Barack Obama Works For Me

The other day I finally re-opened my favorite web browser and I noticed that some prankster had changed my home page to JoshJonesIsYourNewBicycle.com!

I was of course outraged, and since nobody spoke up, I had no choice but to have the entire admin staff TERMINATED!

Just a few days later, as the issues mounted, I re-started my browser again and, I assume due to the perspective lent by time, realized it was nothing more than a jest in good fun!

In fact, I was touched. And so, I immediately re-hired everybody (but at only 60% of their previous salaries so they knew not to pull that crap again)… only to find out that what I thought was such a kind and creative tribute to their illustrious leader was nothing more than a crude knock-off of BarackObamaIsYourNewBicycle.com!

Once again ENRAGED, I had no choice but to fire EVERYBODY. This time I got the entire support team, marketing, HR.. not even our gourmet chefs, fighter jet pilots, or doggie masseuses were safe. I even may have killed a few of the weaker employees.

I’ve finally got some solitude, and it got me to thinking about this whole Barack Obama thing.

To tell you the truth, I can’t get behind Obama. Let me tell you why.

Why?

You see that picture at the top? That’s Senator Obama’s actual name plaque from the actual Senate. Back in 2005 my dad had to testify before some senators about something or other, and I went along for fun. And before you ask, yes, that is how I roll.

One of the four Senators in the room was Mr. Obama, who was already semi-famous after his speech at the DNC in 2004. And, to be truthful, he actually seemed the most intelligent and educated on the issues of the four… but I still can’t get behind him.

Why Not?

Well, after the hearing was over, I took that picture with his name plate, and was THIS (yes, THIS) close to stealing it! Wouldn’t that have been 100% SWEET to put on my desk? But at the last moment, I wussed out.

I knew that thing was already worth a couple of bucks on eBay, or at least would make a cool momento to pass down to my grandchildren or bury on a deserted island… but man, if he becomes PRESIDENT? The first BLACK PRESIDENT?

It would just kill me.

So, that is why I hope he doesn’t win.

But the truth is, as I alluded to in the last newsletter, I can’t understand anybody voting for any politician they don’t personally know.

It is so hard to judge the true character of anybody, even people you’ve been friends or colleagues with for years… HOW could anybody feel comfortable voting for any politician whose entire career is based on projecting an “electable” persona? And that is any politician.

That is why I truly do like propositions. Unlike people, a proposition can’t back-pedal, change its mind, break campaign promises, cheat on its wife, pander to special interests or give in to the freaking UN. A proposition is simply a self-contained law, and before you cast your vote on it, you can do all the real research on it you want!

After a new proposition has been approved, nobody’s allowed to say “I know the law says 5,500 new slots, but now we need an extra 10,000 to stay the course.” (Not without putting it up to another direct public vote at least.)

Not to mention, even if your vote on a proposition ends up “losing”, at least you know that greater than 50% of your fellow voters “won.” Whereas a politician might often do things that are in nobody’s interest but their own.

Proposition Paradise!

So, what if every government decision were, like California’s propositions, put up to a direct public vote? Back in 1789, this would have been technically impossible, and a representitive democracy was the only feasible solution.

But the same is not the case in 2008. We’ve got the Internets now!

What if we kept everything the same about the current government, except that instead of the congressmen doing the final voting on laws, it was always put to the public directly in the form of propositions? Sort of a Government 2.0.

Or, as wikipedia puts it, a direct democracy!

Reading that article, the arguments against direct democracy are pretty weak. Let me debunk them now:

* Scale: The Internet make it easy.
* Practicality and efficiency: Again, thanks Internet! Plus, there should still be just one election per year. Everything would be voted on at once, making it more efficient and less of a burden on the voting populace. The fact that laws can’t be changed more than once a year is just gravy!
* Demagoguery: Please… if we can’t trust our public to vote intelligently, perhaps we’d all be better off in the Irans?
* Complexity: Haven’t you read The Wisdom of Crowds? The masses in aggregate are not fools and they do understand the issues when they affect them.
* Voter apathy: Again, people are apathetic only when the issues do not affect them; and if they feel the issues do not affect them, why does it matter whether they vote? If they did, they’d just vote randomly and cancel each other out anyways.
* Self-interest: I believe a thing it’s been proved time and again that the best way to make rational decisions is by acting in your own self-interest. I mean, that’s why we’re voting, right? To see if a proposed law would be in the majority’s best self-interest. Nobody should ever, ever, ever vote for something that would hurt them just because they think it will help society “as a whole”! Don’t worry, if it’s going to help more people that it hurts, it will win regardless of your measly vote.
* Suboptimality: Well gee, it’s also “sub-optimal” to have a competitive marketplace. It’s “sub-optimal” to have random mutations. It’s “sub-optimal” to buy an index mutual fund. There will be a lot of fumbling in the dark to be sure, but like natural selection, the “optimal” laws will bubble to the top eventually, and the “sub-optimal” ones will be voted the way of the dodo. And with a direct democracy, that will only happen faster.
* Manipulation by timing and framing: Again, all the voting would just be done on the first Tuesday in November each year!

Our founding fathers were also against the idea mostly due to the “Tyranny of the majority”… but as long as we still have the bill of rights and the Judicial branch everybody’s personal freedoms would stay intact.

Especially Interesting

Another bonus of a true direct democracy would be the end of special interests. Special interests exist whenever there is something that benefits a few people a lot while hurting everybody else a tiny bit. Those who stand to gain fight nooth and tail to keep the advantage, whereas there’s no single individual who feels enough pain to bother standing up to them. It’s thanks to this that industry subsidies, trade barriers, and real estate agents exist.

If every law was put to a vote of every citizen, say goodbye to subsidies, tariffs, and monopolies! I know I don’t give a damn if corn farmers have to compete harder as long as it means cheaper food for me. Now, I’m not going to go writing my congressman about it, but if it ever came up on a ballot that’d be a big fat NO vote.

And you’d vote against the law that’d show up every year requiring the state provide each DreamHost CEO a new SUPERCAR every month (so they could get to the data center quicker in the case of a power outage). Unfortunately, I think it’d be tough for me to get greater than 50% of you behind such a measure, no matter how much I plaster this blog with posts extolling the many virtues of such a proposed legislation.

Could It Work?

Yes. And how do I know? Because it has. And I’m not just talking about the DreamHost suggestions system either.

Switzerland has had the most direct democracy on the planet for over 160 years, and it’s the most competitive economy in the world, has a 3.1% unemployment rate, and hasn’t been in a war since 1815! Things are different when the people deciding whether to fight are the same people who would be fighting.

To Barack

So, Mr. Obama, if you really want to “bring real change to Washington,” why not (if/once elected) put every decision you ever come across up on whitehouse.gov, along with what you see the pros and cons to be. Send login info out to every single US citizen (you can include them in those mailed social security updates), and allow We, The People to at least be your guide. You know, radical transparency and all that.

Think of the clout you’d have with congress if every one of your decisions, proposals, and policies was backed by a direct “mandate from the people”! Not to mention, it seems like you should never have less than a 50% popular approval rating!

People say you don’t have much experience. So why not ask for advice? It’s worked out decent for us.

Remember Barack, you are not running for King of America. You are simply interviewing for a job. And that job is to provide guidance and support to us taxpayers, your direct supervisor.

Of course in the end, who knows if all this would make for a better presidency.

But at least it wouldn’t be any worse.

Zero C!

I have been to the future.

It’s a very well known future, one everybody knows is coming, and yet, it is still, frustratingly, not here.

It’s not the future of nano-bots, flying cars, and hamburger toothpaste that some predict. Nor is it the future of sex-bots, self-driving cars, and hamburger frosties that others believe in. As pleasing as those two possible futures are, they are not the universally accepted inevitability that this future is.

No, this is the future of ubiquitous wireless high-speed INTERNET! Everybody knows that day will eventually arrive, it’s just a matter of when, and through what vessel.

Whether it be an 802.11 mesh, cell phone technology, sattelites, wi-max, that new spectrum Google was bidding on, or some as-yet unknown future technology, I think it’s a pretty much a forgotten conclusion that by the Year 2000, everywhere you go will have wireless high-speed connectivity, and nobody’s going to pay for it.

