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Build a Dot Corps, Not just a Dot Com
Madanmohan Rao Interviews George Colony, CEO, Forrester Research
George Colony is the founder and CEO of Massachusetts-based Forrester
Research, a leading Internet market research firm. Forrester is
now 17 years old and has a presence in more than 15 countries,
with primary research centers in Cambridge, Massachusetts; Amsterdam;
and London. A graduate of Harvard University, Colony has 19 years
of experience as an analyst and is widely quoted in the international
business press.
What are your reactions to the Black Friday tech-market crash
in the U.S. and its echoes around the world?
I believe that the U.S. tech-market crash was inevitable. Too
many companies had gone public too soon in their life cycles.
Many business plans were ill informed, management was unseasoned,
and competition in some dot com market segments—like pet supplies—was
too intense. Now that the detritus is being cleared away, we can
get down to building sustainable, well-managed Internet companies.
Which industries do you see as likely to be most challenged by
new Internet formats and technologies?
If you sell products which can be reduced to bits—like tickets,
music, film, financial services, content, books, magazines, newspapers,
money, and TV programming—you are in for a wild ride. I like to
play the Main Street game: when I drive down the main drag of
any town, I look at every storefront and predict how much longer
it will be there. Many of them—the insurance agent, the music
store, the bookstore, the newspaper stand—will go the way of the
horse-drawn carriage.
What would you rate as the top five things required for a country
to succeed in the Internet age?
- Enlightened and open public policy. Do not overtax or overregulate.
- The size of the communications pipes in the country. The wider
the pipes, the faster the country will move in the Internet economy.
- Developed capital markets—especially venture capital
- A wide supply of smart, risk-taking managers
- A trustworthy, solid business ethic
What are the key impacts the Net has had over the past years in
business-to-business [B2B] e-commerce?
The Net has injected efficiency and faster response into supply
chains, but most of these changes have been unflashy and behind-the-scenes.
The next set of changes will come around pricing—bidding and auction
systems slowly replacing the fixed-price mentality in Western
nations.
The big change coming in B2B will be what Forrester calls eBusiness
Networks—the interconnection of many companies' supply chains
to form value-producing networks. Companies will become virtually
integrated, not vertically integrated.
What are the top three trends we are likely to see in the realm
of mobile Internet access in the coming year?
- Wireless will do well, but it will not live up to some of the
overly optimistic predictions that are being propagated by cellular
providers.
- G3 will gain a small beachhead this year—but most of its promise
lies ahead.
- The search for a killer app will continue—but not be found—in
2000.
What role do you see for content alliancing in an e-commerce economy?
Content and commerce are headed for a collision. In the future,
the two will be inseparable. You will buy equities at WSJ.com
without having to click away to Schwab. The metatrend of convenience
will necessitate this merger of content and commerce.
Whom do you view as your competition, and how do you stack up
against that competitor?
Our competitor is Jupiter Communications. Jupiter is a well-run,
fast-growing company that does a great job in B2C [business-to-consumer]
and events. Our strength lies in the whole view of e-business—helping
companies meld their technology, e-commerce strategy, and customer
connection—the three critical elements of an e-business.
What are the top three misconceptions you notice in the way companies
are approaching e-business?
- Overmarketing before building value. Example: Boo.com, which flopped
in Europe
- An overfocus on getting public
- Building only a dot com. Forrester advocates that companies build
Dot Corps—melding their Internet efforts with the three other
channels: face-to-face, telephone, and mail.
What trends do you see emerging in global governance of the Internet?
Governments are and will remain two to three years behind the
curve of technology. So I am doubtful that global governance will
get any traction or have any impact on the Internet—at least for
the next five years.
What are the obstacles holding back truly broadband Internet access?
It always seems to be "just 18 months away."
Physical plant. The wires are too thin, the switching is too archaic,
the network is underdeveloped. All of these elements will take
years to upgrade.
What kind of growth can we expect to see in the global market
for Internet services and application service providers [ASPs]?
In the U.S. market, we expect these markets to accelerate. In
2001, 5 million square feet of hosting will come on line in the
U.S.—with more to come in 2001.
How does India fit into your global plans?
We are watching India very carefully. Our plans for being in the
Indian market are still in the development stages. India will
be highly significant because of its large supply of high-IQ business
and technology people. But for the market to truly develop, those
managers and leaders have to stay in India—not move to greener
pastures in the U.S.
Any other thoughts, comments, or advice to Internet professionals
and entrepreneurs around the world?
Want to make a lot of money? Watch what is happening in the U.S.,
and regionalize those business models to fit your markets. And
don't get too greedy! There's still lots and lots of time to build
a great business. Build a company to last, not to flip.
About the Author: Madanmohan Rao
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