Internet Connections

March 1, 1998May 2, 2008 Roger Matz

When future historians get around to naming eras and establishing turning points, expect 1993 to be a year students must memorize. That’s when commoners gained entrance to a domain previously reserved for Knights of Academia (colleges and universities) and the Ruling Elite (government agencies).

The domain, of course, is the Internet, a fascinating electronic forest where most commoners are still strangers but gradually getting acquainted, thanks to visionaries like Dale and Yvonne Karsten of Mankato. The Karstens earned a footnote in local Internet history for being among the first to connect ordinary Minnesotans to the Internet.

Pooling their expertise, the couple founded Internet Connections, Inc., with half a dozen subscribers in 1993. Now with thousands of subscribers and growing rapidly, Internet Connections has spread from Mankato into New Ulm, Owatonna, Waseca, LeSueur, St. Peter, Gaylord and New Sweden. The Karstens plan to push north into the metro suburbs this spring.

The four-year-old company seems to thrive by empathizing with customers, by innovating creative approaches and by keeping capacity ahead of demand so there are no “busy signals” to frustrate subscribers. But their subscription fee – $20 a month – remains competitive with the handful of other internet providers operating in Southern Minnesota. That includes 180 hours on-line and four e-mail addresses.

Modestly launched with a few phone lines, four modems, a single computer and zero employees in the Karstens’ basement, the company now occupies 1,800 square feet of second-floor office space in the Northwestern Office Building in downtown Mankato. They’re talking about eventually putting up a building of their own. Their 19 employees do far more than plug in subscribers and welcome them to the Internet. “They manage our infrastructure to make sure our connections stay running and they do custom programming for businesses,” Yvonne said. For the uninitiated, they provide training in how to access and use the Internet. For the more sophisticated, they design web pages, engineer special applications and devise computer security regimens. “We help people protect their computer systems from fraud or an invasion by hackers,” she said.

It was Dale who first sensed the dawning of this new age from his vantage point as network manager for the Minnesota State University System. He conceptualized for Yvonne what it could mean for the future, and began talking about buying a line to the Internet and selling access to others. Describing himself as a “Johnny Appleseed,” he now quietly works part-time in customer service and leaves it to Yvonne, with her entrepreneurial genes and PhD. in marketing and child psychology, to lead another generation of commoners into an electronic world without borders.

“Dale came to me in 1993, knowing I’d be done soon with my PhD., and said the National Science Foundation planned to privatize the Internet. Until then, the Internet was exclusively for the use of government and educational institutions,” Yvonne said. “He thought it would be ideal if we could get kids in schools and business people in small towns hooked up. Dale had been on the ‘net for years. He had the technical expertise and I knew how to run a business from watching my dad and from taking all those management classes,” Yvonne said. “I grew up in several different places because my dad was an entrepreneur, in a true sense of the word. He’d start a business, get it off the ground, then sell it and move on,” she said.

Yvonne graduated from Mankato State University in 1982, then devoted four years to having two children and acquiring a master’s degree. She taught beginning business and marketing classes at MSU from 1986 to 1988, but was told she needed a doctorate to continue. She applied at the University of Minnesota’s Carlson School of Management, along with 100 others, and was one of three doctoral candidates accepted. It took eight years of spending three days in Minneapolis and four days at home to obtain the PhD. Internet Connections was born while she was still finishing her doctoral thesis.

While Dale worked on the technology, Yvonne became a “missionary” for the Internet in the summer of 1993, offering herself as a speaker to any group willing to listen. “I explained what the Internet was and when I could, I’d demonstrate. My psychology background helped me in thinking about it from their angle, tailoring it to them,” she said. If her audience was a group of nonprofit volunteers, she downloaded information about government grants. If she was speaking to Rotarians or Kiwanians, she showed them how the Internet could be searched for recent legislation affecting business. “Then I’d demonstrate e-mail by sending myself messages. You could see the lights going on. Most of the people in town who are considered experts now probably were at one of the talks I gave.”

When the Karstens volunteered to bring the Internet to students and staff at Kennedy Elementary School, that also helped spread the gospel. “We wanted desperately to show people how valuable this could be, so we donated our time to build a local area network at the school,” Yvonne said. Kennedy students, who still used textbooks listing East and West Germany as separate countries, suddenly enjoyed instant access to the most current information. “There are tremendous educational resources on the ‘net,” Yvonne said. “Some teachers said ‘don’t put a computer in my room, I won’t use it,’ but by the end of the school year, they were saying ‘when do I get my computer?'”

The Kennedy project also replaced mountains of paper with electronic memos. “I saw how much paper was being used there when I was president of the Parent Teacher Organization. They were doing thousands of copies a month,” Yvonne said, adding that “Kennedy soon dropped from the school system’s No. 1 paper-user to less than No. 3.”

Parents and teachers at other schools, envious of what they saw happening at Kennedy, began clamoring for the new technology. Now all of Mankato’s schools are wired and students are communicating with their peers abroad, even doing science and art projects together.

