Burn Rate

by Michael Wolff

  Ken Cron, about forty, I guessed, a plump pixie with tie askew and shirt gaping at the buttons, was CMP’s chief operating officer, but he seemed more clearly practiced as a salesman than as an executive. He drew his chair close to my desk in some weird combination of conspiracy, ingratiation, and intimacy, and I soon learned that he had spent his whole career with CMP, had seen it grow from a fledgling company to an important fixture in the technology business, and that while not a member of “the family” (i.e., the Leeds family, the billionaire owners), he himself, he would have me know, had a vision for where the company was going (and was taking home a seven-figure salary to prove it). CMP was going to be a force in bringing computers into every single American home. Computers, he confided to me, were on their way into every room in every American home! His number two was a lumbering bear in his mid-fifties with the euphonious name of Drake Lundell and an Ed McMahon avuncularity. He seemed more a toastmaster than, as Cron described him, the “creative genius” of the company.

  They were a great audience. They had never seen the Internet but were convinced of its charms. Because they published magazines about computers, they, unlike executives in more mainstream media companies, were predisposed to the virtues and the inevitability of digital technology. Still, they did not personally use nor did they have any special abilities for technology. They had no real experience, in other words, to get in the way of their enthusiasm. They were at that point in time, for instance, and for several years to come, unable to receive e-mail successfully. But no matter. We were all very self-congratulatory that we all had the foresight to understand that this new medium would be the next television.

  “We saw your proposal yesterday morning, didn’t we, Drake?”

  “We did.”

  “And, well, open kimono here, Mike . . . or Michael?”

  “Michael.”

  “We’ve been thinking about something very similar.”

  “Great minds,” said Lundell, “think alike.”

  “Of course, we never put it together with such flare. Right, Drake?”

  “You gave it a lot of flair. It was super.”

  “We were at a company retreat. Right, Drake?” Cron then lowered his voice: “We were trying to figure, you know, what’s the next big thing? We had just launched our Windows title. And we beat everybody on that. Everybody got caught with their pants down. Ziff. IDG. Windows is the fastest-growing title in the category. So we’re sitting around thinking about what’s next, and one of the things we came up with was online. We thought online. Not yet. But it was going to come. You have to think like this. You have to think, ‘What’s next?’ You have to think about what’s next before everyone else thinks what’s next.”

  “But not too much before,” said Drake.

  “Not too much before,” grinned Cron. “So we started to think about everybody who’s getting online. Prodigy. CompuServe. America Online. Internet. It’s big. It’s going to be very big.”

  “What about Wired?” I asked, wondering how the year-old magazine had affected their worldview.

  “Pretty wacky,” said Lundell.

  “It’s not competition for us,” said Cron dismissively. “They just got money from somebody, didn’t they?”

  “Condé Nast,” I said, but Condé Nast did not prompt any apparent respect or even, necessarily, recognition.

  “Yeah, they’re in real bad shape,” said Cron.

  Wired was some way-extreme techno rock and CMP clearly saw itself as top forty.

  They handled the book version of NetGuide with both interest and uncertainty. “Where will you sell this?” asked Cron. “Where will people buy it?”

  “In bookstores,” I said, unclear what they were getting at.

  “So . . . like . . . Howard Stern’s book?”

  As sons of Long Island, I supposed this wasn’t an entirely illogical association. But I suddenly had the feeling that they could not have readily named another book.

  “Let me tell you a little about how CMP works,” said Cron. “When we decide to do something, it’s a total commitment. It’s 200 percent. We want to be first, and we will spend more money than the next guy could ever dream of spending in order to be first.”

  This is the credo of the software business. It’s a marketing credo. The Microsoft credo.

  “Actually,” I said, “I wonder if that’s necessary here. I think that we have an opportunity to create a magazine that can speak to this new—”

  “But what happens when Ziff gets into the business,” said Cron rather frantically, “or IDG or . . . even Microsoft? Drake?”

  “There’s a lot of synergies here.” The Drakester bobbed his head.

  “This is what I’d like to do, Mike. Let’s have you out to CMP. Let’s have you take a look at us. Open kimono. Meet the Leeds family. Give you a sense of how we do business.”

  “I’d be willing to do that.”

  “How ’bout tomorrow?”

  “Tomorrow?”

  Undoubtedly, this was the moment when I should have demurred. I should have pulled back because these two seemed like Stan and Ollie to me, or Vladimir and Estragon, and I should have been looking for better partners. But the truth is that it was 1994 and the Internet was not something whose inevitability could be taken for granted. Reasonable people looking at the Internet that winter might not have seen it as the television business, they might have seen it as the library business. Now there was a glamorous concept: not TV Guide but Library Journal.

  “They want to do this,” I said, immediately calling Alison.

  “They do?” She seemed suspicious.

  “I’m going out there tomorrow.”

  “Who exactly do they think you are?” She asked, in a tone that was not entirely flattering.

