Network: Going Organic after Yahoo!

What's next on the agenda for Jonathan Nelson, the unconventional brains behind two pioneering Web companies?

You know the story, the one about how Jonathan Nelson, the CEO of Organic, designed Yahoo! on the back of a cocktail napkin while on a camping trip with its founder, Jerry Yang. The bad news is: "It's simply not true," says Nelson. "Well, it's kind of an amalgamation of two stories. It is true that we designed Yahoo!, but it was a long, arduous process, not done on cocktail napkins. And I've never gone camping with Jerry Yang, much as it would probably be fun to share a tent with a millionaire.

"The story you're probably thinking of was in 1994, when we were designing a site for Club Med, the first online travel site. The same ad agency that hired us to do Club Med for them also did Volvo, and the account person from Volvo walks into this cocktail party and says, `Where's that Web guy? We want one of those Web things. What would it look like?'

"I just sketched it out for him - I literally drew the thing and said, `Here', and in fact if you looked at that site, it looks a little better than the sketch, but essentially it had exactly the same architecture."

Organic charged $20,000 for this, the first automobile website - wildly inexpensive by today's standards, but Nelson says: "It was twice as much as Club Med, which was $10,000."

This rather begs the question: what would Nelson have been doing with a cocktail napkin on a camping trip. "Having a cocktail," he says.

Nelson doesn't have "CEO" tattooed across his forehead, by any means. The size and complexity of his company - 700 employees in seven offices, including London, Sao Paolo and now Singapore - that began in his home seems to stun him anew every time he considers it. He's as happy to talk to you about jazz, or art, or, indeed, Tibetan parenting as he is about e-commerce and the Web.

Nelson, born in Wisconsin, did most of his undergraduate degree in art and history at a small liberal arts college there. When he graduated, he says: "I figured I'd do what every other logical, right-minded liberal arts major would do, which was write a book about Tibetan birth methods."

Come again? "But I was graduating in June of 1989, and it was not the right time to go to China; Tiananmen Square happened two days before I graduated. Rioting in Shanghai and all that stuff."

Instead, Nelson went to New York. "I called up these friends of mine who were in the music industry" Nelson worked at the Knitting Factory, a SoHo jazz club for about a year. He toured the world with bands such as the Jazz Passengersand Negativeland. "It was a very East Village kind of thing."

Leaving the music business wasn't difficult for Nelson. "Either you do the music you really love, which denotes lack of income - `non-profit' is too generous a term - or you end up working for Mariah Carey and Whitney Houston, making money but never spending it because you're always on the road." Nelson moved to San Francisco to get into in multi-media because he thought developments there in 1991-92 were "kind of interesting".

After a couple of ill-fated start-ups, he founded Organic in November 1993, "in my house". Nelson was employee number one, with three part- time partners. "It was mostly my money," he says. "It was everything we had. Looking back on it, we were quite stupid ... but we felt we had nothing to lose."

By the spring of 1994, the company was struggling. Then a school friend of Nelson's started HotWired with Wired magazine's Andrew Anker - "and they needed advertising. When HotWired launched in October 1994 we kept ourselves from going out of business."

On the company's first birthday, Organic took offices in the building on 3rd Street in San Francisco that housed Wired and HotWired. "Space was cheap, and, at that time, you couldn't get Internet service from anybody. Wired had pulled connections with a telecoms company, and traded ad space for connectivity. We found a room with a hole in the floor that we could dangle an ethernet cable down into the network for HotWired, and we got bandwidth in trade for doing advertising."

This being the early days of the Internet, making use of that bandwidth was a challenge. "You would call MCI or AT&T, and you'd say, `Can I get bandwidth?' and they'd say, `Yeah, we can give you frame relay, or we can give you a leased line, but what are you going to connect it to?' and you'd say, `I want to connect it to the Internet.' They didn't know what that was. They'd say, `Well, we've never heard of that. Are they a new competitor?'

"The way I first really used the Net commercially," says Nelson, "[was through a group of] hippy hacker characters in San Francisco called the Little Garden, a bandwidth co-operative." They paid to get on the Net by going through the neighbourhood's central telephone operating switch.

"They rented the space next door, punched a hole in the wall and paid off the guy who ran the building to give them Internet bandwidth. We all chipped in and bought this 14.4 modem, for about $500, which we shared. The co-op was this whole weird political thing, very California - it had bylaws, meetings to discuss who's hogging bandwidth, who's contributing ... and that's how we all got on the Web.

"Organic.com was probably one of the first 200 websites in existence. When HotWired came out, it was revolutionary because here was content for consumers, and Organic was pretty revolutionary because we built stuff. ... We were doing things like the Apache webserver and application development before we had a designer on staff."

Eventually, Nelson says, Organic is going to find itself in the entertainment industry. For him, it's not much of a leap. "Nothing was better training for being manager of a Web start-up than taking rock bands to the Eastern bloc," he says.

"The neat thing is to organise loose groups of teams, often across different countries, to work on projects that are very demanding on timeline, with very high budgets, and trying to get them to perform like an orchestra, or a great jazz ensemble."

Nelson tries to keep Organic's remit broad. It has been involved in several start-ups, and recently sold a company to Amazon. The company also offers "McKinseyesque" services to companies in older, more established industries, such as auto giant Daimler Chrysler. "Clearly, automobiles are being marketed and sold in a radically different way than they have for the past 100 years or so.," Nelson says. "Meanwhile, they've got an X billion-dollar company that's trying to figure out, OK, what do we do? And we're trying to help them figure that out, strategically and tactically."

Nelson keeps Organic's eye firmly on the original ball, a Web that's usable and democratic. "The Web is sort of a combination of form and function. It should look good, and you should have a good experience doing it, and yet there's all this great technical complexity that sits underneath it. It's a geek's dream."

He strives always for what he calls "classic Apple stuff", and adds: "The user experience should be intuitive, and it should be beautiful and elegant. We're trying to take the inventiveness of what we were thinking when we were younger and apply it to real businesses today."

Organic

http://www.organic.com/

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