Web Masters Episode #42: Bruce Judson


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Bruce Judson:

A lot of people think about it, “Was it an experiment in Portals?” And, I guess it was an experiment, in some sense, to see how people read things, what content interested people on the web. But, the other thing that it’s most known for is advertising. Remember, we are at a moment where advertising on the web, paid advertising, does not exist. And, we were effectively one of the nation’s largest advertising companies. So, for us to do something here and say, “This is going to be a new advertising media,” was a big deal.

Aaron Dinin:

And it wasn’t just a big deal, it was a huge deal, because that was Bruce Judson. In the mid 1990s, Bruce was helping run new media for Time Warner, one of the largest ad-supported companies in the world. And, he was overseeing pathfinder.com, one of the web’s first content portals. In his role at Time Warner, Bruce had been tasked with figuring out how to monetize the World Wide Web, which means he was setting a precedent for how online advertising would work that we continue to experience even today. Are you ready to hear the story? Let’s get dialed in.

[INTRO]

Aaron Dinin:

Welcome to Web Masters, the podcast that explores entrepreneurship by talking with some of the Internet’s most impactful early innovators. I’m your host, Aaaron Dinin. I’m a serial entrepreneur, I teach entrepreneurship at Duke University, and, obviously, I’m an online content creator who generates revenue through advertising. That makes this episode’s guest important to me because without him maybe this podcast wouldn’t exist. Maybe the web never would have been commercialized. Maybe there wouldn’t be any creepy retargeting ads following us everywhere we go online. In reality, and as we’re going to discuss, chances are none of that is true. But, it doesn’t change the fact that Bruce Judson’s impact on web advertising was enormous. We’re going to hear all about it.

However, before we can, it seems wildly appropriate that I pause here for an advertising break so I can tell you about this podcast sponsor. This podcast is being brought to you thanks to the generous support of Latona’s. Latona’s is a boutique mergers and acquisitions company that helps people buy and sell cash flow positive internet businesses and digital assets. What is a cash flow positive internet business? Well, it could be a content website that makes money off advertising, like we’re going to discuss here in this episode. It could also be something like an e-commerce store, or an Amazon FBA, or a SaaS app, or even a domain portfolio. Basically, if you’ve got a business that’s generating revenue using the internet and you’re thinking of selling it, then you should be talking to the team Latona’s. They are going to help you get a great deal. And, if you’re interested in buying an internet business, Latona’s is going to be able to help you too. Just head over to the Latona’s website, where you’ll find listings for all the businesses currently being sold. That website is latonas.com. L-A-T-O-N-A-S.com.

This episode’s guest, Bruce Judson, was one of the people in charge of pathfinder.com. Here, I’ll let him explain what that was.

Bruce Judson:

Pathfinder was Time Warner’s first website. It was created by Time Inc., which is a division of Time Warner, and it was an internet portal in a sense, in that it had content from a number of Time Inc. magazines, as well as other divisions within Time Warner. We had something from Time Life Books. We drew content from around the company and put it together within Pathfinder.

Aaron Dinin:

Okay, so that’s what Bruce ultimately built. In order to understand why he built it, imagine yourself in the mid 90s. The primary forms of media at the time are television, movies, radio, newspapers, books, and magazines. It’s this last one that’s particularly important in the context of this episode, because Time Inc. published over 100 magazine brands, including its namesake, Time Magazine, as well as Sports Illustrated, Food and Wine, InStyle, People, Entertainment Weekly, and a bunch of others you’ve surely heard of. They were the 800-pound gorilla of the magazine industry, which means they had lots and lots of content.

It’s also an industry that would get decimated by the internet. But, Time’s leadership wasn’t oblivious to that impending fate, and they were trying to get ahead of it. This is the context in which Bruce Judson first joined the Time Inc. team.

