Once upon a time, three little businesses wanted a connection to the ARPAnet/internet. The year was 1990 or 1991. John Gilmore, John Romke, and Trusted Information Systems (TIS) split the $15K or so it took to get a leased-line and 3COM Brouters to Alternet, with what today you'd call fractional T1. An additional 56K leased line and Brouter brought the 'net up to Gilmore's house, Toad Hall, in San Francisco.
They all knew Rick Adams, a principal of Alternet. Rick pretended he didn't know about the "sharing" bit, and was probably glad for the sale.
As time went on, friends of theirs wanted in on this rare and exciting 'net connection, resulting in Tim Pozar putting an old PC running Phile Karn's KA9Q/NOS program, an amateur radio router capable of TCP/IP, onto Toad Hall's ethernet. Tim installed a pair of modems, then dialed in once and stayed connected 24 hrs/day (Pacific Bell never said you couldn't do that...) Eventually the NOS box was full, and more friends wanted in, but everyone was too busy to deal with the hassle.
Somehow, in September 1992, Pozar and Gilmore and I worked out a deal where, I would maintain the thing, collect money to build more NOS boxes and contribute to the monthly Alternet bill, install more people, and get (1) a free connection to the internet and (2) a slice off the top after it exceeded N connections.
By that December, there were enough connections in place that I was pocketing $420/month. By March 1993 there were 11 modem-connected members (as we fancied ourselves). By June I was writing how-to documents and FAQs on how to get connected to the internet, and deal with the AUP.
But this is only part of the story. We were living in a grey zone; we were "sharing" a paid-for, quasi-commercial net connection, and Rick Adams wouldn't come out and say it was OK, or not OK. The underlying problem was that no one would or could sell you a small connection to the net, and the service providers put unreasonable constraints on content and use (aside from the AUP, set to disappear). In other words, this amazing ability and freedom to communicate was at the mercy of the usual commercial self-interests. Gilmore, who always becomes properly annoying under these circumstances, attempted to draw out Adams on this -- are we OK or not?
Well, when a Little Garden (we named ourselves after the Palo Alto restaurant we occasionally met in) member openly discussed how to run a 56K leased line to "our" network, Rick Adams replied to Gilmore: "find another service provider". So that's exactly what we did.
Only it was a monstrous project; no one would sell us a connection that met our criteria; unfettered, unregulated use our or network connection. We were outright refused and occasionally laughed at. It was simply about money, freedoms be damned.
Well as it turned out, my friend Randy Bush (Portland OR) was in a similar bind, having worked up a shared net connection of his own. He got us both an "in" at SprintLink, Government Systems Division, a subtle mess tangled in CO/RE restrictions and such. (Randy had been putting networking into amazingly unlikely places around the globe by then.) We signed one contract for T1 service, and another with Metropolitan Fiber Systems for a colo at their brand new 444 Market Street POP. (Due to an MFS salesmammal screwup, they underpriced it by 10X, and then never billed us -- ever.)
Clearly the casual, shared-net days were over. I was turning over $5000/mo and signing contracts. While we had no formal business plan, we had a clear goal, a cash-paying customer base (we ran in the black from the start) and a head-start.
We were not without goals and plans however. We were uppity upstarts, and not taken seriously by our competitors. It couldn't have been better for us. When later MCI offered T1 internet service, they coudln't sell T1 service within a hundred miles of TLG -- we were so off their map of what "competition" meant they never figured it out.
We had an explicit social/political goal that fit in quite nicely with making money. Many laughed at our naivety, but we put checks in the bank. Here is the critical fragment, little changed from 1993:
TERMS AND CONDITIONS TLGnet exercises no control whatsoever over the content of the information passing through TLGnet. You are free to communicate commercial, noncommercial, personal, questionable, obnoxious, annoying, or any other kind of information, misinformation, or disinformation through our service. You are fully responsible for the privacy of, content of, and liability for your own communications. TLGnet exercises no control whatsoever over the content of the information passing through TLGnet. TLGnet makes no warranties of any kind, whether expressed or implied, for the service it is providing. TLGnet also disclaims any warranty of merchantability or fitness for any particular purpose. TLGnet will not be responsible for any damages you suffer or inflict on others. This includes loss resulting from delays, non-deliveries, misdeliveries, or service interruptions caused by its own negligence or your errors or omissions. Use of any information obtained via TLGnet is at your own risk. You are responsible for determining whether or not the traffic you originate will end up being carried on another network, and for following the rules of any such networks. TLGnet specifically denies any responsibility for the accuracy or quality of information obtained through its services. Any access to other networks connected to TLGnet must comply with the rules appropriate with the other network. Use of TLGnet itself may be for any purpose. Use of TLGnet for commercial purposes is both permitted and encouraged.
