Esther Dyson is chairman of EDventure Holdings, a small but diversified company focused on emerging information technology, especially those in the markets of Central and Eastern Europe. EDventure also publishes the monthly computer-industry newsletter, Release 1.0, and sponsors two of the industry's premier annual conferences, PC Forum in the US and EDventure's High-Tech Forum in Europe. Esther Dyson has recently (November, 2000) finished a two-year-term as founding chairman of
ICANN, the Internet Corporation for Assigned Names and Numbers, the international agency charged with setting policy for the Internet's core infrastructure independently of government control. Esther Dyson has been called the only real Internet guru as she has not only been writing and speaking about he Internet, but also investing in it and actually co-creating the infrastructure for it. Alexander Dake met Esther Dyson in her office in the Flat Iron district of Manhattan
AD: You started your career as reporter for Forbes magazine and subsequently you became a technology analyst for several securities firms. How did you move on toward the Internet?
ED: I was never qualified for any job I had. I always learned on the job. I didnt know anything about business before I started with Forbes and I didnt know anything about stocks when I moved to Wall Street. Once on the job I did learn a lot. I discovered I didnt like the culture at Wall Street and joined Ben Rosen, Chairman of Compaq, who also had his own research firm, focusing on emerging technologies. In the end I took over that firm and renamed it EDventure. My interest in the Internet developed from my experience with email. In 1989 I was traveling often to Russia and noticed that whenever I was back in New York that the only way to reliably communicate with Russia was via email. I became more and more interested in the Internet and privacy issues, and in 1991 I joined the board of the
Electronic Frontier Foundation, specifically to focus on civil rights and the Internet, and to promote the Internet as an open system as opposed to having closed private networks, as advocated by some other parties.
AD: Why are you involved both in the pure business aspects of technology and in the more regulatory issues, such as privacy and openness of the Internet?
ED:: You see more and more people in business realizing that you have to pay attention to policies, especially in an area as the Internet which started out without any rules or traditions. Personally I have been always interested in governance and rules and how things work. Obviously governance has not played a significant role in the world of computers, but did in the world of telecommunications. However, few telecommunications executives understood the Internet when it came up, and I was lucky to be familiar with both the Internet and regulations. Thats how I became more and more involved with both.
AD: You are a strong advocate of the potential of the Internet to empower individuals. How do you see that happening?
ED: I see it in my own life. You used to have to be part of a big institution to matter and to have your voice heard. The last 200 years have been all about economies of scale. You needed a lot of capital in order to buy capital equipment, to build plants, to reach larger markets. Now many of these activities can be outsourced whether you are a small or large firm, and an individual can have the same communications capabilities as someone working for a large company. You can communicate around the world, you can buy in smaller units, and you dont need to own an office to have answering service. You now can be in a small business, which is just as efficient as a large one.
AD: But what about the consolidation of telecom and media companies, which now even seem to own most of the Internet assets?
ED: They are big, they are rich, but they are not more powerful than in the past. It used to be if you were 100 times bigger you were 200 times more powerful, now if you are 100 times bigger you are maybe 50 times more powerful. Not only big companies are becoming less powerful; also governments are becoming weaker and weaker. To a certain extent thats due to globalization, but its also because of the increased power of individuals around the world. I think this trend of increased power for the individual and the small firm will continue as long as technology keeps improving.
AD: An interesting example of how the Internet works is ICANN, the Internet Corporation for Assigned Names and Numbers. This is an international agency dealing with the Internet's infrastructure and domain names. You have been the first chairman of that organization. [Esther Dysons term expired in November, 2000.] How was that experience for you?
ED: This was clearly an experiment of how to self-regulate the Internet infrastructure without government control. It was based upon voluntary cooperation of the domain registrars around the world. In order to be part of that technical infrastructure they need to sign up to the policies, which were established by ICANN. These policies were established by consensus, and that is how open standards are formed. You set up a standard and then need to gather enough parties who will support it. Only then will the standard have the force of a standard. Even though it had a strong US flavor at its start, which is not surprising because most of the Internet users were found in the US, it truly has become a global organization over the last two years.
AD: How do you see the developments for privacy on the Internet?
ED: What will happen is that jurisdictions will develop on the Internet, that fundamentally will not be part of a country. Some countries try to regulate the Internet such as Iran, China and even France, but they will find out that it will be a waste of their energy. The essence of the Internet is that it is not part of a particular country or territory. What will happen and should happen is that individual users can choose certain filters to screen the sites they can browse on their PCs, but that will be an individual decision not a government decision. This will continue to be a major issue for governments, which are still not used to relinquishing control over their citizens and territories.
AD: What is your reaction to Rutgers University biology professor David Ehrenfelds comments in an article titled The coming collapse of the age of technology
where he says: Email has opened up a world of global communications. Considerable good has come of this for the handicapped, for those who have urgent need of communicating with people in distant places, for those living in politically repressed countries. But the ease and speed of email are traps that few evade. Real human interaction requires time, attention to detail and work. Every hour spent online in the global village is an hour not spent in the real environment of our own communities. He claims that thats why an early study of the well being of Internet users found a significant decrease in the size of their social circle and a significant increase in their depression after one to two years online.
