|
|
|
|
 |
BusinessWeek: September 27, 1999 |
|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
The Auto Beat
Byte of the Apple
Europe Insight
Eye on Asia
Getting In
Investing Insights
The New Entrepreneur
NEXT: Innovation Tools & Trends
On Media
Technology at Work
The Tech Beat
Traveler's Check
TECHNOLOGY
Product Reviews
Tech Stats
Hands On
AUTOS
Home Page
Auto Reviews
Car Care & Safety
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip FINANCE Investing: Europe Annual Reports Bloomberg BW50 SCOREBOARDS Hot Growth Companies: 2008 Mutual Funds Info Tech 100 B-SCHOOLS Undergrad Programs Rankings & Profiles |
|
Cover Story -- e.biz -- The e.biz 25
The e.biz 25: Masters of the Web Universe The Internet pioneers of the inaugural BUSINESS WEEK e.biz 25 are changing the competitive landscape of almost every industry in the world Thus, we offer up BUSINESS WEEK's inaugural e.biz 25. It's our celebration of the innovators and influencers who are doing the most to spark a transformation of society that is every bit as profound as the Industrial Revolution. This is the PC biz times 1,000. That's because these 25 larger-than-life characters, and thousands more who are aspiring to be just like them, are determined to overthrow the old world order. Forget paper, fax, phones, and all those rabid sales people. The Internet way calls for direct contact between buyer and seller, collapsing space and time while cutting costs. "The Internet is not only creating a new industry in itself but changing the competitive landscape of every industry in the world," says Benjamin M. Rosen, the chairman of Compaq Computer Corp. So who made BUSINESS WEEK's e.biz elite? Some of our picks are already bona fide captains of industry--like Yahoo! Chief Executive Timothy Koogle, financier Masayoshi Son of Softbank Corp., and e-commerce king Jeffrey P. Bezos of Amazon.com Inc. Others are as-yet unproven Netrepreneurs who made the list because of the radical trails that they're blazing--like Webvan Group Inc.'s Louis H. Borders, of Borders bookstore fame, who is turning his mathematical prowess on a huge Web conundrum: How to deliver perishable foods to cybershoppers everywhere. DAREDEVILS. And then there are the best-kept secrets: Goldman Sachs & Co. tech IPO quarterback Lawton W. Fitt, for example, who laid the groundwork for the launch of 22 highfliers this year. Ever heard of Glen T. Meakem? You will. The founder of FreeMarkets Inc. is challenging fixed pricing by making it possible for all manner of businesses--even coal mines--to use the Web for their auctions of products and services. It was no cinch to pick the 25 ultimate Netheads. We brainstormed and amassed a master list of more than 100 names. Then, over the course of three weeks and with much, er, spirited debate, the best of those rose to the top as the standouts we believe are most profoundly influencing the Internet today. They're the empire builders, the innovators, the bankrollers, the architects, the visionaries, and the pacesetters--daredevils who gladly risk all and leap the chasm between what they know and what they believe. Here's a sign of how much things have changed. The daredevil of the PC generation is not on our list: William H. Gates III. It wasn't so long ago that the honcho of Microsoft Corp. seemed to have the computer industry in a brainlock. But now we're seeing the wholesale redistribution of leadership in the technology industry. Like the Web itself, the Internet industry has no center of gravity. It's creative chaos incarnate. Now, someone at Noname.com is just as likely to create the next great business as is someone at Microsoft. "The beauty of the Web is that it's open to everybody," says Scott G. McNealy, CEO of Sun Microsystems Inc. Everybody gets to stand on the shoulders of everybody else's work. That's why everything's accelerating." Eventually, things will slow down. Power will coalesce, too. But don't expect the Internet to mimic the PC industry, with only a duo of dominant players. That's because the Net's technology underpinnings are not owned by one company--the way Microsoft owns Windows on PCs. Ron Chernow, author of Titan: The Life of John D. Rockefeller, Sr., doubts that anybody will be able to control the Internet the way Rockefeller controlled oil. "It's a very greasy pole," he says. "It's very difficult to maintain a dominant hold because of the speed of change and the competition that can emerge from unexpected areas." The members of our e.biz 25 don't take their successes for granted. Even Bezos doesn't rule out the possibility that his seemingly unbeatable company might end up being just a "footnote" in e-commerce history. Or not. The fact that he's so watchful could assure that he will make our list for years to come. Return to top | |
|
|
|
  Return to top Jeffrey P. Bezos A lot of kids in the 1960s wanted to be astronauts, but few as ardently as Jeffrey P. Bezos. A paper he wrote for a NASA student program, "The Effect of Zero Gravity on the Aging Rate of the Common Housefly," won him a trip to the Marshall Space Flight Center in Huntsville, Ala. And in his high school valedictory speech, he called for colonizing space to ensure humanity's future. Bezos, now 35, never realized those high-flying dreams. But as the founder and chief executive of online superstore Amazon.com Inc., he's on a rocket ride of his own--one certain to transform everyday life far more than Alan Shepard's first flight in space. More than anyone else, Bezos made the Internet safe for shopping. With more than 10 million customers expected to buy about $1.4 billion of books, CDs, toys, and more this year at Amazon, Bezos is poised to define the future of consumer commerce. Says Paul Saffo, futurist at the Menlo Park (Calif.) think tank Institute for the Future: "He's the Richard Sears or the F.W. Woolworth of his age." Actually, Bezos aims to build an online empire much broader than any earthly enterprise. With a brand already recognized by 118 million U.S. adults, Bezos wants Amazon.com to be the place for consumers to find almost anything they want--whether Amazon itself sells the products or simply takes a cut from other merchants selling on its Web site. If he's successful, the conventional description of Amazon as the Wal-Mart of the Web will prove too limited. Says Bezos: "We want to build something the world has never seen." His secret so far? When Bezos started Amazon in his suburban Seattle garage in 1994, he quickly realized the buyer is king on the Web--and set out to build the most customer-centered store anywhere. Rejecting the notion that Web surfers are fickle, he views customers as his most enduring asset--the one thing that makes Amazon's stock worth $22 billion. "The Internet is this big, huge hurricane," he says. "The only constant in that storm is the customers." More than any rival before or since, Bezos has focused everything at Amazon's Web site on making it easy for visitors to find what they want, discover what they didn't know they wanted, and buy it fast--with just one mouse click. He was among the first to encourage visitor participation, even running negative book reviews. And he pioneered new technologies, such as collaborative filtering, which suggests products each individual buyer might like. The result: Nearly 70% of Amazon's sales are from repeat customers. INFORMATION EMPIRE. Before Amazon, Bezos showed little sign of becoming a titan of business--besides scary smarts, unbounded energy, and the world's loudest laugh. As a senior vice-president at New York investment bank D.E. Shaw & Co., the Princeton University electrical-engineering and computer-science grad was a quick study--always jumping into new businesses. He's still pushing into new frontiers. Putting off profits to get big fast, he's outfitting warehouses to offer better selection and faster service than rivals. Adding auctions last March, he moved Amazon into the huge market for commerce between individuals. And with a raft of tech acquisitions in the past year, he aims to help consumers find anything, whether at Amazon or other sites. His strategy: to gather so much data on customers that he can target each one with unique, irresistible offers. By building an "information empire," says Forrester Research Inc. analyst Evie Black Dykema, "they're absolutely surrounding the customer." Bezos' boundless ambition could prove risky. "You can get too big to reach the outer limits of your empire," says Kenneth Orton, chief strategist for e-Business at San Francisco consultant Cognitiative Inc. "Rome did." But rivals hold out no such hopes. Sighs Darryl Peck, CEO of computer retailer Cyberian Outpost: "Amazon is probably a threat to anything they decide to get into." If Bezos gets his way, Amazon will end up being in just about everything. Return to top RESUME Jeffrey P. Bezos AMAZON.COM INC. Position: CEO Contribution: Showed the world how to deliver "anal-retentive" customer service on an e-commerce Web site. Ambition: To create the online place where people can find anything they want to buy--not just books and music CDs. Return to top Stephen M. Case Stephen M. Case is to the Internet what rca's David Sarnoff was to television. More than any other leader in e-business, the 41-year-old chairman of America Online Inc. is responsible for bringing the Internet revolution to the masses. By making online access convenient and entertaining, AOL has attracted 20 million subscribers, making it by far the world's largest