out to one of those apps - or all three.

At the time Facebook was more of a browser tool. Few people used the mobile app. And for those that did try and post photos on Facebook, doing so was laborious, using a mobile camera roll in the app and taking more steps than needed. Instagram became the perfect glue to stitch other apps together. And rather than always needing to come up with something witty to say like on Twitter, we could just point the camera on our phone at something and hit a button. 

The posts had links back to the photo on Instagram. They hit 100,000 users in the first week and a million users by the end of the year. Their next growth hack was to borrow the hashtag concept from Twitter and other apps, which they added in January of 2011.

Remember how Systrom interned at Odeo and turned down the offer to go straight to Twitter after college? Twitter didn’t have photo sharing at the time, but Twitter co-founder Jack Dorsey had showed System plenty of programming techniques and the two stayed in touch. He became an angel investor in a $7 million Series A and the first real influencer on the platform, sending that link to every photo to all of his Twitter followers every time he posted. The growth continued. June, 2011 they hit 5 million users, and doubled to 10 million by September of 2011. I was one of those users, posting the first photo to @krypted in the fall - being a nerd it was of the iOS 5.0.1 update screen and according to the lone comment on the photo my buddy @acidprime apparently took the same photo. 

They spent the next few months just trying to keep the servers up and running and released an Android of the app in April of 2012, just a couple of days before taking on $50 million dollars in venture capital. But that didn’t need to last long - they sold the company to Facebook for a billion dollars a few days later, effectively doubling each investor in that last round of funding and shooting up to 50 million users by the end of the month. 

At 13 employees, that’s nearly $77 million dollars per employee. Granted, much of that went to Systrom and the investors. The Facebook acquisition seemed great at first. Instagram got access to bigger resources than even a few more rounds of funding would have provided. 

Facebook helped them scale up to 100 million users within a year and following Facebook TV, and the brief but impactful release of Vine at Twitter, Instagram added video sharing, photo tagging, and the ability to add links in 2013.  Looking at a history of their feature releases, they’re slow and steady and probably the most user-centered releases I’ve seen. And in 2013, they grew to 150 million users, proving the types of rewards that come from doing so. 

With that kind of growth it might seem that it can’t last forever - and yet on the back of new editing tools, a growing team, and advertising tools, they managed to hit a staggering 300 million users in 2014.

While they released thoughtful, direct, human sold advertising before, they opened up the ability to buy ads to all advertisers, piggy backing on the Facebook ad selling platform in 2015. That’s the same year they introduced Boomerang, which looped photos in forward and reverse. It was cute for a hot minute. 

2016 saw the introduction of analytics that included demographics, impressions, likes, reach, and other tools for businesses to track performance not only of ads, but of posts. As with many tools, it was built for the famous influencers that had the ear of the founders and management team - and made available to anyone. They also introduced Instagram Stories, which was a huge development effort and they owned that they copied it from Snapchat - a surprising and truly authentic move for a Silicon Valley startup. And we could barely call them a startup any longer, shooting over half a billion users by the middle of the year and 600 million by the end of the year. 

That year, they also brought us live video, a Windows client, and one of my favorite aspects with a lot of people posting in different languages, they could automatically translate posts. 

But something else happened in 2016. Donald Trump was elected to the White House. This is not a podcast about politics but it’s safe to say that it was one of the most divisive elections in recent US history. And one of the first where social media is reported to have potentially changed the outcome. Disinformation campaigns from foreign actors combined with data illegally obtained via Cambridge Analytica on the Facebook network, combined with increasingly insular personal networks and machine learning-driven doubling down on only seeing things that appealed to our world view led to many being able to point at networks like Facebook and Twitter as having been party to whatever they thought the “other side” in an election had done wrong. 

Yet Instagram was just a photo sharing site. They put the users at the center of their decisions. They promoted the good things in life. While Zuckerberg claimed that Facebook couldn’t have helped change any outcomes and that Facebook was just an innocent platform that amplified human thoughts - Systrom openly backed Hillary Clinton. And yet, even with disinformation spreading on Instagram, they seemed immune from accusations and having to go to Capital Hill to be grilled following the election. Being good to users apparently has its benefits. 

However, some regulation needed to happen. 2017, the Federal Trade Commission steps in to force influencers to be transparent about their relationship with advertisers - Instagram responded by giving us the ability to mark a post as sponsored. Still, Instagram revenue spiked over 3 and a half billion dollars in 2017.

Instagram revenue grew past 6 billion dollars in 2018. Systrom and Krieger stepped away from Instagram that year. It was now on autopilot.  Although I think all chief executives have a 

Instagram revenue shot over 9 billion dollars in 2019. In those years they released IGTV and tried to get more resources from Facebook, contributing far more to the bottom line than they took. 

2020 saw Instagram ad revenue close in on 13.86 billion dollars with projected 2021 revenues growing past 18 billion.

In The Picture of Dorian Gray from 1890, Lord Henry describes the impact of influence as destroying our genuine and true identity, taking away our authentic motivations, and as Shakespeare would have put it - making us servile to the influencer. Some are famous and so become influencers on the product naturally, like musicians, politicians, athletes, and even the Pope. . Others become famous due to getting showcased by the @instagram feed or some other prominent person. These influencers often stage a beautiful life and to be honest, sometimes we just need that as a little mind candy. But other times it can become too much, forcing us to constantly compare our skin to doctored skin, our lifestyle to those who staged their own, and our number of friends to those who might just have bought theirs. And seeing this obvious manipulation gives some of us even more independence than we might have felt before. We have a choice: to be or not to be. 

The Instagram story is one with depth. Those influencers are one of the more visible aspects, going back to the first that posted sponsored photos from Snoop Dogg. And when Mark Zuckerberg decided to buy the company for a billion dollars, many thought he was crazy. But once they turned on the ad revenue machine, which he insisted Systrom wait on until the company had enough users, it was easy to go from 3 to 6 to 9 to over 13 and now likely over 18 billion dollars. That’s a greater than 30:1 return on investment, helping to prove that such lofty acquisitions aren’t crazy. 

It’s also a story of monopoly, or at least of suspected monopolies. Twitter tried to buy Instagram and Systrom claims to have never seen a term sheet with a legitimate offer. Then Facebook swooped in and helped fast-track regulatory approval of the acquisition. With the acquisition of WhatsApp, Facebook owns four of the top 6 social media sites, with Facebook, WhatsApp, Facebook Messenger, and Instagram all over a billion users and YouTube arguably being more of a video site than a true social network. And they tried to buy Snapchat - only the 17th ranked network. 

More than 50 billion photos have been shared through Instagram. That’s about a thousand a second. Many are beautiful...

Steve Jobs returned to Apple in 1996. At the time, most people had a digital camera, like the Canon Elph that was released that year and maybe a digital video camera and probably a computer and about 16% of Americans had a cell phone at the time. Some had a voice recorder, a Diskman, some in the audio world had a four track machine. Many had CD players and maybe even a laser disk player. 

But all of this was changing. Small, cheap microprocessors were leading to more and more digital products. The MP3 was starting to trickle around after being patented in the US that year. Netflix would be founded the next year, as DVDs started to spring up around the world. Ricoh, Polaroid, Sony, and most other electronics makers released digital video cameras. There were early e-readers, personal digital assistants, and even research into digital video recorders that could record your favorite shows so you could watch them when you wanted. In other words we were just waking up to a new, digital lifestyle. But the industries were fragmented. 

Jobs and the team continued the work begun under Gil Amelio to reduce the number of products down from 350 to about a dozen. They made products that were pretty and functional and revitalized Apple. But there was a strategy that had been coming together in their minds and it centered around digital media and the digital lifestyle. We take this for granted today, but mostly because Apple made it ubiquitous. 

Apple saw the iMac as the centerpiece for a whole new strategy. But all this new type of media and the massive files needed a fast bus to carry all those bits. That had been created back in 1986 and slowly improved on one the next few years in the form of IEEE 1394, or Firewire. Apple started it - Toshiba, Sony, Panasonic, Hitachi, and others helped bring it to device they made. Firewire could connect 63 peripherals at 100 megabits, later increased to 200 and then 400 before increasing to 3200. Plenty fast enough to transfer those videos, songs, and whatever else we wanted.

iMovie was the first of the applications that fit into the digital hub strategy. It was originally released in 1999 for the iMac DV, the first iMac to come with built-in firewire. I’d worked on Avid and SGI machines dedicated to video editing at the time but this was the first time I felt like I was actually able to edit video. It was simple, could import video straight from the camera, allow me to drag clips into a timeline and then add some rudimentary effects. Simple, clean, and with a product that looked cool. And here’s the thing, within a year Apple made it free. One catch. You needed a Mac.

This whole Digital Hub Strategy idea was coming together. Now as Steve Jobs would point out in a presentation about the Digital Hub Strategy at Macworld 2001, up to that point, personal computers had mainly been about productivity. Automating first the tasks of scientists, then with the advent of the spreadsheet and databases, moving into automating business and personal functions. A common theme in this podcast is that what drives computing is productivity, telemetry, and quality of life. The telemetry gains came with connecting humanity through the rise of the internet in the later 1990s. But these new digital devices were what was going to improve our quality of life. And for anyone that could get their hands on an iMac they were now doing so. But it still felt like a little bit of a closed ecosystem. 

Apple released a tool for making DVDs in 2001 for the Mac G4, which came with a SuperDrive, or Apple’s version of an optical drive that could read and write CDs and DVDs. iDVD gave us the ability to add menus, slideshows (later easily imported as Keynote presentations when that was released in 2003), images as backgrounds, and more. Now we could take those videos we made and make DVDs that we could pop into our DVD player and watch. Families all over the world could make their vacation look a little less like a bunch of kids fighting and a lot more like bliss. And for anyone that needed more, Apple had DVD Studio Pro - which many a film studio used to make the menus for movies for years.

They knew video was going to be a thing because going back to the 90s, Jobs had tried to get Adobe to release Premiere for the iMac. But they’d turned him down, something he’d never forget. Instead, Jobs was able to sway Randy Ubillos to bring a product that a Macromedia board member had convinced him to work on called Key Grip, which they’d renamed to Final Cut. Apple acquired the source code and development team and released it as Final Cut Pro in 1999. And iMovie for the consumer and Final Cut Pro for the professional turned out to be a home run. But another piece of the puzzle was coming together at about the same time.

Jeff Robbin, Bill Kincaid, and Dave Heller built a tool called SoundJam in 1998. They had worked on the failed Copeland project to build a new OS at Apple and afterwards, Robbin made a great old tool (that we might need again with the way extensions are going) called Conflict Catcher while Kincaid worked on the drivers for a MP3 player called the Diamond Rio. He saw these cool new MP3 things and tools like Winamp, which had been released in 1997, so decided to meet back up with Robbin for a new tool, which they called SoundJam and sold for $50. 

Just so happens that I’ve never met anyone at Apple that didn’t love music. Going back to Jobs and Wozniak. So of course they would want to do something in digital music. So in 2000, Apple acquired SoundJam and the team immediately got to work stripping out features that were unnecessary. They wanted a simple aesthetic. iMovie-esque, brushed metal, easy to use. That product was released in 2001 as iTunes.

iTunes didn’t change the way we consumed music.That revolution was already underway.  And that team didn’t just add brushed metal to the rest of the operating system. It had begun with QuickTime in 1991 but it was iTunes through SoundJam that had sparked brushed metal. 

SoundJam gave the Mac music visualizers as well. You know, those visuals on the screen that were generated by sound waves from music we were listening to. And while we didn’t know it yet, would be the end of software coming in physical boxes. But something else big. There was another device coming in the digital hub strategy. iTunes became the de facto tool used to manage what songs would go on the iPod, released in 2001 as well. That’s worthy of its own episode which we’ll do soon. 

You see, another aspect about SoundJam is that users could rip music off of CDs and into MP3s. The deep engineering work done to get the codec into the system survives here and there in the form of codecs accessible using APIs in the OS. And when combined with spotlight to find music it all became more powerful to build playlists, embed metadata, and listen more insightfully to growing music libraries. But Apple didn’t want to just allow people to rip, find, sort, and listen to music. They also wanted to enable users to create music. So in 2002, Apple also acquired a company called Emagic. Emagic would become Logic Pro and Gerhard Lengeling would in 2004 release a much simpler audio engineering tool called Garage Band. 

Digital video and video cameras were one thing. But cheap digital point and shoot cameras were everwhere all of a sudden. iPhoto was the next tool in the strategy, dropping in 2002 Here, we got a tool that could import all those photos from our cameras into a single library. Now called Photos, Apple gave us a taste of the machine learning to come by automatically finding faces in photos so we could easily make albums. Special services popped up to print books of our favorite photos. At the time most cameras had their own software to manage photos that had been developed as an after-thought. iPhoto was easy, worked with most cameras, and was very much not an after-thought. 

Keynote came in 2003, making it easy to drop photos into a presentation and maybe even iDVD. Anyone who has seen a Steve Jobs presentation understands why Keynote had to happen and if you look at the difference between many a Power Point and Keynote presentation it makes sense why it’s in a way a bridge between the making work better and doing so in ways we made home better. 

That was the same year that Apple released the iTunes Music Store. This seemed like the final step in a move to get songs onto devices. Here, Jobs worked with music company executives to be able to sell music through iTunes - a strategy that would evolve over time to include podcasts, which the moves effectively created, news, and even apps - as explored on the episode on the App Store. And ushering in an era of creative single-purpose apps that drove down the cost and made so much functionality approachable for so many. 

iTunes, iPhoto, and iMovie were made to live together in a consumer ecosystem. So in 2003, Apple reached that point in the digital hub strategy where they were able to take our digital life and wrap them up in a pretty bow. They called that product iLife - which was more a bundle of these services, along with iDVD and Garage Band. Now these apps are free but at the time the bundle would set you back a nice, easy, approachable $49. 

