How the Internet Happened

by Brian McCullough

  And that wasn’t the worst of it. What really stuck in Clark’s craw was the fact that he wasn’t filthy rich. Clark believed he had built SGI into a technology powerhouse that rivaled the likes of Microsoft and Oracle. And yet, he had nowhere near the wealth of Bill Gates or Larry Ellison to show for it. The need to raise venture capital in the early years of SGI’s development had repeatedly diluted Clark’s ownership share so that, despite Silicon Graphics’ billion-dollar valuation, Clark had a net worth of only about $20 million. He had billionaire envy.

  Clark told SGI and the press that he wanted to start a new company. He resolved that this time he would do things his way, and he would hold on to enough equity to become a billionaire. The trouble was, Clark didn’t know what his new company would do, exactly. He had some vague ideas about creating software or hardware for interactive television, what was being called the information superhighway. The information superhighway was supposedly the next big thing, and that was exactly what Clark wanted to be a part of. He even went so far as to have exploratory meetings with companies like Time Warner and Nintendo. After all, if interactive TV was the next big thing, then you could do worse than have the founder of Silicon Graphics helping you build the set-top boxes.

  But really, Clark was just casting around for anything that would give him a second act. And this meant that he was open to ideas. Any ideas. He turned to his friend Bill Foss, a veteran Silicon Valley engineer; did Foss know anyone smart Clark could talk to?

  “Well, what about Marc Andreessen?” Foss asked Clark. “He just moved to Palo Alto from Illinois.”29

  By way of explaining who Andreessen was, Foss loaded a version of the Mosaic browser onto Clark’s computer. Clark must have been impressed; shortly after his first session using Mosaic was over, he sent the following note to Andreessen’s personal email address:

  Marc:

  You may not know me, but I’m the founder and former chairman of Silicon Graphics. As you may have read in the press lately, I’m leaving SGI. I plan to form a new company. I would like to discuss the possibility of your joining me.

  Jim Clark.

  Sometime in early 1994, Jim Clark and Marc Andreessen met at 7 A.M. at a coffee shop in Palo Alto called Caffe Verona. Andreessen had found a job at a Palo Alto–based company named Enterprise Integration Technologies, working on Internet security products. Even while gainfully employed, Andreessen certainly knew who Jim Clark was, and he was very interested in whatever new venture he might be cooking up.

  Andreessen would later remember that it was the first time he had been up that early in several years. Clark told him that he was looking to start a new company. He didn’t know what kind of company it would be yet, but he was looking for people to help him figure it out.30 Clark must have been impressed with Andreessen, because he invited the young engineer to join a small group of Clark’s trusted associates, including Bill Foss, who would meet on a regular basis at Clark’s house to kick around ideas.

  During one such confab, at about one in the morning in late March 1994, Clark said to Andreessen simply, “You come up with something to do and I’ll invest in it.”

  “Well, we could always build a Mosaic killer,” Andreessen told him.

  ■

  MORE THAN ANYONE ELSE in the world, Marc Andreessen knew that the next big thing was the World Wide Web. The information superhighway might have been what all the smart, big money people like Clark thought was going to be next, but Andreessen understood that Clark didn’t have to chase dreams of interactive TV or cut deals with cable companies—the future was already here, and millions of people were already using it.

  It came down to simple numbers. Andreessen showed him that users of the web were doubling every few of months at that point—absolutely exponential growth. Clark didn’t know how someone could make money off that growth exactly, but he figured with numbers like that, there had to be a way. Andreessen had proven with Mosaic that a web browser was a pretty darned good way to piggyback on that growth explosion. As Clark came around to this point of view, the notion that thrilled him the most was the idea that they could pounce on this opportunity first. Let the rest of the world develop the information superhighway. He and Andreessen would deliver it before anyone else was any wiser.

  What would eventually become Net­scape was formally incorporated as Mosaic Communications Corporation on April 4, 1994. The first order of business was locking down a software team capable of coding a better browser. Andreessen had been careful to keep in touch with his former colleagues back in Illinois, so it was just a matter of getting the band back together.

