Release 2.1: A Design for Living in the Digital Age by Esther Dyson

From Barnes & Noble

The Barnes & Noble Review
Hailed as "the most powerful woman in the Net-erati," Esther Dyson has acted as an entrepreneur, analyst, and adviser to corporations and governments at the forefront of information technology for more than 20 years. A bold and brilliant pioneer in cyberspace, she possesses a keen awareness of the impact and implications of the digital world on all aspects of daily life. In her breakthrough book, Release 2.0: A Design for Living in the Digital Age, Dyson offers a visionary and provocative view of our impending future — even as she explores the choices we all must face as active members in an increasingly interactive society.

For years, Esther Dyson has been editing, writing, and publishing her influential industry newsletter, Release 1.0, which is read by media leaders all over the world. In this new book, Dyson takes a step back to share her ideas with a much broader audience. Taking its title from a software industry term for the version of a product released after the first version has been thoroughly revised, as well as from the title of her newsletter, Release 2.0 reveals an insider's understanding of how the Internet world will work and how we can work within it. But readers will not be daunted by the high-tech language — in Dyson's own words, "[It's] a book about the highway system for people who don't drive. They may not be on the highways, but they still should want to know how they work, where they go, how much they cost (in taxes, and otherwise), how they influence how people live their lives."

Calling attention to themyriadopportunities, trade-offs, and potential dangers throughout the digital landscape, Release 2.0 empowers and challenges readers to devise practical solutions to the issues we face. With an eye on causes for both concern and celebration, Dyson considers issues that affect us all: work, education, content control, security, and intellectual property. Above all, Release 2.0 provides a promising road map of our digital future; the Net, Dyson maintains, has untold power to celebrate human nature, creativity, and diversity — if we do it right.

From the Publisher

A provocative and visionary look at our new digital society, from "the most powerful woman in the Net-erati" (The New York Times Magazine).

Welcome to Release 2.1, Esther Dyson's fascinating exploration of life in our new digital society.  In this provocative and timely book, Dyson--an entrepreneur, high-tech industry analyst, government adviser, and Net expert--examines the impact and implications of cyberspace, challenging us to think intelligently about its effect on every aspect of our private and public lives, from businesses to government to education.  Written with an insider's knowledge and ready wit, and filled with anecdotes about the movers and shakers behind the products and politics of the computer industry, Release 2.1 presents us with a hard-hitting message: With the advent of the Internet, we all have both the opportunity and the obligation to shape the new rules we want to live by.

Publishers Weekly

Despite its technical title, this first book from the New York Times-dubbed "most powerful woman in the Neterati" summarizes 20 years of experience and intelligent speculation for those whoWeb-savvy or notare wondering what all this wiring is going to mean. Editor of the newsletter Release 1.0 (from which some portions of this book are directly pulled), chairwoman of the Electronic Frontier Foundation and president and owner of EDventure Holdings, Dyson doesn't present many surprises here for those familiar with her thought, but nearly everything she says is worth hearing, even twice. With a firm grounding in the status quo, Dyson simply and clearly envisions the role of the Web in humanity's future, from how it will affect education to how new business models for intellectual property will emerge. "The source of commercial value will be people's attention, not the content that consumes their attention," she says. As reproduction is made cheap and fast, "businesses who make content will have to figure out ways other than selling copies to make money, and they will." Perhaps the greatest achievement here of this prescriptive visionary is her brilliant balancing of the intersection of life and technology. With a vigorous optimism that will bring some relief to the paranoid, this longtime sage to the wired now puts her thoughts in a form that will allow many to see what the impact of digitization on our lives is, and what it will be. 125,000 first printing; first serial to Newsweek; BDD Audio Cassette; author tour. (Oct.)

Library Journal

This landmark expedition into the philosophy of life on the Internet (LJ 11/1/97) is excellently read by Candice Agron. Author Dyson has taken an inspired, thoughtful look deep into cyberspace and come up with predictions on the future therein. As many listeners will know, Dyson's credentials are appropriate for making such predictions on the use of the Internet. She is to be commended for making a powerful, reasoned argument for self-regulation of cyberspace by the citizens of the Internet communities. Along the way, Dyson gives the listener a wealth of information on the use and development of the Internet and pertinent insights into the responsibilities of cyberspace citizenry. All ages and even the savvy cybrarian will learn something here.Cliff Glaviano, Bowling Green State Univ. Libs., Ohio

Product Details

• Table of Contents
• Interviews & Essays
• Read an Excerpt
• Read a Sample Chapter

Table of Contents

Interviews & Essays

Esther Dyson: Glad to be here, too.

