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TCHO New American Chocolate

Remembering HotWired

This is a picture of my desk at TCHO.

Notice the HotWired mousepad that the tormented saint Carl Steadman gave me. Carl was the co-creator with Joey Anuff of Suck, the first blog ever, and for years the arbiter of the Web. Suck was born at HotWiredHotWired was the first website that combined original content (as in, not repurposed) and Fortune 500 advertising. It did it 15 years ago last week. I and about 20 other intrepid souls were in the room in the Wired building in SOMA when Brian Behlendorf flipped the metaphorical switch to make us visible to the Net, the first click arrived, and we served our first page.

It’s hard to imagine now what life was like just before we served that first page. As we stood there, we were wondering exactly what would happen next. Because until then, the Internet was ferociously anti-commercial. Mosaic, the first Web browser, had only been released the year before. There was no such thing as Web media with original content. There were no Fortune 500 ads on the Web. Indeed, “www” meant precisely nothing to the vast majority of the planet. What was running through our minds was: would the Internet throw up on us, shun us, make us outcasts, kill our baby – and maybe take downWired with it?

The whole HotWired project was a huge leap of faith. When we launched Wired 21 months before in January 1993, we carried not one word about the World Wide Web. That happened in the second issue, two months later, when John Browning wrote a small piece about Tim Berners-Lee’s invention at CERN in Switzerland. Wiredwas on the Net from the beginning, serving pages via FTP. Then we created a presence on AOL, but that was truly an unhappy experience, since all site maintenance had to be done by AOL, and putting stuff up took days if not weeks.

We were finally inspired to think about moving to the Web by the rude shock of waking up one fine morning, in the Fall of 1993, to discover that all our issues were suddenly available on the Web – thanks, it turned out, to a couple of young engineers in Singapore. That was about the time we ran a cover story by William Gibson about Singapore called “Disneyland with the Death Penalty.” Turned out the engineers had wanted people to have access to our material, even if the government had banned our issue, so they had sucked down the content that had been available via FTP and put it on the Web. We purchased the site back from them, then let it lie fallow.

That didn’t end our interest in the Web, however. We put Vice President and CTO Andrew Anker in charge of creating a business plan for our own website, dubbed HotWiredHotWired was amibitious: we didn’t want to put Wired on the Web, we wanted to make content specifically for the Web, that took advantage of the new medium.

Meanwhile, Jane and I had been continually raising money since 1991 to fund Wired. At the end of beginning of 1994, the year after our launch, we finally secured a $3.5M investment from Condé Nast, and were thrilled that we could finally stop raising money and turn our undivided attention to building our business.

One of the conditions of the investment, that we had insisted on, was that Condé Nast would not have control of Wired. And Condé Nast was okay with that because they had studied our business plan and had figured that we couldn’t possibly accomplish the publishing program we had outlined, and would have to come back to them for more money, at which point they would then get control.

The funds clicked up in our account in January. In February, we won the National Magazine Award. In March, we began direct mail to grow circulation, dropping a million dollars on our first mailings. And then in April, we approved Andrew’s HotWired business plan – earmarking money from the Condé Nast investment. HotWired had not figured anywhere in Wired‘s original business plan. Condé Nast had not been told about the HotWired project until after we launched it. They certainly didn’t approve it.

Even internally, people were skeptical – our first business wasn’t profitable yet and here we were starting another? In effect, we were taking the money that Condé Nast had given us for growing Wiredcirculation and investing it a completely unknown, untried, potentially dangerous project to invent Web media.

The 20+/- person HotWired team set up shop in loft space at Third and Brannon in what was to become the center of the Web universe, South of Market, San Francisco. We then beavered away round the clock, drawing on a diverse collection of talents to shape our offering. We met with advertisers to convince them to take a flyer on what we promised would be the future of media. In the end, we actually secured a dozen big advertisers.

Since we didn’t have the capacity to also produce the ads, we handed that off to Jonathan Nelson at his fledgling (soon to become Web powerhouse) Organic. I still remember sitting next to art directorBarbara Kuhr fiddling with the dimensions of what would later become the first, hated but essential “banner ad.”

