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On WIRED magazine's startup phase (1993-1997)
Today I want to share a piece of writing that I’ve been fiddling with for the book project. I’m writing a book about the history of the digital future, leaning heavily on the back catalog of WIRED magazine to draw out some lessons from the repeat predictions of broad, positive social changes that never quite arrive as expected.
The book isn’t about WIRED, per se. Rather, it uses WIRED’s tech coverage to tell a coherent story about the biases of our dominant tech culture. I’m planning to write one chapter in the book that will focus on the magazine itself. That’s what I’m sharing today — some early writing about the magazine’s so-called “golden era.”
Fans of WIRED magazine sometimes speak of its first few years in the same reverent tones that comic book fans reserve for Steve Ditko and Chris Claremont.
The magazine burst onto the scene in 1993, declaring in its opening pages that the Digital Revolution was ushering in “social changes so profound their only parallel is probably the discovery of fire.” It was an immediate, improbable hit.
Within a year, WIRED had over 100,000 subscribers and a National Magazine Award. What Jann Wenner’s Rolling Stone did for Rock ‘n’ Roll culture in the 70s, Louis Rossetto’s WIRED was doing for digital culture in the 90s. For a time, in the mid-1990s, WIRED was the single most recognizable brand in digital culture.
It didn’t last. Despite all the subscribers and the accompanying ad sales, WIRED Ventures was a cash furnace. In 1996, Rossetto tried (twice!) to jump on the tech stock bubble through an IPO. It was a disaster both times. The IPO failed. By 1998, Conde Nast took over the magazine and the web properties were sold to Lycos. Rossetto and Jane Metcalfe (WIRED’s president and Rossetto’s life-partner) were forced out.
WIRED is currently celebrating its 30th anniversary. Five years ago, I spent the summer reading the magazine’s entire back catalog. I wanted to watch the “digital future” as it arrived over the course of a quarter-century. I wrote about it for the 25th anniversary issue. I’ve been tinkering with a booklength version of the project ever since.
The magazine has certainly changed over the decades. 90s WIRED brimmed with an ideological certainty that contemporary WIRED no longer holds. It has become a much more critical magazine. It no longer treats the entrepreneurs, engineers, and investors of Silicon Valley as de facto heroes in the long arc of historical progress.
Diehard fans look back on these early years as the Golden Era, or the Rock ‘n’ Roll era. I don’t think that’s quite right. The writing and reporting are a lot better today than back then.
I think a better description is that WIRED’s early run (1993-1997) was its Startup Era.
Louis Rossetto ran WIRED like a startup. It burned cash, had a ton of flash, and ultimately couldn’t sustain itself. The magazine grew at a phenomenal rate. It constantly spun up new products (the Hotwired website, Suck.com, the Hotbot search engine, Wired news, a book publishing unit, a tv production unit…). But it never turned a profit. And it ultimately couldn’t take advantage of the tech IPO mania, because it wasn’t actually a tech company. It was a media company, facing all the same financial constraints that all other media company faced.
Thinking of early WIRED as a startup helps explain its unique appeal and contextualizes some of its oversights. It also helps make sense of what did and did not change after Rossetto and Metcalfe were replaced.
There’s a striking early scene in Gary Wolf’s book, WIRED: A Romance (2002). Rossetto, Metcalfe, and Nicholas Negroponte (early investor, head of MIT Media Lab) try to pitch the magazine to one of the top New York banking firms specializing in media:
[the banker] could see from the spreadsheets forecasting Wired’s circulation growth that Louis had absolutely no idea how the magazine business worked, and he picked the plan apart in detail. He asked Louis archly about various circulation ratios that ought to have been familiar to anybody who fancied himself a media entrepreneur, and he elicited expressions of ignorance in response. Truthfully, Louis did not know what Suhler was talking about.
Louis had been prepared to discuss the fundamental concept of Wired. He wanted to talk about a magazine that would exemplify a new global culture. But the meeting never budged from the topic of these arcane circulation formulas, which Louis could not discuss. Louis was reduced to silence, and by the end he was shaking with rage.
A few minutes later all three of them were out on the New York street. (…) “Do you want your money back?” Jane asked Negroponte.
Nicholas Negroponte had invested $75,000 in Wired in exchange for 10 percent of the business and a backpage column. Negroponte comes from extreme wealth (I’ve been told that his family owned an island), so he was effectively taking a cheap flier on a magazine that, at a minimum, would further elevate his status in tech circles. Conde Nast eventually purchased the magazine for $90,000,000. It isn’t clear how much his shares had been diluted prior to the sale, but it certainly appears as though he made out like a bandit.
In one sense, Rossetto goes on to prove that banker wildly wrong. WIRED’s first issue was a massive hit. By the end of the first year, the magazine had over 100,000 subscribers and a National Magazine Award. Rossetto successfully tapped into the zeitgeist.
But in another sense, the banker’s skepticism was clearly warranted. Over the next five years, the magazine swelled, and it filled up with advertisements. Here’s a chart of the magazine’s size and advertisement counts over Rossetto’s tenure:
…How the hell does a magazine get that big, sell that many ads, with that many subscribers, and still not turn a profit?