Esther Dyson: My opinion is I don't like it, but I think the only means of control should be individual control, or the choice of parents or guardian control.

Esther Dyson: I think it's a valid concern, but there are ways of dealing with it. It's just like being burglared is a concern and locking your door is a valid concern. In the case of privacy, you want to know what they're doing with your data, and it's your right as a consumer to ask. The Electronic Frontier Foundation, of which I am chairman, is cosponsoring a foundation called TRUSTEE (www.trustee.org) to ensure that this can happen. I won't go into it here, but point your browser....

Esther Dyson: Sorry, I won't be passing through Knoxville, but check with your local Barnes & Noble -- they'll have some signed copies. Or send them to me and I'll send them back.

Esther Dyson: There's no magic answer, but at least in Eastern Europe, here is what I'm doing: You try and persuade their governments (which control the PTTs) that the Net is a medium for commerce, rather than just a concern for the telecom industry. One person who's helping to do that is the U.S.'s own Ira Magaziner, who is leading Clinton's Global Electronic Policy. So far it's slow going, but I'm seeing some progress.

Esther Dyson: "Release 2.0" is sort of a joke, because I also have a newsletter called Release 1.0. The newsletter is for business types mostly; the book is really for citizens and what I call rule makers. "Release 2.0" is also the name given to the second version of a software product.

Esther Dyson: The incumbents will always somewhat resent the newcomers. But I think the issue has more to do with the architecture than with what is being carried. Certainly PCs are more centralized than what came before.

Esther Dyson: It is already a crime to breach copyright -- I don't think a new law is necessary. (Many laws have unintended consequences.)

Esther Dyson: I don't know if I'm allowed to mention it, but it's a tool that rather than let kids play games, lets them design games for themselves and their friends. And if you're really interested, send me email and I'll forward it to the creator, and he will reply if he wants.

Esther Dyson: Yes, fundamentally I agree, but you'd be amazed to see what people who grew up without PCs can do when they have the time, which some do when they retire. Some of you are probably watching right now -- chime in if you're over 50!

Esther Dyson: Other people, very simply.

Esther Dyson: This is a broad one, but fundamentally, it's email. You may be hoping to hear about new multimedia extravaganzas, but I think the most magical thing is email. And as several people have said, the killer app is people. Five years from now I think it's going to be email plus better tools for visualizing the geography of the Web, not just finding specific addresses in a search. Some of the following companies: Semio and Perspecta and Inxight and Spotfire.

Esther Dyson: 1) We're supporting the concept of voluntary and competing ratings systems rather than a one-size-fits-all approach. 2) I would recommend to my kid that he go to a different college, or I would take external classes. Find some additional training, whether it's training on the Web or in a vocational training program.

Esther Dyson: No, because I don't think it's true. I think the tool gives people the choice to do what they want. Some will use it to sustain ties with people, and some will use it to maintain a distance, but the choice is up to them.

Esther Dyson: A lot depends on you. You can encourage students to use it to communicate with other children, to find information they will want or need. I hope it will help you make the classroom a more exciting place by extending it to the outside world.

Esther Dyson: I hope she would agree that it's mutual.

Esther Dyson: At some point people have to make up their minds for themselves. One thing I have done on occasion is to send an email from some exotic place to my office and ask them to fax it to a third party who's not on email. I could imagine doing that, or having my child email me something for his grandfather that I would then print out for my father to show him what he's missing. Hope that helps.

Esther Dyson: All of the above. And Riochet, which is a local wireless service.

Esther Dyson: Yes, there's some money to be made. But probably more money to be saved by running a lot of non-Net businesses more efficiently. Right now the fastest way to get rich on the Net is to sell consulting or to get rich by going public rather than through profits -- I don't think this will last.

Esther Dyson: They are already available. Check your local search engine.

Esther Dyson: I think current progress has to continue. We have to develop better security systems, better mapping and visualization tools, and it needs to get easier to use and more reliable.

Esther Dyson: They will probably be improved by having more human intelligence applied. The improvement of Yahoo and others will need improved search quality, and so forth.