  “I’m not sure they can place us. They clearly don’t know from books. And they don’t seem to have a good sense of the media community. I think they think we’re the smart people and the hip people, which they basically have contempt for, and that they’re the practical people.” I shrugged.

  “Do you think that’s a basis for doing business?”

  With more than a little incredulity (both CMP and the Internet seemed like odd occurrences in my normal life), I made my first trip out to CMP. Its headquarters, just off the Long Island Expressway, was one of those low, sprawling mirrored-glass office buildings that suggest from the outside little about what goes on inside. This exterior facelessness complemented the company’s resolute lack of identity and a decor that was closer to a driver’s ed school than to a media or technology company. Its walls were filled with framed awards and honoraria; the covers of CMP’s lineup of publications, including VAR News and Computer Reseller News, and handmade birth announcements and other motivational posters and artwork.

  My visit to CMP was at a “State” level. I was whisked immediately into a conference room which, while it could have nicely accommodated today’s instruction on parallel parking, served as the executive war room, with overhead projectors and white boards.

  There the bantamweight Cron, in an open-necked shirt, and the bearish Lundell, in a bulky sweater, were joined by a classically colorless CFO and the heir to all this, Michael Leeds, son of the founders, a slight and sulky man in his early forties with a remarkably full and lustrous pompadour (the heft of the hair made him seem all the slighter).

  Leeds, who had grown up on Long Island, not ten minutes from where he now worked, was worth, quite possibly, a billion dollars.

  Ten or twenty years from now, I thought to myself, computers will not make ordinary schmoes fabulously rich anymore. But one of the wonders and inequities of America is that if you inadvertently grasp the idea of the moment a moment before . . . well, good for you. I didn’t yet dare say, “Good for me”—but I was starting to think it.

  “Have you been given a copy of the CMP principles?” asked Leeds.

  “We’ll give you a copy to take with you,” said Cron, trying to hurry the conversation off t
his point, I thought.

  “Actually, I noticed them on the wall,” I said (“Be a great company to do business with,” etc.).

  “You can ask anyone,” said Leeds. “We adhere to these principles strictly.”

  “It’s not just bull,” said Cron.

  “I think you’ll always find that in dealing with us we’ll go out of our way to do the right thing,” said Leeds.

  I nodded.

  “Ken and Drake have been telling me about your idea,” began Leeds.

  “It’s really a variation on an idea we’ve been talking about,” said Cron.

  “Why don’t you tell me why you think it has a chance to be successful,” Leeds said in a slightly aggressive manner.

  “Have you taken a look at the materials we prepared?” I asked.

  “I’d like to hear it in your own words.”

  “Those are, actually, my words. But . . . I think the opportunity we have—at the end of the day there aren’t that many good ideas—but there’s one and it’s called TV Guide. And if you can find that model again, that is, to look ahead and to see what the whole country is going to be doing and to create a guide for how to do it, well—”

  “I haven’t been on Internet yet,” said Leeds. “I’m going to be trying it soon.”

  “Hey,” Cron said, either naively or with interesting calculation, “why don’t we go to Mike’s office and have him give us a demo?”

  “In the City?” Leeds’s eyes narrowed.

  “It’s really not necessary to come in, if you don’t want to,” I said with a sinking sensation that the jig would be up if we had to mount a demonstration (I thought of the painful experience at Random House).

  “I’ve had it described to me. I can envision it.”

  “I think we should see it,” prodded Cron.

  “Sure,” said Leeds. “We’ll definitely want to take a look.” But he clearly had little interest in looking at it, or in making the drive into Manhattan. “It’s TV Guide for the Internet.” Leeds had already convinced himself. “Everybody’s gonna need something like that. It’s gotta be coming. It’s gotta be.”

  “It’s a great idea,” said Cron.

  “Great minds think alike,” said Lundell.

  “We gotta do this,” said Cron. “It’s gonna be great.”

  The world seemed to be dividing cleanly between those who had no interest in the Internet, saw no logic or sexiness in it, and those who were just dying to believe in it.

  “What do you want?” Leeds asked. But that question made him impatient. “Let me tell you how I see this,” he said. “It’s 1967. Mossad has just picked up rumors that Egypt is planning a first strike. Israel’s response is unequivocal, overwhelming, decisive. That’s the way I want to get into online.” Anger flowed off of him.

  “There’s a lot of synergy here,” said Cron, diving in. “We have a lot of leverage in the market, and you have a really well developed concept. I think we want to take the next step. We ought to decide if there’s something we want to do together or not. If not, nothing lost. You’ll do your magazine, and we’ll do ours.”

  A hollow threat? I thought. That must mean something.

  Leeds took me on a perfunctory tour of the CMP executive office area. He was an uncomfortable person. His facial expression moved from pained smile to a brooding scowl. People stiffened when he passed. Then, in a gesture whose significance I did not immediately understand, he brought us into a room where some desultory festivities were in progress around two miniature, carefully preserved elderly people.