Internet access provider. For Case, this is just the beginning. With this potent new medium, he wants to transform the lives of tens of millions of people worldwide--and build a vast cyber empire in the process. Case predicts people everywhere will use their online connections daily to communicate, work, shop, and entertain themselves. "Instead of viewing the PC as a productivity machine, we've turned it into a communication device," says Case. "It's about...building a sense of community and engaging people." His goal, which he dubs the AOL Anywhere strategy, is to make sure that no matter what device or type of service consumers may favor, AOL will remain a trusted, easy-to-use gateway to the Web. The company is working to provide service on the popular handheld Palm computer. It also has teamed up with satellite broadcaster DirecTV to bring AOL to television--still the most popular appliance in the house. Long-term, Case expects his biggest rivals will be goliaths Microsoft Corp. and AT&T. But by blanketing the landscape--to extend people's everyday lives online--Case thinks AOL could vie with them in the 21st century. "We have a shot at being the most valued and respected company in the world if we play it right," he says. So far, he's playing it impeccably. Return to top RESUME Stephen M. Case AMERICA ONLINE INC. Position: Chairman and CEO Contribution: Attracted 20 million customers by making logging onto the Internet easy and fun. Everybody else is playing catch-up. Ambition: To make AOL the gateway to e-commerce and one of the world's most valuable companies. Return to top Timothy A. Koogle Timothy A. Koogle never quite took to the trappings bestowed on senior executives in Corporate America. Even after nine years in various top jobs at Motorola Inc., which entitled Koogle to a swank marble-floored office in a sky-high tower, he felt out of place. "I never could stand it," says the 48-year-old Virginia native. No surprise, then, that Koogle traded in his buttoned-down surroundings for the stripped-down world of Yahoo! Inc. in Silicon Valley. But what was stunning was how thoroughly Koogle transformed not just Yahoo but the world of consumer Web sites. Koogle's Yahoo pioneered the concept of the Web "portal," the notion that businesses could create powerful gateways to the Net for millions of people--much like the influence of the early TV networks. Today, Yahoo's vast network, which includes everything from e-mail to news to auctions, attracts some 80 million people worldwide every month. Its market value is $42 billion, more than CBS Inc. Now everybody's trying to out-Yahoo Yahoo. They'll have to hurry. Koogle is upping the ante by pushing hard on e-commerce. He's figuring out ways to drive transactions by hosting stores on Yahoo's site, and targeting likely buyers via e-mail. And he's adding snazzy video. This is all part of Koogle's ultimate dream: "A goal is to be the largest media company in the world," says Koogle. But even then his office is unlikely to ever have marble floors. Return to top RESUME Timothy A. Koogle YAHOO! INC. Position: Chairman and CEO Contribution: Transformed a directory of cool Web sites into an Internet portal, including everything from weather reports to shopping to games. Ambition: To create one of the world's largest media companies. Return to top Louis H. Borders Louis H. Borders may be the newest--and perhaps unlikeliest--member of the Internet brat pack. After all, the 51-year-old entrepreneur is known as the man behind bookseller Borders Group Inc., the second-largest bookstore chain in the U.S. What does he know about doing business in cyberspace? Turns out he's got an idea compelling enough to lure more than $120 million from hallmark investors such as CBS, Yahoo!, LVMH, Softbank, and venerable venture-capital firms Sequoia Capital and Benchmark Capital. And soon public investors will be able to get a piece of the action when Borders' latest venture, Webvan Group Inc., launches an initial public offering. They will all be banking on the same thing: That Webvan is going to be one of the biggest ideas to hit the Net. It's not just that Webvan, which delivers groceries ordered from its Web site to customers' homes, is going after a piece of the $720 billion grocery market. Or that the Foster City (Calif.) company hopes to offer nearly double the selection of products of a typical grocery store--at comparable prices. It's more because Borders looks to have invented a novel way to make a buck on an industry that has, so far, largely stumped the online crowd. In 1998, fewer than 1% of all groceries were sold online, according to Forrester Research Inc. That's despite formidable efforts from the likes of Peapod Inc. and HomeGrocer.com Inc. But those upstarts haven't taken the tack that Louis Borders has. The mathematics wizard--he has a math degree from the University of Michigan and did graduate work in the subject at Massachusetts Institute of Technology--has used his analytical knowhow to reinvent much of the back end of the grocery business. Spending many a night with his old math textbooks over the last two years, Borders has devised more efficient ways to assemble customer orders, store them while in transit, and deliver them to homes within the 30-minute window customers select. "Intuitively, I knew I'd have a great financial model if I could eliminate store costs," Borders said in a May interview before entering the quiet period required by the company's planned IPO. That's not all that has been eliminated. Borders also got rid of the need for most stock clerks and multiple warehouses. In their place will be giant distribution centers that Borders designed to service major metropolitan areas around the globe. Borders maintains that each of its facilities, which at peak will be run by some 700 employees, can handle the equivalent of 25 traditional grocery stores. "Louis is a genius at applying technology to business," says Benchmark partner David Beirne, who also serves on Webvan's board. The first facility, a 330,000-square-foot center in Oakland, Calif., that opened in June, includes 4 1/2 miles of conveyor belts as well as temperature-sensitive rooms to house items such as wine, cigars, and fish. The idea is to make it possible for workers to assemble customer orders quickly. Instead of traipsing down numerous aisles to find specific items, selected products are brought to workers on the belts or on rotating carousels. Borders actually mocked up various scenarios of his scheme in a warehouse before deciding on the optimal number of items to put on carousels and how far apart they should be to minimize the amount of walking a worker would have to do. The result, says Webvan, is a one-of-a-kind system that allows so-called pickers to compile an average 25-item order--out of an eventual 50,000 available products--in less than an hour. The expected result of all this increased efficiency and logistics magic: an increase of more than 10 percentage points in the grocery industry's traditionally low 6% operating margins. Borders says his Web dream has a sort of "back to the future" quality. His company is harkening to such warm and fuzzy traditions as the milkman, providing reliable, personal service to customers' homes. At the same time, Webvan uses high-tech innovations to offer more than yesterday's home delivery businesses ever could. Down the road, he hopes Webvan will expand beyond groceries and provide door-to-door service for such routine chores as dry cleaning and film development. "Webvan is giving customers back some of their time so that they can relax and hang out at home like Ozzie and Harriet," Borders says. Although Webvan is still unproven, supporters say if anyone can pull off its ambitious plan, it's Borders. An intense, soft-spoken man, he brings a wealth of experience from his days with the bookstore chain. Back then he devised an inventory tracking system that is now widely used throughout the book industry. And friends say his knack for business and sheer brainpower make up for his uneasiness amid the often wacky Internet crowd. A few billion in market value won't hurt, either. Return to top RESUME Louis H. Borders WEBVAN GROUP INC. Position: Founder and CEO Contribution: Making home delivery of perishable goods possible at grocery store prices. Ambition: To fulfill virtually every local delivery need--from groceries to dry cleaning to video rentals Return to top Jay S. Walker For a glimpse inside Jay S. Walker's universe, walk into his Stamford (Conn.) office. It looks like a rich man's playpen: On the wall are Nixon's letter of resignation to Henry Kissinger and four flags that went to the moon, along with man-size models of Star Wars' Yoda and Boba Fett characters. Diapers, detergent, and tins of tuna crowd the shelves--pointing to a future foray for priceline.com, the Web site that sells air tickets, cars, hotel rooms, and loans. What else does a billionaire want? Escape from earth, of course. "Space is one of the great frontiers," says Walker, 43, echoing Star Trek actor and now priceline.com spokesman William Shatner. "I'd love to go on a shuttle to the moon." For the right price, maybe he will. Since priceline.com made its debut 17 months ago, Walker's name-your-own-price system has turned commercial logic on its head. It proves that, for the right savings, people will buy something without knowing the brand or, in the case of airline tickets, without knowing when their flight takes off. In