COLUMBUS, Ohio — Before Microsoft. Before AOL. Before Google.
There was CompuServe.
Founded in Columbus, Ohio in 1969 as a unit of Golden United Life Insurance, CompuServe grew through the 1970s and 1980s into the first major online service in the U.S., offering chat and email to tens of thousands of customers, not to mention helping bring newspapers and stock trading into the digital age. It was known for its entrepreneurial and innovative culture, one which co-founder and former CEO Jeff Wilkins helped spark.
But CompuServe lost its way, eventually outfoxed by rival AOL in the 1990s.
All of this may seem like ancient history now, especially in the fast-moving tech industry. But for Wilkins, who spoke Monday night at Columbus Startup Week, the lessons of CompuServe still resonate.
While companies such as Intel and Microsoft remain, CompuServe has largely been swept into the dustbin of tech history.
Why is that?
Wilkins, who left CompuServe as CEO in 1985 and now leads a new Columbus startup by the name of Facilities Management eXpress, said the answer is quite simple. And it remains a lesson that many trendsetting companies can learn from.
The company just lost its innovative spark in the 1990s, failing to reinvent itself for a new era. Those missteps not only sunk CompuServe, but they set back the hopes of Columbus transforming into a sizable tech hub, issues that are still present in this capital city of Ohio.
“The senior executive management of the company became kind of complacent because of the amount of money the company was making,” Wilkins told a crowd at the Gateway Film Center Monday night.
Wilkins got so concerned about the company he helped build in the 70s and 80s that he went to visit the CEO at the time, pointing out the rising threat of upstart AOL.
“I thought they had lost their edge, so I went into see the CEO, and I said: ‘You guys have got the high road right now. You can change the rules of the game every 90 days. You could just crush these pipsqueaks.’ And, he said, Jeff: ‘We just made $100 million, they are not going to be a threat to us.’ I walked out of the building and went home and said to my wife: ‘They are lost.’ Because the minute you stop innovating, you become complacent.”
Earlier in the talk, Wilkins stressed the importance of diversifying a business, finding big niches where others aren’t playing. CompuServe did that initially, spending money on offbeat projects, like when engineer Steve Wilhite created the GIF file format.
“It is OK to the get the rewards of the success, but you better not forget how you got there, and that was by working hard and innovating and paying attention to customers and competitors,” he said. “Not by counting what a great year you had last year. That was the flaw.”
By 1997, AOL had not only surpassed CompuServe in size, it was able to gobble up the company in a complex $1.2 billion deal involving WorldCom and H&R Block.
What was CompuServe like back in the day? Take a ride back into tech history with this 1981 TV news report, a portion of which Wilkins showed at his presentation last night, sharing a wonderful story about how he won over some of the biggest newspaper publishers in the country to start sharing information (and free ad space) with CompuServe.