The Kennedy experiment, Yvonne’s sermons to an endless list of organizations and a cadre of enthusiastic new subscribers all widened the circle of interest in what Internet Connections had to offer. From July to December of 1993, 94 customers signed up, although most were experienced computer users. “The word spread pretty quickly among the hackers that the Karstens had started this,” she said. In the summer of 1995, Internet Connections offered hookups in New Ulm and Owatonna and by December, there were 600 subscribers. Another 800 joined in 1996 as the service became available in Waseca and LeSueur. In 1997, Internet Connections added St. Peter, Gaylord and New Sweden and topped 2,500 by the time 1998 arrived. “As we go into each town, the potential market grows,” Yvonne said.

Internet Connections subscribers get more than just a reliable link to the outside world. The company’s programmers have developed a number of software products for customers. One is “E-Web,” which allows people to update their web sites using e-mail rather than stumbling through a complicated programming language. “This makes it easy for customers to change their tip of the day or their sales specials,” Yvonne said. Another is “E-Fax.” When Internet shoppers order a product from a subscriber’s web site, the order activates a fax which arrives at the subscriber’s office.

This kind of productivity flows more freely in a creative work environment, according to Yvonne. “We play and laugh a lot at work. We brainstorm, we go off on creative tangents.” To lessen stress and spur creativity, she keeps the office stocked with stuffed animals and other toys. “I picked up a Slinky when I was trying to think of an idea for a customer’s web page, and it occurred to me to lay it out as a spiral, putting the links in the curves, and it was a great idea. That happens all the time,” she said. “I love coming to work. I have a staff I genuinely enjoy. I want them to be happy here, excited when they’re coming to work in the morning.”

New kinds of jobs need new kinds of descriptive titles, so Yvonne coined “Web Weavers” for the four full-time employees who create web sites. “It’s fun seeing them be creative, watching them do it.” She believes the company has the “best techs in the world for customer support. We don’t hire them based on their computer skills, although they have to be proficient with a computer and good diagnosticians. But we don’t hire based on that. They must be good, friendly people with a genuine interest in helping others.”

Customer support personnel are available 12 hours a day, six days a week, to help if subscribers experience difficulty connecting to the Internet or accessing a web site. “They’re really the heart of what most people know about Internet Connections. They are a large part of why we have such a good reputation,” Yvonne said. 80% of the company’s new sign-ups are credited to word-of-mouth advertising (Dale says he overhears conversations in stores about Internet Connections). “We treat our existing customers as our best marketing dollars,” Yvonne said.

Innovative technology helps the staff guard Internet Connections’ reputation for reliability, according to Yvonne. “We have a network management system, a computer that checks all our dedicated connections to large users, all our links to other towns, every two seconds,” she said. A computer screen populated by green, happy-faced icons means all is well. If a line goes down, perhaps severed by a construction crew or rendered useless by a power outage, the affected icon’s face turns red and begins beeping. If it’s after hours, the system automatically pages their chief engineer. “We try really hard to be proactive. We have systems in place, plans in place to solve problems,” she said. “We plan for bad things to happen. We have backups, reserves, alternate routes, emergency plans. We have lots of experience and make our best effort to be ready for anything. This makes us more reliable.”

A computer also continually monitors Internet traffic, so the company knows how many modems are being used, how much line capacity is being consumed, around the clock. “As soon as we get near capacity, we install more lines. You have to have a pipe big enough to handle your biggest volume,” she said. The system is busiest between 8 and 10 p.m., but tapers off to virtually no traffic in the wee hours of the morning.

Internet Connections also created a tracking system which “maintains a history of every single call a person makes to us and every response we’ve made back. We can look at this history and diagnose underlying issues if people are having frequent problems,” Yvonne said. The system also prioritizes incoming calls “to make sure people are served in order and by priority. If you can’t get connected, that’s a high priority. It could be a flag that something’s wrong in our system. If you can’t get to a particular web site, that’s a low priority, but our support staff works through the calls toward you.” When technicians suggest a solution for a customer’s problem, they make a follow-up call to see how it worked, according to Karsten.

All this – the network management, system, constant monitoring of capacity, tracking service calls – cement subscribers into a loyal base that invites steady growth. “We have a list of towns where people have asked us to come in. We have petitions from some towns,” Yvonne said. But expansion is expensive and like most new companies, Internet Connections may be a bit undercapitalized, financed by the Karstens’ savings and a few small investors. “The biggest problem (with growth) is cash,” Yvonne said.

The most significant variable in taking on a new town is how much the telephone company will charge for the lines, according to Dale. He estimates it costs $20,000 to $80,000 for the lines and basic equipment to serve a community. “That’s not huge dollars, but we’ll probably have to take in more investors to keep growing at this pace,” Yvonne said.

Historically, this kind of pressure leads to mergers and acquisitions. Will today’s newly sprouting Internet providers be merging tomorrow, following the lead of telephone companies and electric utilities until local entities are rare?

“I think there will be a lot of consolidation among providers,” Yvonne said. “But I don’t believe that we’ll end up with only half a dozen across the country because, when you do it right, it’s an inherently local business.”