In desperation, I called a staff meeting before we went nuts and I went broke. There were essentially two big problems, as I saw it. First, we had put ourselves in the hands of technology gurus who just weren’t Internet people. The obvious solution was to hire people who had the experience to make an Internet service of the magnitude that we were operating run smoothly. The second problem was to figure out a way to make some profit from all the “free” service the IIA was providing. Max agreed to handle the technical problem and I decided to tackle the financial one.

Left to his own devices, Max solved his end of things in no time. University computer freaks, he realized, were the ones who built and ran the Internet, not phone company people. Soon all the Ph.D.s were fired. They were replaced by a ragtag assortment of hippies and nerds who, until they received the call from IDT, were sleeping under tables in university computer centers in South Carolina or were wired to consoles at the University of Illinois at Urbana. Max put out the call over the Net, and from across America these strange people came.

Some were shoeless. Some didn’t bathe. Some only grunted when they were spoken to. Many of the guys had ponytails and earrings. They had nicknames like “Pig,” “Countess,” and “the Black Knight.” These were not the kind of people I was used to. In fact, these people were scary. There were two things that persuaded me to give them a chance, however. First of all, they worked dirt cheap, and second of all, I had no alternative. Within a month, Pig and his friends had the whole system working perfectly. I was so grateful that I built him his own shower in the basement. Pig had grown to feel so much a part of our team that he actually used it. No one could stop us now. We were lean and mean. Our systems worked. We had tens of thousands of clients, and we even smelled good. No doubt about it, if we could only come up with some way to charge somebody for something, this Internet business was going to be a great success. But that was one big if, and it was left to me to find some way of getting people to pay for something that they were already getting for free. I couldn’t just do the obvious, and charge a small fee, because that would destroy the IIA from a public relations angle, not to mention the fact that it would compromise our nonprofit status.

Instead, I zeroed in on the telephone bills that the users incurred. There are really two expenses that users incur every time they use the Internet. The first is the fee that they pay to their Internet provider for allowing them to log on to their systems. The second expense is the money that must be paid to the telephone company for dialing in to the Internet provider’s modem. The IIA had already agreed to waive fees for the actual Internet connection, but that didn’t mean we couldn’t try to get a piece of the telephone charge for IDT.

In this embryonic period of commercial Internet, especially before the advent of the World Wide Web, most users logged on for only a few minutes a day. The myriad of interesting services that are available today were, for the most part, yet to be developed. Therefore it really didn’t matter to most of our users that they would have to make a long-distance call to New Jersey in order to access our system; they were simply not on line long enough for the phone bill to really matter to them. But it did matter to us. According to our clients, AT&T was charging our typical client about 25¢ per minute during the day to make an interstate call. Through our arrangements with large wholesale phone carriers, we were able to offer our clients a long-distance rate of 15¢ per minute during the day, and still make a 20 percent profit for ourselves. We got such a favorable rate because of the business we generated from callback, and I was sure that the 40 percent savings we were offering would be irresistible, especially coming from people who had been nice enough to provide them with free Internet access.