Jason Scott is one of the people on the Internet who I most admire. The man behind textfiles.com, he has done amazing work archiving the history of computing through a series of documentaries like Get Lamp and the BBS Documentary.
Jason tells us that this isn’t going to be one of his funny talks.
He tells about Popular Electronics cover which introduced the Altair 8800 to the public, one of the very first personal computers. Contemporary home computer systems couldn’t calculate; they just allowed you to type on the screen. So the Altair was a revelation. But there were problems. MITS was charging under $400, but the CPU itself just cost around $400. MITS was hoping to sell substandard parts. It also didn’t exist- MITS was hoping that people would send in orders, and they would use that money to actually build the computer. MITS got 2,000 orders from that article when they were looking for 200 orders. Jason says this basically started the modern computer industry. Most notably, the Altair came with the “Altair 4k BASIC,” software by the Microsoft Company, founded by Bill Gates and Paul Allen.
What’s the morality of this? Jason calls this a gamble rather than a fraud.
Jason points us at the nature of computer advertising at the time: Radio Shack computer ads compared to an ad for the Omnisonix Honeybox 3d sound system. Are these fraud? What about ads which implicitly promise that you will get laid? He also directs us to the advertising used by Atari for games like Video Checkers. Is it fraud to paint a beautiful image and then provide you with 14 pixels worth of joy? Is a video checkers game really “19 video games?”
World Power Systems on the other hand, was an actual fraudulent company which advertised in magazines to collect money in sales and scam investors. What took them down? One of their advertisements showed an actual circuitboard; subscribing geeks noticed that the layout didn’t make sense. Norman Henry Hunt, who ran the scam, had set up World Power Systems right after getting out of jail. Later, in the 90s, he ran a tax fraud scam from within prison until caught.
There have always been scammers in the computer industry. And because we’re used to seeing huge claims in advertising, it’s difficult for us to
How to be a scammer: move to a new town, make friends, be friendly. Everything and everyone is interesting to you. You go to meetings where you stay afterwards to clean up and make friends. Start investing in things, give people funds, they invest in your projects, and you pay some of it back. Build up deals and there’s a point where the most amount of people have invested the most in me– that’s when you bust out.
To return to Bob Hoquim, we have to revisit the history of FIDONet, a fast, effective technology for sending email. People would connect to BBS hubs to send messages, and the hubs would talk to each other. It might take days to deliver email. but it works. And if you became the hub, “you became the shit.” Bob Hoquim became the hub. He got people to trust him and invest money in him to keep the BBS running. And at one point, he left town. People were not happy. The BBS community shared his face and spread it over the Internet? Did it work? No. In fact, he set up a new FidoNet in Indianapolis and got to see their anger unfold. When Bob Hoquim died many years later, Jason Scott recognized him from the old FidoNet photo and told people to go after the estate– and they did.
The ISP that John Aleshe aka Bob Hoquim set up in Indianapolis took off. Starting an Internet company was something you couldn’t mess up. It became one of Indianapolis’s largest ISPs. When Hoquim died, he had a corvette, a beautiful house, and he had scammed hundreds of people.
How did Hoquim get that way? So Jason called his brother. “I know exactly who you are. You’re the guy with the page,” he said. How do you go from a high school letterman to become a scammer who loses his finger in a wrestle with the cop. Jason’s brother said, “I would like to tell you the story of the good man. I would like to, but I can’t. I can’t tell you what turned him. We were both adopted, raised by loving parents in a Catholic high school in Nevada. We had friends, and things were great.” His brother didn’t even know he was married. John Aleshe was smart and into computers as a teenager. But he didn’t want to work hard; he wanted to snap his fingers and become rich.
Hoquim died at the age of 41, at 300 pounds. He was living super large. Just before his death, he sold the company for 14 million dollars which was supposed to go to the company, but he wired half of the money to himself. But after he wired the money in, he had a heart attack and died. When the police opened up Hoquim’s shipping container, what did they find? A fully fueled pickup truck loaded with fake IDs.
Jason thinks that we’re not much wiser today. The tech industry still loves inflated promises, and in a world where we can give millions of dollars to a photo publishing company.
One of the audience members mentions that the Altair advertisement looks a lot like Kickstarter. Jason, who loves Kickstarter and has kickstarted some of his film projects, thinks they’re ripe for a scam and that it’s going to be a big one.
During the Q&A session, Jason shares some of his favourite scams. Consider for example, box of rocks. You’re going along the highway and encounter someone with a bunch of VCR boxes in the back of their pickup. They tell you each VCR is worth $300, but that they’ll sell it to you for $50. And you only discover when you get home that they’re boxes with rocks.