While the rest of the world was falling in love with Pretty Woman, meeting The Simpsons and buying piles of MC Hammer pants, Pete Ashdown was spending 1990 tinkering with a little-known contraption called the Internet. Three years later, Ashdown had turned his part-time hobby into XMission, Utah’s first Internet service provider (ISP).
Throughout the early ‘90s, XMission not only provided a connection to the World Wide Web, but for Utah customers, was also synonymous with the Internet itself. And though it hasn’t always been easy, XMission continues to evolve to meet the needs of an ever-changing industry.
Bring Home the Internet
Like most innovations, Ashdown’s desire to start an ISP was driven by necessity. Though he was able to connect to the Internet as a computer science student at the University of Utah and at his job with Evans and Sutherland, Ashdown wanted to have that same access at home.
“I figured that if I wanted to access it from home, there were other people who wanted to do the same thing,” Ashdown says. “I started looking around the country at other Internet provider companies—there were probably less than a dozen in 1993. I e-mailed a bunch of them and only one, in San Jose, replied to me and gave me just a few tips about how to do it. But it was enough to help me to draft a business plan.”
That business plan, however, wasn’t enough to land Ashdown a business loan—at least through traditional methods. Banks couldn’t wrap their heads around the idea and the Small Business Administration couldn’t get Ashdown money fast enough to meet his sense of urgency.
That’s when Ashdown ran across of a bit of luck. During a visit to his parent’s house, he accidentally left the business plan on the kitchen table. His dad picked it up after he left.
“I wasn’t intending for him to see it,” Ashdown recalls. “He called me the next day and said he’d loan me the money to start. He didn’t know anything about [the Internet], but he had enough faith in me that I knew what I was doing.”
Finding the Right Customers
With start-up money in hand, Ashdown began growing the business by targeting those he knew best—his co-workers at Evans and Sutherland, fellow computer science students at the University of Utah, and friends he had made in online discussion boards.
“There was a vibrant computer user group scene in Salt Lake City who would get together and discuss software. I pitched the service to these technically-minded people. This was a good move, because when more of the general public began to get on the Internet, they would approach the neighborhood nerd and ask them what they should do to get connected to the Internet. More often than not, [these users] were connected to XMission already, so they made that recommendation to other people,” Ashdown says.
Word of mouth marketing, combined with a national media blitz around this new technology, helped XMission grow from 500 to 5,000 members in 1995 alone. The expansion, however, didn’t come without growing pains.
“We really had to struggle to keep up with the demand. We couldn’t buy modems and phone lines fast enough to accommodate the number of customers that were coming in,” Ashdown says. That’s when the company made some of its first mistakes.
“In order to stem the tide of customers, we set up a waiting list. [As a result], there was an opinion for years and years after that we had a waiting list and people couldn’t get service from us,” he says. “That taught me that it’s much better to raise your price than to set up a waiting list, because it’s very hard to retract the waiting list when you don’t need it anymore. But if you raise the price, you increase your revenue and you also stem the tide of customers. You can lower your price later.”
Transparency in Business and Politics
Though the waiting list approach was a minor setback to XMission’s growth, the company’s scariest moment came in 1996 when a hard drive crashed and lost every customers’ e-mail account.
“I thought it was game over. I thought there was no way I was going to recover the business from this,” Ashdown recounts. “But I was upfront and I told everyone what had happened. They appreciated that fact more than if I’d tried to cover it up or lied to them, like a lot of companies do. If something breaks, we’re upfront. We put out an announcement that not only our customers, but people going to our website, can read.”
Ashdown took this business model of transparency to the campaign trail in 2006, when he challenged incumbent Orrin Hatch for a seat on the U.S. Senate.
“I brought that idea of openness and transparency to my campaign,” Ashdown says. “I think our elected representatives are working for us. I wouldn’t hire an employee that I didn’t know what they were doing or who they were meeting with. With the Internet, it makes it very easy for people to publish their calendars, publish their opinion, and share their opinions and discuss things in a constant fashion, rather than at an infrequent town hall meeting. Unfortunately, this idea of openness and transparency wasn’t something that was copied by other politicians.”
Though his campaign ended in defeat, Ashdown has no regrets and is grateful for the personal growth that came with it.
“For most of my life, I’ve been an introvert—this guy sitting behind a computer screen and not getting myself out in public to really define myself politically,” Ashdown explains. “I [believe] that running for office makes you a better person.”
Though no longer campaigning, Ashdown remains politically active. Most notably, he continues to advocate for individual privacy, individual liberty and less regulation for the Internet.
Though it has faced countless industry and technology changes over the years, XMission continues to thrive by finding new niches for itself—including a greater focus on business services and its new virtual server product called Stackable. Through it all, one thing remains constant: Pete Ashdown still loves the Internet.
“I am a computer nerd at heart. This is something I have been doing since the Apple II. Usually when I go home, I’ll still putter around and hack and program. To be in my position, with so much bandwidth under me, is a real luxury. I enjoy it just as much as I did in 1993.”