All this content creation from the consumer to the prosumer to the professional workgroup meant we needed more and more storage. According to the codec, we could be running at hundreds of megabytes per second of content. So Apple licensed the StorNext File System in 2004 to rescue a company called ADIC and release a 64-bit clustered file system over fibre channel. Suddenly all that new high end creative content could be shared in larger and larger environments. We could finally have someone cutting a movie in Final Cut then hand it off to someone else to cut without unplugging a firewire drive to do it. Professional workflows in a pure-Apple ecosystem were a thing. 

Now you just needed a way to distribute all this content. So iWeb in 2004, which allowed us to build websites quickly and bring all this creative content in. Sites could be hosted on MobileMe or files uploaded to a web host via FTP. Apple had dabbled in web services since the 80s with AppleLink then eWorld then iTools, .Mac, and MobileMe, the culmination of the evolutions of these services now referred to as iCloud. 

And iCloud now syncs documents and more. Pages came in 2005, Numbers came in 2007, and they were bundled with Keynote to become Apple iWork, allowing for a competitor of sorts to Microsoft Office. Later made free and ported to iOS as well. iCloud is a half-hearted attempt at keeping these synchronized between all of our devices. 

Apple had been attacking the creative space from the bottom with the tools in iLife but at the top as well. Competing with tools like Avid’s Media Composer, which had been around for the Mac going back to 1989, Apple bundled the professional video products into a single suite called Final Cut Studio. Here, Final Cut Pro, Motion, DVD Studio Pro, Soundtrack Pro, Color (obtained when Apple acquired SiliconColor and renamed it from FinalTouch), Compressor, Cinema Tools, and Qmaster for distributing the processing power for the above tools came in one big old box. iMovie and Garage Band for the consumer market and Final Cut Studio and Logic for the prosumer to professional market. And suddenly I was running around the world deploying Xsan’s into video shops, corporate taking head editing studios, and ad agencies

Another place where this happened was with photos. Aperture was released in 2005 and  offered the professional photographer tools to manage their large collection of images. And that represented the final pieces of the strategy. It continued to evolve and get better over the years. But this was one of the last aspects of the Digital Hub Strategy. 

Because there was a new strategy underway. That’s the year Apple began the development of the iPhone. And this represents a shift in the strategy. Released in 2007, then followed up with the first iPad in 2010, we saw a shift from the growth of new products in the digital hub strategy to migrating them to the mobile platforms, making them stand-alone apps that could be sold on App Stores, integrated with iCloud, and killing off those that appealed to more specific needs in higher-end creative environments, like Aperture, which went ended in 2014, and integrating some into other products, like Color becoming a part of Final Cut Pro. But the income from those products has now been eclipsed by mobile devices. Because when we see the returns from one strategy begin to crest - you know, like when the entire creative industry loves you, it’s time to move to another, bolder strategy. And that mobile strategy opened our eyes to always online (or frequently online) synchronization between products and integration with products, like we get with Handoff and other technologies today. 

In 2009 Apple acquired a company called Lala, which would later be added to iCloud - but the impact to the Digital Hub Strategy was that it paved the way for iTunes Match, a  cloud service that allowed for syncing music from a local library to other Apple devices. It was a subscription and more of a stop-gap for moving people to a subscription to license music than a lasting stand-alone product. And other acquisitions would come over time and get woven in, such as Redmatia, Beats, and Swell. 

Steve Jobs said exactly what Apple was going to do in 2001. In one of the most impressive implementations of a strategy, Apple had slowly introduced quality products that tactically ushered in a digital lifestyle since the late 90s and over the next few years. iMovie, iPhoto, iTunes, iDVD, iLife, and in a sign of the changing times - iPod, iPhone, iCloud. To signal the end of that era because it was by then ubiquitous. - then came the iPad. And the professional apps won over the creative industries. Until the strategy had been played out and Apple began laying the groundwork for the next strategy in 2005. 

That mobile revolution was built in part on the creative influences of Apple. Tools that came after, like Instagram, made it even easier to take great photos, connect with friends in a way iWeb couldn’t - because we got to the point where “there’s an app for that”. And as the tools weren’t needed, Apple cancelled some one-by-one, or even let Adobe Premiere eclipse Final Cut in many ways. Because you know, sales of the iMac DV were enough to warrant building the product on the Apple platform and eventually Adobe decided to do that. Apple built many of these because there was a need and there weren’t great alternatives. Once there were great alternatives, Apple let those limited quantities of software engineers go work on other things they needed done. Like building frameworks to enable a new generation of engineers to build amazing tools for the platform!

I’ve always considered the release of the iPad to be the end of era where Apple was introducing more and more software. From the increased services on the server platform to tools that do anything and everything. But 2010 is just when we could notice what Jobs was doing. In fact, looking at it, we can easily see that the strategy shifted about 5 years before that. Because Apple was busy ushering in the next revolution in computing. 

So think about this. Take an Apple, a Microsoft, or a Google. The developers of nearly every single operating system we use today. What changes did they put in place 5 years ago that are just coming to fruition today. While the product lifecycles are annual releases now, that doesn’t mean that when they have billions of devices out there that the strategies don’t unfold much, much slower. You see, by peering into the evolutions over the past few years, we can see where they’re taking computing in the next few years. Who did they acquire? What products will they release? What gaps does that create? How can we take those gaps and build products that get in front of them? This is where magic happens. Not when we’re too early like a General Magic was. But when we’re right on time. Unless we help set strategy upstream. Or, is it all chaos and not in the least bit predictable? Feel free to send me your thoughts!

And thank you…

The Whole Earth ‘lectronic Link, or WELL, was started by Stewart Brand and Larry Brilliant in 1985, and is still available at well.com. We did an episode on Stewart Brand: Godfather of the Interwebs and he was a larger than life presence amongst many of the 1980s former hippies that were shaping our digital age. From his assistance producing The Mother Of All Demos to the Whole Earth Catalog inspiring Steve Jobs and many others to his work with Ted Nelson, there’s probably only a few degrees separating him from anyone else in computing. 

Larry Brilliant is another counter-culture hero. He did work as a medical professional for the World Health Organization to eradicate smallpox and came home to teach at the University of Michigan. The University of Michigan had been working on networked conferencing since the 70s when Bob Parnes wrote CONFER, which would be used at Wayne State where Brilliant got his MD. But CONFER was a bit of a resource hog.

PicoSpan was written by Marcus Watts in 1983. Pico is a small text editor in many a UNIX variant and network is network. Why small, well, modems that dialed into bulletin boards were pretty slow back then. 

Marcus worked at NETI, who then bought the rights for PicoSpan to take to market. So Brilliant was the chairman of NETI at the time and approached Brand about starting up a bulletin-board system (BBS). Brilliant proposed NETI would supply the gear and software and that Brand would use his, uh, brand - and Whole Earth following, to fill the ranks. Brand’s non-profit The Point Foundation would own half and NETI would own the other half. 

It became an early online community outside of academia, and an important part of the rise of the splinter-nets and a holdout to the Internet. For a time, at least. 

PicoSpan gave users conferences. These were similar to PLATO Notes files, where a user could create a conversation thread and people could respond. These were (and still are) linear and threaded conversations. Rather than call them Notes like PLATO did, PicSpan referred to them as “conferences” as “online conferencing” was a common term used to describe meeting online for discussions at the time. EIES had been around going back to the 1970s, so Brand had some ideas abut what an online community could be - having used it. Given the sharp drop in the cost of storage there was something new PicoSpan could give people: the posts could last forever. Keep in mind, the Mac still didn’t ship with a hard drive in 1984. But they were on the rise. 

And those bits that were preserved were manifested in words. Brand brought a simple mantra: You Own Your Own Words. This kept the hands of the organization clean and devoid of liability for what was said on The WELL - but also harkened back to an almost libertarian bent that many in technology had at the time. Part of me feels like libertarianism meant something different in that era. But that’s a digression. Whole Earth Review editor Art Kleiner flew up to Michigan to get the specifics drawn up. NETI’s investment had about a quarter million dollar cash value. Brand stayed home and came up with a name. The Whole Earth ‘lectronic Link, or WELL. 

The WELL was not the best technology, even at the time. The VAX was woefully underpowered for as many users as The WELL would grow to, and other services to dial into and have discussions were springing up. But it was one of the most influential of the time. And not because they recreated the extremely influential Whole Earth catalog in digital form like Brilliant wanted, which would have been similar to what Amazon reviews are like now probably. But instead, the draw was the people. 

The community was fostered first by Matthew McClure, the initial director who was a former typesetter for the Whole Earth Catalog. He’d spent 12 years on a commune called The Farm and was just getting back to society. They worked out that they needed to charge $8 a month and another couple bucks an hour to make minimal a profit. 

So McClure worked with NETI to get the Fax up and they created the first conference, General. Kevin Kelly from the Whole Earth Review and Brand would start discussions and Brand mentioned The WELL in some of his writings. A few people joined, and then a few more. 

Others from The Farm would join him. Cliff Figallo, known as Cliff, was user 19 and John Coate, who went by Tex, came in to run marketing. In those first few years they started to build up a base of users.

It started with hackers and journalists, who got free accounts. And from there great thinkers joined up. People like Tom Mandel from Stanford Research Institute, or SRI. He would go on to become the editor of Time Online. His partner Nana. Howard Rheingold, who would go on to write a book called The Virtual Community. And they attracted more. Especially Dead Heads, who helped spread the word across the country during the heyday of the Grateful Dead. 

Plenty of UNIX hackers also joined. After all, the community was finding a nexus in the Bay Area at the time. They added email in 1987 and it was one of those places you could get on at least one part of this whole new internet thing. And need help with your modem? There’s a conference for that. Need to talk about calling your birth mom who you’ve never met because you were adopted? There’s a conference for that as well. Want to talk sexuality with a minister? Yup, there’s a community for that. It was one of the first times that anyone could just reach out and talk to people. And the community that was forming also met in person from time to time at office parties, furthering the cohesion. 

We take Facebook groups, Slack channels, and message boards for granted today. We can be us or make up a whole new version of us. We can be anonymous and just there to stir up conflict like on 4Chan or we can network with people in our industry like on LinkedIn. We can chat real time, which is similar to the Send option on The WELL. Or we can post threaded responses to other comments. But the social norms and trends were proving as true then as now. Communities grow, they fragment, people create problems, people come, people go. And sometimes, as we grow, we inspire. 

Those early adopters of The WELL inspired Craig Newmark of Craigslist to the growing power of the Internet. And future developers of Apple. Hippies versus nerds but not really versus, but coming to terms with going from “computers are part of the military industrial complex keeping us down” philosophy to more of a free libertarian information superhighway that persisted for decades. The thought that the computer would set us free and connect the world into a new nation, as John Perry Barlow would sum up perfectly in “A Declaration of the Independence of Cyberspace”.

By 1990 people like Barlow could make a post on The WELL from Wyoming and have Mitch Kapor, the founder of Lotus, makers of Lotus 1-2-3 show up at his house after reading the post - and they could join forces with the 5th employee of Sun Microsystems and GNU Debugging Cypherpunk John Gilmore to found the Electronic Foundation. And as a sign of the times that’s the same year The WELL got fully connected to the Internet.

By 1991 they had grown to 5,000 subscribers. That was the year Bruce Katz bought NETI’s half of the well for $175,000. Katz had pioneered the casual shoe market, changing the name of his families shoe business to Rockport and selling it to Reebok for over $118 million. 

The WELL had posted a profit a couple of times but by and large was growing slower than competitors. Although I’m not sure any o the members cared about that. It was a smaller community than many others but they could meet in person and they seemed to congeal in ways that other communities didn’t. But they would keep increasing in size over the next few years. In that time Fig replaced himself with Maurice Weitman, or Mo - who had been the first person to sign up for the service. And Tex soon left as well. 

Tex would go to become an early webmaster of The Gate, the community from the San Francisco Chronicle. Fig joined AOL’s GNN and then became director of community at Salon.

But AOL. You see, AOL was founded in the same year. And by 1994 AOL was up to 1.25 million subscribers with over a million logging in every day. CompuServe, Prodigy, Genie, Dephi were on the rise as well. And The WELL had thousands of posts a day by then but was losing money and not growing like the others. But I think the users of the service were just fine with that. The WELL was still growing slowly and yet for many, it was too big. Some of those left. Some stayed. Other communities, like The River, fragmented off. By then, The Point Foundation wanted out so sold their half of The WELL to Katz for $750,000 - leaving Katz as the first full owner of The WELL. 

I mean, they were an influential community because of some of the members, sure, but more because the quality of the discussions. Academics, drugs, and deeply personal information. And they had always complained about figtex or whomever was in charge - you know, the counter-culture is always mad at “The Management.” But Katz was not one of them. He honestly seems to have tried to improve things - but it seems like everything he tried blew up in his face. 

So Katz further alienated the members and fired Mo and brought on Maria Wilhelm, but they still weren’t hitting that hyper-growth, with membership getting up to around 10,000 - but by then AOL was jumping from 5,000,000 to 10,000,000. But again, I’ve not found anyone who felt like The WELL should have been going down that same path. The subscribers at The WELL were looking for an experience of a completely different sort. By 1995 Gail Williams allowed users to create their own topics and the unruly bunch just kinda’ ruled themselves in a way. There was staff and drama and emotions and hurt feelings and outrage and love and kindness and, well, community.

By the late 90s, the buzz word at many a company were all about building communities, and there were indeed plenty of communities growing. But none like The WELL. And given that some of the founders of Salon had been users of The WELL, Salon bought The WELL in 1999 and just kinda’ let it fly under the radar. The influence continued with various journalists as members. 

