And the customer service is very important for a brand-new user. I use the Internet at work, so I'd probably never call unless I had some problem setting up. But my family might take advantage of the Saturday classes and technical support.
Investor
John Jarve, general partner of Menlo Ventures and member of UUNET's board of directors;
Menlo Park, Calif.
The founders have built a very nice business focusing on the critical need today, an easy-to-use interface. In the next year or two, they could probably double or triple their business -- maybe do even better. But over the long term they'll have a difficult time defending their position at the low end of the market. The national providers will be able to keep prices very low in running network operations. Being an investor in one of those companies, I know there are significant economies of scale as you get bigger.
InterAccess's interface and service aren't long-term competitive advantages, because national providers will begin offering very sophisticated interfaces free by early 1995. They're investing a lot of capital in those. And in a year or so it will become much easier for consumers to get hooked up to the Internet. When a consumer buys a home computer, it will come with an Internet icon on the screen that will automatically dial an 800 or a local number.
This market isn't too different from the personal-computer marketplace years ago. There used to be lots of mom-and-pop shops that helped customers out and answered questions. Now it's so easy to buy a computer, you need only dial an 800 number and order a preconfigured system. The same thing will happen with the Internet.
My suggestion to InterAccess is to continue to build by migrating up to the small-business customer, who requires a lot of local customer service. Those customers need more complex networking solutions so their entire local-area networks (LANs) can access the Internet. They need gateway software that integrates their existing E-mail systems and the Internet.
And business customers will need ongoing help as they upgrade their networks. They won't get that help by buying diskettes at a superstore and popping them into their system, not for five years. And the national service providers won't have the local resources in all geographic areas to handle that need for some time.
Observer
Robert Raisch, founder of the Internet Co., which provides technical services to help businesses use the Internet;
Cambridge, Mass.
The company's focus on customer service won't be effective, because service providers are implicitly expected to be experts in every service available on the Internet, even those that aren't in their area. For example, a customer turns on Mosaic, which is programmed to immediately retrieve some information from its home base at the University of Illinois and display that to the user. What happens when it doesn't work? The customer is going to call InterAccess. The problem is, what does InterAccess have to do with an Internet resource that's 500 miles away? Most times it will have to answer the customer with, "I'm sorry, we don't know why it's not working. Try it again in half an hour." Customers will quickly get tired of that. It's not just Mosaic, it's everything. E-mail, everything. The support and service burden is crushing.
I think the founders are being a little na've. Some very big guns are getting into the dial-up business. The industry is in transition from a hobbyist to a consumer industry right now, and when that's finished, corporations like TCI or Viacom will own it. And they'll go after the consumer market in time.
Of all the ways to make money on the Internet, this is the most dog-eat-dog.
Analyst
Ed Kroll, industry pioneer; author, The Whole Internet User's Guide and Catalog; assistant director for Network Information Services, University of Illinois;
Urbana, Ill.
One of the problems of teaching people about the Internet is that it looks a little different to each person because everyone has different software. By giving customers diskettes, the company has ensured that its tech-support people and customers are talking about the same thing on the screen.
The advantage of using shareware is that a lot of people are improving it all the time. When a new version of Gopher or Mosaic comes out, it should be easy for InterAccess to incorporate the improvements. It's pretty labor-intensive to keep a proprietary package updated and get the changes to customers.
As for the company's emphasis on customer service, I don't see how it can afford to keep doing this with the staff it has. Two, three people? One of these days someone is going to burn out and want a vacation. InterAccess will have to make some hires pretty soon.
As an old-time Internetter, I find the flat-rate pricing very appealing. That's the way it has always been. You have it budgeted, and if you're home sick a week and spend your time playing on the Internet, you know you're not going to get a $300 bill. But the threat here is similar to people's deliberately overbooking airline seats. You count on people logging in only when they need to. But if the resource becomes scarce, people tend to act less reasonably. If customers call the service 10 times and can't get on because users are just camping out on-line all day, then they'll say, "Next time I get on-line, I'm going to camp out."
The choice not to pursue the business market is reasonable, given the company's staffing. If you really want to enter the business market, you have a slightly different set of support issues to deal with. Rather than dial-up, you're talking about dedicated circuits or dial-up to LANs and LAN security. InterAccess may have the expertise for it, but if it's growing so big now in the consumer market, why branch out into this area?