Esther Dyson: I think it will change the political system by giving more voice to individuals as opposed to established people. I hope it will foster more enlightened discussion rather than voting without thinking. I think the real benefit will be that it will encourage more people to get involved in their own communities...either online or off.

Esther Dyson: Interestingly, I first started using email/internet back in 1989 in order to communicate with Russians with whom it was extremely difficult to communicate in any other way. Then I discovered it as a medium to reach people back home as well. What captivates me now is both the personal power it gives me as a user and the possibilities I see for it to give similar power and control over their own lives to millions of people. Intellectually, I'm fascinated to see what that means for all our institutions.

Esther Dyson: San Jose is the closest I get -- tomorrow night.

Esther Dyson: First, this is amazing -- what's IN you Tennessee guys tonight? There can be a common platform, but each one keeps changing or evolving. I'm not sure what you mean by "right." I hope they are both successful enough to keep the other one honest.

Esther Dyson: Yeah, I see the potential for people not to rise to the challenge, to be passive and let it become just another place for commercial interests. It's up to all of you to get out there and produce your own content and send your own email and use it for your own goals.

Esther Dyson: Oddly enough, it's probably to do with Internet pricing rather than technology. I think more quality of service pricing combined with continued investment in more capacity will help solve what many people find the most frustrating thing -- slow or unreliable access.

Esther Dyson: They are unnecessary and simply mean that most trademark owners will have to register that many more versions of their trademark.

Esther Dyson: You will find many at your local bookstore -- find one you like. Personally, I just got in there and made enough mistakes so that I learned how to use it. And when you write email, always include a useful subject line, and unless there's a reason not to, include your name and contact number in your message. It just makes life easier for the recipient. Good luck.

Esther Dyson: Well, I could say www.edventure.com, or Release2-0.com, or barnesandnoble.com, but beyond that I often go to news.com which is CNET.

Esther Dyson: Thank you -- especially y'all from Tennessee - Edyson@edventure.com

Read an Excerpt

Read a Sample Chapter

How I got the story and learned to love markets

Because so much of this book concerns the value of openness and disclosure--of origins, of biases, of vested interests--I owe it to you to explain who I am and how I have come to the perceptions and opinions I hold.

First of all, I never expected to be a "techie." My parents were both scientists, so I wasn't afraid of technology. But I always assumed I'd end up being a novelist. I liked reading; I liked writing. I even founded the Dyson Gazette at the age of eight. The technology was ballpoint pen and carbon paper; the coverage was very local!

I was a child of my generation, with the single exception that we didn't have television at home. Because I was raised in the academic hothouse around Princeton's Institute for Advanced Study, with Nobel laureates as dinner guests, I grew up scorning the commercial world. My first regular job wasn't commercial either; I worked as a page in the local public library. I was fourteen when I discovered that most people did not get ten weeks of vacation in the summer. (Of course, I knew that the mailman kept coming; I assumed there were substitute mailmen just as there were substitute teachers.)

How I met Juan and Alice

When I reached Harvard, not much closer to reality in the late '60s, I spent most of my time not in class but at the Harvard Crimson, the university's daily newspaper. I tried out for it my freshman year and wrote for it ever after for love; I also proofread for money. Much as I love the digital world, I also love the old world of movable lead type, the building that shook every night after midnight as the presses rolled, the gruff professional linotypists who scorned us elite college kids. Our archenemies at the Crimson were at the Harvard Lampoon, the college humor magazine that didn't (at the time) take girls, but didn't mind them hanging around if they were pleasant and not too uppity. I liked spending time at the Lampoon; its members were funnier than the serious-minded would-be journalists at the Crimson. There was one couple there that it took me a long time to figure out: Juan and Alice. People were always leaving notes for them: "Juan & Alice--Please don't leave your Tommy's lunch in the refrigerator." "Juan & Alice--Please wash your dishes." It was college; a lot of our lives revolved around food, especially Tommy's Lunch, the local greasy spoon. Finally I figured out that Juan and Alice were a Spanish-English-German pun meaning "one and all" (one and Alles). I have used them ever since when I need some archetypal figures to make a point; you'll be seeing them throughout the book. Thank you, Lampy!