Walker's world, the buyer writes the price tag. There's a competing group of sellers, whose prices are matched against it by priceline.com. ME-TOO SITES. At first, there weren't enough matchups--so priceline.com sometimes discounted prices below costs to make deals happen. But ultimately, Walker persuaded more than 2 million people to sign up for goods over the Web. In the process, he's forcing traditional businesses to rethink their pricing model and spawning imitators, including buyingedge.com and NexTag.com. Now, Walker is extending the approach to fresh fields. Although he won't disclose the next items up for bid--simply smiling at the household products perched on his shelves--Walker sees no end to his potential offerings. "Even in lifesaving medicines, people will be flexible to save money," he says. How far he can stretch the concept is unclear, but priceline.com is off to a rousing start. In one year of business, revenues shot to $111.6 million in the quarter ended June 30, up from $49.4 million for the previous three months. That still meant an operating loss of $16.2 million, but the losses have shrunk from $17.6 million and $73.9 million in the prior two quarters, and analysts see profits by the middle of next year. Walker's winning ways look sustainable: He has received two patents at priceline.com and has applications in on 20 more. "This is a truly unique platform that can be transferred across product lines," says analyst Ryan B. Alexander of Wit Capital Corp. Walker wants to repeat his formula in dozens of markets. "What many people who are affluent fail to appreciate is that most of the world is on a budget," says Walker. And where does this bargain-hunting billionaire expect his business to go? Straight to the moon. Return to top RESUME Jay S. Walker PRICELINE.COM Position: Founder and vice-chairman Contribution: Shook up the world of online sales by letting consumers name the price they'll pay for airplane tickets, hotel rooms, and cars. Ambition: Extend the priceline.com approach to a universe of consumer products. Return to top Margaret C. Whitman EBay Inc. founder Pierre Omidyar was the genius who thought of putting auctions online. But it took the management savvy of CEO Margaret C. Whitman to turn his quirky idea into an Internet giant capable of handling millions of buyers and sellers--not to mention ferocious competition from the likes of Amazon.com Inc. In just 16 months, eBay has grown from 750,000 customers to 5.6 million. More than that, Whitman has helped legitimize the notion of negotiated pricing--making it one of the most powerful economic forces on the Internet. The concept is being applied by others to every kind of selling, from airplane tickets to industrial gear. Now, Whitman is busy adding big-ticket items such as antique cars to eBay's more traditional fare of Beanie Babies and bric-a-brac. She just launched international auctions in Britain and Germany--and expects to enter five other countries by early next year. Next, she plans on setting up regional auctions in 50 U.S. metropolitan areas so people can sell large items that can't easily be mailed. Through it all, Whitman vows to never lose site of the fans that made eBay a monster hit. "One of the things I'm most focused on is managing something that's growing from a small town to a larger community," says Whitman. One initiative: Voice of the Customer Day. Each month, eBay brings 10 to 20 customers into its offices, some of whom spend 5 to 10 hours a day on eBay. New employees meet them. And so does Whitman. Now if she can just get the masses to be such eBay fanatics, the company could start to look like eWorld. Return to top RESUME Margaret C. Whitman EBAY INC. Position: President and CEO Contribution: She put eBay--and Web auctions--on the map by piloting eBay's successful IPO last September. It has racked up a whopping 5.6 million users. Ambitions: To make eBay an international phenom where all sorts of things are auctioned--including big-ticket items such as collectible autos. Return to top Glen Meakem Glen Meakem may look as buttoned-down as a Young Republican, but don't let his carefully combed coif and pressed khakis fool you. This guy lives close to the edge. Consider that Meakem, a U.S. Army Reserve engineer, asked to be sent to the Persian Gulf war: Saddam Hussein's 1990 invasion of Kuwait "kind of pissed me off," he growls. Risk turns Meakem on. That's why he left a solid job at GE Information Services in 1995 to start his own company, FreeMarkets Inc. in Pittsburgh. It's a Web-based exchange that allows businesses, ranging from utilities to farm equipment makers, to post a list of products they want to buy, while suppliers compete for the business. If Meakem's concept takes root, it could revolutionize business-to-business commerce. "They're using the Internet to threaten traditional pricing," says John J. Sviokla, a Net strategist at Diamond Technology Partners Inc. in Chicago. "That's a big deal." Meakem's selling proposition is alluring. FreeMarkets will raise the quality of the products and services you buy, while lowering the price you pay for them by 15% to 20%. Customers are starting to go for the pitch. Last year, FreeMarkets ran auctions covering $1 billion worth of purchase orders and generating $7.8 million in revenues for itself. "The reason we save money is that we're creating competition where there wasn't any before," says Meakem. "We mint our buyers money." Now there's a risky proposition. Return to top RESUME Glen Meakem FREEMARKETS INC. Position: Co-founder and CEO Contribution: Revolutionizing business-to-business commerce by creating Web auctions for industries as diverse as coal mining and auto manufacturing. Ambition: To break down barriers to entry and build frictionless markets. Return to top James H. Clark When James Clark's new $30 million high-tech sailboat, Hyperion, was formally handed over to him at a Netherlands shipyard in January, the co-founder of Internet pioneer Netscape Communications Corp. envisioned a leisurely life on what he called a "luxury floating RV." Well, you can stuff that dream in a bottle and toss it out to sea. Instead, the serial entrepreneur is spending virtually 100% of his waking hours as CEO of yet another startup, myCFO Inc., a personal money-management service. There's just too much happening on the Internet for Clark to take a vacation. But he has only himself to blame. Five years ago, after leaving the first company he started, 3-D pioneer Silicon Graphics Inc., he and programming whiz Marc Andreessen launched the Net revolution with their Netscape Navigator browser. It was that small, simple program that brought the power of the Net to regular folks. And Clark hasn't stopped there. He turned his attention to developing services that take advantage of the Net. First, he co-founded Healtheon Corp., a high-profile Web-based service for managing health care. And now he is focusing on personal finance, another fat target. "I like to look at big markets and see if I can carve off a thick slice," says Clark, 55, who estimates his net worth at upwards of $1.8 billion. If the Net action doesn't let up, he may never get back to his luxury floating RV. Return to top RESUME James H. Clark MYCFO INC. Position: Founder and CEO Contribution: Arguably the father of the commercial Internet. Started Silicon Graphics, Netscape, Healtheon, and myCFO. Ambition: To keep launching companies that satisfy his intellectual curiosity or solve a problem he knows personally. Return to top Christos M. Cotsakos E*Trade Group Inc. is only the second-largest Web trading company. But you wouldn't know it from the stir whipped up by its hyperactive CEO, Christos M. Cotsakos. His in-your-face, "Boot your broker" ads made online trading seem ultrahip after Cotsakos arrived in 1996. That was the wake-up call that sent traditional Wall Street firms tearing up old business plans and reaching for the Tums. He's not letting up, either: E*Trade recently began offering after-hours trading and lowered prices for active traders. And now, it's spending $150 million on a new round of ads. That's just a hint of Cotsakos' blinding ambition. Now, he plans to build an online financial-services empire to rival anything on the Street. Brokerage offerings formed the first building block--letting consumers buy stocks for as little as $4.95 a trade. He's adding online banking and loans and, through partners, insurance, mortgages, and even the ability to buy IPO stocks. For managing all aspects of individual investors' money, "we'll be the one place you bookmark" on your browser, vows Cotsakos. E*Trade can't depend on day traders to pump up its businesses. That's why Cotsakos, 51, is trying to attract the mass of consumers who can't quite bring themselves to use a mouse to buy stocks. That hurdle is "all about clickophobia," says Cotsakos. "If only we could get people to understand that all the databases of the world won't crash and that your information won't be lost when you send through a trade." To combat such fears, E*Trade has a new series of ads to calm nerves. If he can get the message through, he'll be on his way to building a powerhouse that will have Wall Streeters using Pepto-Bismol as a chaser for those Tums. Return to top RESUME Christos M. Cotsakos E*TRADE GROUP INC. Position: Chairman, CEO Contribution: Made Internet trading hip with outrageous ads and got the attention of Wall Street's giants--forcing them to concoct their own Web