The Man Who Discovered Network Effects Isn’t Sorry

ChatGPT warned me against asking legendary engineer Bob Metcalfe about his 1996 prediction that the internet would collapse. This came after I sought the chatbot’s guidance on what questions to ask the man who this week received the ACM Turing Award, the $1 million prize dubbed the Nobel of computing. The AI oracle suggested I stick to quizzing him on his famous accomplishments—inventing Ethernet, starting the 3Com Corporation, codifying the value of networks, and teaching students in Texas about innovation, which he did until he retired last year “to pursue a sixth career.”

But ChatGPT thought it was a terrible idea to bring up Metcalfe’s bold prognostication, just as the network he’d helped pioneer was taking off, that the volume of bits zipping around the internet would cause the mother of all crashes. OpenAI’s black box told me that since Metcalfe’s guess had flopped in a very public manner, I’d be risking the honoree’s pique if I raised it, and from then on he’d be too annoyed to share his best thoughts. The interview would be a disaster.

Oh-kay, I thought. And then I clicked on the Zoom link.

The prizewinner who greeted me looked terrific at 76, hardly changed from the guy I last saw maybe 30 years ago when he was running tech conferences and hosting great parties at his mansion in Boston’s Back Bay. (He spoke to me from his home in Austin, where he had moved for his teaching gig.)

For someone known for his bluster, he seemed genuinely humbled to join the Turing club, though you might say it took them long enough. It was almost 50 years ago to the day that Metcalfe wrote a memo to his bosses at Xerox Palo Alto Research Center proposing a way to connect the lab’s innovative personal computers to its groundbreaking laser printer, and to one another. Inspired by an obscure Hawaiian system called AlohaNet, he figured out a way to dynamically handle high-speed data in a network without having the bits clash or forcing reconfiguration each time a new user showed up. He dubbed it Ethernet. (He developed it with a co-inventor, David Boggs.)

Metcalfe’s idea not only solved the problem at PARC, but wound up scaling into a vital technology for everyone. Over 5 billion people use the internet. Did he have that in mind when he concocted those first networks? “No, although it’d be convenient for me to say so,” he says. “PARC was a very much ‘build your own tools’ kind of place. But in retrospect, what we were doing was helping the internet transition from the networking of dumb terminals to the networking of personal computers.”

In 1979, Metcalfe founded 3Com to help commercialize Ethernet, after he’d persuaded Xerox to make the networking technology an open standard. Throughout the 1980s he relentlessly promoted the standard; by then he’d made a brilliant observation that explained the growth of not just the internet, but also the many services built on top of it: that the value of a network is proportional to the square of the number of users. In other words, each time a new user joins a network it grows more powerful.

In 1985, the economist George Gilder named the idea Metcalfe’s law. It’s probably the most celebrated equation of its kind since Gordon Moore’s observation about computer chips. Metcalfe says his motivation was not science but commerce. “It was a sales tool,” he says. “People were building small networks and not finding them useful. So I ginned up a slide on an Alto that showed that the cost of a network goes up linearly with the number of nodes, but the number of possible connections goes up as the square. Our salesforce took this 35-millimeter slide and told people the reason they weren’t useful is that they weren’t big enough. The remedy, of course, was buying more of our networks.”