Bruce Judson:

I joined Time Warner the day the merger of Time and Warner was announced. I’d been hired by Time Inc. and walked in the door, the merger was announced. And, for people that don’t remember at the time, that made Time Warner the world’s largest entertainment and media company. A lot of people have talked about it as the Google of its day. So, we were an advertising media center, an innovation center. Time Warner subsequently started creating the information superhighway. And, if you go back to the early 90s in Orlando, the CEO of Time Warner had a vision, which has come true today, that we would have two-way interactive cable. And, at that moment, he went around the company and effectively said, “I would like every division within the company to figure out how it’s going to participate in the interactive future.” 

I was, at that moment, running innovation in advertising for Time Inc. and, I thought this was exciting, and so I raised my hand. Time Inc. was built on Henry Luce’s separation of church and state. So, I raised my hand from state, Walter Isaacson raised his hand from editorial, and suddenly we were a division in charge of interactivity within Time Inc.

Aaron Dinin:

Yes, Bruce is talking about partnering with the Walter Isaacson, the author famous for biographies on Einstein, Benjamin Franklin, Henry Kissinger, and, probably most notably for this particular audience, Steve Jobs. Even if you haven’t read that book, you’ve seen it, white cover with a black and white picture of Jobs scratching his chin. You also heard Bruce talking about the separation of church and state. That’s not a reference to the United States Constitution, that’s a reference to how the management at Time Inc. wanted editorial decisions separated from business decisions.

Bruce Judson:

Time Inc. was famous at that moment for its separation between church and state. It goes all the way back to Henry Luce, who was the founder of Time Inc., and the idea that sometimes the magazines would be writing about businesses that bought advertising. And, journalists needed to have editorial freedom to criticize companies that were buying advertising, to say one company was doing something better than another. So, there was a division which the company called, “Church and state.” There was an editor-in-chief, and there was a President of Time Inc. Editorial reported to the editor-in-chief. The business side, which sold ads business, reported through the publisher up to the President.

Aaron Dinin:

Just to clarify, what was your official role in the new entity that got created?

Bruce Judson:

Time Inc. New Media was the first division within Time Inc. Walter became both President of Time Inc. New Media and editor. So, Time Inc. New Media was the first division to combine church and state. I effectively was running the business side, and then at Pathfinder, and then we had an editor who was running the editorial side.

Aaron Dinin:

So now, we’ve got the scene set. Time Inc. and Warner Communications had merged right when Bruce started in 1989. He’s there a few years, when the huge media conglomerate decides it wants to experiment with content on the internet. So, it starts looking for people to lead the efforts. Bruce raises his hand and winds up basically running the business side of Time Warner’s New Media division. From there, the question becomes, “What should they build?” And to be clear, launching website wasn’t the only thing they were focused on. At that point, it was obvious digital media was going to change the broader mass media landscape. And, part of Bruce’s job was to figure out where and how Time Warner should be evolved.

Bruce Judson:

The internet was just beginning, but we were there thinking about the future and the interactive future. And, suddenly then things started to happen. AOL came to us and said, “We want to put your magazines on our service.” CompuServe wanted to put our magazines on their service. And, that became our responsibility, because we were in charge of interactivity. And then, we started to see people talking about the internet. And, because our place in the world, and because we were in place, we were one of the few companies that had a place for people to go, everyone who was starting to think about the internet, do something, came through our doors. Jim Barksdale and Marc Andreessen, who at that moment it was called Mosaic Communications, became Netscape, came in, and I think people now are familiar with Andreessen Horowitz. But, Marc Andreessen was the inventor of the browser as we know it. So, they came through.

When Yahoo, which had been started by two graduate students at Stanford, first said, “We’re going to be a business” and hired a CEO, he came to CSO. Everybody who was thinking about the internet came and talked with Walter and I. And, we said, “We think this is something. We are going to do something.” And, the more we talked about it and said, “Time Warner is going to do something in the internet,” the more we wove ourselves into the fiber of the early internet days.