schemes. Ambition: To build a financial powerhouse on the Net to match the breadth and influence of mighty Citigroup's brick-and-mortar operations. Return to top Masayoshi Son He's admired, envied, and even feared by some. But there's no denying that Masayoshi Son is single-handedly dragging Japan into the Information Age. Once scorned by the Establishment, Son now regularly gets face time with Prime Minister Keizo Obuchi. And there isn't an executive in Japanese finance, retailing, or high tech who isn't in awe of the clout Son now has over Japan's emerging Internet economy. Small wonder. Since 1995, Son's Softbank Corp. has made perhaps the savviest venture-capital bets of all time by taking equity stakes in what are now the hottest sites on the Web. Think about Yahoo! Inc., GeoCities, E*Trade, or E-Loan. Son owns a piece of all them. He has parlayed startup investments of nearly $2 billion into paper profits now worth $15 billion. And his own net worth tops $2 billion. Had he stopped there, Son might just have been remembered as a shrewd Silicon Valley sugar daddy who struck it rich. But he has no intention of slowing down. In what might be the model for global expansion of e-commerce, Son is binding together his 100-plus confederation of companies into a cyber-conglomerate that will expand into Asia and Europe. At its core is his Softbank, a sprawling empire in Japan and in the U.S. that includes software, retailing, magazines, Web publishing, and computer trade-show properties, with a market cap of $38 billion--exceeding that of Toshiba. His first big target is Japan, which Son figures is "missing out on a dramatic world movement." Son already has set up joint ventures there with Yahoo and E*Trade. His basic strategy is to import U.S. Web sites into Japan, where there is precious little experience in commercializing the Internet. He's also smashing through some barriers that have held Japan back. The irrepressible dealmaker has clinched a deal to create a U.S.-style Nasdaq over-the-counter market next year for high-tech startups that bypasses Japan's restrictive small-cap market. He also plans to offer the service free to Japanese schools for a decade to kick-start interest in the Net and get Japan's personal-computer penetration to U.S. levels. That has endeared him to officialdom. The government is counting on e-commerce and business-to-business transactions to lower Japan's bloated price structure and spur a productivity surge, as they have in the United States. WITH A SHRUG. Yet others worry that a country that has always wanted its own Bill Gates should be careful what it wishes for. Son and his alliance directly or indirectly control 70% of listed Internet companies in Japan. And if Softbank controls 60% of Nasdaq Japan as planned, would Son's friends get preferential treatment? "It will be like having your cake and eating it too," worries Joichi Ito, chairman of competitor portal Infoseek Japan. Others worry that Son is selling out Japan and letting U.S. companies into the most lucrative niches of the Net in Japan. Son shrugs off the criticism. He vows his Nasdaq will treat all comers fairly. And he says his co-ventures with U.S. companies are good for the Japanese consumer. "I keep hearing about Son bringing in the black ships," he says, alluding to U.S. gunboats that forced Japan to open up during the Meiji era. In a way, Son himself is the alien invader--but it's a positive thing. By dint of his drive and vast wealth he's proving something of an inspiration to Japan's home-grown Netrepreneurs. The irony is rich. Son is an ethnic Korean who suffered ridicule and once had to beg for startup financing from Tokyo lenders. Now, this cybermogul may be Japan's best hope to make a necessary and speedy transition into the Internet Era. Return to top RESUME Masayoshi Son SOFTBANK CORP., JAPAN Position: Founder and CEO Contribution: With $2 billion invested, one of the biggest backers of Internet startups worldwide. Ambitions: To pull Japan out of the Web dark ages and dominate e-commerce in Asia. Return to top Robert C. Kagle Robert C. Kagle has come a long way from his days growing up in the Rust Belt burg of Flint, Mich. The oldest child in a single-parent family, Kagle was always looking to make a quick buck. For a time, he pushed an ice cream cart around his neighborhood. He took a job in the spark-plug division of General Motors Corp. He even did a stint at a tuxedo shop just so he would have a tux to wear to his high school prom--complete with top hat and cane. Today, Kagle, 43, can afford to buy a chain of tuxedo stores--and then some. Thanks to his skill at spotting future Internet headliners such as auction pioneer eBay Inc. and online-mortgage upstart E-loan Inc., the partner at venture-capital firm Benchmark Capital has emerged as one of the industry's elite investors. And, with Kagle as its spiritual leader, four-year-old Benchmark has become one of the hottest venture-capital firms in Silicon Valley. eBay was Kagle's first home run. Benchmark's $5 million is now worth some $3.2 billion. And Kagle's personal take: A cool $170 million. Another Kagle winner is business-to-business upstart Ariba Inc., a $4 million investment now worth almost $1 billion. Kagle believes tomorrow's online sensations will have chucked traditional marketing by demographics in favor of targeting individuals based on their up-to-the-minute purchasing habits. "What's more valuable to know: that someone is a 35-to-45-year-old male who drives a Cadillac or that someone recently bought golf clubs and is going on a vacation?" Kagle asks. The answer to that question is obvious. But it's quite another matter to pick companies that can do it. Fortunately for Benchmark, Kagle finds sharp entrepreneurs as readily as an ice cream cart jockey attracts kids on a summer afternoon. Return to top RESUME Robert C. Kagle BENCHMARK CAPITAL Position: General Partner Contribution: Used his consumer marketing expertise to help launch such Internet darlings as eBay, E-Loan, and Ariba. Ambition: To make Benchmark as dominant in venture capital as McKinsey is in management consulting. Return to top Lawton W. Fitt Chief executives tend to get the credit when startups go public and the stock blasts through the ozone layer. But they owe a huge debt to those who work behind the scenes on Wall Street. Nobody deserves more accolades than Lawton W. Fitt, managing director of Goldman, Sachs & Co., who quarterbacks more tech IPOs than anybody else. This year alone, she has greased the skids for more than 22 tech IPOs, including E-Toys and Juniper Networks, raising more than $2.7 billion. That made Goldman the tech-IPO champ. Silicon Valley execs say Fitt keeps a lid on IPO prices, and Fitt, 46, agrees that pricing is her most difficult task. "My job is to find the point of balance between the issuers and investors where everybody feels the price is fair," Fitt says. "I want them to be equally happy or equally unhappy." Right now, in spite of a high-tech IPO slowdown, there are a lot of happy capitalists and not many complaints. Fitt expects the action to pick up again soon--though not with the speculative fury of early this year. "This is not a bubble," she says. "Five years from now, there won't be Internet companies because everybody will be doing business over the Internet." So much the better for Goldman Sachs. Return to top RESUME Lawton W. Fitt GOLDMAN, SACHS & CO. Position: Managing director Contribution: Has quarterbacked dozens of Internet IPOs, including those of Yahoo! and eBay. Ambition: To find the magic price point that satisfies IPO stock issuers and investors equally. Return to top L. John Doerr Venture capitalist L. John Doerr is a one-man Internet hit parade. Netscape, Amazon.com, Healtheon, drugstore.com, @Home, Excite--each received initial funding and early nurturing from Doerr. Sure, the Kleiner Perkins Caufield & Byers partner has had his losers in the past. Remember pen computing? Nevertheless, ever since he took a chance on Netscape Communications Corp., Doerr has wielded the Midas touch. "John Doerr is not only the best venture capitalist in the world, but he is also one of the top business leaders," says Cisco Systems CEO John T. Chambers. Doerr is also a master matchmaker. Who would have thought a bookstore had anything to teach a drugstore? Yet when drugstore.com's fledgling team needed some lessons in online retailing, Doerr arranged to have them mentored by a really big brother in the Kleiner keiretsu--Amazon.com Inc. And when then-@Home, the cable Internet access company, needed content as well as bandwidth, Doerr engineered its merger with Internet portal Excite. Where is Doerr applying his artistry next? His latest ideas whirl around handheld computers. Five years from now, he says, people will tap the Internet far more frequently from palmtop devices than from desktop computers. By investing in Handspring Inc., a startup handheld computer maker, Doerr believes he once again has positioned Kleiner Perkins at the forefront of a revolution. "Much sooner than a PC on every kid's desk, we'll have a handheld in every kid's pocket," he says. If that comes to pass, once again, Doerr will be the man who has beaten the venture-capital pack to the Next Big Thing. Return to top RESUME L. John Doerr KLEINER PERKINS CAUFIELD & BYERS Position: General Partner Contribution: Backed blockbuster Net pioneers like Netscape, Amazon.com, and Excite. Knits startups together with the famed Kleiner