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First in a two-part series.
By Robert Rivard
Nick Longo had a big idea in Corpus Christi back in 1994. Any contemporary history of the Texas Gulf city ought to credit him as the man who opened the city’s very first coffee-house, “The Raven and the Sparrow.”
Equal credit should go to his wife, Serena, a registered nurse, who worked 60-80 weeks at Driscoll Children’s Hospital to keep afloat the undercapitalized venture.
“I started the coffee shop with $500 in cash and my wife’s Master Card,” Longo now recalls.
It seemed like easy money. The young couple was preparing to move back to Texas from Miami when Longo picked up a copy of Entrepreneur while sitting in the waiting room of his dentist. The magazine boldly predicted, “Coffee is the next big thing.” Corpus Christi, close to Aransas Pass, where Longo had lived and gone to high school, looked ripe for the picking.
The initial media hype was great, but the Longos soon learned that The Raven and the Sparrow was an idea before its time. Sleepy Corpus wasn’t quite ready for its first coffeehouse. The shop had plenty of people hanging around, but not many paying customers.
Longo would have to think again if he was going to make a go of it. His second idea, it turns out, was a real game changer. It proved once again that timing can be everything.
From Coffee Shop to CoffeeCup.com
Longo describes himself as “someone who was lucky to get out of high school,” but he also was an early adopter whose first experience with a computer came in the mid-80s in a high school class with a Radio Shack TRS-80, an early desktop. Longo joined the Air Force after graduation and soon found himself with a high level security clearance, working as a satellite communications operator at a military facility outside London. Looking back, Longo realizes his virtual workspace — the network connecting Air force signals intelligence around the globe — was, in fact, its own Internet.
But Longo was slow to leverage that experience. Like a lot of returning veterans, he struggled to find a job and clear direction in civilian life. In retrospect, it seems surprising that he didn’t see a future for himself in the emerging digital economy. Instead he finally found work — true story — training greyhound racing dogs, first in Aransas Pass and later down in Harlingen where he and Serena met. For a brief time in the 90s, greyhound racing and parimutuel betting was hot in South Texas.
Later, after the couple’s move to Corpus and the opening of the Raven and Sparrow, Longo was enjoying his new Packard Bell PC with a 486 chip, ostensibly bought for the business, spending idle time at the coffeehouse on listservs, in forums, and teaching himself basic html coding. He had an early dial-up Internet connection at a time when most people didn’t yet know about the Internet. Hoping to lure in people more interested in technology than espresso, Longo bought a second PC for public use in the coffeehouse. Access to the Internet was free at The Raven and the Sparrow. In a world then dominated by AOL, that mattered.
He also had the foresight to purchase the domain name “www.coffeecup.com,” which became the first commercial website in Corpus Christi. “We had no idea what we were actually doing, but looking back, we were one of the first Internet cafes in the world, and the only one that didn’t charge for access,” Longo said.
Longo reached out to downtown hotel clerks, some of whom didn’t even know the word about email, but did understand that coffee drinks were free if they steered hotel guests to The Raven and Sparrow. Traveling business people and other early computer users could come to the coffee shop, hang out, and connect to the Internet.
“Coffeecup.com was the first commercial website in Corpus, even the public library didn’t have Internet and neither did any of the downtown hotels,” Longo said. “As soon as word got out through the newspaper and television stations, everyone wanted to come in and use the computer. Pretty soon people started asking me to build their websites, which I did for $500-1,000 a pop.
“Web development as a business didn’t really exist,” Longo said. “There were no contracts, nothing about how many hours I’d work, or whether I’d charge for subsequent changes a customer requested.”
There are about 300 million websites operating in 2010, but when Longo started, there were less than 5,000 worldwide. People wanted on the web and they were willing to pay Longo to show them how to do it. He wasn’t finished with his customers when he finished their websites. People kept calling back for support, which was time-consuming and unpaid.
“I needed to come up with some solution so people could make their own changes,” Longo said. He subsequently created the CoffeeCup HTML Editor, the first software program of its kind, about as far away from the Silicon Valley programming universe as you could get. Longo charged customers $20 a copy.
With the arrival of Microsoft’s Windows ’95, personal computers now featured built-in dialers that revolutionized Internet access for the masses. Longo’s timing was perfect. But credit card companies were still reluctant to embrace Internet transactions. While Longo worked to get a credit card processor, he allowed his growing base of the CoffeeCup HTML Editor customers to email him their credit card numbers to cover the $20 charge.
“We were taking orders on the phone, by email, the hurdles we went through to start up were crazy,” Longo said. After three months, he finally obtained a credit card machine and began processing the pile of uncounted $20 IOUs that had accumulated on his desk. “I had to type each $20 charge one at a time. When I reached $20,000 or $30,000 worth of $20 charges and still wasn’t done, I left my office, went out front, and announced that the coffee shop was now closed.”
For the next year, Longo slept under the coffee shop counter, processing orders 24 hours a day. “Download.com opened the same week we did and there was no security, people just emailed their credit cards, and I had set it up so that each incoming mail caused a ka-ching cash register sound to go off on the computer,” Longo said. “When I heard the sound, I’d get up and send the HTML Editor to the buyer as an email attachment. In case they couldn’t download an attachment, I also mailed them 2 floppy discs.”
Serena said being married to an Internet entrepreneur then was, “Like a rollercoaster ride with lots of turns out of nowhere, hills to climb, and sudden falls you don’t see coming. It can be scary, but it’s always been a lot of fun too.”