Aaron Dinin:

What you’re hearing Bruce allude to is that it wasn’t obvious in the early days of the web that companies would want to create their own websites. As a result, Time Warner’s first forays online weren’t in the form of creating website, it was in the form of providing content for other companies like AOL and Yahoo. Eventually however, Bruce and his team recognized the potential value in hosting their own content.

Bruce Judson:

Time Warner’s first foray into the web, which we created, was called Pathfinder. The name was taken from James Fenimore Cooper’s book, The Pathfinder. It was meant to be your guide and experience into the web.

Aaron Dinin:

And, as you heard at the top of this episode, as much as Pathfinder was a content portal, it was also a Time Warner experiment on if and how the web could be monetized.

Bruce Judson:

A lot of people think about it, “Was it an experiment in portals?” And, I guess it was an experiment, in some sense, to see how people read things, what content interested people on the web. But, the other thing that it’s most known for is advertising. Remember, we are at a moment where advertising on the web, paid advertising, does not exist. And, we were effectively one of the nation’s largest advertising companies. So, for us to do something here and say, “This is going to be a new advertising media,” was a big deal.

Aaron Dinin:

Did you think the web had a lot of potential for monetization when you first started working on Pathfinder?

Bruce Judson:

I had a background in direct marketing. I looked at it, and the first thing I saw was, “This is in some way going to be the world’s greatest direct marketing vehicle.” And, my first book, which was called Net Marketing, said that. It was written in the early 90s, I guess. I remember people saying to me, “Do you really believe people are going to type into the web, “WQXR”?” And they meant http, internet addresses. And, I said, “Yeah.” I just had this absolute vision that, in terms of buying and selling products, the interactive ability to present goods and services was going to be transformative.

Aaron Dinin:

You said you wrote a book about it, how did that happen?

Bruce Judson:

After we had started Pathfinder, the big advertising association at that point was the Association of National Advertisers. They called and said, “Would you write an article about internet advertising?” I remember I drew a diagram about how it was going to all work at the end on content companies, and marketers, and businesses. And, that diagram became the cover of that issue of the ANA quarterly magazine. And then, Michael Wolff, better known for Fire and Fury, he was running his own imprint of books about the net, and it was affiliated with Random House. He came to me, and I knew Michael, and he said, “You should write a book and I’ll publish it.” I was like, “Michael, I’m barely sleeping, I don’t have time. How can I possibly even think about it?” But of course, going all the way back, I’m also an attorney, and all attorneys want to write books. It’s kind of something about it in their blood.

I remember, I went to see the Head of Communications for Time Inc., a wonderful man named Peter Costiglio, and he looked at me and said, “Have you ever wanted to write a book?” I said, “Peter, all lawyers want to write books, of course I want to write a book.” And, he said, “You’re not going to say anything negative about advertisers.” I said, “No,” at that point companies had websites, “I will put out there which are the best ones, but I’m not going to say anything negative about anyone else. But, I don’t have time to do this.” And, he looked at me and said, “Bruce, it doesn’t matter if you never sleep again. You will never have this opportunity again.”

So, Net Marketing was a side gig, and it became a sleeper best seller, which was kind of a thrill. I was suddenly a best selling author about the internet, but it was totally a sleeper because there were many, many people… At that time, the whole idea that this was going to transform the way goods and services were sold and, “Here’s how it’s going to work,” was just out of everybody’s frame of reference.

Aaron Dinin:

Wow, okay. So, you literally wrote the book on internet marketing in the mid 90s, can you give us an example of what marketing was like back in the early days of the web?