The web came. And the members of The WELL continued their community. Award winning but a snapshot in time in a way. Living in an increasingly secluded corner of cyberspace, a term that first began life in a present tense on The WELL, if you got it, you got it.

In 2012, after trying to sell The WELL to another company, Salon finally sold The WELL to a group of members who had put together enough money to buy it. And The WELL moved into the current, more modern form of existence.

To quote the site:

Welcome to a gathering that’s like no other. The WELL, launched back in 1985 as the Whole Earth ‘Lectronic Link, continues to provide a cherished watering hole for articulate and playful thinkers from all walks of life.

For more about why conversation is so treasured on The WELL, and why members of the community banded together to buy the site in 2012, check out the story of The WELL.

If you like what you see, join us!

It sounds pretty inviting. And it’s member supported. Like National Public Radio kinda’. In what seems like an antiquated business model, it’s $15 per month to access the community. And make no mistake, it’s a community. 

You Own Your Own Words. If you pay to access a community, you don’t sign the ownership of your words away in a EULA. You don’t sign away rights to sell your data to advertisers along with having ads shown to you in increasing numbers in a hunt for ever more revenue. You own more than your words, you own your experience. You are sovereign. 

This episode doesn’t really have a lot of depth to it. Just as most online forums lack the kind of depth that could be found on the WELL. I am a child of a different generation, I suppose.

Through researching each episode of the podcast, I often read books, conduct interviews (a special thanks to Help A Reporter Out), lurk in conferences, and try to think about the connections, the evolution, and what the most important aspects of each are. There is a great little book from Katie Hafner called The Well: A Story Of Love, Death, & Real Life. I recommend it. There’s also Howard Rheingold’s The Virtual Community and John Seabrook’s Deeper: Adventures on the Net. Oh, and From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, And the Rise of Digital Utopianism from Fred Turner and Siberia by Douglas Rushkoff. At a minimum, I recommend reading Katie Hafner’s wired article and then her most excellent book!

Oh, and to hear about other ways the 60s Counterculture helped to shape the burgeoning technology industry, check out What the Dormouse Said by John Markoff. 

And The WELL comes up in nearly every book as one of the early commercial digital communities. It’s been written about in Wired, in The Atlantic, makes appearances in books like Broad Band by Claire Evans, and The Internet A Historical Encyclopedia. 

The business models out there to build and run  and grow a company have seemingly been reduced to a select few. Practically every online community has become free with advertising and data being the currency we parlay in exchange for a sense of engagement with others. 

As network effects set in and billionaires are created, others own our words. They think the lifestyle business is quaint - that if you aren’t outgrowing a market segment that you are shrinking. And a subscription site that charges a monthly access fee to cgi code with a user experience that predates the UX field on the outside might affirm that philosophy -especially since anyone can see your real name. But if we look deeper we see a far greater truth: that these barriers keep a small corner of cyberspace special - free from Russian troll farms and election stealing and spam bots. And without those distractions we find true engagement. We find real connections that go past the surface. We find depth. It’s not lost after all. 

Thank you for being part of this little community. We are so lucky to have you. Have a great day.

Tesla

Most early stage startups have, and so seemingly need, heroic efforts from brilliant innovators working long hours to accomplish impossible goals. Tesla certainly had plenty of these as an early stage startup and continues to - as do the other Elon Musk startups. He seems to truly understand and embrace that early stage startup world and those around him seem to as well.

As a company grows we have to trade those sprints of heroic output for steady streams of ideas and quality. We have to put development on an assembly line. Toyota famously put the ideas of Deming and other post-World War II process experts into their production lines and reaped big rewards - becoming the top car manufacturer in the process. 

Not since the Ford Model T birthed the assembly line had auto makers seen as large an increase in productivity. And make no mistake, technology innovation is about productivity increases. We forget this sometimes when young, innovative startups come along claiming to disrupt industries. Many of those do, backed by seemingly endless amounts of cash to get them to the next level in growth. And the story of Tesla is as much about productivity in production as it is about innovative and disruptive ideas. And the story is as much about a cult of personality as it is about massive valuations and quality manufacturing. 

The reason we’re covering Tesla in a podcast about the history of computers is at the heart of it, it’s a story about the startup culture clashing head-on with decades-old know-how in an established industry. This happens with nearly every new company: there are new ideas, an organization is formed to support the new ideas, and as the organization grows, the innovators are forced to come to terms with the fact that they have greatly oversimplified the world. 

Tesla realized this. Just as Paypal had realized it before. But it took a long time to get there. The journey began much further back. Rather than start with the discovery of the battery or the electric motor, let’s start with the GM Impact. It was initially shown off at the 1990 LA Auto Show. It’s important because Alan Cocconi was able to help take some of what GM learned from the 1987 World Solar Challenge race using the Sunraycer and start putting it into a car that they could roll off the assembly lines in the thousands. 

They needed to do this because the California Air Resources Board, or CARB, was about to require fleets to go 2% zero-emission, or powered by something other than fossil fuels, by 1998 with rates increasing every few years after that. And suddenly there was a rush to develop electric vehicles. GM may have decided that the Impact, later called the EV1, proved that the electric car just wasn’t ready for prime time, but the R&D was accelerating faster than it ever had before then. 

That was the same year that NuvoMedia was purchased by Gemstar-TVGuide International for $187 million. They’d made the Rocket eBook e-reader. That’s important because the co-founders of that company were Martin Eberhard, a University of Illinois Champaign Urbana grad, and Marc Tarpenning.

Alan Cocconi was able to take what he’d learned and form a new company, called AC Propulsion. He was able to put together a talented group and they built a couple of different cars, including the tZero. Many of the ideas that went into the first Tesla car came from the tZero, and Eberhard and Tarpenning tried to get Tom Gage and Cocconi to take their tZero into production. The tZero was a sleek sportscar that began life powered by lead-acid batteries that could get from zero to 60 in just over four seconds and run for 80-100 miles. They used similar regenerative braking that can be found in the Prius (to oversimplify it) and the car took about an hour to charge. The cars were made by hand and cost about $80,000 each. They had other projects so couldn’t focus on trying to mass produce the car. As Tesla would learn later, that takes a long time, focus, and a quality manufacturing process. 

While we think of Elon Musk as synonymous with Tesla Motors, it didn’t start that way. Tesla Motors was started in 2003 by Eberhard, who would serve as Tesla’s first chief executive officer (CEO) and Tarpenning, who would become the first chief financial officer (CFO), when AC Propulsion declined to take that tZero to market. Funding for the company was obtained from Elon Musk and others, but they weren’t that involved at first. Other than the instigation and support. It was a small shop, with a mission - to develop an electric car that could be mass produced. 

The good folks at AC Propulsion gave Eberhard and Tarpenning test drives in the tZero, and even agreed to license their EV Power System and reductive charging patents. And so Tesla would develop a motor and work on their own power train so as not to rely on the patents from AC Propulsion over time. But the opening Eberhard saw was in those batteries. The idea was to power a car with battery packs made of lithium ion cells, similar to those used in laptops and of course the Rocket eBooks that NuvoMedia had made before they sold the company. They would need funding though. So Gage was kind enough to put them in touch with a guy who’d just made a boatload of money and had also recommended commercializing the car - Elon Musk. 

This guy Musk, he’d started a space company in 2002. Not many people do that. And they’d been trying to buy ICBMs in Russia and recruiting rocket scientists. Wild. But hey, everyone used PayPal, where he’d made his money. So cool. Especially since Eberhard and Tarpenning had their own successful exit.

Musk signed on to provide $6.5 million in the Tesla Series A and they brought in another $1m to bring it to $7.5 million. Musk became the chairman of the board and they expanded to include Ian Wright during the fundraising and J.B. Straubel in 2004. Those five are considered the founding team of Tesla. 

They got to work building up a team to build a high-end electric sports car. Why? Because that’s one part of the Secret Tesla Motors Master Plan. That’s the title of a blog post Musk wrote in 2006.  You see, they were going to build a high-end hundred thousand dollar plus car. But the goal was to develop mass market electric vehicles that anyone could afford. They unveiled the prototype in 2006, selling out the first hundred in three weeks.

Meanwhile, Elon Musk’s cousins, Peter and Lyndon Rive started a company called SolarCity in 2006, which Musk also funded. They merged with Tesla in 2016 to provide solar roofs and other solar options for Tesla cars and charging stations. SolarCity, as with Tesla, was able to capitalize on government subsidies and growing to become the third most solar installations in homes with just a little over 6 percent of the market share. 

But we’re still in 2006. You see, they won a bunch of awards, got a lot of attention - now it was time to switch to general production. They worked with Lotus, a maker of beautiful cars that make up for issues with quality production in status, beauty, and luxury. They started with the Lotus Elise, increased the wheelbase and bolstered the chassis so it could hold the weight of the batteries. And they used a carbon fiber composite for the body to bring the weight back down. 

The process was slower than it seems anyone thought it would be. Everyone was working long hours, and they were burning through cash. By 2007, Eberhard stepped down as CEO. Michael Marks came in to run the company and later that year Ze’ev Drori was made CEO - he has been given the credit by many for tighting things up so they could get to the point that they could ship the Roadster. Tarpenning left in 2008. As did others, but the brain drain didn’t seem all that bad as they were able to ship their first car in 2008, after ten engineering prototypes.

The Roadster finally shipped in 2008, with the first car going to Musk. It could go for 245 miles a charge. 0 to 60 in less than 4 seconds. A sleek design language. But it was over $100,000. They were in inspiration and there was a buzz everywhere. The showmanship of Musk paired with the beautiful cars and the elites that bought them drew a lot of attention. As did the $1 million in revenue profit they earned in July of 2009, off 109 cars shipped. 

But again, burning through cash. They sold 10% of the company to Daimler AG and took a $465 million loan from the US Department of Energy. They were now almost too big to fail. 

They hit 1,000 cars sold in early 2010. They opened up to orders in Canada. They were growing. But they were still burning through cash. It was time to raise some serious capital. So Elon Musk took over as CEO, cut a quarter of the staff, and Tesla filed for an IPO in 2010, raising over $200 million. But there was something special in that S-1 (as there often is when a company opens the books to go public): They would cease production of the Roadster making way for the next big product.

Tesla cancelled the Roadster in 2012. By then they’d sold just shy of 2,500 Roadsters and been thinking through and developing the next thing, which they’d shown a prototype of in 2011. The Model S started at $76,000 and went into production in 2012. It could go 300 miles, was a beautiful car, came with a flashy tablet-inspired 17 inch display screen on the inside to replace buttons. It was like driving an iPad. Every time I’ve seen another GPS since using the one in a Model S, I feel like I’ve gotten in a time machine and gone back a decade. 

But it had been announced in 2007to ship in 2009. And then the ship date dropped back to 2011 and 2012. Let’s call that optimism and scope creep. But Tesla has always eventually gotten there. Even if the price goes up. Such is the lifecycle of all technology. More features, more cost. There are multiple embedded Ubuntu operating systems controlling various parts of car, connected on a network in the car. It’s a modern marvel and Tesla was rewarded with tons of awards and, well, sales.

Charging a car that runs on batteries is a thing. So Tesla released the Superchargers in 2012, shipping 7 that year and growing slowly until now shipping over 2,500 per quarter. Musk took some hits because it took longer than anticipated to ship them, then to increase production, then to add solar. But at this point, many are solar and I keep seeing panels popping up above the cars to provide shade and offset other forms of powering the chargers. The more ubiquitous chargers become, the more accepting people will be of the cars.

Tesla needed to produce products faster. The Nevada Gigafactory was begun in 2013, to mass produce battery packs and components. Here’s one of the many reason for the high-flying valuation Tesla enjoys: it would take dozens if not a hundred factories like this to transition to sustanable energy sources. But it started with a co-investment between Tesla and Panasonic, with the two dumping billions into building a truly modern factory that’s now pumping out close tot he goal set back in 2014. As need increased, Gigafactories started to crop up with Gigafactory 5 being built to supposedly go into production in 2021 to build the Semi, Cybertruck (which should begin production in 2021) and Model Y. Musk first mentioned the truck in 2012 and projected a 2018 or 2019 start time for production. Close enough. 

Another aspect of all that software is that they can get updates over the air. Tesla released Autopilot in 2014. Similar to other attempts to slowly push towards self-driving cars, Autopilot requires the driver to stay alert, but can take on a lot of the driving - staying within the lines on the freeway, parking itself, traffic-aware cruise control, and navigation. But it’s still the early days for self-driving cars and while we make think that because the number of integrated circuits doubles every year that it paves the way to pretty much anything, no machine learning project I’ve ever seen has gone as fast as we want because it takes years to build the appropriate algorithms and then rethink industries based on the impact of those. But Tesla, Google through Waymo, and  many others have been working on it for a long time (hundreds of years in startup-land) and it continues to evolve.

By 2015, Tesla had sold over 100,000 cars in the life of the company. They released the Model X that year, also in 2015. This was their first chance to harness the power of the platform - which in the auto industry is when there are multiple cars of similar size and build. Franz von Holzhausen designed it and it is a beautiful car, with falcon-wing doors, up to a 370 mile range on the battery and again with the Autopilot. But harnessing the power of the platform was a challenge. You see, with a platform of cars you want most of the parts to be shared - the differences are often mostly cosmetic. But the Model X only shared a little less than a third of the parts of the Model S. 

But it’s yet another technological marvel, with All Wheel Drive as an option, that beautiful screen, and check this out - a towing capacity of 5,000 pounds - for an electric automobile!

By the end of 2016, they’d sold over 25,000. To a larger automaker that might seem like nothing, but they’d sell over 10,000 in every quarter after that. And it would also become the platform for a mini-bus. Because why not. So they’d gone lateral in the secret plan but it was time to get back at it. This is where the Model 3 comes in. 

