Pictured above: Josh Baer, founder of SKYLIST & Capital Factory, with President Barack Obama
“My story is all about being at the right place at the right time,” said Josh Baer, founder and managing director of Capital Factory, a startup incubator and accelerator. “I grew up in the eighties and went to study computers in the first dot-com boom.”
For someone wanting a crash course in the Internet, there could not have been a better time to learn. When Baer entered Carnegie Mellon in the fall of 1994 the Internet was just beginning to accelerate, and Netscape was just releasing its first public beta.
Netscape and the World Wide Web caught Baer’s attention, so he started looking for ways to get involved.
“I wanted to run a website,” said Baer. “So I applied for the beta program on StarNine’s website.” (StarNine Webstar was a web server for Mac OS X).
In the years before remote web hosting, “If you wanted to run a website you had to have a computer that you had to run all the time. If your computer crashed, your website crashed,” said Baer. Though Baer admits then: “I had no idea what that server was or what it did.”
He applied for a beta web server anyways. On a whim he also applied to StarNine’s ListSTAR beta, an email server-testing program.
They didn't accept him into the program for the web server, they did accept him for the email server.
“I read the whole manual,” said Baer, “because I am a college kid with more time than money.”
It just so happens the email server company had a web forum where people would go to ask questions.
“So I would answer their questions,” said Baer. “I was apparently the only person that read the manual.”
In time, StarNine caught on, and hired him as an intern.
“That kinda got me started in email very much by accident,” said Baer. “The way my first company started was also by accident.”
StarNine sold software, but they didn’t offer customization or consulting services. Customers would call asking for services and eventually the company started referring them to Baer.
So Baer would fix email server issues and consult with businesses on the side. Eventually one businessman got so tired of having to come to Baer to get his email up and running again that he made a proposal.
“How about I pay you 50 bucks per month and you just run it for me?” said the businessman.
“That sounds pretty obvious today, but then it was pretty revolutionary,” said Baer. Essentially, what he proposed was an early version of hosted email.
“That was my first hosting client. I was then able to incrementally add customers,” said Baer. By the time he graduated Carnegie Mellon SKYLIST, as it came to be called, had a few hundred thousand dollars in revenue each year.
Move to Austin and the Wild West of email
Though Baer would step away from SKYLIST for about a year to work at Trilogy software– the company that brought him to Austin– email was an accidental calling that hooked him.
“Email is one of the best, most effective tools that marketers have. Allowing people to communicate with each other. It’s what people do the most on the Internet,” said Baer.
When Baer returned to SKYLIST, after his hiatus at Trilogy, he put that passion to work again. Right around then, email was just finding its footing as a marketing channel.
“Back then we referred to it as the Wild West of email. There were no rules, best practices and ways to use email, “ said Baer. “There were a whole bunch of marketers doing the exact same things you did over paper mail, [things] we view as spam on email.”
“It was all new.”
There was a lot of opportunity in straightening things out; opportunity to make email an effective marketing tool for the masses.
“We really were in the middle of helping people figure out and define what are the right practices,” said Baer. “One of the first examples of me being in the right market in the right time and how much that can help your company grow. The market that we were in was really growing fast and we were being disruptive.”
To meet market needs, SKYLIST would later shift its focus away from discussion forums to email newsletters and promotions, creating its own email platform called Stormpost. This was a defining time period for email. Those that set and understood the standards had a big advantage on everyone else. Many of the industry’s best standards would be implemented into law via the 2003 CAN-SPAM Act.
Eventually, the success of the Stormpost platform led the company to sell to Datran Media in 2005.
Post-SKYLIST Baer has gone on to build Austin’s leading incubator and accelerator, Capital Factory. Capital Factory is a deliberate effort to help distill startup lessons in a structured way, helping entrepreneurs learn more efficiently.
Still, despite the thoughtful mentorship of incubators like Capital Factory, it’d be remiss to forget the advantages of willingly learning new technologies without any agenda. Sometimes happily stumbling upon great inventions and being open to the opportunity to work with them is the best advantage in the world.
“I really believe that email is the original killer app of the Internet,” said Baer. "As a user I can’t imagine life with out email.”
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