(The repeated first sentence is intentional; bold my emphasis.) Some thought us insane; but in fact our customers didn't "compete" with us, they provided vertical services we couldn't or wouldn't (I guess we did have a business plan). And in fact we set further standards of behavior and policies that other ISPs, including MCI and SprintLink, were obliged to match. Though some, like Alternet and PSI, never did; they skimmed the high-end deep-pockets customers, and we got all the new growth.
I made T1 service available in January, 1994 (having discovered the Great Secret) for $800/month -- our nearest competitor was $2400/month, but offered only turn-key service. TLGs was strictly DIY; we knew that Moore's Law was on our side (and we were 100% right).
I hired my first employee, Flesh (Randy Mills) part time, answering phones and collating email, then in May, TLG moved out of my bedroom into 3004 16th Street, with a lovely view of the 16th Street BART station, and I hired Deke Motif Nihilson, who stayed to the end and became a minority partner.
Our policies were radical, and our business model radical too, since we fully exposed the connection process, including written documentation on how to order leased lines, routers, CSUs and software issues (might be common now, but was a new priesthood in 1994 loathe to give up the goods).
[When was Edgar hired.]
Another thing of crucial importance to me, and to Deke, Edgar and a lesser extent Gilmore, was hiring from our local communities; we hired principled people, punk and queer writers and organizers, and trained and paid them -- pay in scale with effort. Total staff turn-over in three years was probably 20; peak staff was 12. Some 10 of them started out at $8.00/hr, unskilled, ended up with $30,000 salary a year later [1994-1996], and stayed in the industry (at prevailing pay). (And we provided health insurance too. Deke being damned Wobbly may have had some small effect.)
TLG wasn't started with an eye to selling it off, but that became the only longer-term option visible to us by 1995. We had no funding, and operating cash (though TLG grew at an average of 12% per month from Jan94 through July96) wasn't enough -- our internal network had grown to a T3 backbone from San Francisco to San Jose, with redundant double-T1 triangles, and a rash decision to go with an utterly incompetent T3-level ISP hurt us. We were buying some $50K of routers and such a month (Cisco 7000's and 7500's, etc), but there was no way we would have survived without having hunted for cash a year before.
Edgar Nielsen almost single-handedly built the technical infrastructure that TLGnet ran on. He designed much of the network and routing structure, all of the security (with some help from Stu Grossman), wrote a complete, queryable, shared and remotely-accessible database (included every single modem, router, wire, cable, customer, IP (domain names and IP address allocations), and logical link) in standard and portable tools, installed equipment, built and maintained our unix boxes, put SNMP on every single node (hundreds) and automated the entire ISP technical infrastructure from one end to the other. I doubt many small to mid-size ISPs today have the things Edgar wrote by 1995.
Luckily we were bought by Best Internet Communications, Mountain View; they had money, marketing, and a non-burned-out management; we had a solid locked-in customer base and positive cash flow.
TLG was the hardest thing I've ever done. I learned how to be a good manager (not that I always was); I found I liked having employees. I learned how to run a business, at the end handling a monthly gross of about $125,000.00 (I kept the books day to day, we of course had a great CPA), and found that I had a knack for it, and even liked it (aside from hating the murderous workload). We always knew where our money was, and what our ongoing and predicted expenses were. We planned our infrastructures carefully, made few tactical mistakes, and never wasted our money on silliness (we watched would-be competitors spend their initial cash on too-fancy digs, and other trappings before they built next month's network).
And last but hardly least, we treated our staff well, gave them credit for work done, paid them actual money, gave raises and bonuses (upon sale of the business, even some fired employees got small bonus checks). TLGnet wouldn't have existed without its talented staff!
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