Bruce Judson:

I’ll never forget, a salesman from Detroit called me and said, “One of large car companies wants to put something up on what will be our Pathfinder.” He’s thinking they want us to build the site within our site, kind of a mini site for this car company. And, I’ll never forget, I went back to my office, sat down and thought about it, and said, “How is this going to work?” And, all I could think was, “This is not going to work. Because, we’re going to put up this website, and then their ad agency is going to say, “What are you doing? This is our business creative, that’s what we do.”” number one. Two, people didn’t really use the word scale, but I was thinking in terms of scale and said, “This is going to be a tremendous amount of energy, and effort, and back-and-forth. It’s not like a magazine where you just take an ad and put it in, that’s what we do. We don’t create ads for people.”

The other thing was, I already was immersed in a belief that the internet was going to transform the world. That was not a widely shared view. But, I said, “If the web evolves the way you think it’s going to evolve, this car company, by this time next year, is going to have their own website. And, their goal is going to be to send people to that site. So, advertising is going to have to fit within that business goal.” And, that lead me to the banner ad.

Aaron Dinin:

That’s right. Bruce Judson is the guy who invented the banner ad. To be fair, there’s some controversy about who really should hold that title, but Bruce has a pretty good claim.

Bruce Judson:

Pathfinder went up on a Tuesday, and on that Thursday Hotwired went up. Hotwired included an ad as well. And, for a variety of reasons, for many, many years, people always said, “Wired invented internet advertising.” But, Walter said, “No, Judson invented internet advertising.” And, I’ll never forget, one day my wife called me and said, “Walter Isaacson is on NPR and saying you invented internet advertising.” And, I was kind of like, “That’s kind of like saying you invented e-commerce, you’re not going to tell people that,” but there was that grain of truth.

The other point I think I always took away from it was there are two kinds of inventions. There are inventions that I’ll say are in the air. And, obviously, if we had not existed, banner ads would have come into being through Hotwired. And, go back to Darwin, he had his theories about origin of this species, but he held them. I believe he held them for something like 20 years because if they were heretical for the church, he knew they’d be controversial. He finally published because someone else was going to publish and beat him to it. So, I look at the banner ad as kind of an invention that was in the air. It was going to happen.

Aaron Dinin:

So, you’re saying you don’t go around passing out business cards with, “I invented internet advertising,” on them? Because, I feel like if I were in your position I would definitely have those.

Bruce Judson:

I never said to anybody, “I invented internet advertising,” because people would think you were crazy. But, to have said, “I played a role in figuring out how it was going to work, in getting it to work, in creating this new media,” that I feel terrific about.

Aaron Dinin:

Of course, the important thing, from an entrepreneurial perspective, isn’t really whether Bruce technically invented the banner ad, or whether he was simply among a handful of people who first conceived of the concept around the same time, what matters is that even thinking the banner ad was a good idea at that time in advertising history was actually a huge gamble.

Bruce Judson:

You may say, “The banner ad, that’s kind of obvious.” As you can see, people didn’t see it as that obvious because they were thinking you’re going to put up a site for people. The other thing was, if you think about a magazine, or television, there’s ads in it. But, the media company does not expect the person reading the magazine, watching Turner, something like that, to all of sudden drop what they’re doing, leave the media to go away and run to the store. They think of it as, “We’re going to have an impact. And later, when that person’s shopping, when they’re doing something after they have enjoyed our media for which they’ve paid us, they’ll remember the advertising.”

And so, there was a heretical notion there, which was, “For us to make money on advertising, we are going to have to send people away from our media.” And so, it was quick, and leave. And, of course then we could have layout formats so it would scale, people could provide banner ads and they would work.

Aaron Dinin:

Hold on, can you talk about that for a moment? What kind of infrastructure did you have to set up for all of this to work?

Bruce Judson:

We set up Pathfinder and budgeted that we would be selling advertising, it was not added value. We had a certain metrics, and we had a certain investment. Later, there was controversy over what we were spending, what we were losing, all of those kinds of issues. But, the first logistics were, as in creating any business, here’s what we’re going to need, we’d need, what we called, editorial then. Which, was people to decide what the content would be, create it, figure it out. And, we’d need a business side. The business side was everything from administration, to… Here, it was operations, which was something Time Inc. had never had before, which was software. And, early ad serving platforms, all of those things, Ad insertion. Which, [inaudible 00:20:39] company, [inaudible 00:20:40] division. Ad agencies were just beginning.