How I learned about markets

Like my friends on the Crimson (the Lampoon was somewhat more elitist), I was a good liberal. I thought the government was heartless because it didn't simply take care of all the poor people; wasn't that what taxes were for? But somehow, I sensed that if I wanted to change the world, my best hope was to study economics, not politics. So I majored in economics at Harvard and learned about supply and demand and market equilibrium: If you allow a free market, prices will adjust so that demand will meet supply. If that produces unfairness, then the government should step in to fix things. But none of that explained how things really worked, or how markets could produce growth and progress instead of just equilibrium.

All that I learned later, first as a fact-checker and then as a reporter for Forbes magazine. Known as a magazine for investors, Forbes is fanatical about disclosure and investors' rights to know what is going on at their companies. But its stories also illustrate how numbers and the laws of economics that make markets work aren't the whole story; the men and women running companies by and large determine their fates within the broader market. It was real-life business school: Instead of sitting in the library I got to go out and interview the principals who made everything happen.

By 1977 I got tired of watching and reporting. I went to Wall Street as a securities analyst, following high-tech stocks and trying to tell investors which companies would grow and prosper. That was where I switched from the electric typewriter I had used at Forbes to a word-processor and eventually a PC (a Tandy, for what it's worth). As it turned out, understanding companies was a lot easier than predicting stock prices. I discovered that I had less interest in the stock market than in the inner workings and the products of the high-tech companies themselves -- especially since their products were beginning to change how businesses operated.

But my financial experience taught me a few things. Apart from high-tech, I covered one other company, Federal Express. There I met Jim Barksdale, then chief information officer of FedEx, and now CEO of Netscape. The lessons we both learned about creating a market, not just a company, have proved relevant ever since.

In the end, I left Wall Street to get closer to the computer industry, joining venture capitalist Ben Rosen and taking over his Rosen Electronics Letter, a newsletter targeted to the industry itself rather than to investors in it. Rosen, also a former analyst, was finding the newsletter a burden as he became increasingly involved in venture capital. It also turned into a conflict of interest as two of his investments took off and it was impossible to write about the industry without mentioning them -- Compaq and Lotus. I first met Lotus founder Mitch Kapor in Ben's office when Mitch was looking for funding for his new product, 1-2-3, a spreadsheet pitched as "VisiCalc for the PC."

In short order, Ben became chairman of Compaq and a director of Lotus. I assumed his burden entirely by buying the company and the newsletter, which I renamed Release 1.0 (R E L---get it?). One of my first newsletter articles was based on a trip to Bellevue, Washington, to write about yet another start-up, Microsoft. (I said that it needed to "lose some of its charm" to succeed in the cutthroat software business.)

As a result of this path I grew up intellectually regarding Federal Express, Apple, Compaq, Lotus, and Microsoft as typical start-ups -- fairly high standards. Most of what happened in any of these companies had little to do with economics; it had much more to do with people, strategy, implementation. Nor did they look to government for any help. Left to their own, they could produce miracles.

And they did. They created not just hot new products but hot new markets. It all worked in a wonderful manner: Competing firms got stronger and stronger in the furnace of the market, while the weaker ones dropped out. That magical market worked for people, too: While troubled firms died or were swallowed up, the people within them found new jobs elsewhere, honing their skills as they went.

The industry flourished away from the spotlight, away from government interference, away from social responsibility. Personal computers were still largely novelties for hobbyists; serious mainframe computer folk considered PCs basically toys. While many people of this generation were reformed college activists settling down to reality, the PC industry remained a haven for freewheeling, free-market thinking. Its people couldn't understand why everyone couldn't be as successful as they were.

Personally, I was having a lot of fun covering Silicon Valley, the home of untrammeled commercialism, economic freedom, and technical innovation. I kept finding new stuff to learn as the industry kept changing. I took Release 1.0 and changed its focus from PCs to software as the PC business grew mature and organized; there wasn't much new to say about PC hardware in the mid-'80s -- just market-size forecasts and new product releases.

But suddenly software, which had been interesting as an emerging business, became even more interesting because of the nature of what it sold: Groupware, and networking in general, fostered social as well as technical change. Com panies installing groupware systems (the precursors to today's intranets) had to deal with problems of personal interaction, workflow, sharing of credit, and people's tendency to hoard information as power. The new software involved classification of knowledge, not just manipulation of dry data. I had enjoyed the mathematical and logical challenges of figuring out how databases work, but this was more complex and somehow more real. It affected people's daily lives.

What is a market?