  “Marc basically sends mail, says, ‘Hey, I met Jim Clark. He’s a cool guy. He’s looking to start up a company. And I’m talking with him about what we should do,’ ” says Jon Mittelhauser.31

  “One thing led to another,” remembers Aleks Totic. “And he said, ‘We’re not going to do a Nintendo network, I think we’re going to do the web.’ ”32

  Clark and Andreessen flew back to Urbana-Champaign and checked into the University Inn. They met their quarry (the original Mosaic team: Eric Bina, Aleks Totic, Jon Mittelhauser, Rob McCool, plus two additional outside engineers, Chris Houck and Lou Montulli) at a pizza place near the University of Illinois campus. Clark offered the men identical $65,000-a-year salaries, one week’s paid vacation in Tahiti on Clark’s own yacht, and, more important, 100,000 shares of stock in the new company.

  “So, we go out to this place and they’re basically like, ‘Yeah, let’s do Mosaic, except let’s make a company out of it,’ ” says Rob McCool. “He [Clark] has this Jedi Mind Trick speech where he brings us all upstairs and we all come down saying, ‘Yes, we’re going to make a company! It will be great!’ ”33

  Clark told the team: “Within five years, if things go the way I hope they will, it is my objective that you make over ten million [dollars].”34

  Clark typed up identical agreement letters on his laptop and had them printed on the University Inn’s fax machine. The whole team signed on and retired to a bar named Gully’s to celebrate.

  “We didn’t really know much about Jim Clark,” says Aleks Totic. “But we trusted Marc. He gave us all these papers to sign. We just met him for one night. Next morning, we all walked in and quit. That was on Thursday. On Saturday, we were in California picking out apartments.”35

  Today, recent college graduates from around the world dream of heading to Silicon Valley and finding their fortune. The original Mosaic crew was the first to make this journey. They didn’t know they were the vanguard of a newfangled gold rush. They were, literally, corn-fed midwesterners. They were used to making six bucks an hour for their coding and had little inkling that software development could pay much more than that. When Jim Clark dangled a high-five-figure salary in front of them, they almost thought he was joking.

  But the midwestern kids showed up in California to find that 11,699 square feet of real office space had been secured for them above a Mexican restaurant at 650 Castro Street, the main drag in the town of Mountain View. Work quickly commenced on a new web browser that would be better than Mosaic. Mac, Windows and Unix versions of the new browser would be developed simultaneously. The browser code and the server code would be rewritten, with a focus on greater speed, greater stability and better features. In other words, this was to be a proper product, not just a research project.

  Their first effort had been a bit of a hobby, a lark project. At the NCSA, “we were students; we were just having fun,” Mittelhauser recalls. “We had no thoughts about quality, really. That was the coolest thing about doing Net­scape after Mosaic. We literally started from scratch and were able to avoid many of the same mistakes (while of course making new ones).”36 This time they would do it better and get it right. All hands were tasked with speedily producing what the team of young coders had dubbed “Mozilla,” suggesting that the new browser was a monster set to devour their previous brainchild, Mosaic.

  ■

  THE
COMPANY THAT WOULD BECOME Net­scape was the first web company, the first true dot-com. In so many ways, it blazed a trail and set a template for what we think of as a modern technology startup. Details we take for granted about the modern tech industry can trace their roots to the Net­scape story, whether accidentally or by design. One of the ways this manifested was in the corporate culture of the young company. Everything was about speed, about what Jim Clark would call “Net­scape Time,” but would later be widely adopted by the media as “Internet Time.” For most of the twentieth century, the “product cycle” was something that happened in a comparatively leisurely, plodding, measurable pace. But as has become common to the point of cliché over the last twenty years, in the Internet Era, change—whether to products, industries or entire economies—would come literally overnight.