And of course, everybody knows that’ll be pretty cool. I mean, everybody who’s already got EVDO service (*cough cough*) knows how great it is to have a fast usable Internet connection with you at all times. It’s great because it’s fast, portable, and reliable… but for most people it’s just not $80 a month great.

But, just as cell phones have supplanted landline phones, so will “cellular” Internet replace the “landline” Internet. Once it gets price-competitve (and FREE is very competitive) no long-term contracts or cancellation fees on the planet will be able to hold back the tsunami of people rushing to escape their local telco and cable company.

You see, apart from the reliability, portability, and convenience advantages that wide-area wireless internet provides, there’s one other pro… a little something I like to call “ZERO C”

I’m not talking about the temperature in Boston right now, either. I’m talking about Zero Configuration!

Currently, to get the Internet set up at your home or office, you’ve got to have a service man come and set things up.

Then, to share that internet throughout your multitude of computers, video game systems, slingboxes, iPhones, and refrigerators, you’ve got to set up a not-exactly-something-your-mom-can-do home network.

Then, whenever a friend comes over with their laptop, they never seem to be able to get on the net without your help.

Then, whenever the cable modem drops out in the middle of the final game of a Bomberman Live match, all Time Warner has to say is “everything looks okay on our side“.

Then, whenever you’ve been using your Airport Express for too long, the music cuts out and you’ve got to unplug it, wait fifteen seconds, and plug it back in.

Then, your wireless never seems to reach to the guest bedroom reliably.

Then, you’ve got ugly cat-5 ethernet everywhere.

Then, once every two months you’ve got to do a firmware upgrade on everything for “stability” and re-do the whole thing..

But now think… what if every device you ever bought was always reliably connected to the Internet at high-speed, no matter what, for free?

You’d never have to deal with Time Warner Cable or Verizon DSL again.

You wouldn’t have to set up or manage or worry about a home network.

Visitors would already be on the Internet everywhere they went, just like you are.

Your Xbox 360 would always be able to connect to Xbox Live.

Your airport express would always stream your music reliably, and you could control it from anywhere in the world.

Everything would still work in the guest bedroom.

You would have no cat-5 cables, anywhere.

Devices could automatically get firmware upgrades because the manufacturer would always know they’d be reliably on the net, since it was free and just automatically worked.

However, as I was saying in the beginning… I’ve already been to this future. And my vessle was..

The Amazon Kindle

That’s right, this humble, $400, sold-out e-reader, is our first baby-step to technology nirvana!

Because I wanted to check it out, I got my wife a Kindle for her birthday in January, and the coolest thing about it is its barely-mentioned “whisper net”.

Shhhhh… this “whisper net” is just Amazon hiding the fact that the Kindle comes with Sprint’s 3G EVDO service for free. I’m not sure what kind of deal Amazon made with Sprint, but …. THIS …. IS …. AWESOME.

Because it’s just ALWAYS on the Internet, everywhere, the thing is like magic… and super-easy for moms and (I assume) grandmoms to use. There’s no settings, no account to create, no monthly bill, no passwords, no nothing. Just a physical switch on the back to “turn the internet on” and you’re buying e-books and browsing the full Internet at a perfectly usable speed.

Once the Kindle costs $99 instead of $399 (and there’s no waiting list), it (or something like it) is going to mop the floor as a super-cheap “internet appliance” that “just works” for “people that are old”.

My hats off to Amazon for truly making the first device that is truly always on of the Internet. By making it free, they’ve guaranteed that as long as a Kindle is working, it’s on the net.

Just imagine the other ZERO C possibilities ubiquitous, free, high-speed Internet would bring!

How sweet would it be for your next digital camera to have? No more worrying about sd cards, usb cables, or emailing your pics… the moment you take a pic, it’s backed up to some picture hosting site, shared with the world and freed from your camera’s internal memory. As a bonus, all pics you’ve ever taken would be able to be called up and previewed right from your camera’s (not-so) little LCD screen.

How awesome would it be to have a free-EVDO skype handset? That’s it for paying for cell phone calls.. and it’d be so easy to get everybody to switch from the archaic POTS system to voip when there was finally a no-monthly-fee cell phone that worked everywhere their existing cell did.

How cowabunga would it be to have a Nintendo DS with this? Anytime you’re sitting around, riding on the bus, like I am now, but uninspired from writing any meandering blog posts, you could whip it out, do a couple Mario Kart races, and then when you realize you forgot your Dr. Mario cartridge at home, shortly thereafter remember that there are no cartridges anymore, every game is just streamed directly from your account on Nintendo’s servers!

Anyway, yep, that’d all be very awesomely cowabungifiededly sweet.. but it’s still a ways off. In the meantime, I hope this little ZERO C fix will hold you.

We’ve finally made a true one-click install process, which is the way I always envisioned our one-clicks would work from the beginning, several long years ago.

Just go to our panel’s one-click installer area, and click the new “easy” mode.

From there, you just choose the domain or sub-domain you want to use and give your new site a name, click the submit button, and in literally under five minutes, you’ll get an email when everything’s done.

Previously, you’d have to already have set-up the domain or sub-domain you wanted, and you’d have create or pick a database you wanted to use, and then when you got the email there’d be some more software package-specific installation steps for you to complete.

NO MORE!

This time, one click really means ONE CLICK!

When you get that email, you are done.

It is only available for WordPress now, but believe it or not, this new one-click process we have is actually easier to implement for future software packages than the old way, so it shouldn’t be long at all before we fill in the portfolio with lots of other yummy goodies.

The only downside is, the easy mode actually hosts all the software on a centralized, load-balanced service we’ve set up, rather than in your normal webspace. This means that any customizing that requires changing files won’t be doable. Fortunately, most software packages keep all the customization you’d want to do in the database these days, so this isn’t really that big of a restraint.

The upside is no maintenance (we handle all upgrades), hopefully better reliability and performance (as it’s now effectively a “hosted” service as opposed to a local install), and of course…

ZERO C!

Two Troubling Techniques This Time

Welcome back to this week’s (and the final) edition of Friday illiterative lists!

Two business practices of pretty big-name companies came to my attention this week that I thought were too underhanded/sleazy not to be shared/copied.

#1. Sending something via FedEx Express Saver:

On Tuesday I had to FedEx some stuff from downtown Los Angeles to Chino. It’s only 36.5 miles so I figured, why not save a buck (or twenty?) and choose “Express Saver” .. it must be cheaper and it must get there in the same amount of time when we’re this close!

Wrongo! I guess FedEx really doesn’t want to cannibalize their overnight delivery sales for packages that aren’t going so far. So much so that they will actually ship an envelope from LA to MEMPHIS on its way back to Chino!

#2. Checking a domain’s availability via Network Solutions:

Now I didn’t do this. But a fair number of our customers must still remember way back when Network Solutions was the only registrar, and for some reason go to their site to check the availability of domains before attempting to register them with us.

BIG MISTAKE!

Since at least January 8th, any (non-gibberish) domain you decide to just CHECK availability for via their site, Network Solutions GOES AHEAD AND REGISTERS!

Although undoubtably sleazy, this maybe wouldn’t be sooo terrible if NetSol wasn’t still charging $35/year!

I’d actually thought about this a while ago. I thought, “If *I* were a good-for-nothing cyber-squatter, I’d set up a registrar, advertise insanely cheap rates, and then whenever anybody went to check or register a domain with me, I’d just register it for myself and then offer it to them for much more!”

But then I thought, “What about when people caught on? They’d come and check completely fake domains they never wanted, and then I’d be out the $7 a year for all these worthless domains!”

Of course, all this was way before ICANN’s Add Drop Grace Period (AGP) came into effect. The AGP provides registrars with a five-day grace period to delete a domain they’ve “mistakenly” registered and to get all their money back. The original purpose was to help people out when they make typos or when a registrar is the victim of fraud; noble enough goals.

In practice, the AGP has resulted in “Domain Tasting,” the numerous ill side-effects including:

Allowing Net S.O.L. to actually implement this practice at no financial risk.

