"Being Small Was an Advantage"

Online small-business pioneer Janet Attard talks about innovation and why technology means nothing without the right ideas

Back in the dawning days of the Digital Age, on Aug. 8, 1988, Janet Attard launched a small-business forum on an online dial-up service called GEnie, which was owned by General Electric (GE ) and had fewer than 75,000 subscribers. Two years later, Attard launched a three-month trial forum on GEnie's upstart rival, America Online (AOL ), and wound up running it for 11 years. As technology and the online business media have evolved rapidly over the years, Attard has had to adapt her business model accordingly. Attard, who founded and currently runs BusinessKnowHow.com, spoke recently to BusinessWeek Online's Karen E. Klein about her pioneering years and the quick changes she has had to make.

Q: How did you start working online?


I was a writer and one of my customers required all of their writers to get a computer and send their work over a modem. That was 1986, and I used a Sanyo CP/M computer that had 64K of memory, no hard drive, and one 360K floppy disk -- and it really was floppy! My "high-end" modem ran at 1200 baud. It was possible to run a fairly sophisticated word-processing or database program with that limited memory and disk space.

Q: What did people say when you told them what you were doing?


The general public had no idea why anyone would have a computer in the home, let alone what I meant when I said we were "online." Their eyes would roll and I could see there was no comprehension, so I would just say, "I work with computers." I remember visiting my local Small Business Development Center (SBDC) and they had an online connection but when I showed them a demonstration of what I was doing, the woman in charge said, "This really nice, but who's going to use it? Small-business owners will never do this."

Q: How did you respond to the skeptics?


I really got hooked on the technology. I knew we had a wonderful communications medium and it struck me that this was going to be really big. Turns out I was right about it being a big thing, but I thought it was going to boom in about five years and it actually took twice that long before it truly caught on. And there were a whole lot of technical advances during the interim.

Q: How did your business model work during those early years?


The online services paid me by the amount of time I got people to spend in my area, so I had to collect as much intriguing content as I could find to engross participants. GEnie's whole focus was to get people to go online and stay there as long as I could keep them, because [visitor's] paid fees for the time they were connected -- about $35 an hour during the daytime, less at night. In fact, GEnie started as a way to use up the otherwise idle night hours on General Electric's real-time computing system, which was being used to run the company during the day.

Q: How did things change when pay-per-use fees ended?


My business model changed to a flat fee around the time that the networks changed their payment plans. At one point, I was managing small-business sites for three networks at once -- my RoundTable forum was on GEnie until 1996, I was a content provider in the early days of the MSN service, and I provided content for AOL. Instead of trying to keep people logged in for long times, we began aggregating and creating content and managing communities, with the idea of getting people to come back frequently to the site so the services would make money through advertising and subscription fees.

While I continued presenting the same type of content, my customer changed at that time also. The end-user was still the small-business person, but I worked for big corporations, which wanted to attract people to their sites. What I realized at that time was that as the industry was changing, I had to become indispensable, and being an independent provider became more and more difficult.

Q: How did the bursting of the Internet bubble affect you?


Venture companies had started to come into the Internet with lots of money, and they were paying huge fees for advertising. Knowing the market, I couldn't see how they could possibly earn back that money for their investors, but I didn't think everything would fall apart completely the way it did. I had contracts that fell through at the last minute -- that hurt! -- but I didn't have a huge company and a lot of overhead. For a while, I simply didn't have work to give any of my subcontractors who were writing, or doing design and production for my sites.

In summer of 2001, it looked like the industry was going to come back -- and then September 11 happened. That was also the year the AOL/Time Warner merger was completed and I knew they would no longer need our content and services because they could generate their own inhouse material from their publications. When the large commercial services weren't paying us to provide content and manage online communities for them, we had to find some other way to make money.

Q: That must have been a tough time for you. What kept you going and how did your business change yet again?


I knew that there were 16.5 million companies in the U.S. that had no employees, and I knew we had always been popular with that small-business audience, and that we still could be. Besides, I knew that, as the Web changed, my company also had to keep changing constantly. But at the same time, I had to keep a focus on my core skills and core business.

Being small was an advantage, because I didn't have to sit in meetings all day. I could make a decision, call up some programmers and a designer, and in a couple of hours, we could start working on a job and have it done in a few days. There were no lengthy approvals, no meetings, and no egos to stroke.

Q: You've been serving the small-business audience for a long time. How have entrepreneurs changed over the years?


More people have the tools to start a business because computers and other equipment are so much cheaper and more available. I don't necessarily think they have more of an idea what to do once they get the tools they need, however.

One change for the positive has been that small-business people are getting more sophisticated about scams and learning to avoid them. The access to information that the Internet has give them has made them less isolated and less vulnerable to fraud. We also have more new entrepreneurs who are coming off long careers in corporations, and they have a sense of things like cost constraints and how to do business right from the start.

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