It was a world at that moment where it was small enough, everybody kind of knew everybody else. There was something about it. Because, you weren’t tilting at windmills, but you certainly weren’t mainstream. It’s hard for people to appreciate it this moment.

Aaron Dinin:

Yeah, I was interviewing John Danner, who founded NetGravity, which was the first internet ad serving software. And, I remember him mentioning that Pathfinder was one of their first customers. So, it sounds like early on you were focused mostly on selling the vision of advertising to customers, right? And, that was the hard part, even to the point that you left the building of any sort of fundamental new ad technologies to other companies? Is that kind of how it worked?

Bruce Judson:

There’s an interesting discussion around it. One of the things I remember feeling was… We built out three area. A content creation area, a technology area, and the business, ad sales, finance, and marketing. And, the technology area… There’s a site, I think it’s still exists, called In the Pathfinder Basement. The technology area was literally underground, they found a large space in the Time Inc. building. But, I remember at one point we had some issue, and I remember thinking… I’d been in contact with people in Silicon Valley, Mark Andreessen, and lots of other people, and I was thinking, “The people graduating from MIT, they are going out to Silicon Valley. They are the heroes at their company. If you’re a technical person and you come to Time Warner,” in those days, not true anymore, “You are quite literally in the basement.”

So, it didn’t really make sense. We were never going to have that cutting-edge talent, nor did it make sense for us to have it, it was going to have to be a service from somebody else as they invented stuff. The real question for us was, “How much should we have built?” I’ll never know what impact it had, but in the early days DoubleClick was starting.

Aaron Dinin:

DoubleClick was the other big web advertising company that started shortly after NetGravity. NetGravity sold ad serving software to big companies like Time Warner. The companies would install it on their servers and then have their own sales teams sell their ad inventory. In contrast, DoubleClick was a SaaS platform. Companies would add their software to their webpages, and the software would automatically inject adds onto websites. In addition, DoubleClick had a sales team selling ad inventory for everyone on its network. This made it more valuable to the smaller companies that either didn’t want to or couldn’t support an entire ad sales team. For more details about both companies, you can hear from NetGravity’s founding CEO, John Danner, in Web Masters episode number 37. And, DoubleClick’s founding CEO, Kevin O’Connor, in Web Masters episode number 28.

Bruce Judson:

I met with a couple of people from DoubleClick, and they wanted to self for us. I remember meeting them and saying, “We have several 100 sales people, plus we’re building our own sales force, Time Inc. is never going to outsource its ad sales. We’re never going to feel you can do it better than us. However, there is definitely a business in advertising infrastructure. We’re building that out ourselves, and it doesn’t feel to me like something we should be doing or the companies are going to do in the future as this all evolves.”

Aaron Dinin:

So, it sounds like even then you knew network ad sales was a better way to monetize, even if you couldn’t do it. That seems like it might relate to the controversy you alluded to earlier about how much Pathfinder was costing Time Warner. Would you mind telling us a bit more about that?

Bruce Judson:

One day, the CEO of Time Inc., Don Logan, was at a conference and he made a joke that New Media was a money pit. He was joking. But, the press picked it up. And, we were on a downward spiral ever after that. And, a couple of things. Because Time Warner had spent an undisclosed amount, and you know what it means when I say an undisclosed amount, on the information superhighway, there’d been a policy decision that we would not say what were spending on Pathfinder. So, publicity started to say, “They’re losing money,” then people started putting numbers out. And again, I would go into Peter Costiglio’s office every week and say, “Peter, we were spending $10 million a year.” And, if you think about it, for the world’s largest entertainment and media company, their play in what they thought would be a giant new media, that was by no means a lot. I couldn’t say it to the press.

