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A GUIDE TO THE WORLD’S THOUGHT-LEADERS IN E-BUSINESS Gurus include: Sergey Brin • Manuel Castells • Michael Dell Peter Drucker • Esther Dyson • Bill Gates • Steve Jobs • Kevin Kelly Gerry McGovern • Robert Metcalfe • John Naisbitt • Nicholas Negroponte Larry Page • Linus Torvalds • Michael Porter • Thomas Stewart Alvin Toffler • Niklas Zennstrưm John Middleton GURUS ON E-BUSINESS JOHN MIDDLETON Published in 2006 by Thorogood Publishing Ltd 10-12 Rivington Street London EC2A 3DU Telephone: 020 7749 4748 Fax: 020 7729 6110 Email: info@thorogood.ws Web: www.thorogood.ws © John Middleton 2006 All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, photocopying, recording or otherwise, without the prior permission of the publisher This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than in which it is published and without a similar condition including this condition being imposed upon the subsequent purchaser No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by the author or publisher A CIP catalogue record for this book is available from the British Library PB: ISBN 85418 386 Cover and book designed and typeset in the UK by Driftdesign Printed in India by Replika Press Special discounts for bulk quantities of Thorogood books are available to corporations, institutions, associations and other organizations For more information contact Thorogood by telephone on 020 7749 4748, by fax on 020 7729 6110, or e-mail us: info@thorogood.ws The author John Middleton is Co-Director of the Centre for Strategic Thinking, a membership-based organization that exists to promote better quality thinking and planning practices within UK companies Recognized as a leading expert in decision-making tools and processes, he specializes in working with individuals and organizations that are determined to make best use of the future From 1996 until 2004, he was Director of the Bristol Management Research Centre, before which he spent 18 years working for BAA (formerly the British Airports Authority) and AXA Sun Life in various senior HR roles, covering recruitment, training, management development, information systems and HR strategy John is a Chartered Member of the Institute of Personnel and Development, as well as a member of the Institute of Directors He holds a Masters Degree from the University of Bristol, where he has been an Associate Lecturer since 1994 He has taught IT Management on Manchester Business School’s International MBA programme since 2001 He has written 11 books to date, including Writing the New Economy (Capstone, 2000), The Ultimate Strategy Library (Capstone, 2003), Culture (Capstone, 2002), and Upgrade Your Brain (Infinite Ideas, 2006) From 1996 to 2002, he published and edited Future Filter, a bi-monthly business digest covering trends and developments in the new economy His email address is john.middleton@mac.com THE AUTHOR iii Blank Contents Acknowledgements The scope of this book Introduction The influence of technology Summary E-business – the strategic dimension The internet offers huge scope for cost-cutting The hare, the tortoise and the internet ONE Internet only companies carry less organizational baggage He who pays the piper… 11 Internet-based alliances 11 The simple conclusion – strategy has an e-dimension 13 E-business – the global dimension 15 Let’s stick together: the importance of clusters THREE 10 The rise and fall of the middleman TWO 10 19 E-business – the organizational dimension 23 The internet and organizations 24 The rise of the cyber cottage industry 29 CONTENTS v FOUR The e-business gurus 31 Tim Berners-Lee 33 Jeff Bezos 37 Frances Cairncross 40 Manuel Castells 44 Jim Clark 48 Michael Dell 51 Larry Downes & Chunka Mui 54 Peter Drucker 58 Esther Dyson 63 10 Philip Evans & Thomas Wurster 66 11 Carly Fiorina 69 12 Bill Gates 72 13 William Gibson 75 14 Andy Grove 78 15 Michael Hammer 82 16 Jonathan Ive 86 17 Steve Jobs 89 18 Kevin Kelly 92 19 Ray Kurzweil 97 20 Charles Leadbeater 21 James Martin 104 22 Gerry McGovern 106 23 Regis McKenna 110 24 Robert Metcalfe 113 25 Paul Mockapetris 116 26 Geoffrey A Moore 118 27 Gordon Moore 122 28 John Naisbitt vi 101 125 GURUS ON E-BUSINESS 29 Nicholas Negroponte 30 Larry Page & Sergey Brin 130 31 Jeff Papows 133 32 Don Peppers & Martha Rogers 136 33 Michael Porter 141 34 David S Pottruck and Terry Pearce 144 35 Thomas Stewart 148 36 Alvin Toffler 152 37 Linus Torvalds 155 38 Meg Whitman 158 39 Niklas Zennström 161 40 Shoshana Zuboff FIVE 128 164 Case studies 167 e-Bay 172 Encyclopaedia Britannica 173 Seven-Eleven Japan 175 Vermeer Technologies 177 Best practice: pulling it all together 181 SIX Annotated bibliography 183 SEVEN Tracking e-business trends 209 EIGHT An e-business glossary 215 CONTENTS vii Blank Acknowledgements I would like to thank The ‘Friends of e-Business’ – colleagues, acquaintances and chums – whose