The simple answer is that Rossetto wanted WIRED ventures to be a central player in the digital revolution it was covering. He plowed the revenues from the magazine into moneypit online ventures like HotWired.com.
HotWired was a decade or two ahead of its time. (And, from a business perspective, that’s fatally early.) The benefit was a short-lived first-mover advantage: it looked innovative and brought in early “Netizens.” Hotwired sold the first-ever banner ads, and (since it was inventing a new advertising market out of thin air) managed to briefly charge absolutely comical prices. (“a small banner on one of Wired’s web pages would cost ten thousand [dollars per month], with a three-month minimum.” - Wolf pages 106-7)
This is pretty standard startup-like behavior. It can lead to some pretty dicey journalistic choices, though. The unremarked upon conflicts-of-interest in the early years of the magazine are staggering in retrospect.
In 1994, for instance, Joel Garreau wrote a feature story titled “Conspiracy of Heretics.” The thesis of the article is made clear in the subheading: “The Global Business Network was founded in 1988 as a think tank to shape the future of the world. It's succeeding.” Nowhere does Garreau mention that GBN was an investor in WIRED magazine. (h/t Fred Turner)
The problem for Rossetto was that, even if WIRED was channeling the essence of ‘90s tech utopianism, it was not, itself, a tech company. Rossetto wasn’t insisting that the bankers were all wrong, because they didn’t understand how the internet was going to revolutionize magazine publishing. He just had a good, timely idea for a magazine that could be popular. There was no disruptive business model hiding inside Rossetto’s publication strategy. The best-case scenario was still just a magazine with a large readership that you can sell cars and fancy watches to.
This all culminated in the 1996 failed IPOs. WIRED needed money. All the big tech companies were going public and getting insane valuations. WIRED was the most recognizable brand in cyberspace. It seemed to just make sense.
The IPOs were a disaster though. WIRED’s prospectus was laughed out of the room. Andrew Ross Sorkin summed it up contemporaneously as “The money-losing publisher of Wired magazine and the online HotWired service presents a prospectus that sounds like a cry for help.”
As Michael Wolff describes it in his book, Burn Rate: How I Survived the Gold Rush Years on the Internet:
“Wired wasn’t really an Internet business. It was the magazine business, the publishing business. It was content. It wasn’t software. A money-losing software business with a good brand name and the chance to be number one in its category could be worth twenty times its revenues. A money-losing content business, even one with a good brand name and chance to be number one in its category was maybe, on a fine day, worth one times its revenues.”
I wonder sometimes how much this behind-the-scenes startup drama affected early WIRED’s penchant for bravado. Here, again, Wolff provides some useful perspective:
“What you were buying, what you felt compelled to buy, was the notion that Louis, and the rapidly growing Wired magazine staff, knew more than you knew. They understood something that you didn’t understand. They had a feeling for the future, which you didn’t have. The fact that this knowledge basis was not profit producing was judged to be irrelevant by the marketplace. You had to understand the future, you had to step into the future, you had to be part of the future before you could make a buck off of it—or so the market seemed to be saying.
This became, first for Wired, and the pretty much for every other Internet-associated business, the basic economic model. You are as valuable as your vision.”
WIRED in 1993 and 1994 was ahead of the curve. Rossetto insisted that the digital revolution was coming, and that it would be led by computer programmers. By 1995, with the Netscape IPO, it looked like he was right. But WIRED’s IPO was premised upon the magazine continuing to display a “feeling for the future” that everyone else lacked. And so, in 1996 and 1997, the magazine starts taking increasingly wild swings. These were the years of some of WIRED’s biggest swing-and-a-miss predictions, like PUSH! and The Long Boom.
Another interesting point is that WIRED’s failed IPOs looked to contemporary observers like “a bellweather moment in the history of the Internet” (Wolff, again). But it goes completely unremarked upon in the magazine itself. Was the increasingly belligerent tone of the magazine circa 1997 an indicator of the broader tech culture, or just a symptom of Rossetto’s flailing attempts to regain control of his fading empire?
Another thing I like about the startup analogy is that startups tend to take on the traits of their founders (much like dogs and their owners). And Louis Rossetto, uh, cuts a distinct figure.
Rossetto stumbled into tech culture by way of libertarianism. As a student at Columbia University in 1971, he was featured on the cover of the New York Times Magazine in a story titled “The New Right Credo - Libertarianism.” He had watched the mass student activist movements of the late 1960s and decided what the world needed most was counterprotestors.
In 1985, Rossetto spent three weeks in Apartheid South Africa. It left a deep impression on him — he became convinced that it was an idyllic paradise, unburdened by the oppressive hand of The State. The real problem, he concluded, was the distorted picture painted by the mainstream press.
By the late 1980s, Rossetto became convinced that a great libertarian awakening was on the horizon. Technological innovation was the missing ingredient that would change everything. Digital technologies, combined with free markets, would emancipate the global public. Old institutions — governments and the media in particular — would fade into irrelevance. Rossetto was working in Amsterdam, editing a small computer industry magazine titled Computers and Translation. He convinced his boss to let him change the name, and started fiddling with some newfangled desktop publishing tools. The resulting magazine, Electric Word, was something of a prototype for WIRED.
