Simonds decided his customers would be Chicago's "newbies," or new Internet users. Detested by most experienced Internet hands, newbies also irritate many service providers with their repeated elementary tech-help questions. But there are a lot of newbies, and Simonds figured they presented a real opportunity for a service provider that wanted to, well, provide service.
Some dial-up providers are hotly pursuing the business market, but Simonds believes that corporate America isn't quite ready for prime-time Internet. "It has some security problems with E-mail," he points out. "And it's not the most timesaving resource for a salaried business user searching for information."
Winning customers isn't difficult. Because of the Internet's constant coverage in the media, most service providers achieve spectacular growth rates without spending two bits on marketing. But InterAccess has ambitious growth plans; it aims to own Chicagoland before too much competition crops up. "People will see our name and think, 'Oh, the Internet guys,' " explains marketing director Huyler, who joined InterAccess full-time in April 1994. To reinforce that thinking, Simonds has been lecturing, appearing on radio talk shows, and making presentations to local organizations. In addition, about 10% of sales will go toward blanketing Chicago with advertising, including ads on the radio and on cable TV, and in newspapers, trade publications, and magazines.
The ads will target "hip consumers, who'll tell their friends," says Huyler. "People know the Internet is the future. We just have to make the connection that InterAccess is the Internet." The typical Internet user is a youngish male and not necessarily a computer neophyte. In fact, he's probably used one of the giant on-line services and is curious about the Internet. "We want to grab CompuServe and America Online customers who feel as if they're spending too much money or not getting enough from their on-line service accounts," says Simonds.
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When the partners took the plunge and created a company, step one was to buy some serious hardware. The job fell to Norton, a University of Illinois graduate and chemical engineer and confessed Internet junkie. "I got hooked on the Internet in college," he says. "I spent my first month logged onto the computer. I saw friends drop out of school after spending too much time on-line." Bored as an engineer, he had jumped at Simonds's idea. "We began by looking at high-end stuff that large companies buy," Norton says. "They didn't take us seriously." He opted for used equipment, which cost about $12,000 after a few quick upgrades.
Simonds invested nearly half of his $106,000 in loans in a T1 connection from a backbone maintained by Advanced Network Services (ANS). A T1 phone line moves information at a rate of 1.5 million bits per second. Simonds figures that opting for a T1 connection over a slower but cheaper connection was worth it. "We paid 10 times as much for 15 times the capacity."
Although Simonds admits he may never be able to explain to customers the technical value of having a T1 connection, he argues that they'll notice how much they can do with it. The connection enables Simonds to offer Serial Line Internet Protocol (SLIP) accounts. A traditional Unix-based account connects users' computers to other computers on the Internet. But a SLIP account hooks its computer directly into the Internet. Users can then do things like work two programs at the same time -- letting the computer search for a software file in the background while the user checks E-mail, for example. Microsoft is adding SLIP software to its Windows package for accessing the Internet, so InterAccess is already prepared to service future users.
To connect to the backbone, InterAccess had to pay ANS a onetime fee of $51,000. It also pays a yearly rate based on how many bits of information flow along the connection -- the cost was about $10,000 the first year and $7,000 the second time around. The company selected that payment plan (rather than a flat yearly fee based strictly on capacity) so that its costs would grow only with its customer base. InterAccess is currently using about half of the available capacity it first negotiated for and will pay an additional fee when it exceeds the total. Simonds predicts that won't be for another year, unless he begins offering additional business services.
To appeal to Internet neophytes, InterAccess developed its big gun -- a user-friendly graphical interface called Plug n' Play Internet. The difficulty of getting around on-line has always been the bane of the Internet, and not many service providers have addressed it. With a regular Unix-based Internet account, it's impossible even to check E-mail without knowing a list of arcane commands. Although tech support can guide users through the rocky spots, many quickly give up in frustration. Simonds and Hudson knew their inexperienced customers would need more help than most, so Hudson spent four months designing the screen of 14 icons.
To develop Plug n' Play, Hudson gathered shareware from the Internet, including an E-mail program called Eudora and the popular graphical search program Mosaic. It wasn't rocket science, which is what Hudson had studied as a dual English/physics major at the California Institute of Technology. All that software is available free on the Internet, for those who know where to look and how to program it to work together. The value InterAccess adds is bundling it on two installation disks. Customers can easily load the software into Windows or their Macintosh, using Hudson's accompanying booklet. When they log on, icons, which they click on with a mouse, appear instead of command lines. InterAccess plans to start offering Plug n' Play demo disks, hoping that users will pay to play after two weeks of free user-friendly Internet access.