advice, tips, and comments about which e-business gurus should be featured here (and, just as crucially, who in their view didn’t merit a place) helped me to end up with a final list that was a vast improvement over my initial attempt The final decision though about what went in was mine, so I alone deserve it on the chin for any howlers, omissions, or glaring errors of judgment My fellow Co-Director at the Centre for Strategic Thinking Bob Gorzynski, whose regular pearls of wisdom have enhanced my understanding of business strategy and of the e-business environment Finally, I could not have written this book without the support of my wife Julie, particularly in the final days of writing Thanks also to our children Guy and Helena who, if they ever think about e-business when they are older and forging their own careers, will probably wonder what all the fuss was about To you all with love ACKNOWLEDGEMENTS Cyberspace: Term originally coined by William Gibson in his book Neuromancer Now generally used to describe the notional social arena we ‘enter’ when using computers to communicate Data marts: Scaled-down version of a data warehouse containing specific information of interest to a particular target group Data mining: The process of using advanced statistical tools to identify commercially useful patterns or relationships in databases Data warehouse: A database that can access all of a company’s information Discontinuities: One-off changes in the market place that force radical change, e.g Amazon’s entry into the book market place Disintermediation: Buzzword for how the internet is cutting out the middlemen, enabling wholesalers/manufacturers to sell direct to the end user Classic potential victims of disintermediation are estate agents and travel agents Domain name: Unique internet address used to identify a website, e.g www.futurefilter.com e-business: Using the internet or other electronic means to conduct business The two most common models are B2C (Business-toConsumer) and B2B (Business-to-Business) Partly due to news coverage given to high profile companies like Amazon, B2C is the better known model; on the other hand, B2B is growing faster than its more glamorous cousin e-by gum: A term to describe the quaint practice of sending a message via the traditional postal service using a sealed envelope e-commerce: Commercial activity conducted via the internet Ego surfing: Looking on the web for occurrences of one’s own name e-lancers: independent contractors connected through personal computers and electronic networks These electronically connected 218 GURUS ON E-BUSINESS freelancers – e-lancers – join together into fluid and temporary networks to produce and sell goods and services e-tailing: Retail strategy based on selling and order processing via the web e-zines: The online equivalent of print-based newsletters and magazines Eyeballs: A measure of the number of visits made to a website Globalization: The integration of economic activity across national or regional boundaries, a process that is being accelerated by the impact of information technology Going dot.com: The trend that started in the US of leaving a wellpaid job to join an internet organization HTML: Abbreviation for Hypertext Markup Language, a computer language, the one that most web pages are currently written in Infomediary: A company or individual that makes money by bridging the gap between companies’ need for capture of detailed customer information and customers’ desire for protection of such information from exploitation by companies Informate: Term coined by Harvard academic Shoshana Zuboff to describe the capacity for information technology to translate and make visible organizational processes, objects, behaviours and events Intellectual capital: Intellectual material – knowledge, information, intellectual property, experience – that can be put to use to create wealth In a business context, the sum total of what employees in an organization know that gives it a competitive edge The Internot: Business executives or organizations that see no value from getting online The term was devised by psychologist David Lewis, who also coined the phrase ‘road rage” to describe when motoring frustration spills over Research conducted by Lewis suggests that about half of all managers are Internots EIGHT AN E-BUSINESS GLOSSARY 219 Intranet: A network designed to organize and share information that is accessible only by a specified group or organization ISP: Abbreviation for Internet Service Provider, the party that connects users to the internet Killer app: A new good or service that establishes an entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment Knowledge management: A system, normally computer-based, to share information in a company with the goal of increasing levels of responsiveness and innovation It may be tacit (inside the heads of individual staff-members, and