  “You’re going to meet Gerry and Lilo, the founders,” whispered Lundell excitedly.

  And on the first date, I thought.

  “Mom. Dad. This is Michael Wolff. He’s working in online. Like Prodigy. We’re talking to him about a concept.”

  I smiled. “It’s a very exciting concept.”

  “Speak louder,” said Leeds.

  They wanted to see something.

  An ever-growing CMP delegation arrives in our office the next day with the same flurry of parking questions and apologies about the traffic. The delegation includes an executive assigned to the project and another new business development person and a chief technology officer, plus Cron, Lundell, the CFO, and Leeds.

  The top executives—indeed, the whole top management layer—of one of the fastest-growing information companies in the nation gather around our Macintosh and scrutinize our hundred-dollar FileMaker Pro database (as rudimentary a program as you could pull off the shelf), into which we had haphazardly recorded a few thousand newsgroups, gopher addresses, ftp, and telnet sites. And they are dumbstruck. Notionally, they seem to believe that we have somehow blocked out the parameters of the Internet, that we have captured the Internet and bottled it. And they want it.

  It is a condition I have come to recognize. If you have the money, if you are a buyer, then you want to own something. The fact that the Internet is not ownable is an annoyance that few buyers are willing to accept. They know there must be something they can buy. In the age of the Internet, many Brooklyn Bridges will be sold.

  “What about sailing? Can you show me something about sailing?” says the Drakester.

  “What about Porches?” Says one of the execs excitedly.

  “What about skiing?” says Leeds.

  Skiing it is, as we pray that we had entered something—anything!—about skiing into the database. Bingo. The newsgroup rec.sport.skiing pops up, which has everyone awestruck.

  In part, this is charming. It is a wonder-of-technology tableau. Men at play. What they are seeing for the first time is the stark wonder of the medium, that anyone can access information about anything. On the other hand, it is unnerving. The Internet is as new to the technology industry as it is to the rest of the world.

  Over the next week, CMP sends to our office the range and breadth of its brain power: its technical teams, its marketers, its outside consultants.

  Then one fine day, Alison and I, with a $125-per-hour car (leather-upholstered Fleetwood) and driver, set out for the glass headquarters on Long Island to talk a deal.

  I knew I was going to get rich.

  I was not sure, though, what I was going to get rich for. Would I get rich for being a visionary? Or would I get rich for being a charlatan?

  I was, alternately, giddy and embarrassed.

  A life of fairly conventional ethics and ambitions had not prepared me for this.

  Fuck ’em.

  Our proposal was reasonable and straightforward: we were looking for partners to provide the capital to develop a magazine about the online world. We saw this magazine as having both a print and an electronic side, it should be represented on the literal as well as the virtual newsstand. I was not, in fact, thinking I could become Annenberg with this notion—hardly. I thought that the audience for this magazine was mostly made up of young men who were pioneering a fairly exclusive world of their own idiosyncratic design and that the magazine should be much less TV Guide and much more about a world that few people had access to—noir, sexy, new . . .

  What CMP had in mind, on the other hand, was a magazine that would make the Internet safe for families. Indeed, they had no idea that it might not be the safest place for the whole family. Through the morning, I hinted and prodded at this cultural dissonance. It was hard, though, to communicate this divergence without insults. It is hard to tell people who are not sexy that they are not.

  “It’s a mass medium. Everybody will have Internet. Everybody will have to have Internet . . . like television. The magazine, NetGuide magazine, has got to have wide appeal,” said Leeds, the believer.

  “Yes and no,” I counseled. “There’s still a lot of subtleties to the medium.”

  “Netiquette,” said Lundell. “That’s kind of good online manners. People on the Net have made it up.”

  “Well, that’s a good article!” said Leeds.

  “I’m not sure you want to create a magazine about the Net for people who don’
t use the Net.”

  “But they will,” Leeds said, sold.

  “There’s an interesting thing that happens with the Net. As soon as people start to use it, they become experts. So I don’t think you want a magazine that isn’t, well, cool.”

  “They all say ‘cool’ on the Net,” said Lundell.

  “You guys, for instance,” I said playfully, “are not cool.”

  No one smiled.

  I hurried on: “One of the virtues of working with us and of letting us create this magazine is that we have, I think, a feeling for this community, this sensibility.” I was trying to find nonfighting words to tell them they were ploddingly square, dull, uncool.

  “The essence,” I said, “of a magazine like this is to get inside, not to be looking in from the outside.”

  “They hate you,” Alison analyzed during a break in the meeting, after our steam-tray lunch.

  “Why would they hate me?” For a second, I was honestly taken aback.

  “You keep implying that the Internet is only for a certain kind of person, and not them.”

  “Well—”

  “This is not high school. This is business.”

  “Fine. What do you want to do? I don’t even know why we’re here then? Why don’t they just kick us out?” I asked petulantly.