And, if you look in Wikipedia, on Pathfinder it says today, “People speculate that Time Warner was spending $100-$200 million a year.” No. If it was $100 million a year, we would have had a building. We would have been able to afford our own building. But, that was the number that was out there.

Aaron Dinin:

Is it fair to say there were a lot of expectations on you that were maybe a bit unreasonable?

Bruce Judson:

That’s an interesting question. I can tell you that, I’ll never forget because it was obviously a significant moment, in the early days of the internet, when suddenly things got astronomical, valuation… An analyst from Merrill Lynch did a report on Time Warner and said that Pathfinder was worth £500 million, and it was after a year. Had added $500 million evaluation to the company, and even today that’s a decent sized number. Then, companies were smaller, that was real money.

Aaron Dinin:

How successful would you say Pathfinder was in comparison to those expectations?

Bruce Judson:

It went through this really fascinating thing. It became popular, it became well known, and it won awards. So, it had real ups and downs. But, the thing that did happen, was the idea of advertising and that advertising would pay for things on the web. The web would be ad-supported. Which, was really fundamental to Pathfinder, and Hotwire, and others like us in those early days, that certainly caught on. Companies started to put up their own websites, and they wanted to send people to those sites, they started to buy ads in internet media, they had to create metrics. People paid for impressions. Google popularized paying per click. People bought impressions. Of course, the above the fold became an issue, they had to be visible impressions. But, we sold impressions. Partly, it was because it was the notion of it was the quality of your ads to get people to click. Different categories would get different click-through rates and all of those things as well. But, doing that, and measuring it, and tracking it.

So, you had to create your own language. You had to create your own metrics. All of these things that we had a huge advantage. And, people ask me, “Was it added value?” Which, is a term in the ad industry which means you’re giving it away.  The answer was no. But, we did have a huge advantage, in that we came with the aura of Time Warner, an established media company, an advertising-driven company. And so, when we said, “This is going to be something,” it was not people with no experience in media coming in and trying to sell ads or do something. So, we absolutely had that as an advantage.

Aaron Dinin:

And, it was a huge advantage, even if Pathfinder and Time Warner’s New Media division were costing a closer to $10 million, rather than that reported $200 million. That was still a lot of money to spend on what was essentially an experiment to first learn whether the internet could support content-based business models. During that experiment, Bruce and Time Warner learned a ton. But, for Bruce at least, perhaps the biggest learning was that Time Warner was not the right company for producing the kind of content that would ultimately be most successful on the web.

Bruce Judson:

Very quickly the marketplace decided on what internet advertising was worth. And, you could quickly see that you needed huge audiences to pay the bills. And, one of the things that I remember feeling very, very strongly… You forget the things that were wrong, but you remember the things where you were right, I guess it’s part of human something. Because, I remember feeling strongly, “The New York Times, The Wall Street Journal, will ultimately dominate. They will be winners in this media.” Because, we quickly realized that it was a 24 hour media.

One of the reasons we made Pathfinder as a portal was that we were a weekly magazine company. We knew we didn’t have a content to put something new up each day. But, if we were drawing from lots of different sources, we’d have content to put in. But, even there, I remember feeling, “It’s the companies that are already creating the stories and the media, where the bills are being paid by somebody else for the content. And, it wasn’t 24 hours, but it was daily. So, the newspapers, they were going to be winners.” And, I kind of thought at the time, and sadly it’s become true also, that… In those days, pre-internet, every major city had a major newspaper, they had a Washington Bureau, so The Los Angeles Times would have its Washington Bureau, it would report on politics. San Francisco Chronicle would report on politics, The Chicago Tribune… And, I remember feeling, “This is how the Times”… And, The Wall Street Journal was already international, but it wasn’t what it is today. “This is how they’re all going to build huge national audiences. And, the regional papers are going to suffer.”