possibly including personal experience, intuition, belief and values) or explicit (what has or can be written down, including technical specifications, procedures, training manuals, financial and management information) Mass customization: Cost-efficient mass production of goods and services in lot sizes of one or just a few at a time as a matter of routine m-commerce: David Potter, Chairman of Psion, predicts that electronic commerce, today conducted largely via internet connected desk-tops will soon be overtaken by mobile (or m-) commerce using mobile phone technology Meme: An idea, behaviour, or skill that can be transferred from one person to another by imitation Examples include the way in which we copy ideas, inventions, songs, catch-phrases and stories from one another In a wired global economy, memes will have the capability of spreading at astonishing speeds Netiquette: A system of tacit codes encouraging members of the online community to uphold certain standards of behavior Net generation: A term coined by Don Tapscott to describe the first generation – now in their early teens to mid-twenties – to grow up surrounded by digital media 220 GURUS ON E-BUSINESS New capitalism: A term coined by Robert Reich, former US Secretary for Labor, to characterize how the chief assets of new economy companies are intellectual assets rather than traditional assets like machinery, buildings etc One-to-one marketing: Customizing and personalizing a product or service to meet an individual’s specific needs Out of the garage: A term for a young company that has just moved to its first real office Portal: Web page that serves as a start-point or central directory for a range of internet services Product overlap: This occurs when more than one generation of the same product is available simultaneously For example, the original version of a piece of software may sell at a reduced price alongside the latest version at a higher price Push technology: The delivery of news and multimedia information via the world wide web to personal computers on people’s desks The Web is basically a ‘pull’ medium Users decide what they want, point their browsers at the relevant website and then pull the designated pages back to their PCs Silver surfers: A term used to denote older members of the population who are comfortable ‘surfing’ the internet for information and services Spam: In a phrase, junk e-mail – unwanted messages sent to uninterested recipients Sticky content: The term refers to whether a website is alluring enough to ‘catch’ visitors as they go flying past Until recently, most companies have concentrated their website efforts on increasing the flow of traffic to their site Companies are now realizing that the emphasis needs to be less on attracting visitors on a one-off basis, and more on enticing visitors to stay, return again and even tell their friends EIGHT AN E-BUSINESS GLOSSARY 221 Strategic Inflection Points: A term coined by Andy Grove to describe a moment in the life of a business when its fundamentals are about to change for better or worse 10X force: Another term coined by Andy Grove to describe a supercompetitive force that threatens the future of a business Technology Adoption Life Cycle: Model created by Geoffrey A Moore to demonstrate the various points at which individuals will become involved with a technological innovation Moore identifies five key groups that will become involved with any new technology at various stages of its life cycle: Innovators: the technology enthusiasts Early adopters: the visionaries Early majority: the pragmatists Late majority: the conservatives Laggards: the sceptics Viral marketing: Releasing a catchy message, typically distributed online, with a view to the message reaching growing numbers of people, initially organically but then exponentially Virtual organization: An organizational form representing a loose combination of technology, expertise and networks VOIP: Short for Voice Over Internet Protocol, the means by which it is possible to make telephone calls using the internet rather than traditional landlines or mobile networks World wide web: The set of all information accessible using computers and networking Xanadu: Computer scientist Ted Nelson’s planned global hypertext project, generally recognized as a forerunner of the web Zombies: dot.com companies that are on their last legs, waiting for their cash-burn rate to kill off the business 222 GURUS ON E-BUSINESS NOTES 223 224 NOTES NOTES 225 226 NOTES Other titles from Thorogood GURUS ON MARKETING Sultan Kermally £14.99 paperback, ISBN 85418 243 £24.99 hardback, ISBN 85418 238 Published November 2003 Kermally has worked directly with many of the figures in this book, including Peter Drucker, Philip Kotler and Michael Porter It has enabled him to summarize, contrast and comment on the key concepts with knowledge, depth and insight, and to offer