  With Mosaic, the NCSA kids had stumbled upon something that truly represented a new method of software development, a new ethos for product development. Software, at the time, meant floppy discs or CDs sold in cardboard boxes at retail. Jim Clark came from the world of machines and hardware, where development schedules were measured in years—even decades—and where “doing a startup” meant factories, manufacturing, inventory, shipping schedules and the like. But the Mosaic team had stumbled upon something simpler. They had discovered that you could dream up a product, code it, release it to the ether and change the world overnight. Thanks to the Internet, users could download your product, give you feedback on it, and you could release an update, all in the same day. In the web world, development schedules could be measured in weeks.

  It was this new paradigm for product development, more than anything else, that was Net­scape’s first contribution to the modern idea of “a startup.” Marc Andreessen described it this way: “You keep kicking versions out the door, making them better. Any individual product is less important than the basic idea. If a beta turns people off, you put out a beta that turns them back on.”37 Jim Clark eagerly embraced this new way of doing things. “You didn’t build some physical thing, move it down an assembly line, box and shrink-wrap it, and stick it on a store shelf,” Clark wrote in his autobiography. “You conceived of it in your head, produced it in a computer, and tossed it up for grabs on the Net.”38

  This new paradigm demanded an almost 24/7 work schedule, another now ubiquitous feature of Silicon Valley that Net­scape would enshrine. During the period of the new browser’s development, a young programmer named Jamie Zawinski regularly posted to an online diary. These entries (which would be considered blog posts today) captured what it was like to be a member of the team. He described working for as many as thirty-nine straight hours, catching catnaps under the desk in his cubicle, missing meetings because of fatigue, hoping to catch his “second or third or eighteenth wind.”39

  Software engineering has always been a pursuit that lends itself to intense bouts of work, long bursts of productivity when you come up for air and realize you’ve been coding for days straight. In a way, we can’t blame Net­scape for the high-intensity template that it would bequeath to our collective understanding of startups. Even though so many of the breathless news clippings from the time focused on the all-nighters and the frat-house hijinks of the Net­scape offices, these were, after all, young men fresh out of college. That’s just what they knew.

  “We [were] working around the clock because that’s what you used to do before,” says Aleks Totic. “Four years later, five years later, the entire valley [would] be living the same lifestyle. But those people actually have lives. We really didn’t have any lives outside of the office so of course we’re going to be at the office all the time! I mean, I had no furniture. Why should I ever go home?”40

  Lou Montulli says, “The press just take what they think is most interesting, juicy and fascinating out of their limited time and they publicize that. Especially post-Net­scape, in 1998, 1999, every startup was trying to do the things they read about in magazines.” Montulli admits that his own schedule was inhuman at the time. “I would catch about four or five hours of sleep at the office . . . wake up and do another 20 hours and then go home and sleep for about 12 or 15 hours and then start the whole cycle again. I wouldn’t recommend doing that to your average startup. Unfortunately, a lot of startup people think that that’s the way it should be done because of all the publicity we had.”41

  Other features that now define Silicon Valley startups include the informal working environment and the insane perks that companies seem to dole out freely. Net­scape pioneered this informal work culture as well, but in retrospect you have to wonder if it was all just a matter of motivating twenty-something male software engineers.

  Net­scape had foosball and air hockey and networked computer games and anything else postcollege bros thought was cool circa 1994. The most notorious intracubicle competitions were the bouts of chair football, gladiatorial contests pitting contestants against each other while riding atop their rolling desk chairs. Chair football was brutal, and sometimes even bloody. “We probably took out about ten chairs [because of] that game,” recalled Bill Foss, who had joined the company as an advisor.42

  “There was a huge movement to play multiplayer Doom [in the office],” remembers Rob McCool, referencing the then-popular first-person shooter video game. “It got to the point where they started having to threaten disciplinary action; making policies of no gaming before 5 P.M. and that kind of stuff.”43

  One person who was seldom participating in any of these hijinks was Marc Andreessen. Nor was he participating in the all-night coding sessions. Now, in California, at a real company, developing a real product, Andreessen’s role was different. Jim Clark had made good on his offer to build a company around Andreessen’s ideas. From the earliest days, Andreessen was referred to as the new company’s cofounder.