ED: A lot of things have risks, like alcohol and cars, but most people will learn how to deal with those risks. There are also risks to the Internet, but again most people will integrate that use in their daily lives. Actually I believe the risks of using the Internet are less than watching television. The Internet is an interactive communications medium, while television is a passive medium actually having no community sense whatsoever.
AD: You mentioned in your book the different characteristics of the Internet and television, the former being an instrument of conspiracy and the latter an instrument of propaganda. Could you explain that a bit more?
ED: It is a bit of a simplification, but what I want to say is that propaganda is a centrally propagated formal truth, which can be good or bad. Conspiracy is an undermining, decentralized force. The point is depending whether the centralizing authority is good or bad, the conspiracy is good or bad. The role of the Internet is to be an undermining force. If I had to choose between the Internet and television, I would choose the Internet and its conspiracy over television and its propaganda.
AD: It seems that the abundance of content on the Internet at the same time has killed the value of content. What do you think about those developments?
ED: The intrinsic value of content remains high, because if there was no content, no one would go to the websites. However, the fact that content is reproducible causes the monetary value to go down. It is like water: water is cheap, but you need it to grow plants, which can be very expensive. So water is still very valuable, because without it you could not grow any plants. Thats how I view content. It is very valuable but cheap. As far as business models are concerned, a subscription model could still survive, because people want to have a steady, reliable supply, and if they can only get that by paying for it, they will. Again, like water, people are willing to pay for water in the home or they are willing to pay for bottled water. So the question for content is how to bottle the content.
AD: You already said in the late 1990s that the stock market was overvalued and not sustainable. Do you still believe in a New Economy?
ED: There still is a New Economy in the sense of better-rewarded employees, better and cheaper products for the consumers and increased competition among the companies and around the world. But what everyone forgets is that in this competitive environment it is hard to make a profit. What happened during the Internet Boom, was that the employees were well awarded with salary, equity, and stock options. The investors share became increasingly diluted till the bubble burst. The New Economy is real and will continue, the stock market was not real.
AD: Do you see a specific role for the Internet in this New Economy or is it just one of the many facets of the New Economy?
ED: The Internet is the platform of the New Economy: the means for faster communication; the collection and archiving of information; the lowering of transaction costs and prices. It will change how we work and live.
AD: Silicon Valley was the technology and financial engine of the Internet Boom. Many in Europe tried to replicate that. Whats your view on how Europe can adopt the same entrepreneurial attitude?
ED: What was lacking in Europe was the pleasure in taking risks. I love what I do. I have fun at it. I think it is creative. I am not counting money. I am helping small businesses to grow and deal with people I like. So even if I lose money, I dont feel I am wasting my time. Silicon Valley had a lot of that creativity and lightness in doing business, which became overshadowed by the stock market mania. It appears that Europe has been looking too much at the financial successes of Silicon Valley and not at the deeper source, which is fun and creativity in building new businesses. It is hard to create that in an European context, because it needs to come from the bottom up: students, young people and professionals should see starting a business as one other option in their career track, not as something which is completely out of the ordinary. Just copying the financial infrastructure for venture capital and new European stock exchanges will not do it.
AD: Can you say a bit more in his context about your experience in Eastern Europe and Russia?
ED: Because the East Europeans have less to lose than the West Europeans, I see a greater willingness for people, especially young people to try new ventures. They often have fewer business skills than people in Western Europe, so they have a harder time. In Russia a lot of western investors have left due to the local economic uncertainty. This is forcing the Russians with business training to say, lets do it ourselves. That is an exciting development, even though the situation in Russia is nothing to be cheerful about.
AD: You have always been very vocal about the importance of technology, PCs, and the Internet for education of especially poorer and less educated children. Still, there are people who say that it is not the digital divide which is important but the general lack of good education for these children. How do you see that?
ED: Let me be clear. I have supported the use of technology for education if all other things are equal. However, if you have to make a tradeoff then the investment should be made in better education and not solely in PCs and Internet connections.
AD: Where do you see the biggest developments of the Internet for society in the coming years and which commercial applications of the Internet do you see taking off?
ED: For society it still is about connecting people. More and more people, but also not- for- profit organizations are coming online and reaching their friends, counterparts and audiences. Especially for not-for-profits its about increasing the economies of scale at affordable costs. On the business side it is also about communication: customer support with email tools but in conjunction with real sales people talking to customers. I also see a huge demand for the management of complexities of large enterprises: inventory management, purchasing etc. and finally I believe we will see huge developments in wireless entertainment.
Books by Dyson:
Release 2.1: a design for living in the digital age
Electronic Frontier Foundation
The Internet Corporation for Assigned Names and Numbers
© 2001, A.M. Dake, can be contacted at Alex@paraview.com