Allowing the “Drop-Catching” business to thrive… currently 100% of expired .com/net domains are re-registered immediately by cyber-squaters and AdSense fiends.

Allowing these skuz-buckets to register hundreds of thousands of domains a day, testing their typo-traffic-potential, and then deleting hundreds of thousands that don’t make at least $7 a year.

Allowing these skuz-buckets to actually only require a domain to make 42 cents a year to be profitable… even the domains they intend to keep, they go ahead and delete every five days. And then immediately re-register. That way, they’re never out the $7/year.. they’re only out the interest they could be earning on the money they have to keep with Verisign in order to keep their zillions of domains in perpetual register/delete/re-register limbo!

In practice, the noble goals that the AGP hoped to solve are just not very big problems. If you’re a “legit” domain-registering entity and you typo a domain: you’re out a few bucks. It’s your fault, c’est la vie. If you’re a registrar and you’re being massively frauded every day (as we are), you quickly develop techniques to find and fight fraud and you prevent suspicious domains from even getting registered in the first place.

The AGP as it is now hardly ever saves us any money from fraud, because the vast majority of bunk registrations we catch before we even submit them, and the rest we don’t catch until long after the five days have already passed!

There is a bright side to all of this! Thanks primarily to Network Solutions’ ballsy new policy, ICANN decided last week to finally end Domain Tasting!

Hooray! This is good news for the Internet, bad news for Google!

Good thing I sold all my Google yesterday and bought Yahoo!

Good thing I wish I sold all my Google yesterday and bought Yahoo!

Um, Whoops.

Hello.. how’s your morning going?

I hope it’s been a little better than mine.

We had a teensy eensy weensy little billing error last night… my first clue something was up when I saw this morning’s daily billing report (so far): $7,500,000.

It turns out due to my excessively fat fingers, nearly every one of our customers has been seriously over-billed in the last 12 hours.

I bet when you read this part of the last newsletter:

4. New Office!

Another important thing I’ve been doing instead of writing newsletters
is looking out the window of our NEW OFFICE:

http://blog.dreamhost.com/2007/12/21/were-so-high-right-now-you-dont-even-know

If your next web hosting bill from us is mysteriously tripled, now you
know why.

.. you thought it was a joke!

Ha, the joke is on you! I guess. Um, okay, no, not really, I’m sorry.

How on earth could something like this happen?

Let Me Explain

A couple of weeks ago, just around new years, we started beefing up some of our internal “controller” servers. These are the machines that run all of our “behind-the-scenes” services; things from adding a user to registering a domain to configuring apaches to rebilling customers.

I was on a little-bit-too-long vacation, but when I got back, I noticed our daily credit card payments seemed a tad low in the new year.

So, late last week I tried re-running the billing services for all the days back three weeks or so. I knew this was safe, because after 10 years, the one thing you DO get perfect is your billing system. Our biller is pretty bug-free and robust at this point, because we’d be broke and eating bugs if it weren’t.

In fact, it’s so robust you can just run it on any day you want, and it’s safe. It won’t double-charge people and it’ll even automatically find any missing charges and catch everything up to the day you said.

Anyway, I ran it, and things were fine.. and sure enough, it caught a lot of missed payments. I didn’t have time to look into it right then, but I made a note to myself to check up on it on Monday (yesterday) and see if things were fine or still messed up.

Come Monday

Monday came. I checked the reports and sure enough, things were still pretty low. So I looked at the logs for some of the biller services, and I noticed they were only failing on the machines that had been recently upgraded!

That explained why we were getting some money still (since not all the controllers have been upgraded yet), but not all of it.

Anyway, it turned out there was no 64 bit version of the PFProAPI module we use to interface to the credit card transaction server. No big deal, there’s a new module that interfaces with their new and preferred https interface, and it was only a couple of lines of code to change to get us switched over!

So anyway, I made the change, and it worked, and I even tested it, and things were fine!

But then… late last night, I realized: when I re-ran those biller services last week, they must not have fixed everybody then either! It’s just that by running it again I randomly got different people being charged on the working controllers who had been assigned an upgraded (and therefore broken) one before.

So why not just run it all one more time?

Sure, it should be no problem! So I did, manually running the biller (which is normally automatically scheduled) for 2008-01-14, 2008-01-13, 2008-01-12, 2008-01-11, 2008-01-10, 2008-01-09, 2008-01-08, 2008-01-07, 2008-01-06, 2008-01-05, 2008-01-04, 2008-01-03, 2008-01-02, and 2008-01-01.

I probably should have just stopped there. But then I thought better. I thought to myself, “When did we start upgrading these controllers anyway?”

I couldn’t remember. But, since the biller is super-safe and robust anyway, I went ahead and ran it for 2008-12-31, 2008-12-30, 2008-12-29, 2008-12-28, 2008-12-27, 2008-12-26, and 2008-12-25, just for the hell of it.

Notice Anything?

Don’t feel bad if you didn’t. I kind of missed it myself.

THOSE SHOULD HAVE BEEN 2007!!

Heh, uh.. um, er.. my bad?

So what happened?

Well, that super-robust and stable biller did what it was programmed to do, it ran as though today was December 31st, 2008!

And what did it see? Well, it saw a whole lot of accounts (essentially all of them) who for some unknown, mysterious reason hadn’t been charged at all for eleven and a half months!

So off it went, busily through the night, “fixing” everything up for “today”, December 31st, 2008.

Really, it’s sort of amazing this never happened before in the last ten years.

There IS a bug here.

I can imagine the half second or so of thought that sprinted through the programmer’s mind when he was adding the ability to allow you to pass in what day to run the biller as though today is:

Hmm.. well, I could see us POSSIBLY wanting to be able to bill for a future date.

Well guess what… NO! We will NEVER want to rebill as though today were a day that hasn’t happened yet! But instead, somebody along the line (Sage? Me? Somebody else?) figured, “What’s the harm in keeping it flexible?”

About $7,500,000 in harm, that’s what!

The serious part.

The end to this story is that of course, I’m very very sorry, we’re very very sorry, and I’m sure you’re very very sorry this happened. I really am. I understand the sort of problems that an unexpected large charge to your credit card (or worse yet, your debit card) can cause. If the tone of this blog post seemed a little light, I apologize I don’t mean to offend and I realize how serious an issue this is. I’ve been up since 3:50am trying to undo the damage and maybe I’m a little shell-shocked.

A new service is running right now (in parallel on all the controllers) that fixes all those future charges, re-enables your account if it was erroneously suspended, and if your credit card was automatically rebilled, refunds the payment automatically. You don’t have to contact us or your bank, and you’ll get an email when your account is finished fixing up. It’s going to take several more hours to complete. There are (or were, after this incident) a lot of you these days!

If, because of this billing mistake, you somehow incurred some fees from your bank or credit card company, please let us know after tomorrow (today we are just replying to all 10,000+ billing messages with a generic explanation) and we’ll do our best to make it right for you.

And of course, the biller no longer allows dates in the future.

The moral of this story is that “flexibility” is rarely desired in programming! The less a program will accept/the less a program will do/the less options and preferences it has, the more usable it is/the more understandable it is/the more stable it is.

Tough Love

When designing a program, you’ve got to make some tough decisions .. and when you really can’t decide if this is something your users will need someday, err on the side of leaving it out.

Otherwise, your users will someday err on the side of your face.

A Strike on One Laptop Per Child

The writers strike continues, and so do I. This is my third strike in a row, a turkey in the parlance of our times, which I now offer to you in the belated spirit of Thanksgiving.

The real turkey however, is the target of my now hardly-notorious STIKES.. the one laptop per child project.

For those less charitably-minded, let me explain the project a little. A few years ago Nicholas Negroponte, already hardly-notorious for his crazy Wired columns and being director of the the MIT Media Lab, decided that what would most benefit the poorest children of the world is not basic necessities and safe living conditions (like Bill Gates and Warren Buffet believe), but consumer electronics!

A Great Idea!

