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Summary:

In December 1994, I was managing the new product development process for a long-distance carrier. We were in the midst of being acquired, with the new combined company becoming a credible threat to the Big Three. My soon-to-be CEO asked for a review of the product […]

In December 1994, I was managing the new product development process for a long-distance carrier. We were in the midst of being acquired, with the new combined company becoming a credible threat to the Big Three. My soon-to-be CEO asked for a review of the product development pipeline, about a third of which was Internet related. His response? “That Internet stuff –- shut it down. The Internet’s a toy, businesses will never pay for it. Shut it down.”

I lead with this story for two reasons. First, to remind us of how quickly things can change. Second, to set the stage for a much longer, still evolving story.

Was this guy completely out of touch with reality? No. In 1994, his opinion was very common and reasonably credible. In 1994, the telecom industry was dominated by long-distance voice. Local voice was a not-too-distant second. All data, including the small blip that was any form of Internet connectivity, was a very distant third. A tiny percentage of households accessed anything remotely resembling the Internet (think AOL, CompuServe, Prodigy) and concepts such as e-commerce and online advertising were beyond comprehension.

But, his comments were still shocking to those of us who saw the future. That evening, my boss, the guy on my team leading the Internet charge and I gathered over coffee at the local Village Inn and started drawing up plans for our exit. Early in 1995 we turned in our resignations and founded Digital Frontiers, the first professional web development firm in Oklahoma.

That year, everything changed. Most impactful was Netscape’s groundbreaking IPO, which attracted risk-taking innovation. But more lastingly, Yahoo was incorporated, Amazon sold its first book, and eBay held its first auction, all during one transformational year. By December, my partners and I had been vindicated and seemingly every business was dying to pay to be on the Internet.

And yet, getting on the Internet was still very painful by today’s standards. Our startup required a T1 connection at $1,200 per month and a $20,000 Sun server to host our web sites. The technician from the local Big Bell grumbled about the hassles of installing the 4-wire circuit, and I grumbled about having to figure out how to configure sendmail. For end-users, the choice was whether to go the easy route and get an AOL account or get a “real” Internet connection from a local dial-up provider.

Broadband options didn’t really arrive until scrappy startups like Covad, Northpoint and Rhythms Netconnections overcame Big Bell resistance to offer DSL in a handful of cities in 1997. Hosting options for startups, and certainly cloud computing options, were even farther away. But still, we were all proud of the way we were improving life at 28.8kbps! At Digital Frontiers, we partnered with a local hospital to introduce perhaps the first online newborn photos, and we partnered with Pennwell Publishing to create an online community for professionals in the oil and gas industry.

Looking at today’s dominant Internet properties and business models, it’s easy to see how mass market broadband adoption has fundamentally transformed those nascent attempts to revolutionize the world. In 1996, only 16 percent of American households had any kind of Internet access; by 2007, 86 percent did. In 1996, virtually all of the industry revenues were for access; by last year, advertising was nearly as big as access and e-commerce was in a class by itself. The world has changed.

But, what does this have to do with mobility?

I’m thankful to now work for a visionary telecom company. Sprint PCS was formed in 1995 on the promise of mobile data and Nextel introduced the first open GPS-based development platform in 2002, but we are probably at the equivalent of 2001 on the Internet timeline. Yes, there are again nay-sayers who argue that businesses should never pay for mobility, but we know the benefits that mobility is already delivering.

Innovative developers have introduced cool and life-changing mobile applications (BlackBerry, Telenav, and Loopt come to mind) in an essentially dial-up world. We’re a couple of years into ADSL-speed broadband, but not yet at mass adoption, and cable-modem-fast WiMAX networks are just around the corner. Mobile browsers, operating systems, and even carrier platforms are opening new windows for innovation.

I don’t know what this new revolution will bring, but I believe that mixing always-with-you broadband connectivity, location, presence, a device with camera/processing power/impressive display/touchscreen, push-to-x, and innovation will change our lives forever.

Join me at Mobilize to get a glimpse into that future.

Russ McGuire is Vice President of Strategy for Sprint Nextel, and the author of The Power of Mobility (Wiley, 2007). Russ blogs regularly at McGuire’s Law.

By Russ McGuire

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  1. Russ,

    This was well written. Up until you said:)

    …”I’m thankful to now work for a visionary telecom company. Sprint PCS…”

    Is Sprint PCS selling Android cell phones?

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  2. Ah, the classic days of dial-up internet, it’s remembering back to then that I roll my eyes whenever people complain about current broadband speeds.

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  3. Hey Alex,

    Is anyone selling Android phones yet? ;)

    I’m sure you know that Sprint is a founding member of the Open Handset Alliance and has indicated that it will sell Android phones in the future. I’m curious – do you see that as an indicator of vision or blindness?

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  4. [...] set the stage for Mobilize, my thoughts on “Mobile Broadband – A New Revolution?” are up at GigaOm.  Check it [...]

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  5. Hi Russ:

    We were both at that same LD company at the same time — I was an RSM in the east. Your soon-to-be CEO who thought internet was worthless in 1994 ending up spending $14 Billion (with a “B”) less than 4 years later to get his company into the internet …..

    I hope things are going well for you at Sprint Nextel. Are you by any chance going to be moving over to the New Clearwire?

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  6. Hi Russ,

    I’ve been with Sprint for > 10 years, and hope the WiMax comes soon to Silicon Valley and at an affordable price – I’d be very interested in multiple connections for one price — for home (DSL replacement) and road (Nokia N810).

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  7. Hi Russ,

    That was a very well written article – I completely agree with your assessment that we are in the throes of a mobile broadband revolution. Unfortunately, Western Europe and parts of Asia are way ahead in charting this mobile broadband revolution. The biggest challenge confronting mobile users here in the US is the high cost of mobile broadband. I attempt to show in this blog entry of mine how mobile broadband pricing in both Western and Eastern Europe is actually cheaper than fixed broadband options.

    http://mobilebroadbandblog.wordpress.com/2008/09/11/interesting-chart-on-mobile-broadband-pricing-premium-or-lack-thereof/

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  8. Those were the days, Russ! I realize how far we have come when I see my wife twittering on her iPhone. Great post.

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  9. Sorry to rain on your parade, but from my perspective of small business entrepreneur I don’t even see Lenin going to Switzerland yet, let alone revolution. With tight caps on bandwidth consumption all my choices with broadband internet a really limited to casual browsing and checking e-mail.

    5GB limit and e-mails size of 0.05KB? Have you ever seen a 20-line legal disclaimer at the end of EACH e-mail coming from corporate e-mail account? Throw in some Excel spreadsheets, Word documents, maybe couple of PDFs and think of what’s left.

    BTW, if I did the math correctly, the total throughput of always on 24x7x30 28.8 kbps dial up connection is 9GB. Please check it from your end :)

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  10. [...] GigaOM’s Mobilize conference is this Thursday. It is designed to bring to you the future of the broadband mobile web [...]

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