Electric Word lasted a year and a half, and exhausted two publishers before it was shut down. The second publisher sued Rossetto and Metcalfe for financial mismanagement. They had used his credit line to print a final issue after he had told them they were cut off.
Rossetto and Metcalfe then traveled back to New York City, where they leaned on Michael Wolff for tips on how to succeed in publishing. Wolff offers some brutally funny reflections in Burn Rate. He describes Rossetto as “someone I certainly would have voted among the least likely to succeed.” Upon first meeting Jane Metcalfe, Wolff remarks “one would certainly not have written [Rossetto] with a girlfriend.”
Nonetheless, Rossetto persevered. The timing for a magazine like WIRED in 1993 turned out to be perfect. Again, from Wolff:
“Louis foresaw the digital revolution without foreseeing the growth of the Internet, just as Hugh Hefner foresaw the sexual revolution without foreseeing the pill. Each saw the desire without seeing the invention. They were the beneficiaries, you might say, of smart luck rather than dumb luck.”
“The country was coming out of a recession, the recovery being led by the technology sector, an industry made up of young men looking for a positive identity. Computer programmers were like bond salesman in the 1980s; they were looking to turn themselves into Masters of the Universe. Windows was spreading the Mac ethic – computers did cool things! What’s more, Wired magazine was a product designed as an artifact – it wasn’t just a magazine, it was a statement.”
Soon Rossetto found himself one of the most influential people in Silicon Valley. This was proof that he was right about the world. The digital revolution was arriving. With it came the promise that citizens would realize the limitless freedom of the marketplace and abandon governments entirely.
Cyberculture pre-WIRED was a chaotic mix of communitarianism and libertarianism, counterculture and corporate culture. WIRED, under Rossetto, treated those libertarian notes as the melody. WIRED was aggressively anti-regulation, anti-mainstream media, and pro-free markets. It celebrated conservative figures like George Gilder and Newt Gingrich, while sniping at Al Gore as a disappointment.
It’s possible that all would have happened even with a different founder at the helm. Mondo 2000, a much more countercultural, communitarian magazine, had already been around for years. It never broke through the way WIRED did. Maybe the only magazine that could pick up WIRED-sized cachet in the early post-Cold War years was a magazine that treated the digital revolution as the technological wing of the broader victory of markets over states.
But it’s equally possible that Rossetto’s main, lasting influence is that he helped define the narrative of digital technology in the 1990s. And the victors of that era — the Marc Andreessens and Elon Musks — have worked to reinforce and promote that narrative ever since.
WIRED’s startup era ends in 1998. Rossetto and Metcalfe are forced out. Conde Nast takes over, and starts running the magazine like, well, a magazine.
The interesting thing is how small the changes turn out to be. I took a look at the mastheads from Volume 5, Issue 2 (the final issue with Rossetto as Editor in Chief) and Volume 6, Issue 2. About 90% of the editorial, writing, and creative team remains in place. Kevin Kelly stays on as Executive Editor. Almost all of the contributing editors and contributing writers stay the same.
John Plunkett and Barbara Kuhr step down as the magazine’s Creative Directors (though, according to Wolf’s book, they couldn’t stand Rossetto and were on their way out regardless). The front-of-book section becomes a bit less comically unreadable. The “Fetish” product review section gets toned way down (no more reviews of helicopters or submarines). And libertarian futurists like George Gilder get a bit less attention. But, for the most part, WIRED in 1998 and 1999 is pretty much indistinguishable from WIRED in 1995 or 1996. These were the peak years of the dotcom boom.
What really changed in 1998 is that the magazine stopped being unique. The dotcom boom was too big, tech culture too dominant, the WIRED model too successful, for the magazine not to attract competitors. Magazines like Red Herring and The Industry Standard cropped up, offering the same sort of stories about the new economy and the triumph of capitalism and a future of limitless prosperity that you could find in WIRED.
The good news for the magazine was that, under Conde Nast’s management, it was able to weather the dotcom crash when so many of these short-lived competing magazines folded.
This year is WIRED’s 30th anniversary. The first five years — the Rossetto years — don’t seem so much like a golden era to me. They’re more startup-like. And though its easy to yearn for the make-it-up-as-you-go, hectic energy of a startup company, it’s ultimately an unsustainable model with a lot of limitations. You probably shouldn’t run a magazine like a startup… at least if you want it to last.
The magazine has changed over the years. Most of that change is a response to how the role of these companies and technologies in society have changed. Silicon Valley isn’t just building the future anymore. It’s deeply enmeshed in the present-day power structure.
But some of the magazine’s change is because of how the magazine itself operated. Rossetto brought a very specific flair and ideology to the magazine he launched. He wasn’t able to sustain it long enough to even enjoy the peak years of the dotcom boom. WIRED is only around as an object of study today because it successfully transitioned beyond its startup phase.