you fresh ideas to improve your own business He describes the key ideas of each ‘guru’, places them in context and explains their significance He shows you how they were applied in practice, looks at their pros and cons and includes the views of other expert writers GURUS ON BUSINESS STRATEGY Tony Grundy £14.99 paperback, ISBN 85418 262 £24.99 hardback, ISBN 85418 222 Published June 2003 This book is a one-stop guide to the world’s most important writers on business strategy It expertly summarizes all the key strategic concepts and describes the work and contribution of each of the leading thinkers in the field It goes further: it analyses the pro’s and con’s of many of the key theories in practice and offers two enlightening case-studies The third section of the book provides a series of detailed checklists to aid you in the development of your own strategies for different aspects of the business More than just a summary of the key concepts, this book offers valuable insights into their application in practice GURUS ON PEOPLE MANAGEMENT Sultan Kermally £14.99 paperback, ISBN 85418 320 £24.99 hardback, ISBN 85418 325 Published March 2005 Managers HAVE to manage people It is the most difficult and yet the most rewarding function This book is more than just a summary of the key concepts, it offers valuable insights into their application and value including national and international real-life case studies that reflect some of the key issues of managing people THE A-Z OF MANAGEMENT CONCEPTS AND MODELS B Karlöf and F Lövingsson £18.99 paperback, ISBN 85418 390 £35.00 hardback, ISBN 85418 385 Published May 2005 An A to Z of all the essential concepts and models applied in business and management, from Balanced scorecard and the Boston matrix to Experience curve, Kaizen, McKinsey’s 7S model, Market analysis, Porter’s generic strategies, Relative cost position, Sustainable development to Yield management and Zero-based planning MANAGE TO WIN Norton Paley £15.99 paperback, ISBN 85418 395 £29.99 hardback, ISBN 85418 301 X Published April 2005 Learn how to reshape and reposition your company to meet tougher challenges and competitors, when to confront and when to retreat, how to assess risk and opportunity and how to move to seize opportunities and knockout the competition Real-life case-studies and examples throughout the text, plus practical guidelines, numerous management tools and usable checklists OUT OF THE BOX MARKETING David Abingdon £14.99 paperback, ISBN 85418 312 Published September 2005 How to skyrocket your profits – this treasure trove of a book is crammed full of time-tested strategies and techniques to help you to get more customers, get more out of your customers and to keep them coming back for more This really is the ultimate, hands-on, 'paint by numbers' guide to help you achieve rapid business success This book gives you countless proven, powerful and profitable ways to build your bottom-line profits faster, quicker and easier than you ever though possible Focused on developing your potential Falconbury, the sister company to Thorogood publishing, brings together the leading experts from all areas of management and strategic development to provide you with a comprehensive portfolio of action-centred training and learning We understand everything managers and leaders need to be, know and to succeed in today’s commercial environment Each product addresses a different technical or personal development need that will encourage growth and increase your potential for success • Practical public training programmes • Tailored in-company training • Coaching • Mentoring • Topical business seminars • Trainer bureau/bank • Adair Leadership Foundation The most valuable resource in any organization is its people; it is essential that you invest in the 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Falconbury In-Company Training Falconbury are aware that a public programme may not be the solution to leadership and management issues arising in your firm Involving only attendees from your organization and tailoring the programme to focus on the current challenges you face individually and as a business may be more appropriate With this in mind we have brought together our most motivated and forward thinking trainers to deliver tailored in-company programmes developed specifically around the needs within your organization All our trainers have a practical commercial background and highly refined people skills During the course of the programme they act as facilitator, trainer and mentor, adapting their style to ensure that each individual benefits equally from their knowledge to develop new skills Falconbury works with each organization to develop a programme of training that fits your needs Mentoring and coaching Developing and achieving your personal objectives in the workplace is 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