What is a market? And what does it have to do with the Internet? The fashion right now, one I follow, is to think of the Internet as a living environment, a place for societies, communities, and institutions to grow -- rather than as something constructed, a superhighway, for example. That leads to appropriate metaphors, looking at the Net as something to be cultivated and nurtured rather than built or engineered. (Only its rules need to be designed so that it can grow in good health.) The structure has to emerge from individual actions rather than from some central authority or government. The guiding metaphor is evolution. Evolution is natural, the thinking goes. And markets are just a faster form of evolution.

But I'd like to disagree -- or take the metaphor a step further. First, markets are not just a form of evolution, commonly considered survival of the fittest. Markets have rules and enforcement mechanisms agreed on (more or less) by all the players. And second, what does the survival rule apply to: Is it people? Is it firms? Is it the products or concepts the firms sell or operate on? And is it really the fittest? Or the best nurtured?

For starters, evolution is blind. Call it self-unaware. Its processes operate without visibility. Animals and plants live or die as a whole, eventually resulting in the evolution -- creation or modification or dying out -- of entire species. "Good" genes live on, fostering the survival of good features -- whether wings or eyes or intelligence. An industrial analogy to such surviving features is the technology that runs motors-V-8 or diesel, for example. The technology lives on and spreads even as the individual cars and the brands and models that contain the engines disappear.

Markets are different. They are self-aware. We can see what is successful and what is not. What is the same is the decentralized approach, and tolerance for the destruction of bad ideas. Businesses and communities can adopt good ideas (or "memes") that they weren't born with. "Memes" act more like viruses than like genes. Whole firms do not need to live or die for the best memes to spread and the worst to die off. The market is more Lamarckian than Darwinian. In business, my favorite examples are how the concept of having a single fast-moving line feed several teller stations replaced the concept of several lines moving at different, unpredictable speeds spread through the bank lobbies of America in a matter of months. Likewise, the hub-and-spokes idea has "infected" the airline industry. Analogies for the Net will be rules in a community. business models, and the like. Some Net businesses and communities will come and go, but others will be able to learn and acquire memes from those around them.

"Memes" is the concept of ideas as objects that can evolve and adapt just as other "living" things do, courtesy of biologist Richard Dawkins. The best ones adapt and flourish; the foolish ones die off. Or so the theory goes. Darwin is the acknowledged founder of evolution theory, which needs no explanation; Jean-Baptiste Lamarck was the nineteenth-century French scientist who kept trying to prove, with little success, that the effects of behavior could be inherited-specifically, that giraffes that stretched their necks more had babies with longer necks. But given what we now know about genes (and markets!), some of Lamarck's ideas are beginning to make sense again.

PC Forum

All along there was another facet of the business -- the one that actually supported the business and allowed me to educate myself through the newsletter. That was my annual computer conference, PC Forum, When it started in the late '70s, it had been a little afternoon session at Ben Rosen's Semiconductor Forum. I took it over in 1983, when it had achieved its own identity but was still mainly a showcase for PC companies preening in front of investors. Its heart and soul was as a meeting ground for the industry itself. We had trade shows, where everyone kowtowed to customers and promoted products, but PC Forum was where we talked about our problems as an industry. This was where Mitch Kapor clashed with Bill Gates and with French-born Philippe Kahn, founder of Borland International (a pioneering software company), where people met by the pool to do deals, where Software Arts served a subpoena on its erstwhile partner VisiCorp. People came to argue and to catch up, to find new jobs, new partners, new deals.

PC Forum was and still is conceived as a commercial enterprise, but it also has the flavor of an annual high school reunion. Many of us know one another from before we became who we became. But by 1989, even that had become a little dull. I needed to find something new for commercial reasons, too; I now had ample competition writing about these topics. As I had learned by now, a market is not just the interaction of buyers and sellers; it involves competition between sellers. Rather than compete only on price, sellers compete on differentiation -- the equivalent of the forces that produce new species in nature. Differentiation is a lot easier when you know what your competition is doing, which is why disclosure is good for markets as a whole as well as for investors and customers.

The trick is to find a niche that's unoccupied. As the only writer for my newsletter (and uninterested in finding and managing others), I couldn't hope to compete with other publications on depth of coverage or research. What I could do best was stake out and map new territory.