keiretsu. Ambition: Leverage the keiretsu to create whole new industries on the Web--including health care. Return to top Bernard Arnault When the French corporate raider Bernard Arnault lost a bitter fight to acquire Gucci early this year, some people wondered whether he had any more tricks up his impeccably tailored sleeve. Indeed he did. Arnault, the chairman of LVMH Moet Hennessy Louis Vuitton, is becoming Europe's largest cyberbusiness bankroller--seeding the Continent for the coming explosion of e-commerce. With a plan to pump more than $500 million into Internet ventures in Europe, Arnault is staking a large claim in a market that seems to be on the verge of taking off. "In the U.S., the Internet developed in several stages--first the technical stage, then the portals, and then e-commerce," says Arnault. "In Europe, this is all going to happen at the same time." If it turns out that way, European entrepreneurs will owe a debt of gratitude to Arnault. He has invested in about 30 startups, including the auction site icollector.com and the online retailer boo.com. He's also backing U.S. startups such as E-Loan Inc. to help them with their European expansions. Arnault, 50, says the Web will never replace the sensory pleasure of shopping in one of his luxury boutiques. Still, he's covering his bets. In October, LVMH's Sephora cosmetics chain is opening an enormous store in New York's Rockefeller Center. The same day, Arnault is launching a Web site for Sephora. With that brand of fancy footwork, Arnault could in short order move from being a leading financier of e-commerce to becoming a leading practitioner of it. Return to top RESUME Bernard Arnault LVMH MOET HENNESSY LOUIS VUITTON Position: Chairman Contribution: Founder of Europ@web, and leading bankroller of European Web ventures-about 30 so far, either European startups or U.S. companies expanding there. Ambition: To invest more than $500 million in e-commerce startups over the next several years in areas such as financial services and retailing. Return to top Mary G. Meeker Poor Mary Meeker. When she started covering technology companies as an analyst at Salomon Brothers Inc. in 1989, it looked as though she had come late to a doozy of a party. The PC revolution was well under way, and it seemed that nothing else would come along during her career that could possibly be its match. Still, she learned the fine art of trend-spotting from some of the sharpest analysts in New York--just in case another technology revolution should happen to come along. Boy, was she ready when it did. Meeker, by then at Morgan Stanley Dean Witter, not only called the Internet early as a mega business opportunity, but, with her insightful commentaries and bold predictions, she helped just about everybody else see it, too. She and a handful of colleagues penned three pieces of standout trend analysis--the Internet Report in 1995, followed by advertising and e-commerce studies in 1996 and 1997--that became virtual bibles for investors and CEOs alike. "She gets it, got it earlier than most, and was able to articulate it to the business community in a way they could understand," says John Chambers, CEO of Cisco Systems Inc. NUTTY MARKET? Meeker is an unlikely seer. Born and raised in rural Indiana, she's plain-spoken and humble. But all that only masks her laser-sharp analytical skills. Her specialty: Making sense out of bedlam. Like the day one of her early discoveries, Netscape Communications Corp., went public in 1995. "I will never forget that," Meeker says. "We were on the trading floor when Netscape was trading at 72. Someone turned to me and said `Isn't this exciting?' and I just looked at him and almost started to cry because now I had to deal with this." The market seemed to have gone nuts. Meeker's challenge was to explain it to Wall Street. She saw that new rules were required for evaluating Net startups. These companies didn't have profits. In some cases, they didn't even ask customers to pay for their goods. What they had, she understood, was millions of customers and brands that had a shot at shining around the world. After Netscape's initial public offering, she helped create a new methodology for estimating companies' value based on how much a Web site visitor or software user might be worth in the future and projecting revenues and profits based on that. Since then, hundreds of Internet companies have gone public--and nobody blinks when their stock prices soar. Meeker isn't all numbers and spreadsheets, though. She learned about the Net industry by talking to hundreds of entrepreneurs on frequent visits to Silicon Valley and San Francisco. She immersed herself in Net culture--hanging out in the Valley with Netscape wunderkind Marc Andreessen. In 1995, she and Andreessen smugly estimated that only 400 people really "got the Net." Meeker was one of them--and proved expert at pulling all that she had gleaned into one big picture. Some of Meeker's early revelations seem quaint or obvious now. But at the time, they were daring. In 1993, she backed America Online Inc., a fledgling service with just 300,000 subscribers that was viewed skeptically by many analysts. But she understood how AOL would gain tremendous power and value as more and more people signed on for news, e-mail, chat--and, ultimately, access to the Web. "She understands the economics of the medium and has an intuitive feel for the people and trends," says AOL Chairman Stephen M. Case, whose service now has more than 20 million customers. The trends Meeker is spotting now could very well become tomorrow's gold standards. She believes there is plenty of room for good companies to build huge businesses that support rich market caps. She has high expectations for business-to-business markets that are revamping traditional commerce. Example: Chemdex, an online marketplace that brings together chemical buyers and sellers. Another hot space could be online music, where companies such as RealNetworks, MP3.com, Amazon.com, and AOL are making deep inroads. Since 1995, Meeker's job has shifted with the Net tides. Now, in addition to analyzing new companies and trends, she increasingly focuses on how established companies such as Yahoo, AOL, and Amazon will adjust and compete with one another. And she even gives counsel to some of the industry's big shots. "She sees how large the opportunity is--and encourages us to think big," says Amazon CEO Jeffrey Bezos. Meeker also has become something of a Cassandra--warning that greed is encouraging investments that won't ever pan out. "I think we have a vicious cycle, where the amount of money lost for a lot of new companies and a lot of old companies trying to get into this space is going to be HUGE--in all caps," she says. That's a scary warning, especially if you consider the forecasting record of the person it's coming from. Return to top RESUME Mary G. Meeker MORGAN STANLEY DEAN WITTER Position: Managing Director Contribution: Kicked off the consumer e-commerce gold rush by predicting huge growth in Internet advertising and consumers' readiness to open their wallets on the Web. Ambitions: To spot the next Netscapes (the way she did the original one) and help investors avoid getting caught in the backdraft when the weaker Internet stocks melt down. Return to top John Hagel III John Maynard Keynes didn't live on Internet time, but if he had, he probably would have been a fan of McKinsey & Co. strategy consultant John Hagel III. Practical, powerful men, Keynes wrote, are usually the unwitting slaves of some defunct intellectual scribbler. Hagel is a scribbler, but these days, because things move so fast, thinkers like him don't have to die before they get the credit due them. Hagel is a fountain of concepts that are being put into practice all over the Web. In 1997, his book Net Gain (co-authored by Arthur G. Armstrong) suggested how noncommercial Web communities could use content, chat, and bulletin boards to promote e-commerce. Hagel's reputation stems from what happened after Net Gain came out: a burst of new sites serving special interests from cooking to golf. "I think he's a combination of someone who can put a name on things that are already happening and an instigator," says Ron Martinez, CEO of Brodia Group, an e-commerce startup. In 1999, Hagel was back with Net Worth (co-author, Marc Singer), arguing that a new way to make money online is to become an "infomediary." An infomediary would gather its customers' profiles and seek out special offers and discounts for them from suppliers on the Net. He says an average consumer could save more than $1,100 a year even after paying commissions on purchases. The infomediary would make the rest of its money selling profiles to marketers, who would cough up because of the advantages of precise targeting. What's next? Net Net. It's about how brick-and-mortar companies try to become infomediaries. Don't rush out to buy it, though. Net Net will be finished "as soon as my wife lets me," says Hagel. Return to top RESUME John Hagel III McKINSEY & CO. Position: Principal Contribution: Wrote two books, Net Worth and Net Gain, that were early in pointing the way to Internet success. Ambition: Publish the much-awaited Net Net, which tells established companies how to harness the Web and avoid being roadkill. Return to top William Joy The technology world's going pretty much according to Bill--but not the Bill you think. While Microsoft Corp.'s William H. Gates III must worry about an