I believe this all started back in 2005, and I guess the main idea was to make a sub-$100 “laptop” that used very little power (so little as to be able to be hand-cranked back to life), but would at the same time catapult poverty-ravaged children into the 21st century! The laptop would have to be durable, easy-to-use, keep kids interested, and include learning software that could replace expensive books.

The lucky millions of children who got to use these laptops would get all this great “computer experience” and so be more ready to compete in the REAL WORLD when they happened to not die of starvation first.

A Great Idea?

Unfortunately, there are only two practical advantages to giving third-world children laptops:

There could possibly be savings compared to current textbooks and learning materials.

The children could gain familiarity with the most important tool in the modern world: the computer.

Well, it’s almost three years later, and what’s finally come out of the project is a $200 laptop, that runs some custom learning software on a custom operating system with custom hardware.

And frankly, the third-world is no longer interested! Despite being promised orders of several million from such reputable countries as Libya and Nigeria, so far Negroponte has only delivered 2,000 laptops so far, and has total orders for less than 200,000… many of those to rich westerners!

On top of that, Microsoft and Intel have teamed up to offer the ClassMate, a real-deal laptop running actual Windows for just a bit more than the crazy, custom, non-standard OLPC is turning out to actually cost. Negroponte is crying foul and saying, “They don’t care about the children … they’re just selling these things at a loss to protect their market share!”

Well Duh

Duh, Nicholas. If they cared about the children they wouldn’t be making cheap laptops for them at all.. they’d be starting foundations to train teachers and start schools and buy books and provide water and medicine and all that other boring stuff. But that’s not what Intel and Microsoft are for. That’s what the Bill and Melinda Gates Foundation is for.

Intel and Microsoft are for making computer hardware and software (and dominating while they do it).

How in the world did you think you could start a company with 20 people and beat the entire computer industry that’s been doing this for decades and decades? And how in the world did you think you could beat them on price?

What To Do

Don’t worry Nicholas, it’s not your fault. You’re a bold thinker, and bold thinkers don’t get that way by worrying about details.

I, however, am an italics thinker! And italics thinkers get that way by being practical and worrying about details. Fortunately for you, I am now going to give you some italics advice for free.. as long as you promise to follow it.

One Nintendo DS Per Child!

Give up on selling the hardware! You’ve said so yourself, “I’m not good at selling laptops, I’m good at selling ideas!”

You’ve already done the hard part and convinced at least some people that what the poorest children in the world need are home electronics.. now it’s time to let somebody with some experience fulfill the manufacturing.

The Nintendo DS is literally perfect for your needs:

It’s cheap. ($129… and I’m sure if you order 150 million Nintendo will cut you a deal.)

It’s power-efficient. (Easily lasts 14 hours on a single charge, even with the screen bright enough to be seen in direct sunlight.. there’s even a hand-crank charger!)

It’s a computer. (All advantages to be gained by giving a young child a laptop are also gained by giving a child a DS. Just by using a DS they’ll become confident and “fluent” in the use of technology, and future “real” computer use will come much much easier. Worked for me!)

It’s got wi-fi. (In fact, it even does ad-hoc networking, and allows downloading content from one host DS to all the others.. just the teacher could have the lesson plan on their DS and wirelessly beam it to all the students at the start of each class!)

It’s rugged. (Nintendo’s been making toys for actual children for over 100 years and Game Boys have survived actual wars.)

It’s powerful enough. (If it can handle Mario Kart tournaments, it can handle Multipli Kation tables.)

It’s small and has a touch screen. (Like the iPhone. Just like laptops have replaced the desktop, in the future ever smaller portable electronics will replace the laptop. Why teach on antiquated technology?)

It’s forward-compatible. (Nintendo’s portable systems have very long life cycles. Any software you write for the DS will very likely still be runable on the hardware they’re selling in a decade.)

Children love it. (You want a teaching tool that’s “fun to use?” You want a teaching tool that’s “collaborative” You’ve hit “the jackpot.”)

It’s a world-wide standard. (Over 53 MILLION have been sold already. The platform has thousands of developers. The future leaders of the developed world are growing up playing Nintendo DS.. why give the future leaders of the developing world anything less?)

It’s already used for education. (Millions use their DS to learn a language, develop logic skills, practice cooking, learn math, read books, research, and browse the web every day!)

It worked for Japan. (Since the original Game Boy was released in 1989, Japanese GDP has grown over half a trillion dollars, which is clearly 100% attributable to the device.)

For Reals

So please, Mr. Negroponte, hear my plea! Give up on the laptop, and just make a Nintendo DS cartridge with your educational software on it!

If only you’d done this from the start, you would have had your hardware already and maybe a couple million African kids would be on their way to a digital future years ago.

It’s not too late though.. switch your “buy one get one” promotion to be DSes now, and you could have that couple million yet! You could even partner with Nintendo and make a “special edition” DS you can only get through your program.

I suggest it have this picture on it, in honor of the italic thinker who made it all possible:

Josh Jones

A Strike on Insurance

In keeping with my writing bretheren, I am continuing my strike. Not my strike on writing however; just my strike on good writing.

So, remember how I got an iPhone? Well, I gave that one away. But then later, I actually got another iPhone, even though I still love that T-mobile HotSpot @ Home thing. I can ’splain! (That’s short for a’splain.)

It was the day they (not they Apple, they Hackers) announced the software-only unlocking process, and I wanted to give it a shot. We were also planning on getting an iPhone for my sister-in-law for Christmas (don’t read this, Sheireen), and I figured then was a good time to get one since they still had 4GB ones available for $299. Which was a 40% price drop compared to a 33% price drop for the 8GB ones.

I figured I’d buy a 4GB one, mod it, try it out a little, and then wrap it back up and save it for her for xmas.

So that’s what I did. After jailbreaking it, I tried out a bunch of the underground 3rd-party applications, and my absolute favorite was iBlackJack.

Favorite for it being the worst blackjack game I’d ever played!

Some of the faults:

Visually, it looked nice.. except the upside-down card was a bright apple logo, which just for some reason always looked confusingly like a right-side-up card.

The INSTANT the game was over, a pop-up appeared telling you if you’d won or lost. And by INSTANT, I mean INSTANT: you couldn’t even see what the dealer’s hole card turned out to be, it was covered by the pop-up!

Finally, and this was hard to notice because of the other problems, the dealer actually always drew exactly one card. It didn’t matter if they were already over 16 or were still under 16 after drawing, they always drew one card, no more, no less!

This iBlackJack was so awful it would always be the first thing I’d show to people who wanted to checkout my iPhone, just so I could sit back and watch the transition from excitement to confusion to utter disgust as it swept across the face of my victim.

This game served as a textbook example for Steve Jobs’ argument about why he claimed they wanted to lock out third parties from developing iPhone apps: playing it made me really hate Steve Jobs, personally.

But Then

Sadly, this could not last forever. Updates of iBlackJack kept coming out, and within just a few weeks, all the glaring usability and logic errors were squashed. Now it’s a decent little app, and serves as a strong counter-example against a locked iPhone.

Yes, the game was a boiling pot of dog turd at first, but now my iPhone (oh yes, it’s MINE now) has a full-featured blackjack game in it; one with such features as how many decks in the shoe, when to re-shuffle, when the dealer hits, and even if it should bother asking if you want insurance.

Oh Yeah, Insurance

That’s what I was going to talk about!

Everybody knows you should NEVER TAKE INSURANCE in blackjack. It’s yet another way gambling mimics real life.

In real life, as in iBlackJack on your iPhone, you should NEVER TAKE INSURANCE.

There are only two exceptions to this rule.

One, if it’s required by law. Goddamn it, I guess you gotta get it.. but still, only get the minimum amount.

Two, if you absolutely, positively would be ruined should the insured against event occur.. and the event has more than about a one in a million chance of occuring.

Let me ’splain.

The only way to build real wealth in real life is to take risks where the total expected return is greater than the total actual cost. “Total expected return” simply being the summation of each possible return times its chance of occuring. “Total actual cost” simply being the money/time/personal cost of this risk, plus the “opportunity cost” of what other risk you could be taking.

Makes sense, no?