Next step: Moscow

So, naturally enough, I went to Russia -- something I had wanted to do since learning the language in high school. There was a lot of new territory there in 1989 -- both for me and for the Russians themselves. I had brought along five books, including James Gleick's Chaos (Viking Penguin, 1987), which is a layperson's explanation of the science of complexity, including evolution, markets, and learning. Two were books by my father (Freeman Dyson) that I had never had the time to read: Infinite in All Directions (Harper & Row, 1988), about evolution, life, and implicitly about markets; and Disturbing the Universe (Basic Books, 1981), his own intellectual autobiography, in which he explained his distrust of big organizations as opposed to his trust and tolerance of the individuals he encounters. (His distrust came from his experience as a mathematician working for the Bomber Command of the British Royal Air Force during World War II. The pitifully small survival rate of shot-down crewmen indicated their bombers' escape hatches were too small; crewmen couldn't climb out fast enough to open their parachutes in time. The Air Force and the aircraft manufacturers ignored the problem and let the boys keep dying.)

Here I was with new intellectual eyes, and a new world to look at. I could finally see what a market was -- by seeing what the lack of one had done to Russia. No feedback loops. No competition. No differentiation. No growth. No progress. The Soviets had constructed a complex industrial machine after World War II, but for all its moving parts, it was static. It had no way to adjust to the unexpected, to allow for progress or for human nature. This giant edifice had gradually rusted beyond repair. As its parts broke down, they could not heal themselves, and the Soviet system could not fix them either. It could only vainly exhort its troops to do more of the same.

But all this was changing. The Congress of People's Deputies had just been elected, and all over the nation people were going to work and instead of working, watching the Congress's deliberations on television. "Our government is going to set free-market prices just like yours," one exuberant Russian told me. It was clear that within a year or two Russia would be on its way to prosperity as a free state. Already the market was starting to work. Following the lead of small entrepreneurs opening restaurants and taxi services, the programmers I knew were beginning to leave their state jobs to form programmers' cooperatives and, they hoped, get rich.

My self-appointed mission was to help them understand the market. "How are you different from the competition?" I would ask.

"We have no competition," would come the answer.

"But what about Ivan and Volodya?"

"Oh, them. They're no good! We're much better!" But they could never tell me how they were better. In fact, no one knew much about anyone.

Customers would simply buy from people they knew. Afraid of being bothered by the government or the growing mafia for being too successful, the entrepreneurs did not advertise.

Information is more useful than money

Why not just be better in something specific, I would ask, rather than defame the competition? Why not meet them and find out what they were doing? Then I would glibly talk about differentiation and speciation. Since it sounded scientific, they liked the idea. And indeed, in Russia's computer market, several years later things are working quite well. Vendors are advertising and explaining themselves clearly. There are industry associations and trade shows where people gather to talk about common problems, pick up competitive information, check out new trends. Their customers are installing computers and accounting systems to manage real businesses; they can't afford to pick suppliers on the basis of bribes or connections.

I knew all about markets, I thought, but I had never realized how important information was until I saw a market without it -- not just pricing, but everything else. Who's doing what? Who's winning? Who is failing, and why? I could see what it took to make a market precisely because it was not there.

Although a market might follow the laws of nature, it is not a totally natural thing. It works far better with information. Instead of firms living and dying aimlessly, ideas and concepts can take shape.

But another thing is lacking in Russia -- another thing I never missed until I saw what happens without it: a solid legal infrastructure, one that enforces contracts and requires honest advertising and disclosure. A market doesn't need a lot of complex regulations if those two are in place: Tell the truth, and deliver on your promises.

In other words, there are global rules that make the market work, and then local players who push the market to improve, depending on their own particular desires. Without those global rules, the specific preferences of the players never get expressed.

Not by markets alone

Outside the computer business, the market in Russia is like evolution. It is blind. Customers often don't know whom they're dealing with, so they can't believe promises. Everything is short-term. There's not much point in trying to develop a reputation in a market that doesn't trust you to be who you say you are.

Consequences multiply. Employees don't trust their employers or one another, so they don't work as a team. They don't regard stealing from an employer (particularly if it is state-owned) as wrong. There's an old Soviet saying: "If you don't steal from the State, you are stealing from your family." People don't understand the role of investment in building companies for the long term, so they regard profit as evidence of exploitation.

Return from Russia

I returned from Russia with the scales gone from my eyes. Over the next couple of years I adopted the region as my territory. The U.S. market was doing fine on its own, but Central and Eastern Europe needed me. My knowledge of markets and specific contacts in the PC market made me uniquely able to be helpful. And it was fun to watch how each country's market developed differently.