antitrust suit and the threat of a post-PC era, the ideas of Bill Joy, Sun Microsystems Inc.'s chief technology officer, couldn't be more in vogue. For 20 years, the bushy-haired Joy, 44, has been the Merlin of the computer industry--peering out 10 years and foreseeing a whole new way of computing. His vision: that computers need to be much simpler to use, and information should be readily available everywhere via the Net on a range of appliances. Now, thanks in good part to Joy's prodding and Sun's Java technology, that vision is becoming reality. Joy's ideas are laying the foundation for making e-business ubiquitous. His latest musings are just as audacious. Joy foresees a world where tiny computers that are embedded in all sorts of devices talk directly to other computers, without need of human intervention. Why, for example, couldn't power plants negotiate with each other to adjust real-time to minimize pollution? "The big emerging trend is finding ways to get computers to reliably work together--and it's much harder to do than people think," says Joy. "It's going to take many years." Joy seems likely to enjoy the long journey. He works with a team of four in Aspen, Colo., close to the ski slopes and far from the daily grind at Sun's Silicon Valley headquarters. To peer into the future, he endlessly scours books on everything from economics to architecture, looking for any hints on how the Net will develop. Lately, he has been studying groupthink in ant colonies. "Bill's often so far outside of the box that he's not aware there is a box," says Java creator James Gosling. Well, why not? It has worked so far. Return to top RESUME William Joy SUN MICROSYSTEMS Position: Co-founder and chief scientist Contribution: Laid the foundation for the Web by putting Internet technology into the Unix operating system in the 1970s. Later molded Sun's hot Internet software, Java. Ambition: Create technology that lets computers talk to each other--leaving humans to do much more interesting things. Return to top Louis V. Gerstner Jr. Years from now, if there is a version of the popular game Trivial Pursuit on the topic of the Internet, one question that would be certain to stump even the most diehard game enthusiasts is: What chief executive officer, criticized for his lack of strategic vision, actually demonstrated more savvy than many of the digerati by jumping on the Internet early and steering his troubled company to a stunning recovery? The answer: IBM Chief Executive Louis V. Gerstner Jr. Dial back to 1995. The computer industry is in the midst of browser wars, talk of 500 television channels, and the notion that content would be king on the Internet. But there is Gerstner, the former McKinsey & Co. consultant who had pushed credit cards and cigarettes for most of his career, delivering a contrarian speech at the annual COMDEX computer industry trade show. His message: The Internet isn't just about browsing and selling to consumers. The killer application, Gerstner argues, will be business-to-business e-commerce. The Internet isn't about personal computers, either, he says. It's about big computer servers capable of handling massive loads. Gerstner receives just a smattering of polite applause. "At that time, it was a pretty lonely position we took," he told Wall Street analysts in May. SWEET SPOT. Today, that position is packed as tightly as a Tokyo subway car at rush hour. And Gerstner's early moves have helped Big Blue stand apart from the crowd. About 25%, or $20 billion, of the company's revenue is driven by e-business. That includes products such as mainframes that serve as the heart of Charles Schwab's online trading business, or e-commerce software that conducts transactions for customers such as Macy's, Victoria's Secret, Lands' End, and CD Warehouse. "You're stupid if you're not looking at IBM," says Bill Bass, vice-president for e-commerce at Lands' End. So where are the Internet opportunities for IBM now? They aren't among the dot.com startups--although IBM is trying to get its share of business there. Instead, Gerstner sees big money in his company's traditional customer base--the thousands of companies that have yet to tap the Internet and transform their businesses. "That's the real revolution," he declares. He's zeroing in on operations such as supply-chain management, customer service, logistics, procurement, and training. As chief of the world's top tech-services company, Gerstner crows: "We're right in the middle of the sweet spot." Lou Gerstner the Internet visionary? Believe it. He was ahead of many in the computer industry--including software mogul William H. Gates III of Microsoft Corp. One of Gerstner's key moves was to shift 25% of the company's research and development budget into projects that fall under the rubric of so-called network centric computing. He also declared that every IBM product--from tiny laptop PCs to mighty mainframes--must have some sort of Web hook. The best part: Other senior executives at the company, worried that they would appear technologically ignorant next to their chairman, started getting wired. And as Gerstner showed, that was no trivial pursuit. Return to top RESUME Louis V. Gerstner Jr. IBM Position: Chairman and CEO Contribution: An early Net believer, he mobilized the computer giant to make Internet technology and services a top priority. Ambition: Have IBM stand for Internet Business Machines. Return to top Pehong Chen If he's lucky and works really hard at it, Pehong Chen has the opportunity to become for electronic commerce what McDonald's Corp.'s Ray Kroc was to hamburgers. Like Kroc, Chen took a concept that had been around for a while and figured out how to make the market explode. E-commerce software sold by his Silicon Valley startup, BroadVision Inc., has the potential of helping cybershops worldwide match McDonald's claims of billions and billions served. Never mind fast food. This is fast software. In the early days of e-commerce, companies typically cobbled together their own technology for selling things online--a process that could take months. BroadVision's software, first released in 1995, allows Web sites to get their virtual cash registers up and running in as little as seven weeks. And, while BroadVision has plenty of competition now, one of its advantages is that its software keeps things simple for shoppers, too. "Our goal is to automate [shopping for] my mother-in-law," says Chen, BroadVision's 41-year-old founder and CEO. He is already automating a ton of Web sites--300 so far, including everything from Home Depot Inc. to Hershey Foods Corp. The past year has been a whopper. The Redwood City (Calif.) company's sales rose 95% in the first half of 1999, to $41.9 million. And things only look to get better now that e-business is really taking off. Forrester Research Inc. says worldwide online sales will reach $3.2 trillion by 2003. "Our biggest challenge is that there are only 24 hours in a day," Chen says. "There's so much business out there it's incredible." Now, that's cooking. Return to top RESUME Pehong Chen Position: Chairman and CEO Contribution: Pioneered off-the-shelf software for transforming Web sites into e-stores. Ambition: To make the online shopping experience so easy that anyone could do it. Return to top David C. Peterschmidt If you wanted an exciting career and had to pick between being an Air Force pilot, working on the original B-1 bomber project, or running a software company, which would it be? For David C. Peterschmidt, 52, who has held all three of these jobs, the answer is easy: software. He's now piloting Inktomi Corp., one of the hottest Internet startups around. The Berkeley (Calif.) fledgling isn't nearly as well known as Yahoo!, America Online, or Excite@Home, but all three online megastars depend on Inktomi's Net speedup or search technologies to power their Web sites. In fact, more than 50 large Web sites rely on Inktomi's products to stay competitive--making it a key technology arms dealer for the Web. Peterschmidt's goals are as grand as they get: He wants Inktomi to provide the technology foundation on the Net, much as Microsoft's Windows operating system is the crucial software for personal computers. The software may reside largely behind the scenes, but "we're supplying a unified operating system for getting information on the Web," says Peterschmidt. "This is about dominance." That strategy is paying off. Inktomi reported revenues of $19.2 million for the quarter ended June 30, up 212% from a year earlier. It's still racking up losses ($6.3 million last quarter), but investors have pushed the company's market value above $5.5 billion. Inktomi recently added Web-shopping software, which could boost sales growth even more. If so, Peterschmidt will drive Inktomi as fast as he does his mint-condition 1967 270 GBT Ferrari. Return to top RESUME David C. Peterschmidt INKTOMI INC. Position: President and CEO Contribution: His search engine makes finding things easier on major Web sites such as AOL and Yahoo! Ambition: Making Inktomi's technology for speeding access to Web information a platform that other companies build upon--like Windows is for the PC. Return to top Kevin J. O'Connor Four years ago, Kevin J. O'Connor helped revolutionize an industry he knew very little about when he started DoubleClick Inc., the first Internet advertising network. To his way of thinking, ignorance was an advantage. Being a tech guy who had already launched a communications