The Model 3 was released in 2017 and is now the best-selling electric car in the history of the electric car. The Model 3 was first shown off in 2016 and within a week, Tesla had taken over 300,000 reservations. Everyone I talked to seemed to want in on an electric car that came in at $35,000. This was the secret plan. That $35,000 model wouldn’t be available until 2019 but they started cranking them out. Production was a challenge with Musk famously claiming Tesla was in “Production Hell” and sleeping on an air mattress at the factory to oversee the many bottlenecks that came. Musk thought they could introduce more robotics than they could and so they’ slowly increased production to first a few hundred per week then a few thousand until finally almost hitting that half a million mark in 2020.

This required buying Grohmann Engineering in 2017, now called Tesla Advanced Automation Germany - pumping billions into production. But Tesla added the Model Y in 2020, launching a crossover on the Model 3 platform, producing over 450,000 of them. And then of course they decided to the Tesla Semi, selling for between $150,000 and $200,000. And what’s better than a Supercharger to charge those things? A Megacharger. As is often the case with ambitious projects at Tesla, it didn’t ship in 2020 as projected but is now supposed to ship, um, later.

Tesla also changed their name from Tesla Motors to Tesla, Inc. And if you check out their website today, solar roofs and solar panels share the top bar with the Models S, 3, X, and Y. SolarCity and batteries, right?

Big money brings big attention. Some good. Some bad. Some warranted. Some not. Musk’s online and sometimes nerd-rockstar persona was one of the most valuable assets at Tesla - at least in the fundraising, stock pumping popularity contest that is the startup world. But on August 7, 2018, he tweeted “Am considering taking Tesla private at $420. Funding secured.” The SEC would sue him for that, causing him to step down as chairman for a time and limit his Twitter account. But hey, the stock jumped up for a bit. 

But Tesla kept keeping on, slowly improving things and finally hit about the half million cars per year mark in 2020. Producing cars has been about quality for a long time. And it needs to be with people zipping around as fast as we drive - especially on modern freeways. Small batches of cars are fairly straight-forward. Although I could never build one. 

The electric car is good for the environment, but the cost to offset carbon for Tesla is still far greater than, I don’t know, making a home more energy efficient. But the improvements in the technology continue to increase rapidly with all this money and focus being put on them. And the innovative designs that Tesla has deployed has inspired others, which often coincides with the rethinking of entire industries. 

But there are tons of other reasons to want electric cars. The average automobile manufactured these days has about 30,000 parts. Teslas have less than a third of that. One hopes that will some day be seen in faster and higher quality production. 

They managed to go from producing just over 18,000 cars in 2015 to over 26,000 in 2016 to over 50,000 in 2017 to the 190,000s in 2018 and 2019 to a whopping 293,000 in 2020. But they sold nearly 500,000 cars in 2020 and seem to be growing at a fantastic clip. Here’s the thing, though. Ford exceeded half a million cars in 1916. It took Henry Ford from 1901 to 1911 to get to producing 34,000 cars a year but only 5 more years to hit half a million. I read a lot of good and a lot of bad things about Tesla. Ford currently has a little over a 46 and a half billion dollar market cap. Tesla’s crested at nearly $850 billion and has since dropped to just shy of 600.

Around 64 million cars are sold each year. Volkswagen is the top, followed by Toyota. Combined, they are worth less than Tesla on paper despite selling over 20 times the number of cars. If Tesla was moving faster, that might make more sense. But here’s the thing. Tesla is about to get besieged by competitors at every side. Nearly every category of car has an electric alternative with Audi, BMW, Volvo, and Mercedes releasing cars at the higher ends and on multiple platforms. Other manufacturers are releasing cars to compete with the upper and lower tiers of each model Tesla has made available. And miniature cars, scooters, bikes, air taxis, and other modes of transportation are causing us to rethink the car. And multi-tenancy of automobiles using ride sharing apps and the potential that self driving cars can have on that are causing us to rethink automobile ownership. 

All of this will lead some to rethink that valuation Tesla enjoyed. But watching the moves Tesla makes and scratching my head over some certainly makes me think to never under, or over-estimate Tesla or Musk. I don’t want anything to do with Tesla Stock. Far too weird for me to grok. But I do wish them the best. I highly doubt the state of electric vehicles and the coming generational shifts in transportation in general would be where they are today if Tesla hadn’t done all the good and bad that they’ve done. They deserve a place in the history books when we start looking back at the massive shifts to come. In the meantime, I’l’ just call this episode part 1 and wait to see if Tesla matches Ford production levels some day, crashes and burns, gets acquired by another company, or who knows, packs up and heads to Mars. 

We can look around at distributed banking, crypto-currencies, Special Purpose Acquisition Companies, and so many other innovative business strategies as new and exciting and innovative. And they are. But paving the way for them was simplifying online payments to what I’ve heard Elon Musk call just some rows in a database. 

Peter Thiel, Max Levchin, and former Netscaper Luke Nosek had this idea in 1998. Levchin and Nosek has worked together on a startup called SponsorNet New Media while at the University of Illinois Champagne-Urbana where PLATO and Mosaic had come out of. And SponsorNet was supposed to sell online banner ads but would instead be one of four failed startups before zeroing in on this new thing, where they would enable digital payments for businesses and make it simple for consumers to buy things online. They called the company Confinity and setup shop in beautiful Mountain View, California.

It was an era when a number of organizations were doing things in taking payments online that weren’t so great. Companies would cache credit card numbers on sites, many had weak security, and the rush to sell everything  in the bubble forming around dot-coms fueled a knack for speed over security, privacy, or even reliability. 

Confinity would store the private information in its own banking vaults, keep it secure, and provide access to vendors - taking a small charge per-transaction. Where large companies had been able to build systems to take online payments, now small businesses and emerging online stores could compete with the big boys. Thiel and Levchin had hit on something when they launched a service called PayPal, to provide a digital wallet and enable online transactions. They even accepted venture funding, taking $3 million from banks like Deutsche Bank over Palm Pilots. One of those funders was Nokia, investing in PayPal expanding into digital services for the growing mobile commerce market. And by 2000 they were up to 1,000,000 users. 

They saw an opening to make a purchase from a browser on a phone or a browser or app on a cell phone using one of those new smart phone ideas. And they were all rewarded with over 10 million people using the site in just three short years, processing a whopping $3 billion in transactions. 

Now this was the heart of the dot-com bubble. In that time, Elon Musk managed to sell his early startup Zip2, which made city guides on the early internet, to Compaq for around $300 million, pocketing $22 million for himself. He parlayed that payday into X.com, another online payment company. X.com exploded to over 200,000 customers quickly and as happens frequently with rapid acceleration, a young Musk found himself with a new boss - Bill Harris, the former CEO of Intuit. 

And they helped invent many of the ways we do business online at that time. One of my favorite of Levchin’s contributions to computing, the Gausebeck-Levchin test, is one of the earliest implementations of what we now call CAPTCHA - you know when you’re shown a series of letters and asked to type them in to eliminate bots. 

Harris helped the investors de-risk by merging with Confinity to form X.com. Peter Thiel and Elon Musk are larger than life minds in Silicon Valley. The two were substantially different. Musk took on the CEO role but Musk and Thiel were at heads. Thiel believed in a Linux ecosystem and Musk believed in a Windows ecosystem. Thiel wanted to focus on money transfers, similar to the PayPal of today. Given that those were just rows in a database, it was natural that that kind of business would become a red ocean and indeed today there are dozens of organizations focused on it. But Paypal remains the largest. So Musk also wanted to become a full online banking system - much more ambitious. Ultimately Thiel won and assumed the title of CEO. 

They remained a money transmitter and not a full bank. This means they keep funds that have been sent and not picked up, in an interest bearing account at a bank. 

They renamed the company to PayPal in 2001 and focused on taking the company public, with an IPO as PYPL in 2002. The stock shot up 50% in the first day of trading, closing at $20 per share. Yet another example of the survivors of the dot com bubble increasing the magnitude of valuations. By then, most eBay transactions accepted PayPal and seeing an opportunity, eBay acquired PayPal for $1.5 billion later in 2002. Suddenly PayPal was the default option for closed auctions and would continue their meteoric rise. Musk is widely reported to have made almost $200 million when eBay bought PayPal and Thiel is reported to have made over $50 million. 

Under eBay, PayPal would grow and as with most companies that IPO, see a red ocean form in their space. But they brought in people like Ken Howery, who serve as the VP of corporate development, would later cofound investment firm Founders Fund with Thiel, and then become the US Ambassador to Sweden under Trump. And he’s the first of what’s called the PayPal Mafia, a couple dozen extremely influential personalities in tech. 

By 2003, PayPal had become the largest payment processor for gambling websites. Yet they walked away from that business to avoid some of the complicated regulations until various countries that could verify a license for online gambling venues. 

In 2006 they added security keys and moved to sending codes to phones for a second factor of security validation. In 2008 they bought Fraud Sciences to gain access to better online risk management tools and Bill Me Later.

As the company grew, they setup a company in the UK and began doing business internationally. They moved their EU presence to Luxembourg 2007. They’ve often found themselves embroiled in politics, blocking the any political financing accounts, Alex Jones show InfoWars, and one of the more challenging for them, WikiLeaks in 2010. This led to them being attacked by members of Anonymous for a series of denial of service attacks that brought the PayPal site down.

OK, so that early CAPTCHA was just one way PayPal was keeping us secure. It turns out that moving money is complicated, even the $3 you paid for that special Golden Girls t-shirt you bought for a steal on eBay. For example, US States require reporting certain transactions, some countries require actual government approval to move money internationally, some require a data center in the country, like Turkey. So on a case-by-case basis PayPal has had to decide if it’s worth it to increase the complexity of the code and spend precious development cycles to support a given country. In some cases, they can step in and, for example, connect the Baidu wallet to PayPal merchants in support of connecting China to PayPal. 

They were spun back out of eBay in 2014 and acquired Xoom for $1 billion in 2015, iZettle for $2.2 billion, who also does point of sales systems. And surprisingly they bought online coupon aggregator Honey for $4B in 2019. But their best acquisition to many would be tiny app payment processor Venmo for $26 million. I say this because a friend claimed they prefer that to PayPal because they like the “little guy.”

Out of nowhere, just a little more than 20 years ago, the founders of PayPal and they and a number of their initial employees willed a now Fortune 500 company into existence. While they were growing, they had to learn about and understand so many capital markets and regulations. This sometimes showed them how they could better invest money. And many of those early employees went on to have substantial impacts in technology. That brain drain helped fuel the Web 2.0 companies that rose. 

One of the most substantial ways was with the investment activities. Thiel would go on to put $10 million of his money into Clarium Capital Management, a hedge fund, and Palantir, a big data AI company with a focus on the intelligence industry, who now has a $45 billion market cap. And he funded another organization who doesn’t at all use our big private data for anything, called Facebook. He put half a million into Facebook as an angel investor - an investment that has paid back billions. He’s also launched the Founders Fund, Valar Venture, and is a partner at Y Combinator, in capacities where he’s funded everyone from LinkedIn and Airbnb to Stripe to Yelp to Spotify, to SpaceX to Asana and the list goes on and on and on. 

Musk has helped take so many industries online. Why not just apply that startup modality to space - so launched SpaceX and to cars, so helped launch (and backed financially) Tesla and solar power, so launched Solar City and building tunnels so launched The Boring Company. He dabbles in Hyperloops (thus the need for tunnels) and OpenAI and well, whatever he wants. He’s even done cameos in movies like Iron Man. He’s certainly a personality. 

Max Levchin would remain the CTO and then co-found and become the CEO of Affirm, a public fintech company. 

David Sacks was the COO at PayPal and founded Yammer. Roelof Botha is the former CFO at PayPal who became a partner at Sequoia Capital, one of the top venture capital firms. Yishan Wong was an engineering manager at PayPal who became the CEO of Reddit.

Steve Chen left to join Facebook but hooked back up with Jawed Karim for a new project, who he studied computer science at the University of Illinois at Champaign-Urbana with. They were joined by Chad Hurley, who had created the original PayPal logo, to found YouTube. They sold it to Google for $1.65 billion in 2006. Hurley now owns part of the Golden State Warriors, the MLS Los Angeles team, and Leeds United.

Reid Hoffman was another COO at PayPal, who Thiel termed the “firefighter-in-chief” and left to found LinkedIn. After selling LinkedIn to Microsoft for over $26 billion he become a partner at venture capital firm, Greylock Partners. 

Jeremy Stoppelman and Russel Simmons co-founded Yelp with $1 million in funding from Max Levchin, taking the company public in 2011. And the list goes on.

PayPal paved the way for small transactions on the Internet. A playbook repeated in different parts of the sector by the likes of Square, Stripe, Dwolla, Due, and many others - including Apple Pay, Amazon Payments, and Google Wallet. We live in an era now, where practically every industry has been taken online. Heck, even cars. In the next episode we’ll look at just that, exploring the next steps in Elon Musk’s career after leaving PayPal. 

PLATO (Programmed Logic for Automatic Teaching Operations) was an educational computer system that began at the University of Illinois Champaign Urbana in 1960 and ran into the 2010s in various flavors. 

Wait, that’s an oversimplification. PLATO seemed to develop on an island in the corn fields of Champaign Illinois, and sometimes precedes, sometimes symbolizes, and sometimes fast-follows what was happening in computing around the world in those decades.

To put this in perspective - PLATO began on ILLIAC in 1960 - a large classic vacuum tube mainframe. Short for the Illinois Automatic Computer, ILLIAC was built in 1952, around 7 years after ENIAC was first put into production. As with many early mainframe projects PLATO 1 began in response to a military need. We were looking for new ways to educate the masses of veterans using the GI Bill. We had to stretch the reach of college campuses beyond their existing infrastructures.

