Jason Scott moves on to tell further details about Robert Hoquim’s BBS fraud and some of the first shady computer deals that were widespread back in the 1970s.
So, he became the ‘solve-all-your-problems’ amazing guy. He ended up taking everyone’s messages, and then quietly entering into these deals with people about getting some cool grey-market goods and investing in a business and doing everything else. And then one day he went to Boston for a computer convention and never returned. The way they found out was the phone number was disconnected on the BBS; they drove by his house – it was empty. And everybody started to piece together how many of them had invested something in him recently, and that he had blown town, never to return.
Now, some people would just go through various stages, but these folks decided that what they would do was they would sit down and they would write out everything about him they knew. And then they discovered his earlier life as John Aleshe. And then they would put it all in a FidoNet transferred file and send it to all the other FidoNet nodes. This was how I heard about it at 18, about this terrible scam artist who had taken all this stuff from people. They were angry, life savings were gone. But he had disappeared with it, and they were using FidoNet.
Ironically, of course, he moved over two states – we now know. And he opened up another BBS and went back on FidoNet, where, extensively, he got to watch this cry for his head. Now, again, you would think that he would go in for that big scam again. And it was there that he founded what eventually became IQuest, one of the largest Internet service providers of Indianapolis. It turned out that starting an ISP in 1992 to 1995 was like starting a video store in 1980 or 1983 or a video arcade in 1978. Turned out he struck gold. And so, enough money came in that he was not running any fraud; he was just a legitimate businessman who was on the FBI Wanted list.
So, my question is: how much does it make him different than a lot of other similar organizations in time, a lot of similar other places. Because, if we go ahead and look at the computer industry, and you look at how marketing is done, and you look at how people make promises, it doesn’t always catch up. And unfortunately, we’ve become relatively inured to that situation, haven’t we? We’ve certainly gotten to the point now where we say to ourselves: “Of course, we’re smart and we see this big cell phone.” I mean, certainly, the wave of anger and trauma that comes with any new iPhone release seems to indicate that we are better educated people.
This (see left-hand image) is the Altair 8800, which is built as the first home computer, mini-computer, computer just for people that did not fill a room or make missiles fly. There’s an earlier one called the Mark-8. However, the Mark 8 was particularly expensive and was a huge financial burden, so you probably wouldn’t be owning that. It was the Altair that ended up on the cover of Popular Electronics in January 1975.
I’ve interviewed many people from that era. And there were people that basically said to me: “This was the moment at which I realized I wanted to own a home computer and I wanted to be a computer owner.” It is a fundamentally beautiful piece of art.
Now, it has no video screen, and for people who might not go back to that time – you were basically flipping those switches on the front to be able to send programs into it. But it was amazing that you could get this thing for $400 in a kit and $498 assembled.
At a time when an Intel chip that would go in here was $400 – now, that should have been a red flag, you would think, right? The $400 chip in this machine plus machine equals $400. But no, what ended up happening was that, in fact, when they put this thing up for sale, it didn’t exist. This computer was myth, it was a gamble, it was an idea, it was a hope.
They had developed a prototype that they thought was pretty good. They had shipped it to Popular Electronics for the cover photo. That was lost in shipping, so they sent them an empty box. So this iconic photo is of an empty box. It is a beautiful testimony to the computer industry that has come afterwards. They needed to sell 200 of these things to be able to make them – they had to pre-sell 200. They ended up pre-selling 2000, and within the first year they had manufactured 5000. They were onto something; they had struck oil. But they had not necessarily known that when they put the thing up for sale. So to me it always stands as a beautiful testimony to the industry.
At the time that we’re talking about, there were a lot of ads making a lot of promises. This is a Heathkit terminal (see right-hand image), 16K RAM, only $1595*. It’s got 100 Kbytes storage and two Z80-s.
It occurs to me that I didn’t quite explain Altair 8800. So, wait a minute: “$400+blank=$400, what are you doing?” Here is the trick: they had cut a deal with Intel. Intel had cosmetically damaged terrible-looking chips that were testing functional. And they made a pre-deal with Intel to sell this chip for $75 if they removed the Intel logo from it. There is your secret sauce, there you go. I expect to see your Kickstarter next week.
This industry offered lots of things that were extremely underpowered that were portrayed as wonderful. This (see right-hand image) is a 64-character terminal kit for $325. There’s no CPU – it’s just going to take what you type and put it on the screen. That’s your machine.
When people promise you more, they’re promising you amazing things for expensive amounts. This is Altair Basic (see left-hand image) that went for the Altair. In 1976 it was written by the two little hippies, Bill Gates and Paul Allen. And I’ve actually found someone who has a receipt from 1978. The price was $213 with tax. This is what $200 gets you. Ah, the software industry, you will never fail me.
They ended up seeing so much money in Basic that they split off and had to settle a lawsuit with Altair when they moved away, because it was so amazing. And they left the center of computing at the time, which was Albuquerque in New Mexico, and went to Seattle, where they were never heard from again. So you have a lawsuit over a piece of software from a company that originally lied about having a computer.
Computers were expensive back then (see right-hand image). The upper left: you cannot beat the 4K system at $599. If you want to have a 16K system, that’s 300 more dollars. And you want to add up a printer – that adds up to $1198. Or the Level II, 16K, printer + disk system bundle at $2385. How are you going to beat it? You’re not. Actually, at the bottom you can see the amazing new 32K, Level II, 2-line printer system for $3874. That was a party. You were like: “Do we buy a second car or do we get a computer?”
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