The Mind Games of Mindspring
Before I begin this next story, I want to acknowledge that this may be the last post that I get in before the great “Telalink Reunion,” to be held on the 20th anniversary of the founding of the company. If you’ve been reading this as a former staff member, a former intern, a customer or a part of the Telalink community in any way, join us on Saturday, August 3, 2013 at Flyte to share stories and enjoy the fun we had in starting and building this company. We will start up around 5 pm. Bring your Telalink memorabilia- photos, shirts, mugs, “moose pads,” etc. I would love to know in advance if you’re coming. You can find the invitation here:
It is also being promoted on Facebook here:
And now, on with the story....
As an early-stage ISP start-up in 1996, Telalink Corporation was definitely experiencing a meteoric rise in popularity with customers, interns, the local media and, yes, there were others. Our good friend, Ken Pence, then a captain with the Metro police department found a great resource in Telalink as he convinced Bill and Tim to host a website for the police academy as well as his “Rate Your Risk” website. To this day, Sitemason, Inc. hosts rateyourrisk.org.
Then, there were the Mindspring folks. In case you don’t remember, Mindspring was incubated at Georgia Tech and was one of the first ISPs to go nationwide with a $19.95/month “all-you-can-eat” internet access plan. Everyone was touting "no busies" as part of their benefit list but Mindpsring had tons of capital to expand their infrastructure and they could back up their promise.
Before Mindspring came along, we were selling access, first 30 hours/month, and then 60 hours/month for $35. The Mindspring model was one of the first competitive challenges that we faced as a fledgling provider. The truth is, Mindpsring never promised that a customer could stay connected day in and day out without being kicked off of their dial-up account. Mindspring was simply gambling no one would ever need or want to be online 24 hours a day and, even if someone attempted it, the connection could be interrupted so that no one had a “dedicated account for $19.95/month.” It was a numbers game that we always felt slightly worried about because we wanted to tell the truth. We didn’t think we could actually advertise “unlimited access” and be honest about it. We certainly couldn’t do it for $35/month. So, I worried that Minspring was simply going to take all of our customers away overnight but that's not exactly what happened.
One day, I got a call from some “reps” from Mindspring. “We want to buy Telalink,” said the young man. “Ummmmm, okaaaay, how much?” I said.
“That all depends,” said Mr. Mindspring. We need to know EBITDA, churn, burn rate, retention, etc., etc....”
Suffice it to say that we were in no position to share our financials and I had no idea what the dude was asking for anyway but they were persistent. In fact, twice, the Mindpspring folks just came to our office and hung out. Both times, I remember getting to the office and there they were, just sitting on the steps of the front door. No appointment. No advance notice. “We just thought we would come over and see what you guys were up to,” said one of the scouts, who could not have been over 22 years old.
“Oh, nothing really,” I said. Just playing some Battle Arena Toshinden and probably going to play some frisbee golf over at Vanderbilt a little later. Will probably just drink a lot around 2pm. Wanna join us?”
“Not today but just let us know if we can buy you. Have a good day!”
The second time the Mindpspring folks came to hang out, I was having some more office furniture delivered to accommodate our growing support and sales staff. We had opted for the white oak tops with the gray bases, probably the cheapest line of furniture that Office Depot sold. So, as the Mindpspring “acquisition team” sat in the yard in front of the office and the Office Depot truck was dropping off our white oak desks, I yelled over at them, “Hey, since you're here, why don’t you help us move this furniture up to the third floor?”
Sure enough, as we formed an assembly line of staff members to carry big Office Depot boxes up to the third floor, there were these guys from Mindspring joining in. They seemed all too eager to make themselves useful and, even though I never was interested in selling to them, I really appreciated them on that day.
As it turns out, Mindspring was not the force with which we would eventually reckon. In fact, despite their aggressive ad campaign in the Nashville market, literally touting their service over “the local guys who started their ISP in the basement” (this was not directed against us but it was universally applicable in most markets), we held our own and hardly lost a customer to Mindspring, even though we offered limited access at a higher price.
By mid 1996, we were trusted as a team that knew how to take care of business accounts and we, somewhat innocently, had given a lot of services away to the non-profits in town. It turns out that giving away internet services to the non-profits did two things: 1) it got us invited to the biggest and best parties in town; and 2) all of the board members were finding out about the need to get their businesses online because they heard about the generous gift that Telalink had recently given. Just like that, we were the commercial internet service provider of choice. Sure, you could pay for a cheap account with Mindspring for your residence but Telalink was a commercial quality provider. When you wanted to get serious about quality service with impeccable support, you called us.
In hindsight, maybe we should have sold to Mindspring or maybe they should have sent a more serious team to go after us. Mindspring merged with Earthlink in 2000 and became huge. We stayed independent and grew bigger and stronger. Other competitors, and eventually a swarm of merger/acquisition offers, were to arrive another day.
AUTHOR: Thomas Conner
Thomas Conner is the co-founder, president and chief financial officer of Sitemason, a hosted, supported alternative to Wordpress and Drupal, built for agencies, freelance designers and developers.