Here’s an example… the “total expected return” of any casino gambling transaction is always less than the dollar cost of making it. Of course, that doesn’t make it totally irrational to gamble.. if your return still beats the total expected cost. Perhaps you derive entertainment from betting, or perhaps you would have just blown the money on strippers and blow… but it does mean it’s never a good move from a purely financial standpoint.

On the other hand, if somebody says, “If you loan me $50 today, I’ll pay you back $80 tomorrow,” and you figure there’s about a 70% chance they’ll pay up, you should probably loan them the money. Unless of course you’ve got a less risky way to get the same expected 12% return on $50 in one day.

Shamefully, it really does seems to be a fact of life that the higher the risk, the higher the reward. If you can accept a 90% chance of losing everything, you can find tons of investments that offer very high total expected returns… that’s even after taking the 90% chance of losing it all into account! It’s why there are venture capitalists.

Besides taking more risk, there’s only one other way to get higher expected returns: have more money.

“It takes money to make money”… true dat, double true! “Mo money, mo problems”… HA!

I don’t see Puff Daddy complaining.

Nevertheless, you should not be risking your entire net worth in any venture with a 90% chance of losing it all, no matter how high the expected return. Doing so is not the highway to riches, it is the trail to crazy town in a van down by the river.

So, unfortunately, you need to have a lot of money already for the world of higher total expected return investments to become available to you. When they do become available, your wealth will then be able to grow at a faster and faster and faster rate.. creating the positive feedback loop of more money => more chances for higher returns => ever more money => less problems!

So how do you start?

Therein rubs the lie. If you can only really make money by already having it, you’re pretty much screwed if you don’t already have it, right?

Yep that’s pretty much true. It’s why the rich get richer and why one laptop per child and girls don’t like boys girls like cars and money. Fortunately, there is one other way to make money, but it’s much, much, harder than all this risky investment stuff.

Saving it! When broke, the only option to build wealth obviously is to spend less money than you earn from your j.o.b. Easier said than done.. but then you can start investing in relatively safe things: buying a house, cds, bonds, etc.

As your nest egg builds, and you can afford to possibly lose some of it, you can start investing in riskier things with higher expected returns: S+P mutual funds, your friend’s small business, maybe even some individual stocks.

Some of those risky investments are not going to pan out.. that’s the risk, remember? But some of them will… and since they offer higher total expected returns you’re going to end up with even more money.. and then newer and ever more lucrative opportunities will keep presenting themselves: hedge funds with $5 Million minimums, angel / VC investing, emerging market real estate, heroin import… and the cycle continues!

Back To Insurance?

Oh yeah… BORING! So, the thing is, insurance is weird because it’s a reverse investment. Rather than risking money you have in the hope of getting a payoff in the future, you’re guaranteeing a loss now in the hope of not having a loss in the future.

Now, there’s nothing wrong with that, IF the value of the loss you’re guaranteeing now is smaller than the total expected loss you’re insuring against. It’s a perfectly valid way to get a return on your money, just like using cash to pay off an existing debt is compared to starting a new investment.

The problem is, with insurance the total expected loss is always less than the loss you’re guaranteeing yourself by paying your insurance premium every month. It’s how insurance companies make money! In fact, insurance (along with gambling) is one of the few “investments” where you know 100% the “total expected return” … and you know it’s negative!

After all, the insurance actuaries went to a lot of trouble to figure it out for you.

On top of that, the “total expected cost” of insurance is always higher than it seems. It’s not like you can just call up your insurance company and say “Hey, I need $35,000 to redo my floors, they got messed up” and the money is wired into your Caymen Islands bank account.

Noooooooooo…… file any sort of insurance claim and be ready for weeks, if not months of paperwork, calls, visits, faxes, more paperwork, more calls, and finally, higher rates in the future.

So, since all insurance is a very bad investment, you will be wealthier long-term if you never buy insurance! Of course, you’d also be better off long-term if you skipped the whole “saving, bonds, and cds” stage and went straight to “leveraged buyouts and social networking startups.”

But you can’t do that. You don’t have the funding yet. It’s a long shot that you’re going to strike it rich on a social networking startup, so you’d better have some money saved up first. It’s a long shot that you’re going to lose your house in a fire, but you’d be ruined if it did, so you’d better get insurance first.

However, as you progress up the ladder of more and more risky investments, one of the very first you should consider is the risky investment of “self-insurance.”

If you’ve got enough saved so that some particular event you were insuring against would no longer absolutely ruin you, it’s a pretty good investment to drop your insurance for that and go it alone. Now you are making the profit that Allstate used to get, and you’re still “okay” in the face of a disaster because of the money you’ve saved up.

Other Benefits

In fact, you will most likely make more profit than your insurance company used to.

For one, they have all kinds of overhead in dealing with claims that you’re not going to have.

For two, people aren’t the most rational consumers when they’re not spending their own money… sure you might get your whole car replaced if insurance is paying for it. But is it actually worth $2,000 of your money just so you don’t have some ugly dents in your passenger door?

For three, “your rate” won’t go up every time you “make a claim.”

Practice, Preacher, Practice

I’ve never bought more than the minimum car insurance legally required (liability) .. the key is just not owning a car you care about at all! I never get extended waranties or travel/rental car insurance, and although I do have home insurance (it’d suck to lose that in a wildfire/earthquake/mudslide/riot), I’m about to drop all coverage for everything inside.

I even just got a $14,000 claim for some water damage, and honestly.. it still isn’t worth it. I don’t have life or disability insurance because I think my wife would be fine with the money we already have, should I bite it or become really stupid. And I’d be fine with just paying for medical bills out of pocket if I didn’t have it through DreamHost… although I want to switch that to be self-insured too!

Over the last ten years, I estimate DreamHost has probably spent close to $2,000,000 more on health insurance than the cost off all benefits that our employees have ever claimed.

For a company filled with 20-somethings, (and, ahem, the newly-30) there just isn’t a lot of expensive health issues going on. If we had self-insured from the beginning, we probably could have cut out a ton of paperwork, offered even greater benefits, been more flexible with our policies, and probably had an extra $3,000,000 (with interest) tucked away for future medical expenses.

I’m not even sure why we haven’t started self-insuring still.

The ABCs of Getting Rich

Wow, that was sum’ lonnnnng ’splainin’!

Here’s the executive summary:

A. Don’t buy anything (that includes investments, expensive cars, fancy home electronics) that would ruin you if you lost it: that way you don’t need to buy insurance for it. If it’s a very good investment (like your house), only then should you buy insurance: so that it wouldn’t ruin you if you lost it.

B. As your build your wealth, less and less things will then be able to ruin you, and higher and higher “total expected return” investments will become available to you.. take advantage!

C. Save more money by spending more time reading free, long, blog posts.

The Writers Strike

In case you’ve been wondering where I’ve been the last few weeks.. well, I’ve been nowhere. But at the same time, I have been somewhere… showing solidarity with my poor writing brothers!

Now, hopefully I can sneak this one little post in withoug being condemned as a “scab”… maybe if I do my best to make it bad. Which should be easy since I honestly have nothing to say. At least nothing hosting-related. But I do have one strike-related thing to say.

The Stock Market Strikes

A ton of good it does now, but I was this close to doing a post on Monday about how it seemed like it was top-of-the-bubble time, and everybody should GET OUT out of the market RIGHT THEN!

How did I know?

Have you seen Wired Magazine lately? The last issue was I believe 272 pages.

The best gauge of a tech market bubble is the thickness of Wired. And Wired ain’t been this heavy since March 2000. I remember around 2003 it was down to like eight pages.

Of course, now that I’ve told everybody, it will cease being a reliable predictor.

The second indicator is that, believe it or not, our daily signups are correlated to the stock market! It’s true! On days when the stock market goes way up, we get maybe 5-10% more signups than average, and on days when it’s way down, we get around 5-10% less!

If only our signups would predict the stock market rather than follow it. Hedge funds would be buying up web hosts left and right!

Nevertheless, any daily correlation is still very weird to me. Are there really people out there who are like “Oh crap, I lost $10,000 in Google today, I guess I’ll have to put off that $100 for a year of hosting until Friday.”?