Computerized testing started with mechanical computing, got digitized with the introduction of Scantron by IBM in 1935, and a number of researchers were looking to improve the consistency of education and bring in new technology to help with quality teaching at scale. The post-World War II boom did this for industry as well. Problem is, following the launch of Sputnik by the USSR in 1957, many felt the US began lagging behind in education. So grant money to explore solutions flowed and CERL was able to capitalize on grants from the US Army, Navy, and Air Force. By 1959, physicists at Illinois began thinking of using that big ILLIAC machine they had access to. Daniel Alpert recruited Don Bitzer to run a project, after false starts with educators around the campus.

Bitzer shipped the first instance of PLATO 1 in 1960. They used a television to show images, stored images in Raytheon tubes, and a make-shift keyboard designed for PLATO so users could provide input in interactive menus and navigate. They experimented with slide projectors when they realized the tubes weren’t all that reliable and figured out how to do rudimentary time sharing, expanding to a second concurrent terminal with the release of PLATO II in 1961.

Bitzer was a classic Midwestern tinkerer. He solicited help from local clubs, faculty, high school students, and wherever he could cut a corner to build more cool stuff, he was happy to move money and resources to other important parts of the system. This was the age of hackers and they hacked away. He inspired but also allowed people to follow their own passions. Innovation must be decentralized to succeed.

They created an organization to support PLATO in 1966 - as part of the Graduate College. CERL stands for the Computer-Based Education Research Laboratory (CERL). Based on early successes, they got more and more funding at CERL. Now that we were beyond a 1:1 ratio of users to computers and officially into Time Sharing - it was time for Plato III.

There were a number of enhancements in PLATO III. For starters, the system was moved to a CDC 1604 that CEO of Control Data William Norris donated to the cause - and expanded to allow for 20 terminals. But it was complicated to create new content and the team realized that content would be what drove adoption. This was true with applications during the personal computer revolution and then apps in the era of the App Store as well. One of many lessons learned first on PLATO. 

Content was in the form of applications that they referred to as lessons. It was a teaching environment, after all. They emulated the ILLIAC for existing content but needed more. People were compiling applications in a complicated language. Professors had day jobs and needed a simpler way to build content. So Paul Tenczar on the team came up with a language specifically tailored to creating lessons. Similar in some ways to BASIC, it was called TUTOR. 

Tenczar released the manual for TUTOR in 1969 and with an easier way of getting content out, there was an explosion in new lessons, and new features and ideas would flourish. We would see simulations, games, and courseware that would lead to a revolution in ideas. In a revolutionary time.

The number of hours logged by students and course authors steadily increased. The team became ever more ambitious. And they met that ambition with lots of impressive achievements.

Now that they were comfortable with the CDC 1604 they new that the new content needed more firepower. CERL negotiated a contract with Control Data Corporation (CDC) in 1970 to provide equipment and financial support for PLATO. Here they ended up with a CDC Cyber 6400 mainframe, which became the foundation of the next iteration of PLATO, PLATO IV.

PLATO IV  was a huge leap forward on many levels. They had TUTOR but with more resources could produce even more interactive content and capabilities. The terminals were expensive and not so scalable. So in preparation for potentially thousands of terminals in PLATO IV they decided to develop their own. 

This might seem a bit space age for the early 1970s, but what they developed was a touch flat panel plasma display. It was 512x512 and rendered 60 lines per second at 1260 baud. The plasma had memory in it, which was made possible by the fact that they weren’t converting digital signals to analog, as is done on CRTs. Instead, it was a fully digital experience. The flat panel used infrared to see where a user was touching, allowing users some of their first exposure to touch screens. This was a grid of 16 by 16 rather than 512 but that was more than enough to take them over the next decade.

The system could render basic bitmaps but some lessons needed more rich, what we might call today, multimedia. The Raytheon tubes used in previous systems proved to be more of a CRT technology but also had plenty of drawbacks. So for newer machines they also included a microfiche machine that produced images onto the back of the screen. 

The terminals were a leap forward. There were other programs going on at about the same time during the innovative bursts of PLATO, like the Dartmouth Time Sharing System, or DTSS, project that gave us BASIC instead of TUTOR. Some of these systems also had rudimentary forms of forums, such as EIES and the emerging BBS Usenet culture that began in 1973. But PLATO represented a unique look into the splintered networks of the Time Sharing age.

Combined with the innovative lessons and newfound collaborative capabilities the PLATO team was about to bring about something special. Or lots of somethings that culminated in more. One of those was Notes.

Talkomatic was created by Doug Brown and David R. Woolley in 1973. Tenczar asked the 17-year old Woolley to write a tool that would allow users to report bugs with the system. There was a notes file that people could just delete. So they added the ability for a user to automatically get tagged in another file when updating and store notes. He expanded it to allow for 63 responses per note and when opened, it showed the most recent notes. People came up with other features and so a menu was driven, providing access to System Announcements, Help Notes, and General Notes. 

But the notes were just the start. In 1973, seeing the need for even more ways to communicate with other people using the system, Doug Brown wrote a prototype for Talkomatic. Talkomatic was a chat program that showed when people were typing. Woolley helped Brown and they added channels with up to five people per channel. Others could watch the chat as well. It would be expanded and officially supported as a tool called Term-Talk. That was entered by using the TERM key on a console, which allowed for a conversation between two people. You could TERM, or chat a person, and then they could respond or mark themselves as busy. 

Because the people writing this stuff were also the ones supporting users, they added another feature, the ability to monitor another user, or view their screen. And so programmers, or consultants, could respond to help requests and help get even more lessons going. And some at PLATO were using ARPANET, so it was only a matter of time before word of Ray Tomlinson’s work on electronic mail leaked over, leading to the 1974 addition of personal notes, a way to send private mail engineered by Kim Mast.

As PLATO grew, the amount of content exploded. They added categories to Notes in 1975 which led to Group Notes in 1976, and comments and linked notes and the ability to control access.

But one of the most important innovations PLATO will be remembered for is games. Anyone that has played an educational game will note that school lessons and games aren’t always all that different. Since Rick Blomme had ported Spacewar! to PLATO in 1969 and added a two-player option, multi-player games had been on the rise. They made leader boards for games like Dogfight so players could get early forms of game rankings. Games like airtight and airace and Galactic Attack would follow those.

MUDs were another form of games that came to PLATO. Collosal Cave Adventure had come in 1975 for the PDP, so again these things were happening in a vacuum but where there were influences and where innovations were deterministic and found in isolation is hard to say. But the crawlers exploded on PLATO. We got Moria, Oubliette by Jim Schwaiger, Pedit5, crypt, dungeon, avatar, and drygulch. We saw the rise of intense storytelling, different game mechanics that were mostly inspired by Dungeons and Dragons, As PLATO terminals found their way in high schools and other universities, the amount of games and amount of time spent on those games exploded, with estimates of 20% of time on PLATO being spent playing games. 

PLATO IV would grow to support thousands of terminals around the world in the 1970s. It was a utility. Schools (and even some parents) leased lines back to Champagne Urbana and many in computing thought that these timesharing systems would become the basis for a utility model in computing, similar to the cloud model we have today. But we had to go into the era of the microcomputer to boomerang back to timesharing first. 

That microcomputer revolution would catch many, who didn’t see the correlation between Moore’s Law and the growing number of factories and standardization that would lead to microcomputers, off guard. Control Data had bet big on the mainframe market - and PLATO. CDC would sell mainframes to other schools to host their own PLATO instance. This is where it went from a timesharing system to a network of computers that did timesharing. Like a star topology. 

Control Data looked to PLATO as one form of what the future of the company would be. Here, he saw this mainframe with thousands of connections as a way to lease time on the computers. CDC took PLATO to market as CDC Plato. Here, schools and companies alike could benefit from distance education. And for awhile it seemed to be working. Financial companies and airlines bought systems and the commercialization was on the rise, with over a hundred PLATO systems in use as we made our way to the middle of the 1980s. Even government agencies like the Depart of Defense used them for training. But this just happened to coincide with the advent of the microcomputer.

CDC made their own terminals that were often built with the same components that would be found in microcomputers but failed to capitalize on that market. Corporations didn’t embrace the collaboration features and often had these turned off. Social computing would move to bulletin boards And CDC would release versions of PLATO as micro-PLATO for the TRS-80, Texas Instruments TI-99, and even Atari computers. But the bureaucracy at CDC had slowed things down to the point that they couldn’t capitalize on the rapidly evolving PC industry. And prices were too high in a time when home computers were just moving from a hobbyist market to the mainstream. 

The University of Illinois spun PLATO out into its own organization called University Communications, Inc (or UCI for short) and closed CERL in 1994. That was the same year Marc Andreessen co-founded Mosaic Communications Corporation, makers of Netscape -successor to NCSA Mosaic. Because NCSA, or The National Center for Supercomputing Applications, had also benefited from National Science Foundation grants when it was started in 1982. And all those students who flocked to the University of Illinois because of programs like PLATO had brought with them more expertise.

UCI continued PLATO as NovaNet, which was acquired by National Computer Systems and then Pearson corporation, finally getting shut down in 2015 - 55 years after those original days on ILLIAC. It evolved from the vacuum tube-driven mainframe in a research institute with one terminal to two terminals, to a transistorized mainframe with hundreds and then over a thousand terminals connected from research and educational institutions around the world. It represented new ideas in programming and programming languages and inspired generations of innovations. 

That aftermath includes:

• The ideas. PLATO developers met with people from Xerox PARC starting in the 70s and inspired some of the work done at Xerox. Yes, they seemed isolated at times but they were far from it. They also cross-pollinated ideas to Control Data. One way they did this was by trading some commercialization rights for more mainframe hardware. 
• One of the easiest connections to draw from PLATO to the modern era is how the notes files evolved. Ray Ozzie graduated from Illinois in 1979 and went to work for Data General and then Software Arts, makers of VisiCalc. The corporate world had nothing like the culture that had evolved out of the notes files in PLATO Notes. Today we take collaboration tools for granted but when Ozzie was recruited by Lotus, the makers of 1-2-3, he joined only if they agreed to him funding a project to take that collaborative spirit that still seemed stuck in the splintered PLATO network. The Internet and networked computing in companies was growing, and he knew he could improve on the notes files in a way that companies could take use of it. He started Iris Associates in 1984 and shipped a tool in 1989. That would evolve into what is would be called Lotus Notes when the company was acquired by Lotus in 1994 and then when Lotus was acquired by IBM, would evolve into Domino - surviving to today as HCL Domino. Ozzie would go on to become a CTO and then the Chief Software Architect at Microsoft, helping spearhead the Microsoft Azure project.
• Collaboration. Those notes files were also some of the earliest newsgroups. But they went further. Talkomatic introduced real time text chats. The very concept of a digital community and its norms and boundaries were being tested and challenges we still face like discrimination even manifesting themselves then. But it was inspiring and between stints at Microsoft, Ray Ozzie founded Talko in 2012 based on what he learned in the 70s, working with Talkomatic. That company was acquired by Microsoft and some of the features ported into Skype. 
• Another way Microsoft benefited from the work done on PLATO was with Microsoft Flight Simulator. That was originally written by Bruce Artwick after leaving the university based on the flight games he’d played on PLATO. 
• Mordor: The Depths of Dejenol was cloned from Avatar
• Silas Warner was connected to PLATO from terminals at the University of Indiana. During and after school, he wrote software for companies but wrote Robot War for PLATO and then co-founded Muse Software where he wrote Escape!, a precursor for lots of other maze runners, and then Castle Wolfenstein. The name would get bought for $5,000 after his company went bankrupt and one of the early block-buster first-person shooters when released as Wolfenstein 3D. Then John Carmack and John Romero created Doom. But Warner would go on to work with some of the best in gaming, including Sid Meier.  
• Paul Alfille built the game Freecell for PLATO and Control Data released it for all PLATO systems. Jim Horne played it from the PLATO terminals at the University of Alberta and eventually released it for DOS in 1988. Horn went to work for Microsoft who included it in the Microsoft Entertainment Pack, making it one of the most popular software titles played on early versions of Windows. He got 10 shares of Microsoft stock in return and it’s still part of Windows 10 using the Microsoft Solitaire Collection..
• Robert wood head and Andrew Greenberg got onto PLATO from their terminals at Cornell University where they were able to play games like Oubliette and Emprie. They would write a game called Wizardry that took some of the best that the dungeon crawl multi-players had to offer and bring them into a single player computer then console game. I spent countless hours playing Wizardry on the Nintendo NES and have played many of the spin-offs, which came as late as 2014. Not only did the game inspire generations of developers to write dungeon games, but some of the mechanics inspired features in the Ultima series, Dragon Quest, Might and Magic, The Bard’s Tale, Dragon Warrior and countless Manga. Greenberg would go on to help with Q-Bert and other games before going on to work with the IEEE. Woodhead would go on to work on other games like Star Maze. I met Woodhead shortly after he wrote Virex, an early anti-virus program for the Mac that would later become McAfee VirusScan for the Mac.
• Paul Tenczar was in charge of the software developers for PLATO. After that he founded Computer Teaching Corporation and introduced EnCORE, which was changed to Tencore. They grew to 56 employees by 1990 and ran until 2000. He returned to the University of Illinois to put RFID tags on bees, contributing to computing for nearly 5 decades and counting. 
• Michael Allen used PLATO at Ohio State University before looking to create a new language. He was hired at CDC where he became a director in charge of Research and Development for education systems There, he developed the ideas for a new computer language authoring system, which became Authorware, one of the most popular authoring packages for the Mac. That would merge with Macro-Mind to become Macromedia, where bits and pieces got put into Dreamweaver and Shockwave as they released those. After Adobe acquired Macromedia, he would write a number of books and create even more e-learning software authoring tools. 