  Andreessen had been dragooned into becoming the public face of the new enterprise. Rosanne Siino, a PR manager who had followed Clark over from SGI, knew she had a good story on her hands. “I thought, I’ve got the Internet, which is hot; I know I can make a big deal out of that. I’ve got Jim Clark, who is hot,” Siino remembers. “And then I’ve got this twenty-two-year-old wonder kid. No matter what, it’s going to get a lot of coverage.”44 Soon, Andreessen and Clark were being featured like a dynamic duo in articles like Fortune magazine’s “25 Cool Companies” list. Fortune dubbed Andreessen “the hayseed with the know-how.”45 The San Jose Mercury News featured Andreessen in an article titled “He’s Young, He’s Hot, and He’s Here.” Toward the end of 1994, People named Andreessen one of its “Most Intriguing People,” alongside a young golfer named Tiger Woods.46

  At the same time, Andreessen and Clark were settling upon the business strategy the new company would pursue. To this end, the pair increasingly looked to the obvious inspiration at that time: Microsoft. Microsoft’s operating systems had a monopoly hold on the personal computer market. DOS and Windows were the platforms that the vast majority of the computer world had to build off of and exist on. If you were a programmer and you wanted to create a program that would reach the greatest number of users, then you worked with Bill Gates’s platform. Sometimes that meant paying a toll to Gates, and sometimes it didn’t. But either way, you played ball with Microsoft or you found yourself and your program relegated to the hinterlands of the computing world.

  Andreessen and Clark began to think of the web browser as a sort of platform for the web. Why couldn’t the web browser be the DOS/Windows for the Internet? The key was to become the market standard, which meant being first. But becoming a platform also meant enticing developers to develop for your platform. Almost from the very beginning, Andreessen and Clark wanted their web browser to enable an ecosystem that other programs, and even other companies, could be built off of. Throughout its life, Net­scape would embrace open-source culture and practices. If they were the first browser to introduce support for an innovation, they didn’t make that advance proprietary. They allowed the new feature to be used by others, ho
ping it would become standard, and hoping they would get credit for the innovation and for being first. A good example of this was the Secure Sockets Layer (SSL) technology, which Net­scape would pioneer. This is the encrypting technology that makes secure interactions on the web possible. Net­scape’s browser would be the first to feature this technology, but Net­scape left the underlying standard free for others to use and support. This open attitude toward the technology is what allowed the first ecommerce activities to begin flowering across the web. Net­scape benefited as the underlying platform that was the most trusted and valued by users. Net­scape also eagerly supported and incorporated the advances of others—for instance, the Java programming language when it emerged. Net­scape would even encourage others to build add-ons and plugins that would interact with Net­scape’s own software, adding features and functions that Net­scape itself couldn’t dream up.

  Throughout the Internet Era, company after company would become obsessed with the idea of creating or owning a platform. If you are a platform, you can create an ecosystem of developers and software and apps all dependent on the underlying platform. To own a platform is to own the ball field, the rule book, the turnstiles, and the broadcast rights. Net­scape did not originate the obsession with platforms, but it would provide the template.

  While he and Andreessen were busy hashing out product and strategy, behind the scenes Clark was busy forming a company that would be ready for the big leagues. Experienced engineering managers were brought in to oversee the development team. Clark knew he wanted a world-class CEO (he himself was content to be chairman of the board), and he swung for the fences, setting his sights on Jim Barksdale, the much-in-demand former vice president and chief operating officer at FedEx, and currently the CEO of McCaw Cellular.

  Clark also raised capital for the company, though he put that off as long as he could. Having been burned by his SGI experience, for many months Clark funded operations out of his own pocket, keeping a firm grasp on his sizable equity stake. When the time finally came for investment, Clark’s reputation secured funding on very favorable terms from the premier venture capitalist in Silicon Valley, John Doerr, a partner at Kleiner Perkins Caufield & Byers. Kleiner Perkins (as the firm is generally known) had directed venture capital funding for such early technology giants as Compaq, Intuit and Sun Microsystems, and Doerr himself would go on to fund web companies such as Amazon and Google, among many others, in the coming years.