Apparently.

Well, that’s it, I’m off to the picket lines. Who knows how long it will be until enough inspiration strikes again for me to break this fast. This fast… of words.

Open and Shut

It’s not just what you do to a door.

Nor is it only a type of case.

And I’m not thinking of following it with the word up, either.

Honestly, I should have probably titled this post “Open and Closed,” but isn’t it way more intriguing since I went with shut.

I’m talking about standards.

I think it’s been over two years since I last thought about this, and I think that’s long enough. After that long it’s okay if I repeat myself.

The Joy of Open

As I said back then: In the end, the best standards, protocols, and Beard Papa’s are the open ones.

Nobody likes to design a product based around a standard that some other company has control over. And nobody likes to buy a product that doesn’t interoperate with the different product all their idiot friends bought. Or a product that doesn’t even work with other products their idiot self bought. Like Guitar Hero controllers.

Eventually, natural market pressures force the most ubiquitous standard to win out, and all the other ones dry up and wither away, like dust in the wind. All we are is dust in the wind. Of course, the most ubiquitous standard is not always the most open standard. Like in the case of Word Docs, PDF, Flash, Gif, MP3.. and I bet even another one I’m forgetting!

The way these formats got to be the de facto standard without being truly open is simple:

They started with the best implementation.

A standard is zilcho without an implementation. You might have the most GPLed, flexible, extensible, well-documented, feature-complete standard on the face of the universe, and if your standard is a beee-yotch to implement (or has a stupid Ogg-something name) it will be born still.

Of course, to become de facto, a non-open standard needs to be open enough. As in, even though some evil corporation “owns” the standard, they allow anybody to use it for free, and for any purpose, without permission… and probably also give away some good tools that actually implement their “standard.”

The Case for Shut

The number one thing a new open standard needs is users. There’s that old chicken and the egg thing again.. nobody wants to go to the trouble of using a standard until it’s been proved good, and you can’t prove a standard is good until people are actually using it.

Generally, the way to beat any chicken and egg problem is by throwing a lot of money at it. Skype had a big C&E problem, PayPal had a huge C&E problem, and eBay had the gigantorous C&E problem of all time! (Hmm, all three are now owned by eBay. Weird.) It just takes a company willing to burn through cash sometimes to beat a chicken and an egg. And, as they’re taking all the risk to develop this new platform, they want the reward… which is easier to keep to themselves by keeping their platform shut.

Not to mention, it’s a lot easier to make a hidden system than a public one. You don’t have to worry about publishing an API, or even documentation, or having months of tedious peer-review everytime you realize something needs to change. You can control the entire environment the system is running on, you can make sneaky like optimizing hacks that just wouldn’t work in the general case, and sometimes you can even add an awesome new feature in a single bound.

I remember wayyyyyyyy back in 1998, I was telling Sage there needs to be a way to email money to people. I was thinking it should be some sort of open standard tied to bank accounts, and some sort of encrypted file that was somehow tied to the government, and you could just attach a “cash file” to an email and it’d automatically transfer the money out of your bank account and into theirs. Or something. The details were a little tricky, but I just thought, “You should be able to email money.”

Of course, less than a year later, PayPal (and X.com) came around and just CHEATED. They just made their own centralized system and had everybody sign up with them! And it worked, and was simple, and nobody cared that they had to sign up for PayPal to do it instead of running their own “encrypted cash server” at their own domain like I was sort of envisioning.

Gah, if I’d have only thought of that kludgey hack, I’d be building rockets and video sharing sites, and DreamHost would have never grown bigger than a few dozen hentai sites.

Just Do It

I guess the moral of the story is, if you’ve got some great new idea, just do it yourself. Any way you can. Even if it is the kind of thing that needs “network effects” and really lends itself to an open protocol or standard, don’t worry about that!

The first thing you need to do is make it work, and make it popular. Then the rest of the Internerd community will take notice and start working on their open standard implementation. But until you prove it’s something worth working on, nobody will.

And eventually, that open protocol will take over, and get included for free in everybody’s DreamHost account… emphasis on eventually.

In the meantime, you’ve probably been bought out for enough money to start working on that space harem I dreamt about last night.

And I’m off to continue rocking the Guitar Hero III demo!

Robbing Your Customers

It’s something we like to do every day!

Yep, the secret to our crazy low prices and amazing ferraris, finally revealed:

We take your billing address and go to your homes at night to steal your jewelry, plasma TVs, and all valuable toiletries!

Not to mention all the credit card numbers we get fund our wild vegas benders (roulette is a great way to launder money) and illicit basketball leagues!

(Damn PayPal and Google Checkout, not sharing the credit card info with us!)

Yeah, overall it’s a pretty sweet scheme we’ve had these past 10 years; and now that we’ve gone into hiding you’ll never catch us, coppers!

Okay Okay Okay

Although I admit what we’ve been doing has been pretty bad, it pales in comparison to what I just found out one of our favorite competitors Lunarpages just did to rob their customers.

According to this thread at Web Hosting Talk, Lunarpages a few days ago turned the default 404 pages for all sites they host (who haven’t specifically customized them already) to one of those ultra-sleazy “domain parking”-style setups. It still happening right now… and here’s an example of a 404 page on a site some poor shmoe has hosted by them, aeroeco.net!

I’m impressed! So roundabout, so complex, so sneaky! We only ever do the simple stuff like read our customers email for blackmail material, or kidnap their pets and their kids.

Maybe Lunarpages doesn’t agree, and maybe it doesn’t seem sooo bad to you, but what they’re doing is outright theft. It’s the Internet equivalent of shoplifting.

For websites, traffic is everything. Stealing a site’s traffic is nothing less than web homicide!

You see, anybody who got a default 404 error before this change, probably just backed up to the site they were on and continued. But now, it seems probable they’ll end up clicking one of the links they see there, or possibly use the “search this site” form, which does nothing of the sort! It searches “http://searchportal.information.com/” instead and Lunarpages gets a kickback!

Of course, Go Daddy has been doing stuff like this for ages.. if you register a domain with them and don’t set anything up on it you’re going to get a lame page filled with lame affiliate links. But at least with parked domains, it’s not like there’s an actual site up that you’re injecting content into! Not to mention, they’re Go Daddy. We’d expect nothing less from them!

And, remember the time four years ago where VeriSign tried exactly this with every non-registered domain? ICANN made them stop less than a week later, after a huge (by Internet nerd standards) public outcry.

These sorts of scams (and the entire domain parking industry) are just a server variant to good old desktop spyware that changes your default search engine or dns error pages on your browser. But just because they’re not surreptitiously installing anything on end users computers doesn’t mean it’s not crooked.

(Oh, speaking of crooked.. yesterday our cool anti-spam site spam.la stopped working, as though the domain had expired. Looking it up, it was paid through July 2008 though! Upon contacting the registry, it turns out that although we had paid Domain Discover to renew the domain in July, they had never paid the registry! Yet another creative way to rob your customers that we should try sometime!)

Why, Lunarpages, Why?

I’m guessing it’s the money?

But come on guys, is it really worth it? How much money are we talking about?

I remember one time when this skeezy SEO guy was asking me “How many domains do you guys host?” I told him “zillions”. He said, “How many are parked?” I said, “I dunno, some fraction of a zillion?” He said: “Do you like to make money?” And I said, “I dunno, it depends…” To which he said, “Do you like to make money?” To which I said, “It depends, is the money one dollar and how much **** do I have to suck to get it?”

Okay, I didn’t really say that, but it was what I was thinking. And in a real tough, bad-ass voice too.

It’s obviously a stupid question, “Do you like to make money?” The question is, “Would you do X if I paid you $Y?“

Lunarpages must be hurting pretty bad right now to sink this low. I also noticed they dropped their 1-800 number and only have a 1-714 now! Shoulda been like us, and not offered phone support in the first place, eh?!

But, I gotta give them a break. It’s easy to be all high and mighty and to “Don’t be evil” when you’re rolling in the dough like Google. But the ethics get a lot murkier when the choice is between stealing a tiny bit of traffic from your customers and selling your first born.