software startup, he wasn't stuck in traditional ad-think. Instead, he and co-founder Dwight A. Merriman were able to spot something that the Web--unlike TV, radio, and print--was uniquely suited to do: instantly deliver ads to the right customers at just the right time. O'Connor's creativity didn't stop there--and that's why he stands out as the leading architect for the burgeoning Web advertising business. Instead of starting a company that simply created ads or bought banner ad space for a handful of clients, the 38-year-old entrepreneur focused on bigger game: building a brand new kind of advertising company tailored to the Web. Today, DoubleClick represents a network of 490 Web sites, including AltaVista, and serves as a middleman between them and 3,100 advertising clients, such as General Motors Corp. and Visa International. On top of that, it provides powerful technology used within the network and by other sites to measure ad performance. O'Connor's new ambition is to achieve the Holy Grail of advertising--true one-to-one marketing. He plans to match up the company's huge collection of consumer shopping data with the latest ad-targeting techniques. If O'Connor accomplishes that, advertising might finally live up to its promised potential on the Web. Return to top RESUME Kevin J. O'Connor DOUBLECLICK Position: Co-founder and CEO Contribution: Created the first Internet advertising network. Ambition: To achieve the Holy Grail of advertising: delivering the right ad to the right consumer at the right time. Return to top Ellen M. Hancock In July, 1997, Ellen M. Hancock had a serious self-confidence problem. Despite a 29-year career at IBM, she was pushed out as chief technologist of Apple Computer Inc. by the mercurial Steven P. Jobs. She wondered if she should bother seeking a CEO job given what she describes as a sullied reputation. Her blue period is over. Since joining Exodus Communications Inc. in March, 1998, Hancock, 56, now CEO, has emerged as a driving force behind one of the hottest new trends in cyberspace: Web hosting. With Internet startups and old-guard behemoths alike wanting to get on the Net with a minimum of money and hassle, dozens of companies have sprung up, offering to run their Web operations for them. Hancock offers a sorely needed nuts-and-bolts approach that is convincing customers they can entrust their most vital computing jobs to outsiders via the Web. Next up: She plans on making Internet communications more secure by running them across private networks. "We think we can change the way the Net looks and feels," she says. Clearly, Hancock has the right formula. With a network of 22 data centers around the nation, Exodus, now No. 3 in Web hosting, is catapulting toward the front of the pack. Last year, the company's revenues grew a staggering 308%, to $215 million, and forecasts call for their doubling again this year. While memories of her time at Apple still smart, Hancock is just relieved she didn't finish her career there. Instead, she has forged a critical place for herself in the New Economy. Return to top RESUME Ellen M. Hancock EXODUS COMMUNICATIONS Position: CEO Contribution: Proved that data-centers-for-hire can be trusted to handle corporations' most vital information over the Net. Ambition: Make the Web as reliable and taken for granted as the phone system. Return to top David S. Pottruck Plenty of successful companies are just now getting around to cashing in on the Net. And they're starting from a deep hole. Think Barnes & Noble Inc. It's having to claw frantically to catch up with Web book-selling pioneer Amazon.com Inc. But discount stockbroker Charles Schwab Corp. was no Charlie-come-lately, thanks to the foresight of co-Chief Executive David S. Pottruck. Schwab already stands tall as the biggest broker in cyberspace. Pottruck's track record is proof that by moving aggressively, established companies can transfer their successes quickly from terra firma to cyberspace. As of June 30, Schwab had 2.8 million online accounts, up from 1.8 million a year ago. It has an impressive 25% share of average daily trades, according to U.S. Bancorp Piper Jaffray. Dean P. Eberling, managing director at investment bank Putnam, Lovell, de Guardiola & Thornton Inc., says Pottruck sets an outstanding example for others: "He took an existing business and turned the battleship around." BROAD AMBITIONS. Now Pottruck is teaching a whole new set of lessons--about how companies can thrive by melding the worlds of Net and non-Net. His so-called "clicks and mortar" strategy: To marry Net-based trading and customer service with Schwab's call centers and network of 300 retail branches. Staffers in the branches, for instance, can teach computer novices face-to-face how to navigate Schwab's Web site. "We want to combine the best of the physical world with the best of technology," Pottruck says. A former college wrestler and football player, the 51-year-old Brooklyn (N.Y.) native's ambitions are as broad as his shoulders. While Chairman and co-CEO Charles R. Schwab sets the overall tone and direction of the company, Pottruck oversees day-to-day operations and comes up with strategies of his own. It was Pottruck who turned Schwab's online business from a sideline into the very soul of the company. That was surprising, since he didn't start using a PC himself until 1995. But itching to become more efficient at work, he had a machine put on his desk. In no time, Pottruck was hooked--shooting around e-mail and pulling up spreadsheets like a veteran techie. "The Internet was starting to blossom in 1995, so my timing was good," says Pottruck. Pottruck wisely set up a separate online unit--a startup-style operation with its own building, hiring plans, and power to make decisions fast. Its mandate: develop the technology and marketing needed for a full online push. The unit introduced trading over the Net in April, 1996--beating all of the established Wall Street companies. Later, he folded the online unit into the company after it had accomplished its goals. Now Pottruck is turning up the dial on his clicks-and-mortar strategy. He believes that the vast majority of Schwab customers can digest information independently, but ultimately, many want a human sounding-board for their investment ideas. To help, he's installing PC kiosks in Schwab's branches. That way, customers can check their accounts, make a trade, or get help from a service rep on the spot. Pottruck faces plenty of challenges. Schwab's $29.95 trades are far from the cheapest--Ameritrade Inc. charges just $8 per trade. So he's got to convince customers that his services are worth the premium price. In part because heavy customer traffic on Schwab's Web site occasionally slows down service, he's spending big to beef up computer systems--$324 million, or about 11.8% of revenue last year. "The process of building better technology is just beginning," Pottruck says. And if growth on the Net keeps going, this late-blooming techie is just getting started, too. Return to top RESUME David S. Pottruck CHARLES SCHWAB CORP. Position: President and co-CEO Contribution: By embracing the latest technologies, he transformed a phone-based stock trading service into the No. 1 player on the Web. Ambition: To create a combo of phone, face-to-face, and Web services that leaves the rest of the investment houses in the dust. Return to top John T. Chambers Nobody is more responsible for laying the foundation for e-business than John T. Chambers, CEO of Cisco Systems Inc. For starters, Cisco supplies the technology plumbing that powers the Internet. And just as important, Chambers is the world's most passionate advocate of e-business. From hob-nobbing with President Clinton to jawboning Chinese President Jiang Zemin in Beijing, Chambers is on a whirlwind mission to convince business and government leaders to embrace the Net Economy. "We're living through the second Industrial Revolution," he says. Chambers preaches Net religion like a Billy Graham wannabe. In the past year, he has spent half his time on the road, meeting 30 heads of state and countless executives. His message: the Internet is already worth a staggering $300 billion in the U.S. alone and by 2010, e-commerce will be 25% of the world's GNP, according to a University of Texas report commissioned by Cisco. Chambers laces his vision with dire warnings to laggards. "You can be Amazoned in a moment," he says. The hard sell seems to be working. "Chambers has made himself into the No. 1 communicator of the networked vision," says Eric E. Schmidt, CEO of software maker Novell Inc. What makes Chambers so convincing? He made Cisco into a prime example of how the Internet can speed processes and slash expenses. Some 78% of the company's sales come via the Web. And the company performs every one of its corporate functions using Net systems, including manufacturing, personnel, finance, even customer support. All told, Cisco has saved $1.5 billion in costs over the past three years by aggressively using Net technology. With the kind of lead he has, Chambers can afford all his hob-nobbing away from headquarters. Return to top RESUME John T. Chambers CISCO SYSTEMS Position: CEO Contribution: Leads No. 1 seller of Internet equipment and ceaselessly promotes e-business with corporate and world leaders. Ambition: To grow the Net into the backbone of all communication, changing the way people "work, play, live, and learn." Return to top Michael S. Dell When it comes to