Aaron Dinin:

So, it sounds like you recognized the consolidation of the media industry that the internet was going to create from pretty much the beginning of the web, is that right?

Bruce Judson:

When I grew up, people in business schools would talk about the law of twos. You’d have Coke and Pepsi, Ford and GM, [inaudible 00:30:37] existed. [inaudible 00:30:38]. Markets would quickly devolve to two. But, the internet inherently goes to one. It does it for two reasons. One is, word-of-mouth is so quick, people say, “I want the best, and the best is Google, as a search engine.” So, it goes to one, in that sense. It quickly moves markets to one. Second, the barriers to entry, and we see this with Amazon, because you’re in the virtual world, you can move easily into new businesses.

Aaron Dinin:

Do you think that’s a benefit or a flaw of the Internet?

Bruce Judson:

I remember writing in 1999 saying… Businesses typically look to their left and right, “I’m in a category. I’m a rental car company.” But, what I said is, “On the internet, people are going to forward integrate, they’re going to take over what people they sell to today and they’re going to backward integrate. They’re going to take over their suppliers. And, they’re also going to move in all kinds of directions, because the cost of moving, once you own the customer, once you understand how to get customer appeal, you’re going to be able to shift.”

By the way, I think Amazon is one of the most innovative companies on the planet. If you look at Prime, giving away movies, giving away NFL rights at one point. So, you have something that people used to pay for, now they’re available for free. So long as they’re making money somewhere, they can take other things that used to support businesses and give them away. The whole system has got too large and too powerful. Privacy right now is mandated by Google and Apple. Apple’s had a huge privacy initiative and Google has followed them. But, it’s not the function of businesses, it’s not what they should be worrying about. So, I am very, very concerned about the internet. I’m also concerned about competition, influence, and privacy, and monitoring.

Aaron Dinin:

So, as one of the early pioneers of the web, it sounds like you’re, let’s say, a bit worried about the direction the web has taken. Or, is it more an issue of how the web and internet have impacted society?

Bruce Judson:

I’m very concerned about the modern web. I guess I have to go back a little. So, I wrote Net Marketing, it came out in 1995. I wrote two other internet books, first one came out in 99, then I wrote the one on entrepreneurship that came out in 2004/2005. In 2007, I was having lunch with the President of HarperCollins, and I said, “I don’t have any new internet books in mind, but we, in America, are hitting record levels of economic inequality.” And, I took my hands, first I put them together as if I was going to clap, “History says that nation’s that go like this,” and I went from a clap to out like this, pushed my arms out as far as I could, “Go like this,” and I pushed them down. And, he said, “We want it.” I said, “What?” He said, “We want the book.” “I was just talking, I wasn’t thinking about a book, but you want it?” He said, “Yeah. You teach in a business school.” I said, “Yeah.” He said, “you’re a capitalist.” I said, “Yes.” So, this is not going to be some crazy socialist book, [inaudible 00:33:57] really believe that economic inequality’s a threat.

And, I went home and I thought about it, and first I said, “I’m not qualified.” And then, I kind of thought, “There’s really nobody… Because, there’s no theory about this. There is literally no theory about, “When does the fabric of a society collapse?”” And then, I thought about it some more and said, “Bruce, there’s probably 30,000 people with think tanks in Washington who would kill to have HarperCollins publish their book about what’s wrong with America, you have to do it.”

So, I wrote the book. As I was writing it the crash of 2008. 2009, the book comes out, says that economic inequality is going to lead to polarization, anger, mistrust, and ultimately insurrection. And, people thought I was… I won’t use the word crazy, but that would be a fair statement. People kind of looked at me and talked, but I could see nobody really took it seriously. I was the most depressing man in America. Everybody’s saying, “We’re coming out of 2008,” and I’m saying, “We’re in trouble.” And, I was also saying, “The middle class is going to collapse.” And, I’ll never forget other people saying, “The middle class is healthy,” and I said, “Today.” Because, I could see the trends, and I could see that money… I said, “It has to come from somewhere, and if you look, it is moving rapidly up to that top 1%, 0.1%, whatever you’re going to call it.”