So PLATO gave us multi-player games, new programming languages, instant messaging, online and multiple choice testing, collaboration forums, message boards, multiple person chat rooms, early rudimentary remote screen sharing, their own brand of plasma display and all the research behind printing circuits on glass for that, and early research into touch sensitive displays. And as we’ve shown in just a few of the many people that contributed to computing after, they helped inspire an early generation of programmers and innovators. 

If you like this episode I strongly suggest checking out The Friendly Orange Glow from Brian Dear. It’s a lovely work with just the right mix of dry history and flourishes of prose. A short history like this can’t hold a candle to a detailed anthology like Dear’s book. 

Another well researched telling of the story can be found in a couple of chapters of A People’s History Of Computing In The United States, from Joy Rankin. She does a great job drawing a parallel (and sometimes direct line from) the Dartmouth Time Sharing System and others as early networks. And yes, terminals dialing into a mainframe and using resources over telephone and leased lines was certainly a form of bridging infrastructures and seemed like a network at the time. But no mainframe could have scaled to the ability to become a utility in the sense that all of humanity could access what was hosted on it. 

Instead, the ARPANET was put online and growing from 1969 to 1990 and working out the hard scientific and engineering principals behind networking protocols gave us TCP/IP. In her book, Rankin makes great points about the BASIC and TUTOR applications helping shape more of our modern world in how they inspired the future of how we used personal devices once connected to a network. The scientists behind ARPANET, then NSFnet and the Internet, did the work to connect us. You see, those dial-up connections were expensive over long distances. By 1974 there were 47 computers connected to the ARPANET and by 1983 we had TCP/IPv4.And much like Bitzer allowing games, they didn’t seem to care too much how people would use the technology but wanted to build the foundation - a playground for whatever people wanted to build on top of it.

So the administrative and programming team at CERL deserve a lot of credit. The people who wrote the system, the generations who built features and code only to see it become obsolete came and went - but the compounding impact of their contributions can be felt across the technology landscape today. Some of that is people rediscovering work done at CERL, some is directly inspired, and some has been lost only to probably be rediscovered in the future.  One thing is for certain, their contributions to e-learning are unparalleled with any other system out there. And their technical contributions, both in the form of those patented and those that were either unpatentable or where they didn’t think of patenting, are immense. 

Bitzer and the first high schoolers and then graduate students across the world helped to shape the digital world we live in today. More from an almost sociological aspect than technical. And the deep thought applied to the system lives on today in so many aspects of our modern world. Sometimes that’s a straight line and others it’s dotted or curved. Looking around, most universities have licensing offices now, to capitalize on the research done. Check out a university near you and see what they have available for license. You might be surprised. As I’m sure many in Champagne were after all those years. Just because CDC couldn’t capitalize on some great research doesn’t mean we can’t. 

We’ve covered Radioshack but there are a few other retail stores I’d like to cover as well. CompUSA, CircuitCity, and Fry’s to name a few. Not only is there something to be learned from the move from brick and mortar electronic chains to Ecommerce but there’s plenty to be learned about how to treat people and how people perceived computers and what we need and when, as well. 

You see, Fry’s was one of the few places you could walk in, pick a CPU, find a compatible mother board, pick a sweet chassis to put it in, get a power supply, a video card, some memory, back then probably a network card, maybe some sweet fans, a cooling system for the CPU you were about to overclock, an SSD drive to boot a machine, a hard drive to store stuff, a DVD, a floppy just in case, pick up some velcro wrap to keep the cables at bay, get a TV, a cheap knockoff smart watch, a VR headset that would never work, maybe a safe since you already have a cart, a soundbar ‘cause you did just get a TV, some headphones for when you’ll keep everyone else up with the sounder, a couple of resistors for that other project, a fixed frequency video card for that one SGI in the basement, a couple smart plugs, a solar backpack, and a CCNA book that you realize is actually 2 versions out of date when you go to take the test. Yup, that was a great trip. And ya’ there’s also a big bag of chips and a 32 ounce of some weird soda gonna’ go in the front seat with me. Sweet. Now let’s just toss the cheap flashlight we just bought into the glove box in case we ever break down and we’re good to go home and figure out how to pay for all this junk on that new Fry’s Credit Card we just opened. 

But that was then and this is now. Fry’s announced it was closing all of its stores on February 24th, 2021. The week we’re recording this episode. To quote the final their website:

“After nearly 36 years in business as the one-stop-shop and online resource for high-tech professionals across nine states and 31 stores, Fry’s Electronics, Inc. (“Fry’s” or “Company”), has made the difficult decision to shut down its operations and close its business permanently as a result of changes in the retail industry and the challenges posed by the Covid-19 pandemic. The Company will implement the shut down through an orderly wind down process that it believes will be in the best interests of the Company, its creditors, and other stakeholders.

The Company ceased regular operations and began the wind-down process on February 24, 2021. It is hoped that undertaking the wind-down through this orderly process will reduce costs, avoid additional liabilities, minimize the impact on our customers, vendors, landlords and associates, and maximize the value of the Company’s assets for its creditors and other stakeholders.”

Wow. Just wow. I used to live a couple of miles from a Fry’s and it was a major part of furthering my understanding of arcane, bizarre, sometimes emergent, and definitely dingy areas of computing. And if those adjectives don’t seem to have been included lovingly, they most certainly are. You see every trip to Fry’s was strange. 

Donald Fry founded Fry’s Food and Drug in 1954. The store rose to prominence in the 50s and 60s until his brother Charles Fry sold it off in 1972. As a part of Kroger it still exists today, with 22,000 employees. But this isn’t the story of a supermarket chain. I guess I did initially think the two were linked because the logos look somewhat similar - but that’s where their connection ends. 

Instead, let’s cover what happened to the $14 million the family got from the sale of the chain. Charles Fry gave some to his sons John, Randy, and David. They added Kathryn Kolder and leased a location in Sunnyvale, California to open the first Fry’s Electronics store in 1985.

This was during the rise of the microcomputer. The computing industry had all these new players who were selling boards and printers and floppy drives. They put all this stuff in bins kinda’ like you would in a grocery store and became a one-stop shop for the hobbyist and the professional alike. Unlike groceries, the parts didn’t expire so they were able to still have things selling 5 or 10 years later, albeit a bit dusty. 

1985 was the era when many bought integrated circuits, mother boards, and soldering irons and built their own computers. They saw the rise of the microprocessor, the 80286 and x86s. And as we moved into an era of predominantly x86 clones of the IBM PC, the buses and cards became standard. Provided a power supply had a molex connector it was probably good to light up most mother boards and hard drives. The IDE became the standard then later SATA. But parts were pretty interchangeable.

Knowing groceries, they also sold those. Get some Oranges and a microprocessor. They stopped selling those but always sold snacks until the day they closed down. But services were always a thing at Fry’s. Those who didn’t want to spend hours putting spacers on a motherboard and puttin

They also sold other electronics. Sometimes the selection seemed totally random. I bought my first MP3 player at a Fry’s - the Diamond Rio. And funny LED lights for computer fans before that really became a thing. Screwdriver kits, thermal grease, RAM chips, unsoldered boards, weird little toys, train sets, coloring books, certification books for that MCSE test I took in 2002, and whatever else I could think of. 

The stores were kitchy. Some had walls painted like circuit boards. Some had alien motifs. Others were decorated like the old west. It’s like whatever they could find weird stuff to adorn the joint. People were increasingly going online. In 1997 they bought Frys.com. To help people get online, they started selling Internet access in 2000. But by then there were so many vendors to help people get online that it wasn’t going to be successful. People were increasingly shopping online so they bought Cyberian Outpost in 2001 and moved it to outpost.com - which later just pointed to Frys.com. 

The closing of a number of Radio Shack stores and Circuit City and CompUSA seemed to give them a shot in the arm for a bit. But you could buy computers at Gateway Country or through Dell. Building your own computer was becoming more and more a niche industry for gamers and others who needed specific builds. 

They grew to 34 stores at their height. Northern California stores in Campbell, Concord, Fremont, Roseville, Sacramento, San Jose, and that original Sunnyvale (now across the street from the old original Sunnyvale) and Southern California stores in Burbank, City of Industry, Fountain Valley, Manhattan Beach, Oxnard, San Diego, San Marcos, and the little one in Woodland Hills  - it seemed like everyone in California knew to go to Fry’s when you needed some doodad. In fact, they made the documentary about General Magic because they were constantly going back and forth to Fry’s to get parts to build their device. 

But they did expand out of California with 8 stores in Texas, two in Airizona, one in Illinois, one in Indiana, one in Nevada, one in Oregon, and another in Washington. In some ways it looked as though they were about to have a chain that could rival the supermarket chain their dad helped build. But it wasn’t meant to be. 

With the fall of Radio Shack, CompUSA, and Circuit City, I was always surprised Fry’s stayed around. Tandy started a concept similar called Incredible Universe but that didn’t last too long. But I loved them. The customer service wasn’t great. The stores were always a little dirty. But I never left empty-handed. Even when I didn’t find what I was looking for. 

Generations of computer enthusiasts bought everything from scanners to printers at Frys. They were sued over how they advertised, for sexual harassment, during divorce settlements, and over how they labeled equipment. They lost money in embezzlements, and as people increasingly turned to Amazon and other online vendors for the best price for that MSI motherboard or a screen for the iPhone - keeping such a massive inventory was putting them out of business. So in 2019 amidst rumors they were about to go out of business, they moved to stocking the stores via consignment. Not all vendors upstream could do that, leading to an increasingly strange selection and finding what you needed less and less. 

Then came COVID. They closed a few stores and between the last ditch effort of consignment and empty bins as hardware moved, they just couldn’t do it any more. As with the flashier and less selection but more complete systems Circuit City and CompUSA before them, they finally closed their doors in 2021, after 36 years. And so we live in an era where many computers, tablets, and phones are no longer serviceable or have parts that can be swapped out. We live in an era where when we can service a device with those parts, we often go online to source them. And we live in an era where if we need instant gratification to replace components there are plenty of retail chains like Target or Walmart that sell components and move far more than Fry’s so are more competitive on the price. We live in an era where we don’t need to go into a retailer for software and books, both sold at high margins. There are stores on the Apple and Microsoft and Google platforms for that. And of course 2020 was a year that many retail chains had to close their doors in order to keep their employees safe, losing millions in revenue. 

All of that eventually became too much for other computer stores as each slowly eroded the business. And now it’s become too much for Fry’s. I will always remember the countless hours I strolled around the dingy store, palming this adapter and that cable and trying to figure out what components might fit together so I can get the equivalent of an AlienWare computer for half the cost. And I’ll even fondly remember the usually sub-par customer service, because it forced me to learn more. And I’ll always be thankful that they had crap sitting around for a decade because I always learned something new about the history of computers in their bins of arcane bits and bytes sitting around.

And their closing reminds us, as the closings of former competitors and even other stores like Borders does, that an incredible opportunity lies ahead of us. These shifts in society also shift the supply chain. They used to get a 50% markup on software and a hefty markup on the books I wrote. Now I can publish software on the App Stores and pay less of my royalties to the retailers. Now I don’t need a box and manual for software. Now books don’t have to be printed and can even be self-published in those venues if I see fit to do so. And while Microsoft, Apple, and Google’s “Services” revenue or revenue from Target once belonged to stores like Fry’s, the opportunities have moved to linking and aggregating and adding machine learning and looking to fields that haven’t yet been brought into a more digital age - or even to harkening back to simpler times and providing a more small town white glove approach to life. Just as the dot com crash created a field where companies like Netflix and Google could become early unicorns, so every other rise and fall creates new, uncharted green fields and blue oceans. Thank you for your contributions - both past and future.

Steve Jobs left Apple in 1985. He co-founded NeXT Computers and took Pixar public. He then returned to Apple as the interim CEO in 1997 at a salary of $1 per year. Some of the early accomplishments on his watch were started before he got there. But turning the company back around was squarely on him and his team. 

By the end of 1997, Apple moved to a build-to-order manufacturing powered by an online store built on WebObjects, the NeXT application server. They killed off a number of models, simplifying the lineup of products and also killed the clone deals, ending licensing of the operating system to other vendors who were at times building sub-par products.

And they were busy. You could feel the frenetic pace.  They were busy at work weaving the raw components from NeXT into an operating system that would be called Mac OS X. They announced a partnership that would see Microsoft invest $150 million into Apple to settle patent disputes but that Microsoft would get Internet Explorer bundled on the Mac and give a commitment to release Office for the Mac again. By then, Apple had $1.2 billion in cash reserves again, but armed with a streamlined company that was ready to move forward - but 1998 was a bottoming out of sorts, with Apple only doing just shy of $6 billion in revenue. To move forward, they took a little lesson from the past and released a new all-in-one computer. One that put the color back into that Apple logo. Or rather removed all the colors but Aqua blue from it. 

The return of Steve Jobs invigorated many, such as Johnny Ive who is reported to have had a resignation in his back pocket when he met Jobs. Their collaboration led to a number of innovations, with a furious pace starting with the iMac. The first iMacs were shaped like gumdrops and the color of candy as well. The original Bondi blue had commercials showing all the cords in a typical PC setup and then the new iMac, “as unPC as you can get.” The iMac was supposed to be to get on the Internet. But the ensuing upgrades allowed for far more than that. 

The iMac put style back into Apple and even computers. Subsequent releases came in candy colors like Lime, Strawberry, Blueberry, Grape, Tangerine, and later on Blue Dalmatian and Flower Power. The G3 chipset bled out into other more professional products like a blue and white G3 tower, which featured a slightly faster processor than the beige tower G3, but a much cooler look - and very easy to get into compared to any other machine on the market at the time. And the Clamshell laptops used the same design language. Playful, colorful, but mostly as fast as their traditional PowerBook counterparts. 

