At the end of 1997, Klay was already out of the military and had moved to Mobile, Alabama to do computer work for a start-up company. Back in Hawaii, John and Dan met for the first time at the auto hobby shop at Barber's Point. After many hours of toiling on Dan's 1972 Econoline van and John's 1970 Plymouth Satellite, the two became fast friends. Dan completed his enlistment in November of 1998, and by February of 1999, was working as a Java programmer and information security consultant for Caterpillar, Inc.

John would be the last of the three to leave the military, and in thinking about his post-Naval plans, decided with Dan over many phone conversations and online chat sessions to start a business. The details about what they would actually do were left for later discussion. John out-processed from the military in November of 1999, while Dan was filling out an online form to create a corporation called AO Industries that was allowed to perform "any lawful business activity". As John and Dan explain it, there was a clear logic in how they named the company. A and O are the initial letters of their online handles Atorax and Orion. John, or Atorax, also pointed out that AO Industries is just vague enough that it would probably fit any type of business they might want to perform, as well as having the added benefit of appearing near the top in alphabetical listings. Thus was AO Industries conceived. Next, like any productive business entity, it needed a purpose.