So, fast forward to today. I think that technology itself, and the way we have had big tech, is a central thing that has pushed economic inequality. And, it has certainly diminished job creation in a way we… We talk about entrepreneurs, but the lifeblood in America was not entrepreneurs, it was always small business. There was a truth to that. Entrepreneurs think of themselves, “I want to create a big business.” Small businesses are people who want to make a good living for themselves and their family. And, if you look at small business creation, it’s dramatically down. Jobs are being created, technology companies, that are not necessarily good jobs, they may not be here as artificial intelligence grows. So, job creation is down. All of the things when I was growing up you’d go to your neighborhood for, your neighborhood graphic store, somebody would do that, you do that all through giant technology companies today. So, size worries me.

Aaron Dinin:

Maybe I’m naïve, but, personally, I’m not as worried as Bruce is about all of this stuff. And, I think in part it’s because, well, look where Bruce is coming from. Here, we’ve got someone worrying that the Internet’s enabling of giant technology companies is undercutting society as we know it. But, the reality is that Bruce was coming from Time Inc. Sure, Time Inc. and its portfolio of 100 magazines seems like a bit of an anachronism today, but for the roughly three quarters of a century it existed before the web, Time Inc. was he huge consolidated empire trampling on all the little guys. And, despite that, look at the innovation they were still able to create.

Bruce Judson:

We had spent a lot of time thinking about media for the information superhighway, for what was going on, what Time Warner was building in Orlando. And, we really believed that if you could deliver sight, sound, emotion. Part of what we started with Pathfinder was also what became known as Road Runner, which was Time Warner Cable’s internet service. And, originally that was a joint venture between Time Inc. and Time Warner Cable, because we had this vision also that it would be delivered through cable, it would be high speed, it would not be the early days of the internet, which was slow. I remember 36 kilobits was considered fast, that was what Pathfinder was designed for. But, we had an early vision that it would be video. And, I really believe this delivered into people’s homes would be a new media. It would build consumer appel. That was part of Pathfinder.

It was an early experiment. An experiment from the world’s largest entertainment and media company of, “What was the appeal? What did people want? What would they do?” We thought instant access to information would be important, would be valuable. So, it was all of these things, I just really looked at it and said, “This is the future.”

Aaron Dinin:

What this tells me is that as long as visionary entrepreneurs like Bruce Judson exist, whether they’re building companies for themselves or working inside huge companies like Time Warner, new technologies will continue being developed. New companies will continue being built around them, and the cycle of innovation will continue. As for whether or not it’s better for entrepreneurship to be in the form of small businesses or huge multi-national conglomerates, well, I suppose that’s probably a debate best saved for another podcast.

For now, I’d like to thank Bruce Judson for taking the time to share his story and the story of pathfinder.com. If you’d like to keep tabs on what Bruce is up to these days, you can find him on Twitter, he’s @BruceJudson. Web Masters is on Twitter too, we’re @WebMastersPod. Please share any thoughts or feedback you have about the episode. You can also share them directly with me, I’m @AaronDinin. That’s A-A-R-O-N D-I-N-I-N. And, if you want more content about business, and entrepreneurship, and startups, check out my website aarondinin.com.

A thanks to our audio engineer, Ryan Higgs, for pulling together this episode. And, thanks to our sponsor Latona’s for their incredible support. Don’t forget to check out Latonas.com if you’re interested in buying or selling an internet business.

Two more requests, then I promise I’m done. First, if you’re enjoying the podcast please share it with friends. I’ve noticed a lot of you have been doing that recently and it’s pretty cool to see. And, my second request, make sure you’re subscribed to Web Masters so you get the next episode when it’s released, which will be soon. For now though, time for me to sign off.