The target launch date came and went, despite my urgings that “Media was software that shipped on time.” Pressure mounted as Jane watched the costs increase. People at Wired not involved in the project became even more skeptical. The new launch date slipped to the end September. And then finally to October. Would we make that date? And how could we have justified ever taking our Condé Nast nestegg and placing it all on the turn of the roulette wheel calledHotWired?

Reminded me of the scene in Lost in America where David (Albert Brooks) is appalled that his wife Linda (Julie Haggerty) had just gambled away their nest egg in Las Vegas:

David: Maybe I didn’t explain the nest egg to you. If you had understood … You know it’s a very sacred thing, the nest egg, and if you had understood the Nest Egg Principle, as we will now call it in the first of many lectures that you will get, because if we are ever to acquire another nest egg, we both have to understand what it means. The nest egg is a protector, like a god, and we sit under the nest egg and we are protected by it. Without it, no protection. Want me to go on? It pours rain. Hey! The rain hits the egg and pours off the side. Without the egg? Wet. It’s over. But you didn’t understand it and that’s why we’re where we are.

Linda: I understood the nest egg …

David: Please do me a favor. Don’t use the word. You may not use that word. It is off-limits to you. Only those in this house that understand the nest egg may use it. And don’t use any part of it either. Don’t use “nest.” Don’t use “egg.” You’re out in the forest, you can point – the bird lives in a round stick. And … and … you have things over easy with toast.

Building a business is never easy. Everyone who does it faces enormous threats — financial, commercial, physical, human, emotional, existential even. The end is always near, success is always subjective, and the feeling of accomplishment always fleeting, as the next, life-threatening challenge looms. Finally, the 20 of us were huddled around Brian’s screen, months of night and day work had come down to this moment – then the first hit on our server arrived, we served our first page, and sheer relief, then exhilaration swept the room, before we realized that, holy shit, we’d have to do this insane effort every day until the end of time.

Fifteen years later we can appreciate the dimensions of what was unleashed that October day. HotWired took off like a rocket. For the first six months, we had more than fifty percent of all web advertising. By 1995, HotWired had more employees than Wired. Even by 1996, our revenues were larger than our nearest rivals Yahoo, Excite, and Infoseek.

This was HotWired’s office; there are 125 Web pioneers in this picture:

And pioneers they were. I never thought we were inventing a new medium. The medium was born with all the genetic traits it would ever have – our job was to discover them, like Lewis and Clark didn’t invent the West, they discovered it. We didn’t know where we were going, all we knew was we had to explore every possibility. The room was a hive of energy and creation – as Gary Wolf put it, people felt they had permission to be bad.

By 1997, our search engine HotBot had been selected as the best of the Web by the computer books. That same year, headcount peaked at 170. By 1998, Wired Digital had more than $20M in revenue, and was cash flow positive. By 1999, Wired Digital had been absorbed by Lycos. And now, 15 years later, Wired Digital is once more part of the Wired brand, now owned by Condé Nast (and yes, they did end up with control, but that’s another story). Oh, and that banner ad we’d been fiddling with? – responsible for a $24B business, and counting, including killing newspapers and inspiring new forms of banner ads like this introduced by a German company:

All of this was brought to mind by an email from Andrew Anker last week inviting me and other HotWired alumni to a reunion drink at one of HotWired’s favorite watering holes in the day, Hotel Utah, to celebrate HotWired’s 15th birthday. Great seeing old friends, catching up, remembering that amazing time.

People sometimes ask me what’s the connection between Wired and TCHO? And sometimes I answer that maybe chocolate was always my destiny, and Wired as the detour. Recently I’ve been wondering whether I should reply that I was once involved in reinventing media, and now it’s chocolate. Or maybe I should just admit that spinning that roulette wheel and sharing the exhilaration and terror of business creation with twenty fearless souls is something I’m genetically incapable of resisting.

Happy Birthday, HotWired, and thank you, each and every one of the wonderful adventurers who were part of that amazing moment.