The CoffeeCup HTML Editor became the foundation of CoffeeCup Software, founded in 1996. Longo’s company went on to develop and sell tens of millions of software applications to users around the world. And Longo then set up a hosting company so all these new web users had a place to host their website. One guy in Corpus Christi helped democratize the web for millions of individual users who otherwise might not have taken the first steps into the new digital economy. CoffeeCup Software developed 30 different pieces of software over the next 11 years before Longo sold the company in two pieces in 2007, a sale that brought him wealth and independence.
Longo was a guerilla marketer before the term existed. CoffeeCup Software, like its owner, operated unconventionally. Longo found a vintage limousine for sale on e-bay and bought it, plastering its exterior with CoffeeCup.com branding. He hired a driver and soon enough Longo and limo were showing up at national tech conventions and events. The brand, and the legend, grew.
When Longo last checked the online counter on Coffeecup Software’s web page, more than 55 million copies of software had been downloaded. Outside his current office, there is a framed collection of tech magazine covers in every imaginable language, all of which feature CoffeeCup Software.
Rackspace’s ‘Chief Rainmaker’
“I found Rackspace back in 2000, as a customer.” Longo said, long before the then-fledging server-hosting company went public and became a household name in the technology world. “I wanted to find a managed hosting company in Texas so I could drive from Corpus and bitch at them if things didn’t go right. I never had to drive to their office to yell though. Rackspace’s service was always great and the people themselves were even better. I did drive up, or they would come visit me, but we did it to learn what we could do better to grow. It was a great alliance of customer and supplier and then friends, for sure.”
Rackspace was located in the downtown Broadway Bank building in those days. Many of Longo’s staff were staged there for convenience to streamline the relationship between Rackspace and Coffeecup’s hosting division and its 15,000 small business customers.
“The Coffeecup servers were located on the sixth floor and I could come there and look at them through the glass,”Longo said. “It was like looking at my baby through the glass in a hospital nursery.”
Later when both the hosting company and CoffeeCup Software were sold, Longo sat out a two-year non-compete and then went to work for the only company that made sense to him – Rackspace. He had built a strong, mutually profitable relationship with Rackspace while running CoffeeCup, and there was no other company he would have worked for in tech.
“If I came back to tech it would have to be with a company where I trusted the people and what they believed in,” Longo said. “That was Rackspace.”
The corporate culture at Rackspace is famously free-wheeling, compared to more traditional businesses, but it is a sales and support driven company, and Internet companies require structure and organization as they grow just like any other business. Even with a job title like “Chief Rainmaker,” a euphemism for big idea generator, Longo can be restless in a structured environment.
“I’m a fireman,” he said. “I like to start fires, I like to put out fires. I don’t like to stand around and watch them burn.”
Longo described Rackspace as a “company run by leaders with great integrity, and that goes a long way, but fitting in isn’t always easy. Most people knew me as the founder of CoffeeCup Software. It’s hard to transition from entrepreneur to a corporate organization. It can be alien when you run your own company very differently for more than a decade.”
By 2011, Graham Weston, chairman and co-founder of Rackspace, was increasingly removed from the company’s day-to-day operations and focusing more on his own initiatives to push for transformation of downtown San Antonio. He saw a more vibrant center city and a faster growing tech economy and community as essential to attracting young, educated creative types to live and work here. Weston already was studying technology incubators and accelerators popping up from New York to Palo Alto, convinced that San Antonio needed its own programs and co-working spaces to nurture young tech workers.
While Geekdom was taking shape in his head, the Rackspace chairman also was working to get Boulder-based TechStars to place its next office in San Antonio, an unlikely home for a technology accelerator devoted to attracting tech entrepreneurs and helping them develop and launch their start-ups.
Weston wanted to find meaningful challenges for Longo and another successful young tech entrepreneur names Jason Seats, who had come to Rackspace after it purchased SliceHost, the company he had cofounded in St. Louis.Weston recruited Longo and Seats to travel with him to look at what other cities were doing, and both eventually were handed new opportunities. Seats became the managing director of TechStars Cloud.A profile of Seats and his highly successful first year as the head of TechStars Cloud in San Antonio was published on The Rivard Report in April.
Longo became the director of strategic initiatives for Geekdom, which in the beginning was only an idea, some empty space and his own creative energy. He also became, in effect, TechStars Cloud’s landlord while transforming the vacant 11th floor of the Weston Centre into a co-working space for tech startups, a forum for tech seminars and hack-ups, and a physical embodiment of the city’s growing tech community. Fellow Rackspace co-founders Pat Condon, and Dirk Elmendorf, now an executive with www.truckingoffice.com, also had left management positions at Rackspace to pursue new Internet ventures and investments, but both joined Weston in supporting Geekdom.
Geekdom caught on fire. It attracted hundreds of dues-paying members and tenants in the space of a few months. Civic and business leaders who could hardly describe what Rackspace actually does in the technology economy were calling to schedule tours. Geekdom opened shortly after Weston finished his term as one of the trichairs for Mayor Julián Castro’s SA2020 initiative. Castro himself had campaigned on the theme of The Decade of Downtown. He and Weston share a vision for keeping more college-educated young people in San Antonio and recruiting others to move from here.
Geekdom quickly became a symbol of change in San Antonio. Yet few of the people who visited Geekdom came to know much about Longo, its colorful new leader. Longo actually likes it that way. Money and media attention are no longer motivators. His new definition of success, he said, “is trying to change the world whether people know who is behind that change or not.”
Some would say CoffeeCup Software did change the world for millions of Internet newbies who might not have found their way without Longo’s hand-holding software. At Geekdom now, Longo finds himself making change happen in new and different ways. When he wants coffee, he hits Starbuck’s.
Coming next: Nick Longo, Geekdom’s Mentor-in-ChiefFollow Robert Rivard on Twitter @rivardreport or on Facebook.