Hungary, which had liberalized first, was the leader, but its new private companies were still run like state organizations, more for the immediate personal benefit of the top guys than for long-term profitability to shareholders. That eventually caught up with them, and a number of Hungarian computer companies went bankrupt. A major exception, Graphisoft, is still flourishing as a worldwide leader in design software for architects. In the Czech Republic, the market ruled supreme, but the government gave way too much power and too little oversight to the banks. The results are starting to show as the banks get into trouble and the companies they own turn out never to have gone through the management restructuring they needed. Poland is probably the greatest success story of all. It got a wholly new government and already had a tradition of small businesses.

But Russia! Russia is the country where I speak the language, which I love as one loves a self-destructive child. In power for more than seventy years, the Soviets had left no bourgeois culture to revive. Here the computer market is a little oasis in a huge, dysfunctional economy where people strike for back wages, not for pay hikes.

But all these insights weren't of great interest to the regular readers of Release 1.0, at least not when presented in terms of Eastern Europe. I started another newsletter, Rel-EAST, and another conference, East-West High-Tech Forum, to focus on Eastern Europe.

The Internet

Once I returned from Russia in 1989 (and kept going back), I started to keep in touch with my new friends in Russia by e-mail. I got myself an MCI Mail account -- horrible to look at, difficult to use, but the best way of reaching people in Russia. I rarely used it for people in the United States, because other methods were easier. Ironically, the people in Russia were quicker to use e-mail than those in Central Europe, where the alternatives of fax and phone already worked somewhat better.

One of the strongest promoters of e-mail was Borland International, the software company, not out of "vision" but because it wanted to keep in touch with its distributors cheaply and effectively. It made each of them get an MCI Mail account -- and of course they ended up being among the East Europeans with whom it was easiest to keep in touch.

At this point, the Internet was a specific technical network, the preserve of scientists and researchers using technical workstations based on UNIX.

Those of us with PCs had our choice of a number of proprietary e-mail/online services, including MCI Mail, CompuServe, and Prodigy, but it was complicated and expensive to send mail from one to another. One by one, they established better connections to the Internet. And meanwhile, Tim Berners-Lee developed the technology for the World Wide Web at the European Center for Nuclear Research (CERN) in Geneva. Over time the Internet, a formal research network, coalesced with a new crowd of less technically inclined users and commercial services. Together, they would blossom into the Net we know today.

But as the '90s began all this was still new to me. What I knew was that more and more people started sending me e-mail, even from the United States. Somehow I got the sense that something was happening. All over the United States and even worldwide, all those single-user PCs that (allegedly) improved individuals' productivity were becoming much more powerful -- a medium for communication. The people who used e-mail had this secret smile, as if they knew some new kind of pleasure denied the rest of us. Maybe life was about to get interesting back in the United States, too.

Mitch Kapor, who had now left Lotus and sold all his stock, was one of the Net's biggest fans. But all I knew about Mitch was that he had gotten involved -- using some of his now considerable fortune -- in defending Steve Jackson, owner of a computer-game company who suffered business losses caused by overaggressive FBI agents who seized his computers and data when they suspected one of his employees of "cracking" - -breaking into other people's computers over the Net. (Jackson was eventually vindicated in court in 1993.) In 1991 Mitch called -- or e-mailed, I can't recall -- to invite me to join the board of his new venture, the Electronic Frontier Foundation, an online civil liberties organization.

Initially, I was dubious about joing the EFF board. "I'm not sure I'd agree with everything you're doing," I told Mitch.

He passed the test perfectly. "That's exactly why we want you on the board," he said.

Somehow, just as I had magically gravitated to the PC at the end of the '70s, I was magically gravitating to the Internet at the beginning of the '90s. I knew that joining the board would force me to learn more about it and since I liked Mitch, I signed up.

As time passed, I found more and more use for e-mail. The Electronic Frontier Foundation was run by e-mail, of course, and other friends began asking me for my e-mail address -- and using it.