But the team had their eye on a new strategy entirely. Yes, people wanted to get online - but these computers could do so much more. Apple wanted to make the Mac the Digital Hub for content. This centered around a technology that had been codeveloped from Apple, Sony, Panasonic, and others called IEEE 1394. But that was kinda’ boring so we just called it Firewire.

Begun in 1986 and originally started by Apple, Firewire had become a port that was on most digital cameras at the time. USB wasn’t fast enough to load and unload a lot of newer content like audio and video from cameras to computers. But I can clearly remember that by the year 1999 we were all living as Jobs put it in a “new emerging digital lifestyle.”  This led to a number of releases from Apple. One was iMovie. Apple included it with the new iMac DV model for free. That model dumped the fan (which Jobs never liked even going back to the early days of Apple) as well as FireWire and the ability to add an AirPort card. Oh, and they released an AirPort base station in 1999 to help people get online easily. It is still one of the simplest router and wi-fi devices I’ve ever used. And was sleek with the new Graphite design language that would take Apple through for years on their professional devices.

iMovie was a single place to load all those digital videos and turn them into something else. And there was another format on the rise, MP3. Most everyone I’ve ever known at Apple love music. It’s in the DNA of the company, going back to Wozniak and Jobs and their love of musicians like Bob Dylan in the 1970s. The rise of the transistor radio and then the cassette and Walkman had opened our eyes to the democratization of what we could listen to as humans. But the MP3 format, which had been around since 1993, was on the rise. People were ripping and trading songs and Apple looked at a tool called Audion and another called SoundJam and decided that rather than Sherlock (or build that into the OS) that they would buy SoundJam in 2000. The new software, which they called iTunes, allowed users to rip and burn CDs easily. Apple then added iPhoto, iWeb, and iDVD. For photos, creating web sites, and making DVDs respectively. The digital hub was coming together.

But there was another very important part of that whole digital hub strategy. Now that we had music on our computers we needed something more portable to listen to that music on. There were MP3 players like the Diamond Rio out there, and there had been going back to the waning days of the Digital Equipment Research Lab - but they were either clunky or had poor design or just crappy and cheap. And mostly only held an album or two. I remember walking down that isle at Fry’s about once every other month waiting and hoping. But nothing good ever came. 

That is, until Jobs and the Apple hardware engineering lead Job Rubinstein found Tony Fadell. He had been at General Magic, you know, the company that ushered in mobility as an industry. And he’d built Windows CE mobile devices for Philips in the Velo and Nino. But when we got him working with Jobs, Rubinstein, and Johnny Ive on the industrial design front, we got one of the most iconic devices ever made: the iPod. 

And the iPod wasn’t all that different on the inside from a Newton. Blasphemy I know. It sported a pair of ARM chips and Ive harkened back to simpler times when he based the design on a transistor radio. Attention to detail and the lack thereof in the Sony Diskman propelled Apple to sell more than 400 million  iPods to this day. By the time the iPod was released in 2001, Apple revenues had jumped to just shy of $8 billion but dropped back down to $5.3. But everything was about to change. And part of that was that the iPod design language was about to leak out to the rest of the products with white iBooks, white Mac Minis, and other white devices as a design language of sorts. 

To sell all those iDevices, Apple embarked on a strategy that seemed crazy at the time. They opened retail stores. They hired Ron Johnson and opened two stores in 2001. They would grow to over 500 stores, and hit a billion in sales within three years. Johnson had been the VP of merchandising at Target and with the teams at Apple came up with the idea of taking payment without cash registers (after all you have an internet connected device you want to sell people) and the Genius Bar. 

And generations of devices came that led people back into the stores. The G4 came along - as did faster RAM. And while Apple was updating the classic Mac operating system, they were also hard at work preparing NeXT to go across the full line of computers. They had been working the bugs out in Rhapsody and then Mac OS X Server, but the client OS, Codenamed Kodiak, went into beta in 2000 and then was released as a dual-boot option in Cheetah, in 2001. And thus began a long line of big cats, going to Puma then Jaguar in 2002, Panther in 2003, Tiger in 2005, Leopard in 2007, Snow Leopard in 2009, Lion in 2011, Mountain Lion in 2012 before moving to the new naming scheme that uses famous places in California. 

Mac OS X finally provided a ground-up, modern, object-oriented operating system. They built the Aqua interface on top of it. Beautiful, modern, sleek. Even the backgrounds! The iMac would go from a gumdrop to a sleek flat panel on a metal stand, like a sunflower. Jobs and Ive are both named on the patents for this as well as many of the other inventions that came along in support of the rapid device rollouts of the day. 

Jaguar, or 10.2, would turn out to be a big update. They added Address Book, iChat - now called Messages, and after nearly two decades replaced the 8-bit Happy Mac with a grey Apple logo in 2002. Yet another sign they were no longer just a computer company. Some of these needed a server and storage so Apple released the Xserve in 2002 and the Xserve RAID in 2003. The pro devices also started to transition from the grey graphite look to brushed metal, which we still use today. 

Many wanted to step beyond just listening to music. There were expensive tools for creating music, like ProTools. And don’t get me wrong, you get what you pay for. It’s awesome. But democratizing the creation of media meant Apple wanted a piece of software to create digital audio - and released Garage Band in 2004. For this they again turned to an acquisition, EMagic, which had a tool called Logic Audio. I still use Logic to cut my podcasts. But with Garage Band they stripped it down to the essentials and released a tool that proved wildly popular, providing an on-ramp for many into the audio engineering space. 

Not every project worked out. Apple had ups and downs in revenue and sales in the early part of the millennium. The G4 Cube was released in 2000 and while it is hailed as one of the greatest designs by industrial designers it was discontinued in 2001 due to low sales. But Steve Jobs had been hard at work on something new. Those iPods that were becoming the cash cow at Apple and changing the world, turning people into white earbud-clad zombies spinning those click wheels were about to get an easier way to put media into iTunes and so on the device. 

The iTunes Store was released in 2003. Here, Jobs parlayed the success at Apple along with his own brand to twist the arms of executives from the big 5 record labels to finally allow digital music to be sold online. Each song was a dollar. Suddenly it was cheap enough that the music trading apps just couldn’t keep up. Today it seems like everyone just pays a streaming subscription but for a time, it gave a shot in the arm to music companies and gave us all this new-found expectation that we would always be able to have music that we wanted to hear on-demand. 

Apple revenue was back up to $8.25 billion in 2004. But Apple was just getting started. The next seven years would see that revenue climb from to $13.9 billion in 2005, $19.3 in 2006, $24 billion in 2007, $32.4 in 2008, $42.9 in 2009, $65.2 in 2010, and a staggering $108.2 in 2011.

After working with the PowerPC chipset, Apple transitioned new computers to Intel chips in 2005 and 2006. Keep in mind that most people used desktops at the time and just wanted fast. And it was the era where the Mac was really open source friendly so having the ability to load in the best the Linux and Unix worlds had to offer for software inside projects or on servers was made all the easier. But Intel could produce chips faster and were moving faster. That Intel transition also helped with what we call the “App Gap” where applications written for Windows could be virtualized for the Mac. This helped the Mac get much more adoption in businesses.

Again, the pace was frenetic. People had been almost begging Apple to release a phone for years. The Windows Mobile devices, the Blackberry, the flip phones, even the Palm Treo. They were all crap in Jobs’ mind. Even the Rockr that had iTunes in it was crap. So Apple released the iPhone in 2007 in a now-iconic  Jobs presentation. The early version didn’t have apps, but it was instantly one of the more saught-after gadgets. And in an era where people paid $100 to $200 for phones it changed the way we thought of the devices. In fact, the push notifications and app culture and always on fulfilled the General Magic dream that the Newton never could and truly moved us all into an always-on i (or Internet) culture.

The Apple TV was also released in 2007. I can still remember people talking about Apple releasing a television at the time. The same way they talk about Apple releasing a car. It wasn’t a television though, it was a small whitish box that resembled a Mac Mini - just with a different media-browsing type of Finder. Now it’s effectively an app to bootstrap the media apps on a Mac. 

It had been a blistering 10 years. We didn’t even get into Pages, FaceTime, They weren’t done just yet. The iPad was released in 2010. By then, Apple revenues exceeded those of Microsoft. The return and the comeback was truly complete. 

Similar technology used to build the Apple online store was also used to develop the iTunes Store and then the App Store in 2008. Here, rather than go to a site you might not trust and download an installer file with crazy levels of permissions.

One place where it’s still a work in progress to this day was iTools, released in 2000 and rebranded to .Mac or dot Mac in 2008, and now called MobileMe. Apple’s vision to sync all of our data between our myriad of devices wirelessly was a work in progress and never met the lofty goals set out. Some services, like Find My iPhone, work great. Others notsomuch. Jobs famously fired the team lead at one point. And while it’s better than it was it’s still not where it needs to be. 

Steve Jobs passed away in 2011 at 56 years old. His first act at Apple changed the world, ushering in first the personal computing revolution and then the graphical interface revolution. He left an Apple that meant something. He returned to a demoralized Apple and brought digital media, portable music players, the iPhone, the iPad, the Apple TV, the iMac, the online music store, the online App Store, and so much more. The world had changed in that time, so he left, well, one more thing. You see, when they started, privacy and security wasn’t much of a thing. Keep in mind, computers didn’t have hard drives. The early days of the Internet after his return was a fairly save I or Internet world. But by the time he passed away there there were some troubling trends. The data on our phones and computers could weave together nearly every bit of our life to an outsider. Not only could this lead to identity theft but with the growing advertising networks and machine learning capabilities, the consequences of privacy breaches on Apple products could be profound as a society. He left an ethos behind to build great products but not at the expense of those who buy them. One his successor Tim Cook has maintained. 

On the outside it may seem like the daunting 10 plus years of product releases has slowed. We still have the Macbook, the iMac, a tower, a mini, an iPhone, an iPad, an Apple TV. We now have HomeKit, a HomePod, new models of all those devices, Apple silicon, and some new headphones - but more importantly we’ve had to retreat a bit internally and direct some of those product development cycles to privacy, protecting users, shoring up the security model. Managing a vast portfolio of products in the largest company in the world means doing those things isn’t always altruistic. Big companies can mean big law suits when things go wrong. These will come up as we cover the history of the individual devices in greater detail.

The history of computing is full of stories of great innovators. Very few took a second act. Few, if any, had as impactful a first act as either that Steve Jobs had. It wasn’t just him in any of these. There are countless people from software developers to support representatives to product marketing gurus to the people that write the documentation. It was all of them, working with inspiring leadership and world class products that helped as much as any other organization in the history of computing, to shape the digital world we live in today. 

QWERTY. It’s a funny word. Or not a word. But also not an acronym per se. Those are the  top six letters in a modern keyboard. Why? Because the frequency they’re used allows for hammers on a traditional typewriter to travel to and fro and the effort allows us to be more efficient with our time while typing. The concept of the keyboard goes back almost as far back as moveable type - but it took hundreds of years to standardize where we are today. 

Johannes Gutenberg is credited for developing the printing press in the 1450s. Printing using wooden blocks was brought to the Western world from China, which led him to replace the wood or clay characters with metal, thus giving us what we now think of as Moveable Type. This meant we were now arranging blocks of characters to print words onto paper. From there it was only a matter of time that we would realize that pressing a key could stamp a character onto paper as we went rather than developing a full page and then pressing ink to paper.

The first to get credit for pressing letters onto paper using a machine was Venetian Francesco Rampazzetto in 1575. But as with many innovations, this one needed to bounce around in the heads of inventors until the appropriate level of miniaturization and precision was ready. Henry Mill filed an English patent in 1714 for a machine that could type (or impress) letters progressively. By then, printed books were ubiquitous but we weren’t generating pages of printed text on the fly just yet. 

Others would develop similar devices but from 1801 to 1810, Pellegrino Turri in Italy developed carbon paper. Here, he coated one side of paper with carbon and the other side with wax. Why did he invent that, other than to give us an excuse to say carbon copy later (and thus the cc in an email)? 

Either he or Agostino Fantoni da Fivizzano invented a mechanical machine for pressing characters to paper for Countess Carolina Fantoni da Fivizzano, a blind friend of his. She would go on to send him letters written on the device, some of which exist to this day. More inventors tinkered with the idea of mechanical writing devices, often working in isolation from one another.

One was a surveyor, William Austin Burt. He found the handwritten documents of his field laborious and so gave us the typographer in 1829. Each letter was moved to where needed to print manually so it wasn’t all that much faster than the handwritten document, but the name would be hyphenated later to form type-writer. And with precision increasing and a lot of invention going on at the time there were other devices. But his patent was signed by Andrew Jackson. 

James Pratt introduced his Pterotype in an article in the Scientific American in 1867. It was a device that more closely resembles the keyboard layout we know today, with 4 rows of keys and a split in the middle for hands. Others saw the article and continued their own innovative additions. 

Frank Hall had worked on the telegraph before the Civil War and used his knowledge there to develop a Braille writer, which functioned similarly to a keyboard. He would move to Wisconsin, where he came in contact with another team developing a keyboard.

Christopher Latham Sholes saw the article in the Scientific American and along with Carlos Glidden and Samuel Soule out of Milwaukee developed the QWERTY keyboard we know of as the standard keyboard layout today from 1867 to 1868. Around the same time, Danish pastor Rasmus Malling-Hansen introduced the writing ball in 1870. It could also type letters onto paper but with a much more complicated keyboard layout. It was actually the first typewriter to go into mass production - but at this point new inventions were starting to follow the QWERTY layout. Because asdfjkl;. Both though were looking to increase typing speed with Malling-Mansen’s layout putting constanents on the right side and vowels on the left - but Sholes and Glidden mixed keys up to help reduce the strain on hardware as it recoiled, thus splitting common characters in words between the sides. 

