Simply stated, as computer, communications, and shipping technologies have speeded the pace and scale of change, massive financial support has become indispensable. This is because customer bases are now created and market position achieved long before the new business has any chance of being profitable. Whereas once capital was invested with those who showed profit, now it is those who attract the capital that get the opportunity to profit.

This may not be an altogether bad thing. A few years ago America seemed to be going under economically in a big way. Suddenly, now America is on top again. Sure, a lot of this is due to the fact that as the society that most prizes individualism, we are the one with the most innovation. And the only one best able to adapt to a faster-changing world. A lot of credit, though, must surely go to the fact that we have the most efficient capital markets. Years ago I thought it was a shame that so many of our best and brightest were going to Wall Street rather than into the “productive sector.” Now I’m not so sure. Where, after all, would I be without them?

On the other hand, I am somewhat of an anachronism. For close to twenty-five years, starting with a hot dog stand, long before I ever dreamed of going into telecommunications, I had run a business with no outside financing. Like the sea captain, every year I turned a larger profit, put aside savings, and reinvested into growing the business. (I had no idea just how important this would turn out to be in the days ahead.) I still had old-fashioned values and taking losses didn’t come naturally. In fact, taking money and giving control to others didn’t come naturally either. So much so, that at one point along the road to going public I insisted on retaining at least three votes per share as opposed to a single vote for those in public hands. I didn’t know how important this would prove to be.

By the early autumn of 1996, I was ready to put aside my old-fashioned values and turn, once again, to Wall Street to raise us more money in a secondary offering. The timing seemed perfect. Our stock had almost doubled since the IPO. Our sales had tripled. We were the fastest-growing Internet provider in the country. We were emerging as the world’s leading international competitive telecom carrier. We had developed a new (and still unrivaled) technology for running normal telephone calls along the Net. Plus, we desperately needed the money. In spite of all our growth (or maybe because of it) we were going through tons of money on a monthly basis. If we didn’t get a big infusion, soon our growth would stop. In fact, if we didn’t get some kind of infusion, soon we’d be out of business.

It wasn’t going out of business, though, that concerned me. The tremendous growth and high stock market valuation had gone to my head. We weren’t ordinary people; we were supermen. We really were going to overtake AT&T. Superman didn’t just raise $30 million or $40 million like we did in our IPO; he raised $100 million or more. To raise this kind of money people didn’t go to Cowen. Sure, they were a good firm. Sure, they got us started. Sure, we owed them loyalty. But I’m talking $100 million here. Only a half dozen or so giant underwriters in the world could raise that kind of dough for our business. Giant underwriters, the kind who dealt with supermen.

These were the guys we ought to be talking with now, right?