(Take Yahoo! for example. Back in 2000 (stock price $100) we tried to advertise with them, and they were all high and mighty about “no animation, no hard sell, no general trashiness.” Now (stock price $28), their site is covered in expanding flash ads, including some for… gasp… Lunarpages!)

Who are your customers?

It’s a good question!

And I don’t mean, are they small businesses, web designers, women, dwarfs, fifth graders, deaf, or asian? I mean, are your customers “People who need a website host” or are your customers “People who pay for traffic”? It seems Lunarpages is trying to get both.

But, you can’t have both. You really have to choose just one and stick with it!

It’s pretty simple in the beginning… your customers are the people (or businesses) who pay for your product (or service). But then later, as you grow, you start to realize that entire “customer base”… that “audience”… is a potential “product” in and of itself. And there are plenty of other types of “customers” who will pay handsomly for it.

Don’t fall for it!

Because your customers don’t like being a product! And, when they finally catch on that they’re PAYING to be SOLD, they’ll vamoose! And you’ll be done… stuck without customers or product!

Just yesteday there was some talk of eBay pissing off its sellers by putting targeted Google ads on their listings… effectively trying to steal their customers’ customers.

This is actually an interesting case.. because who are eBay’s customers, really? Is it the sellers, who directly pay Ebay? Or is it the shoppers, who are the originators of that money the sellers then use to pay eBay?

I’d say, it’s the shoppers. Because even though auction sites are sort of a weird “chicken and the egg” problem, in actuality, it’s just an “egg” problem, and the egg is shoppers.

Because, one thing I’ve learned in this world, is that if you’ve got people trying to spend money, you’ll have no problem finding people trying to take it!

So actually, I’d say eBay is probably fine putting those ads in. If they can help the shoppers find what they’re looking for, even if it’s not through an auction on eBay itself, they’ll be satisfied and come back. The “power sellers” can go suck an egg.. if they leave there’ll be plenty of other sellers who aren’t quite as proud to fill the void.

What to do?

Well, being completely unbiased in the matter, I say vote with your feet!

Any Lunarpages customers who want to switch to DreamHost, we’ll be happy to have you… and we promise to never, never, ever, ever, do anything of this sort, ever! You’re already paying us for hosting.. that should really be enough! (And Lunarpages, if you’re hurting so bad.. just raise prices!)

P.S. Use the promo code LOONEYPAGES when you sign up and get your first year completely free.. it works for current Lunarpages customers only!

Are you older than a Fifth Grader?

We are!

Well, maybe not ALL fifth graders, but I’m sure at least A fifth grader.

Like, one who skipped first grade or something.

Like me! (I was too tall smart.)

Anyway, DreamHost is TEN YEARS OLD!!!

   Domain Name: DREAMHOST.COM
   Registrar: NEW DREAM NETWORK, LLC
   Whois Server: whois.dreamhost.com
   Referral URL: http://www.dreamhost.com
   Name Server: NS1.DREAMHOST.COM
   Name Server: NS2.DREAMHOST.COM
   Name Server: NS3.DREAMHOST.COM
   Status: ok
   Updated Date: 21-sep-2006
   Creation Date: 23-sep-1997
   Expiration Date: 22-sep-2013

In dog years, that’s SEVENTY!

In Internet years, that’s ONE THOUSAND!

In waiting-for-tech-support-to-get-back-to-you years, that’s INFINITY!

To celebrate, I’m doing this super-long blog post retrospective… and if you read the whole thing, you might feel a little less let down about the announcement I mentioned last post just being a freaking birthday announcement.

Stupid Beginnings: Pre-DreamHost

Man, I was just looking through some old emails from 1997, and one thing I can say is, boy, were we dumb!

It’s nice to know some things never change.

Date: Sun, 5 Jan 1997 15:06:32 -0800 (PST)
From: Josh “Evening Optimist” Jones
To: Honchos
Subject: Plan?

Maybe we should piece together a mission statement or guidelines for
business or goals or something. Maybe we should also come up with some
different plans for pricing web hosting. Like some amount for a small
business site (at most 500 hits a day or so) and some amount for a large
site, with a discount if we were the ones who made the site. All should
probably have 20megs of space, with $5 per 10 more or so (I’m of course
wide open to specific price suggestions, these are just round numbers).
Maybe $30 for a small, $45 for a large, plus maybe $5 more per some number
of hits. Also more if they have a domain name. If we made their site
though, how about $15 off the base price?

Anyway, I was thinking we need some reason that people would want
to use us instead of our competitors. Why would they now? We are good at
design and graphics and programming, but honestly there are plenty of
places that are good at that. We have to be something others aren’t. Like:
quicker at getting the job done, better sites, cheaper sites, or maybe
even something like better customer service or even more advertising. The
reason I thought that low price would be a good way to go is because we
have an advantage over most other places in that. We aren’t actualy
dependent on this (at least not _yet_) whereas others are. I don’t think
we have an advantage in speed, especially since we are all full time
students. We are good at design but it’s hard to sell people on our sites
being the highest quality I think. I can imagine some people really liking
our work and other people not so much, there is a lot of personal taste
involved. Another thing which I guess is sort of obvious is that it would
be good to get some large sites that we need to change a lot and sort of
constantly maintain and add things to, because we can keep charging for
that. Like when we get a job, we should outline clearly what is included
in the setup, and additional things (like more pictures, etc..) are
clearly going to cost more later. Okay thats it. I would have written this
earlier, but my connection was flakey yesterday.

Josh

But wait, isn’t that email dated January 1997?! We didn’t register dreamhost.com until September! What oh what were we doing in the meantime?

The thing is, the actual company over here is really called “New Dream Network” .. and the goal was never (and still isn’t!) to be a web host. We did some web hosting on the side to try and cover the network we were stealing from a friend, but we generally didn’t want it to ever get too big.

Buuuuuut, once we started actually raking in the dough, that mentality changed quick. Let me give you an idea of how much dough there was to be raked back when we decided to get serious and get an actual domain name..

07.29.97 pillar Pillar Communications $20.00
07.31.97 pinzler Andrew Pinzler $48.00
07.31.97 jbark Joseph Bark $46.00
08.06.97 tim Timnet $126.00
08.12.97 threnody Cheryl Dowling $136.00 VOID
08.12.97 jhb5 Vickee Sepich $46.00

Here’s an interesting little exchange I found too… the origins of the DreamHost name:

Date: Sat, 20 Sep 1997 14:06:21 -0800 (PST)
From: Dallas Bethune
To: Honchos
Subject: Re: everyhost.com

Hey,

I just discovered that dreamhost.com is not taken!

We could snatch it up! What do you think?

I’m making an ad for hosting right now, BTW…

->Dallas

> > Hey what do you guys think of everyhost.com? We could make it our mission
> > to make having a website with a domain name easy and affordable for
> > everyone from private citizens to small to large businesses. Therefore..
> > everyhost.com (it’s not taken). Also Dallas, are front page extensions
> > still installed somewhere? I’m going to take advantage of the beta status
> > of FP98 to download it and see if we can get our server to work with their
> > extensions. It would be good to put at least on our hosting server once we
> > get it.
> >Josh
>
> I’m not that taken by everyhost.com. I don’t think I would personally want
> to have my site there. It would be fine if we were trying to focus on
> sites with their own domains, though.
>
> I believe I deleted the FrontPage stuff. We never got it working right,
> and were low on space at some point.
>
> I’d almost rather not have FrontPage going on our servers. It seems kinda
> neat, but I’m still worried about what access to our server that it seems
> to require…
>
> ->Dallas

Ha, EveryHost! Just rolls off the tongue, doesn’t it?

I do feel somewhat vindicated that everyhost.com was snatched up less than two years later!

(One thing sort of funny is… we were assuming most people would be getting sub-domains of our main domain. Dallas was saying that he wouldn’t want dallas.everyhost.com as much as dallas.dreamhost.com! Of course “It would be fine if we were trying to focus on sites with their own domains, though.”)

