Business Week e.biz -- Cutting Edge
Remember the Tortoise
Let's all slow down: The notion that speed always wins has crashed
Everything about the past two years was fast. Too fast. Instant formation of new companies followed by quick initial public offerings. Rapid failures and sudden stock plunges. Books such as The 10-Second Internet Man@ger and magazines called Fast Company. Fast talkers pulling fast ones on impatient investors. So here's my suggestion for 2001: Let's slow down. Just because computers run at the speed of light doesn't mean we have to.
I know this notion flouts one of the basic tenets of capitalism, especially Silicon Valley's hypercharged version: Throw as many companies at a market as fast as you can, and great products and financial returns quickly follow. Granted, the formula often works. Amazon.com Inc. and eBay Inc. wouldn't be so dominant if they had taken it easy. But now, even the champions of this approach know the idea that speed always wins has skidded off the highway.
Take Epinions.com, the quintessential fast company. Formed in under six weeks, the product-rating Web site was profiled in a New York Times Magazine article even before it went live. Unlike many dot-coms, it's still here. But CEO Nirav Tolia admits the fast fame created expectations that it would be an instant success, making it tougher to keep investors on board for the long haul. Says Tolia: "I'm not convinced speed is the ultimate metric for success."Mantra. The blind belief in speed has hampered entire industries. Consider wireless commerce. The furious efforts of some 600 wireless startups have resulted in often incompatible networks and competing standards. So now only 300,000 people, or 2% of the 15 million customers of AT&T Wireless, are using the company's Web service via their phones. The underlying problem: With talent diluted among too many startups, no leader emerges, technology gets fragmented, and progress crawls. Gripes John Hamm, managing director of operations for Internet Capital Group: "We can't put together a whole, good team for a company because the VP of marketing we want is the CEO of a business that shouldn't have been funded."
The tech slump could slow things down. But I fear we now have the same problem in reverse. Frightened by Nasdaq's swoon in 2000, everyone is running backwards so fast that they're missing a world of e-business opportunity. And who can blame them? Too many entrepreneurs masked their greed with the doctrine of speed. They thought GBF, the New Economy mantra that stands for Get Big Fast, meant GRQ: Get Rich Quick.
Veterans know better. "There's a difference between fast and too fast," says Packet Design CEO Judy Estrin, who has started four businesses. Her latest effort guides the formation of tech firms, but she won't launch them, let alone take them public, until they have real prospects for products and profits. It's an attitude she says far too few entrepreneurs and venture capitalists follow anymore.
That's why I'm skeptical when I hear execs swear they've reformed, even as they launch the umpteenth optical networking startup and hire a PR firm before they fill out their engineering team. I still see many of these GRQ types running their BMW Z3s through stop signs in my neighborhood. Some people never learn: Even in the New Economy, the tortoise often beats the hare.By Robert D. Hof, Rob_hof@ebiz.Businessweek.com