exploiting the promise of the Internet, Michael S. Dell is taking the rest of Corporate America to school. Other executives at first scoffed at this geeky new world, but Dell made sure his Dell Computer Corp. had set up shop on the Web by 1995--olden days in Internet time. Now, the company is one of the top merchants in cyberspace, selling $30 million worth of computer gear a day. And, after being e-engineered from top to bottom, Dell may be the only company that has made itself a Net company without selling Net products. It was Dell himself who led the charge. The 34-year-old identified and exploited benefits of doing business online, from pumping up sales to slashing the cost of taking service calls. Dell has spent heavily to improve the customer's experience at Dell.com--such as a new feature that lets purchases made online flow directly into a corporate customer's accounting systems. The payoff: "We can interact much, much more efficiently with them than with their rivals," says Ford Motor Co. CIO James A. Yost. Just as important is what happens behind the scenes at Dell, where the company--and often Michael Dell himself--scrutinizes what is selling, in real-time, in order to get a jump on other PC makers. To make sure the process is as efficient as possible, the company is establishing electronic links with its top 30 suppliers. The result: Dell has a return-on-invested-capital of 260%--easily four times that of its nearest competitor. And Michael Dell is still cranking. He's pushing his "e-service" concept to the next level: hardware that can automatically diagnose its problems and notify a service rep over the Net. "Think of the Internet as a weapon there on the table," he says. "Either you pick it up or your competitor does--but somebody is going to get killed." For Dell's rivals, that's a scary prospect. Return to top RESUME Michael S. Dell DELL COMPUTER Position: Founder and CEO Contribution: Showed the rest of the world how to make the Web the foundation of an existing business. Ambition: Make Dell the No. 1 PC company worldwide, overtaking Compaq. Return to top Commentary The Great Equalizer? Not by a Long Shot It'll take conscious effort to make the Net more minority-friendly The Internet was supposed to herald the dawning of a new era of fairness. As the great leveler, the Web would put obscure entrepreneurs, smart 15-year-olds, and outsiders of every stripe on the same footing as multinationals and the rest of the Establishment. But as BUSINESS WEEK identifies e.biz's top 25 movers and shakers, the executive elite of this new industry looks a lot like the traditional corporate world. Nineteen are white men, four are white women, one is Asian American, and one a Japanese citizen. None is African American or Hispanic. In Corporate America as a whole, white males account for about 56% of managers; white women 32%; African Americans 6%; Hispanics 3.2%; Asian Americans 2.5%; and Native Americans less than 1%, according to the U.S. Equal Employment Opportunity Commission. Not that we didn't try hard to avoid overlooking anyone. We racked the brains of our editorial staff and queried Net gurus to identify the captains of this new industry. But here's the sad truth: Few minorities have emerged as leaders of top-tier e-businesses. What happened on the way to the e-revolution? For all the hype about a new order in cyberspace, the old order, for the most part, still rules. While the high-tech crowd likes to view itself as a meritocracy where nothing matters but brains and moxie, this credo masks an important truth: Relationships and crony networks count heavily, even in e-business. Who you know still helps determine whether you'll get a crack at leading one of the companies at the cutting edge of this new industry. Cozy relationships are hardly the only factor, though. African Americans and Hispanics often don't have the backgrounds and experience considered by many to be necessary for the Internet. Just 7.2% of engineering and computer science degrees went to African Americans and 5.9% to Hispanics in 1996, according to the National Science Foundation. And only 23% of African-American households are online, compared with 34% for white Americans, 36% for Hispanics, and 64% for Asian Americans, according to Forrester Research Inc. But rationalizing a largely white male leadership doesn't make it good or right. Remember, the promise of the Net was something more revolutionary than making twentysomethings into multimillionaires: It was about transforming the daily lives of all people. The masters of this new universe must recognize its lack of diversity as a shortcoming if they are to lead the Web to its full potential. Without more managers of color who can tap into the hopes and dreams of the people who use the Net, the Web could end up reinforcing the divisions within society instead of erasing them. "Ultimately, if this is going to be a mass medium, it's critical that it be reflective of society," says America Online CEO Stephen M. Case. Fortunately, there is a kernel of truth to the idea that the Net can be a democratizing force. In 1998, immigrants of Indian and Chinese descent ran 25% of Silicon Valley high-tech startups, according to a study by University of California at Berkeley Professor AnnaLee Saxenian. There are examples of success elsewhere, too. Consider Benjamin Sun, the 26-year-old CEO of New York's Community Connect Inc. At first he was unable to get funding for Asianavenue.com, a portal for Asian Americans, because the concept of an online gathering place for an ethnic community didn't resonate with venture capitalists. "The idea was foreign to them, because the people we approached were not people of color," says Sun, a former Merrill Lynch & Co. investment banker. But after he scraped together 100,000 members in his first year, he was able to attract $4.5 million in financing. And the number of women tech executives is on the rise. Carly Fiorina became the first female CEO of a Dow 30 company when she was named to head Hewlett-Packard Co. in July. eBay CEO Meg Whitman and Exodus Communications CEO Ellen Hancock have become industry stars. And they're working hard to encourage women's success in the future. For example, Hancock has mentored 15 female entrepreneurs. But these are exceptions to the lack of diversity. You can count on one hand the blacks and Hispanics who hold real power in the industry. There's E. David Ellington, CEO of Net Noir, a San Francisco-based portal targeting African Americans. Robert Knowling, CEO of Covad Communication in Santa Clara, Calif., rules a telecom company. Fernando Espuelas, CEO of Star Media Network Inc., has had his site dubbed the Yahoo! of Latin America. Raul Fernandez, the Cuban-American CEO of Proxicom in Reston, Va., sells e-commerce software. These leaders suggest talent is available, but they're a tiny group in the defining business phenomena of our time. The problem in part stems from a sometimes-unconscious reliance on the old-boy network. When venture capitalists look for managers for the startups they fund, they often look first to friends and colleagues. "These companies are founded by small groups of friends, funded by friends of friends, and grow into businesses that look like them," says Joseph Mouzon, the black CEO of Imhotech, a Redwood City (Calif.) company that designs music and entertainment Web sites and software. As the world of business is changed by the Net, it's important to listen to new voices. Some black leaders feel free markets alone won't make diversity happen. Angel investors, VCs, and CEOs should be mindful of promising minority entrepreneurs. Ellington suggests that VCs earmark a certain percentage of their funds for minorities. Beyond money, they can offer advice, as Hanock is doing. As this generation of minority entrepreneurs grows from rags to riches, it can seed a new wave of minority-led companies. With blacks and Hispanics coming online fast, it makes sense to diversify at the top. African Americans still have the lowest percentage of online usage today, but the number will soar to 40% next year, according to Forrester. Hispanic households online will surge to 43% in 2000, from 36% this year. As Net users diversify, there will be increased demand for sites tailored to ethnic tastes. If the minority presence in leadership roles doesn't soon reflect the general population or the online population, it will be time for Net boosters to ask themselves why what was supposed be a democratizing influence didn't work out that way. The answer may be in the nearest mirror. For interviews with Net Noir CEO David Ellington and other minority executives, see ebiz.businessweek.com. Return to top TABLE Who's Lagging in the Net Age Although they are the largest minority groups in the country, blacks and
Hispanics have lagged in Net access and tech management. That has hurt their
ability to break into the top tier of e-business.
PERCENTAGE OF U.S.
HOUSEHOLDS*
WHITES 85%
AFRICAN AMERICANS 12
HISPANIC AMERICANS 8
ASIAN AMERICANS 3
*DOES NOT ADD UP TO 100% BECAUSE OF DOUBLE COUNTING.
DATA: U.S. CENSUS
PERCENTAGE OF ONLINE
POPULATION, 1999
WHITES 78.7%
AFRICAN AMERICANS 7.5
HISPANIC AMERICANS 7.8
ASIAN AMERICANS 5.2
DATA: FORRESTER RESEARCH INC.
PERCENTAGE OF MANAGERS
IN SILICON VALLEY
HIGH-TECH INDUSTRY
AFRICAN AMERICANS 2.4%
HISPANIC AMERICANS 3.3
DATA: COALITION FOR FAIR EMPLOYMENT IN SILICON VALLEY
Return to top |
|
Copyright 2000-2012 Bloomberg L.P.Terms of Use | Privacy Notice |