A Nightmare is Born

Woooooheeee! Thanks the Wayback Machine I’ve been able to find and recreate the entire history of DreamHost.com and lay it out for you here, complete with what I think are the most interesting points in each design! Unending boredom awaits..

This was our first design!

Designed by Dustin Vannatter, New Dream Member extraordinaire, I’ll always hold a special place in my heart for this one!

Back then, we actually had specifically an “adult site hosting” plan.. it was $99.95/month and, like all our plans, included unlimited bandwidth! As unlimited as half a T1 can be! It came with 100MB per 5GB of transfer you used, which was really weird in retrospect.

We also had our Crazy Domain Insane plan for $9.95/month with 20MB of storage, Archive Boy for $17.95/month with 40MB, Code Warrior (we hadn’t gotten that Cease and Desist from Metrowerks yet!) for $23.95/month with 50MB and a telnet user and CGI access, and Strictly Business for $44.95/month with 100MB of storage along with 20 email addresses and anonymous FTP!

It turned out, that Adult Site hosting plan with unlimited bandwidth was the only thing that kept us solvent those early months. As soon as we put that “too good to be true” offer up there, we started getting deluged (as in, multiple PER WEEK!) with signups for it! And these were big customers too.. $100/month!

It took about a week before we realized that unlimited bandwidth plus adult content equals not good. Some of these people were using over a GB a day of transfer.. and according to an early email from michael, we needed to be making $200/GB to stay afloat! We immediately had to re-negotiate with some of those early adopters.. one guy began paying $700/month, and others left.

We did learn an important lesson though, and that was that some of those $100/month adult sites used hardly ANY bandwidth at all! And thus, the truth about overselling was realized!

(Ha, if you thought having a dedicated adult hosting plan was crazy, before dreamhost.com launched we had a dedicated warez hosting plan!)

We also had “colocation” options back then:

For $995/month you got 50GB bandwidth, 64MB RAM, a 3GB SCSI drive, on a Pentium 200Mhz!

For $3000/month you got a PII 400Mhz, 256MB RAM, two 9GB SCSIs and 300GB of bandwidth!

The deals would have been a little sweeter if I’d had my way though…

Date: Mon, 29 Sep 1997 11:35:29 -0800 (PST)
From: Dallas Bethune
To: Honchos
Subject: dreamhost.com site

I looked at it…

I’m alarmed by the colocate page.

How do you think we’re going to offer

200MHZ Pentium II
64 MB RAM
4.2 GB drive
Full Debian Linux Distribution

Only $300 setup
$300 a month.

At this ridiculously low prices?

We’re trying to make money…!

The offer I was talking about would be a 100 MHz Pentium with 16MB Ram and
2 gig drive for $1500 setup and $500/mnth

That price is even low…

Also, I’d rather not give everybody full CGI access that is a client of a
reseller. That would be a good way to open ourselves up for a lot of
attacks from people we don’t even really know at all. I think we should
develop a set of cgi scripts that most people would want to cover people’s
want or need for CGI without opening the server up. We can’t afford to
get new hardware too often…

I also feel especially unsure about granting full CGI to people with warez
pages. They would be the ones most likely to try to cause trouble,
right? (maybe I’m just getting old)

Most people don’t need cgi except for little things. If we can provide
those things, we can secure ourselves from big programs that use up the
processor or what not. I’m paranoid.

I think we may have to discuss our prices overall, as well. We are way
lower than a lot of places. This helps us get business, but we may need
to reassess our costs, and our income, and all that.

->Dallas

Yeah, early on you got ONE mailbox, ONE hosted domain, ONE ftp user, and NO cgi access unless you were at least on Code Warrior.. and you liked it! Not to mention domain registrations were $70/year from Network Solutions (and only Network Solutions!)

From the very beginning we had a “reseller program” (you’d get 20% off) and in November 1998 I started the monthly newsletter. Oh yay.

So yep, that was it, one server, four honchos, and $200 in the bank.

Two Years Pass: September 1999

First thing I noticed on this redesign.. our 1-888-261-4484 is nowhere to be found! I must have gotten tired of all those voicemails setting off my pager. Good riddance to phone support! It wouldn’t return (in the form of callbacks) for three years.

By our two year birthday, DreamHost has grown from the four honchos to 19 people.. and gone from no profit to profit to no profit again, thanks in large part to Sage’s WebRing millions!

We’d dropped the unlimited bandwidth, but added some “extra options” at this point: get an extra ftp username for $5/month, and extra mailbox for $2/month, and extra storage for $5 per 10MB!

We’ve dropped the adult plan, added a domain parking plan for $30/year .. NOT including registration (but refunded if you upgraded to full hosting!), renamed “colocation” to “dedicated” (after all, we still don’t have our very own data center!), started offering squirrel mail webmail, and were giving away a free iBook! This was back when people used to read books!

We later had a lot of other giveaway contests.. DreamCasts, Handspring Visors, Game Boy Advances, and even, on the launch of “DH2″, a PS2!

DreamHost 2: September 2000

Pretty much since I graduated from college in May of 1998, we’d been working on “the future of webhosting.” We were going to call it “DreamHost 2000″ in the theme of “Windows 2000″, but by the time we actually got it out and done, the year 2000 didn’t really seem like the future anymore, so it was just “DreamHost 2.0.”

What did DH 2 bring?

Well, mostly the panel as you more-or-less know it today. We also had a system that should have pretty much seamlessly scaled from 3 or 4 servers to 3 or 4 thousand. And I guess it more-or-less did.

We also started doing our “own” domain registrations (through register.com, then joker, then tucows, and finally, many years later, our own ICANN account!) for $30/year.

We dropped the “Archive Boy” plan and created “Sweet Dreams” and upped our storage offerings to 30/75/150/250MB, our bandwidth to 2/4/7/12GB a month, and our mailboxes included to 3/10/20/40!

We also raised our prices to $10/$20/$35/$60 per month and added more extras: discussion lists for $10/month each, SSL access (not including a cert) for $20/month, extra MySQL DBs for $7/month each, and extra bandwidth for the rock-bottom-remainder price of $15/GB!

We also didn’t include any sub-domains on Crazy Domain Insane back then.. or even CGI access! We did however have an official logo! And 31 employees though.

Promo Codes, DreamServers, and Disaster: September 2001

September 2001: did you forget that American flags weren’t just in meatspace? We got on the bandwagon ourselves.

Witness, the humble beginning of promo codes… originally a way for us to give college students a discount! We also started giving away a free registration with hosting, and had a domain checker right on the front page. We created the KBase and launched DreamServers; starting at only $395/month now.. for 40GB of bandwidth, a 10GB disk, and a 600Mhz Celeron with 128MB RAM!

We were now hosting 29,380 domains! And.. we went crazy and way upped disk to 60/300/600/1000MB, and bandwidth a smidge to 2/5/10/30GB, and dropped pricing for overage to $15/$10/$10/$5 per GB.

Even crazier… on the front page, a huge form where you could specify how much of each feature you wanted and how much you were willing to pay, and we would “recommend” a plan for you! The actual point of this feature was market research though.. after months of data collection I would go back through and decide how to best update our plans to maximize revenues!

At this point we had gone through our own little mini dot-bomb.. our head count was only 28 since we decided to stop borrowing money from Sage! Fortunately, our stock art head count had tripled in the same period.

Rapid Growth: We Turn Five!

Really, we started growing faster a little bit before this completely sweet redesign. It started when I analyzed all those “recommendation” requests and realized we really should just be giving more away on our cheapest plan. Sure, less people are “up-sold” on our more expensive plans, but really, those people were just going to our competitors.

So, we gave CGI on CDI, upped our disk to 100/400/900/1500MB, our bandwidth to 2/10/20/30GB, our mailboxes to 20/60/140/300, and gave away unlimited MySQL databases on all plans… I believe an industry first? Oh ho ho!

Of course, we did put a limit on the database usage you could have… the short lived “conueries” metric! 25 times your connections plus your queries! And you got 10M “conueries” per month on CDI!

But still, the redesign was nice too.. we did it thanks to the prodding of a PR company we hired for the still-ridiculous price of $10,000 a month. The biggest thing we learned from that was how <