The lure of the Net

This was the time that Vice President Al Gore was discovering the Information Superhighway. Ironically, for all its free-market libertarianism, the Internet was a creation of the U.S. government. The government still owned most of it in the early '90s, although an increasing proportion of the equipment over which it ran sat in computer centers in universities, research organizations, and private companies. The Internet, after all, runs over existing phone lines as well as over its own high-speed, high-bandwidth telecommunications "backbones." Although it appears to be free to its users, most of its operating costs were borne first by the government and then increasingly by private computer centers, whose computers are being used to hold the content of the Internet -- newsgroups, Websites, e-mail archives, and the like -- and to forward messages from one node to another.

Among the high-tech community, lively arguments raged over whether commercial imperatives should be allowed to intrude on this pristine environment. Mitch Kapor cast his vote by becoming chairman of the Commercial Internet Exchange, a group of commercial Internet service providers considered social outcasts by the anticommercial Net community of the time.

As one of the most visible entrepreneurs of the '80s, Mitch had good contacts in Washington, and the government (as opposed to the law-enforcement community) was interested in our views. If Big Government wanted our advice, we were happy to give it. The first question was how to foster the development of the Internet.

Mitch's advice was: "Let the market do it." We had both seen the wonders the PC market had accomplished on its own, without government interference or "support." Also, Mitch knew, it was unlikely that the government could refrain from regulating an infrastructure that it owned. But if it was in private hands, there was some chance it would be free to govern itself. Of course, at that time, we all perceived the Net as a fine, elite place populated by literate, mature people -- a place that needed no regulation. It was, after all, the Electronic Frontier.

The NIIAC

In 1994, Al Gore decided that the government should convene the National Information Infrastructure Advisory Council, composed of private citizens and non-federal government people, to guide the government in its delicate attempts to grow this magical foundation without constructing it itself.

The NIIAC was my introduction to Washington. At the time, I was going to California and to Europe once a month, and to Washington just a couple of times a year. Net or no, my life was actually defined by geography. But I soon got the hang of taking the New York-Washington shuttle.

The NIIAC was a well-meaning attempt to collect a diversity of opinion to make sure the emerging "NII" was useful to all Americans, and it probably did more good than I suspected at the time. (Mitch got pretty frustrated with the ponderousness of its deliberations and stopped going to meetings after the first few months.) The members included the usual suspects: a librarian; a grade school teacher; a communications workers' union official; the head of BMI, a copyright agency; several telecom executives; several "content" people, including a legal publisher and a music-company executive; an old lawyer friend of the Clintons from Arkansas; a state senator and several other local government officials; my old friend John Sculley, former CEO of Apple (and another friend of the Clintons). The co-chairs were Ed McCracken, CEO of Silicon Graphics, and Del Lewis, CEO of National Public Radio. There was a good representation of women and a sprinkling of African Americans and ethnic Americans -- but no kids, who might have had a lot to teach us. It's amazing that we came to agreement on anything, but we did.

Just as Russia taught me about markets as well as about the country, the NIIAC taught me about politics even as it taught me about the National Information Infrastructure. Ironically, one of the first heated discussions at the Council occurred when Mitch and I and Robert Kahn (one of the Internet's many "founders") suggested that we should use e-mail to communicate. By the end of the Council's appointed two years of life, most of us were in fact using e-mail, but there were a couple of holdouts.

Our biggest disagreements concerned intellectual property rights. I was in the thick of them as cochair of the subcommittee on intellectual property, privacy, and security. My cochair was John Cooke, a senior executive at Disney -- someone with fairly strong views about the need for protecting copyright holders' interests! By contrast, I was more concerned with users' needs -- and with the notion that intellectual property will lose much of its value anyway as content proliferates on the Net. That wasn't "should," but "will." However, the IP crowd on the Council didn't think I knew the difference (=> Chapter 6). There was also an attitude of "let's just leave it alone" when I suggested that we needed to drink about the issues that would be raised by pornography on the Net.

Overall, we agreed that privacy is important and that intellectual property should be protected, without going into the pesky details that we couldn't agree on. Our most useful and lasting achievement was project Kickstart, an initiative that eventually morphed into the government's current efforts to get the Net into schools nationwide. Perhaps the most important aspect of Kickstart was that it encouraged local communities to do it for themselves (=> Chapter 4).

Back at home ...

All the while, by the mid-'90s, I was leading a different life in my day job. Daphne Kis, my partner since 1988, was running the business, leaving me free to spend time on other things. We had hired another writer, Jerry Michalski, to write the newsletter. I had started investing in information and Net-oriented start-ups, first in Central and Eastern Europe, and then back in the United States.

Chapter One continues