This is the story about America Online, from it's early days as an online gaming company called Control Video Corporation (CVC), to it's later days as a huge online media company.
The book opens with the interesting conversation that Steve Case had with Bill Gates when Gates proposed that Microsoft buy out AOL. The book goes on to cover various topics, including: AOL's desperate attempts during the early days to forge strategic alliances to distribute their products, their mass-marketing campaign that pushed them ahead of Prodigy and Compuserve, their acquisition of Netscape, their financial problems, the building of their of management team (like Bob Pittman), dealing with customer churn, their notorious downtime, their volatile stock price, their accounting and billing issues, dealing with online porn in a family-friendly environment, and the personality of Steve Case.
Before the book gets into any of these topics though, it tells the story of Bill Von Meister - an unknown character in the story of AOL. This was the best part of the book. Von Meister was the founder of many high-tech firms and was the inventor of various telecommunications technologies, one of which was the forerunner to AOL. He formed one company based on technology that would improve the routing of long-distance telephone calls, another company based on technology for delivering information across FM band, and another company based on technology that could send studio-quality music via satellites and cable lines to users in the home. But it was his interest in moving information that became the catalyst for creating a company based on a technology that transferred information over telecommunication networks - a "home information utility" he called it - which became a forerunner to AOL. Von Meister thought this utility he could complete various tasks, such as making airline reservations (think Expedia), creating restaurant reviews (think Yelp), and viewing banking information. After this company got bought out by Readers Digest, he adapted his business strategy to concentrate strictly on video games. The video games would be used as a "trojan horse" to give customers access to all the other information-based services such as email, etc. He predicted that "it could be one of the greatest business stories of all time". Pretty damn impressive.
The story of Bill Von Meister also serves as an example of how not to be an entrepreneur. Von Mister was the archetypal "genius-inventor" who created great products but was unable to translate his innovations into any kind of success. True to form, Von Meister died broke with huge debts and medical bills. People like him are so enamored with the greatness of their inventions that they expect the whole world to knock on their door when they release their product to the public. They and usually perplexed when venture capitalists don't fawn over them. And if they do get funding, they have adversarial relationships with their investors because their newfound company is often bleeding money because of a lack of management skills, operational experience, and financial discipline (overspending). Ultimately, their complete inability to focus on customer needs - instead of technological features - usually led to unmitigated failure. I think we all know people who, at one time or another, have confidently talked about how easy it would be to run their own business, while being completely unaware of the fact that they don't have any innate skills when it comes to the basic functional areas of business, like financing, marketing, or business strategy. Von Meister serves as a case study about how technical knowledge and vision have a negligible effect on the success of a business in the absence of business skills.
Although this book doesn't have many lessons for an investor, it can help you ponder the long-term implications of technological innovation. The book talks about how Von Meister's music service scared the record companies into thinking that the music industry would disappear. This was all the way back in 1981. And when talking about their interest in AOL, the Tribune said: "The potential growth of online services presented a challenge to all newspaper interests. If information became widely distributed electronically, the underpinnings of the traditional media business might face a difficult challenge." Knight-Ridder also stated that they were planning for an age with electronically-delivered information before there were even devices to do it. This was back in the late 1970's. This kind of insight into how the information age was going to inevitably affect traditional media companies would have given alert investors plenty of lead-time in profiting from internet investments (such as the 90% drop in newspaper stocks in the mid 2000s, or, obviously in AOL stock itself).
Steve Case was one of the biggest visionaries of the last few decades. But he will probably never get his place in history, like Bill Gates and Mark Zuckerberg will, because his legacy will always be tainted by the all-too-easy criticism of AOL's strategy mis-steps, poor customer image, and big stock drop after its merger with Time Warner. This is unfortunate.