James Densmore encountered the Sholes work and jumped in to help. They had it relentlessly tested and iterated on the design, getting more and more productivity gains and making the device more and more hardy. When the others left the project, it was Densmore and Sholes carrying on. But Sholes was also a politician and editor of a newspaper, so had a lot going on. He sold his share of the patent for their layout for $12,000 and Densmore decided to go with royalties instead. 

By the 1880s, the invention had been floating around long enough and given a standardized keyboard it was finally ready to be mass produced. This began with the Sholes & Glidden Type Writer introduced in America in 1874. That was followed by the Caligraph. But it was Remington that would take the Sholes patent and create the Remington Typewriter, removing the hyphen from the word typewriter and going mainstream - netting Densmore a million and a half bucks in 1800s money for his royalties. And if you’ve seen anything typed on it, you’ll note that it supported one font: the monospaced sans serif Grotesque style.

Characters had always been upper case. Remington added a shift key to give us the ability to do both upper and lower case in 1878 with the Remington Model 2. This was also where we got the ampersand, parenthesis,  percent symbol, and question mark as shift characters for numbers. Remington also added tab and margins in 1897. Mark Twain was the first author to turn a manuscript in from a typewriter using what else but the Remington Typewriter. By then, we were experimenting with the sizes and spaces between characters, or kerning, to make typed content easier to read. Some companies moved to slab serif or Pica fonts and typefaces. You could really tell a lot about a company by that Olivetti with it’s modern, almost anti-Latin fonts. 

The Remington Typewriter Company would later merge with the Rand Kardex company to form Remington Rand, making typewriters, guns, and then in 1950, acquiring the Eckert-Mauchly Computer Corporation, who made ENIAC - arguably the first all-digital computer. Rand also acquired Engineering Research Associates (or ERA) and introduced the Univac. Electronics maker Sperry acquired them in 1955, and then merged with Burroughs to form Unisys in 1988, still a thriving company. But what’s important is that they knew typewriters. And keyboards.

But electronics had been improving in the same era that Remington took their typewriters mainstream, and before. Samuel Morse developed the recording telegraph in 1835 and David Hughes added the printed telegraph. Emile Baudot gave us a 5 bit code in the 1870s that enhanced that but those were still using keys similar to what you find on a piano. The typewriter hadn’t yet merged with digital communications just yet. Thomas Edison patented the electric typewriter in 1872 but didn’t produce a working model. And this was a great time of innovation. For example, Alexander Graham Bell was hard at work on patenting the telephone at the time. 

James Smathers then gave us the first electronic typewriter in 1920 and by the 1930s improved Baudot, or baud was combined with a QUERTY keyboard by Siemens and others to give us typing over the wire. The Teletype Corporation was founded in 1906 and would go from tape punch and readers to producing the teletypes that allowed users to dial into mainframes in the 1970s timesharing networks. But we’re getting ahead of ourselves. How did we eventually end up plugging a keyboard into a computer?

Herman Hollerith, the mind behind the original IBM punch cards for tabulating machines before his company got merged with others to form IBM, brought us text keypunches, which were later used to input data into early computers. The Binac computer used a similar representation with 8 keys and an electromechanical control was added to input data into the computer like a punch card might - for this think of a modern 10-key pad. Given that we had electronic typewriters for a couple of decades it was only a matter of time before a full keyboard worth of text was needed on a computer. That came in 1954 with the pioneering work done MIT. Here, Douglas Ross wanted to hookup a Flexowriter electric typewriter to a computer, which would be done the next year as yet another of the huge innovations coming out of the Whirlwind project at MIT. With the addition of core memory to computing that was the first time a real keyboard (and being able to write characters into a computer) was really useful. After nearly 400 years since the first attempts to build a moveable type machine and then and just shy of 100 years since the layout had been codified, the computer keyboard was born. 

The PLATO team in late 60s University of Illinois Champaign Urbana were one of many research teams that sought to develop cheaper input output mechanisms for their computer Illiac and prior to moving to standard keyboards they built custom devices with fewer keys to help students select multiple choice answers. But eventually they used teletype-esque systems. 

Those early keyboards were mechanical. They still made a heavy clanky sound when the keys were pressed. Not as much as when using a big mechanical typewriter, but not like the keyboards we use today. These used keys with springs inside them. Springs would be replaced with pressure pads in some machines, including the Sinclair ZX80 and ZX81. And the Timex Sinclair 1000. Given that there were less moving parts, they were cheap to make. They used conductive traces with a gate between two membranes. When a key was pressed electricity flowed through what amounted to a flip-flop. When the key was released the electricity stopped flowing. I never liked them because they just didn’t have that feel. In fact, they’re still used in devices like microwaves to provide for buttons under led lights that you can press. 

By the late 1970s, keyboards were becoming more and more common. The next advancement was in Chiclet keyboards, common on the TRS-80 and the IBM PCjr. These were were like membrane keyboards but used moulded rubber. Scissor switch keyboards became the standard for laptops - these involve a couple of pieces of plastic under each key, arranged like a scissor. And more and more keyboards were produced. 

With an explosion in the amount of time we spent on computers, we eventually got about as many designs of ergonomic keyboards as you can think of. Here, doctors or engineers or just random people would attempt to raise or lower hands or move hands apart or depress various keys or raise them. But as we moved from desktops to laptops or typing directly on screens as we do with tablets and phones, those sell less and less.

I wonder what Sholes would say if you showed him and the inventors he worked with what the QWERTY keyboard looks like on an iPhone today? I wonder how many people know that at least two of the steps in the story of the keyboard had to do with helping the blind communicate through the written word? I wonder how many know about the work Alexander Graham Bell did with the deaf and the impact that had on his understanding of the vibrations of sound and the emergence of phonautograph to record sound and how that would become acoustic telegraphy and then the telephone, which could later stream baud? Well, we’re out of time for today so that story will have to get tabled for a future episode.

In the meantime, look around for places where there’s no standard. Just like the keyboard layout took different inventors and iterations to find the right amount of productivity, any place where there’s not yet a standard just needs that same level of deep thinking and sometimes generations to get it perfected. But we still use the QWERTY layout today and so sometimes once we find the right mix, we’ve set in motion an innovative that can become a true game changer. And if it’s not ready, at least we’ve contributed to the evolutions that revolutionize the world. Even if we don’t use those inventions. Bell famously never had a phone installed in his office. Because distractions. Luckily I disabled notifications on my phone before recording this or it would never get out… 

Steve Jobs had an infamous split with the board of directors of Apple and left the company shortly after the release of the original Mac. He was an innovator who at 21 years old had started Apple in the garage with Steve Wozniak and at 30 years old while already plenty wealthy felt he still had more to give and do. We can say a lot of things about him but he was arguably one of the best product managers ever. 

He told Apple he’d be taking some “low-level staffers” and ended up taking Rich Page, Bud Tribble, Dan'l Lewin, George Crow, and Susan Barnes to be the CFO. They also took Susan Kare and Joanna Hoffman. had their eyes on a computer that was specifically targeting higher education. They wanted to build computers for researchers and universities. 

Companies like CDC and Data General had done well in Universities. The team knew there was a niche that could be carved out there. There were some gaps with the Mac that made it a hard sell in research environments. Computer scientists needed object-oriented programming and protected memory. Having seen the work at PARC on object-oriented languages, Jobs knew the power and future-proof approach. 

Unix System V had branched a number of times and it was a bit more of a red ocean than I think they realized. But Jobs put up $7 million of his own money to found NeXT Computer. He’d add another $5 million and Ross Perot would add another $20 million. The pay bands were one of the most straight-forward of any startup ever founded. The senior staff made $75,000 and everyone else got $50,000. Simple. 

Ironically, so soon after the 1984 Super Bowl ad where Jobs based IBM, they hired the man who designed the IBM logo, Paul Rand, to design a logo for NeXT. They paid him $100,000 flat. Imagine the phone call when Jobs called IBM to get them to release Rand from a conflict of interest in working with them. 

They released the first computer in 1988. The NeXT Computer, as it was called, was expensive for the day, coming in at $6,500. It sported a Motorola 68030 CPU and clocked in at a whopping 25 MHz. And it came with a special operating system called NeXTSTEP.

NeXTSTEP was based on the Mach kernel with some of the source code coming from BSD. If we go back a little, Unix was started at Bell Labs in 1969 and by the late 70s had been forked from Unix System V to BSD, Unix version 7, and PWB - with each of those resulting in other forks that would eventually become OpenBSD, SunOS, NetBSD, Solaris, HP-UX, Linux, AIX, and countless others. 

Mach was developed at Carnegie Mellon University and is one of the earliest microkernels. For Mach, Richard Rashid (who would later found Microsoft Research) and Avie Tevanian, were looking specifically to distributed computing. And the Mach project was kicked off in 1985, the same year Jobs left Apple. 

Mach was backwards-compatible to BSD 4.2 and so could run a pretty wide variety of software. It allowed for threads, or units of execution and tasks or objects that enabled threads. It provided support for messages, which for object oriented languages are typed data objects that fall outside the scope of tasks and threads and then a protected message queue, to manage the messages between tasks and rights of access. They stood it up on a DEC VAX and released it publicly in 1987.

Here’s the thing, Unix licensing from Bell Labs was causing problems. So it was important to everyone that the license be open. And this would be important to NeXT as well. NeXT needed a next-generation operating system and so Avi Tevanian was recruited to join NeXT as the Vice President of Software Engineering. There, he designed NeXTSTEP with a handful of engineers.

The computers had custom boards and were fast. And they were a sleek black like nothing I’d seen before. But Bill Gates was not impressed claiming that “If you want black, I’ll get you a can of paint.” But some people loved the machines and especially some of the tools NeXT developed for programmers.

They got a factory to produce the machines and it only needed to crank out 100 a month as opposed to the thousands it was built to produce. In other words, the price tag was keeping universities from buying the machines. So they pivoted a little. They went up-market with the NeXTcube in 1990, which ran NeXTSTEP, OPENSTEP, or NetBSD and came with the Motorola 68040 CPU. This came machine in at $8,000 to almost $16,000. It came with a hard drive. For the lower end of the market they also released the NeXTstation in 1990, which shipped for just shy of $5,000.

The new models helped but by 1991 they had to lay off 5 percent of the company and another 280 by 1993. That’s when the hardware side got sold to Canon so NeXT could focus exclusively on NeXTSTEP.  That is, until they got acquired by Apple in 1997.

By the end, they’d sold around 50,000 computers. Apple bought NeXT for $429 million and 1.5 million shares of Apple stock, trading at 22 cents at the time, which was trading at $17 a share so worth another $25 and a half million dollars. That makes the deal worth $454 million or $9,080 per machine NeXT had ever built. But it wasn’t about the computer business, which had already been spun down. It was about Jobs and getting a multi-tasking, object-oriented, powerhouse of an operating system, the grandparent of OS X - and the derivative macOS, iOS, iPadOS, watchOS, and tvOS forks.

The work done at NeXT has had a long-term impact on the computer industry as a whole. For one, the spinning pinwheel on a Mac. And the Dock. And the App Store. And Objective-C. But also Interface Builder as an IDE was revolutionary. Today we use Xcode. But many of the components go back all the way. And so much more. 

After the acquisition, NeXT became Mac OS X Server in 1999 and by 2001 was Mac OS X. The rest there is history. But the legacy of the platform is considerable. Just on NeXTSTEP we had a few pretty massive successes.

Tim Berners-Lee developed the first web browser WorldWideWeb on NeXTSTEP for a NeXT . Other browsers for other platforms would come but his work became the web as we know it today. The machine he developed the web on is now on display at the National Museum of Science and Media in the UK.

We also got games like Quake, Heretic, Stife, and Doom from Interface Builder. And webobjects. And the people. 

Tevanian came with NeXT to Apple as the Senior Vice President of Software Engineering. Jobs became an advisor, then CEO. Craig Federighi came with the acquisition as well - now Apple’s VP of software engineering. And I know dozens of others who came in from NeXT and helped reshape the culture at Apple.

Next.com still redirects to Apple.com. It took three years to ship that first computer at NeXT. It took 2 1/2 years to develop the iPhone. The Apple II, iPod, iPad, and first iMac were much less. Nearly 5 years for the original Mac. Some things take a little more time to flush out than others. Some need the price of components or new components to show up before you know it can be insanely great. Some need false starts like the Steve Jobs Steve Jobs famously said Apple wanted to create a computer in a book in 1983. That finally came out with the release of the iPad in 2010, 27 years later. 

And so the final component of the Apple acquisition of NeXT to mention is Steve Jobs himself. He didn’t initially come in. He’d just become a billionaire off Pixar and was doing pretty darn well. His arrival back at Apple signified the end of a long draught for the company and all those products we mentioned and the iTunes music store and the App Store (both initially built on WebObjects) would change the way we consume content forever. His impact was substantial. For one, after factoring stock splits, the company might still be trading at .22 cents a share, which is what it would be today with all that. Instead they’re the most highly valued company in the world. But that pales in comparison to the way he and his teams and that relentless eye to product and design has actually changed the world. And the way his perspectives on privacy help protect us today, long after he passed. 

The heroes journey (as described is a storytelling template that follows a hero from disgrace, to learn the mistakes of their past and reinvent themselves amidst a crisis throughout a grand adventure, and return home transformed. NeXT and Pixar represent part of that journey here. Which makes me wonder: what is my own Monomyth? Where will I return to? What is or was my abyss? These can be large or small. And while very few people in the world will have one like Steve Jobs did, we should all reflect on ours and learn from them. And yes that was plural because life is not so simple that there is one.

The past, and our understanding of it, predicts the future. Good luck on your journey.