Date: October 9, 1999

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The Industry Standard's "Net Returns 2000" conference was
held Sept 29-Oct 2, 1999, at the St. Regis Hotel, Aspen, CO
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Dear Readers and Fellow Internet-Economy Shapers:

It's a good thing Aspen is so laid back. It was a calming influence. Otherwise, all of us converging there from around the globe would've been gasping for breath in the rarefied mountain air, inhaling each other's hype.

As it was, we were somehow able to discuss the enormous possibilities of the Internet without a single attendee passing out. Only an ocassional bout of swooning.

So it was good to get out of town, meet some of the smartest thinkers in the business, get on the decaf, and just, well, kinda hang out and contemplate the e-universe.

When I first heard the location, I thought...gee, why there? Hard to get to, expensive, not a time of the year you'd normally want to go there, all those weirdos in Boulder so close by (just kidding Chris... check out the book Rageboy and friends recently wrapped, "The Cluetrain Manifesto," pre-publication orders for which are choking servers at Amazon this very moment).

But, you know, you have to give these Industry Standard folks credit--they didn't just fall off the turnip truck. Their choice of venue was just right. And, damn, I am so glad I went.

Some sound-bites from 8000 feet above sea level (call it "e-level"):

On the New Breed of Startups:

* As bricks-and-mortar companies look to launch dot-com ventures, they must choose their best assets to build those businesses and adopt an offensive strategy. Doing it for defensive reasons, to protect the flanks, will not be a winning strategy, participants in the invitation-only pre-conference Internet Executive Roundtable agreed. Traditional firms must cannibalize their existing businesses -- we heard it over and over. "And the parent can't say 'don't go out of these boundaries' or tell them to back off the minute things get tough," said Ed Sanctis of NBC's Snap.com. [In other words, start 'em up, let 'em go, and stay the hell out of their way.]

* The biggest problem with small Internet starups is getting people, but for internal ventures at big companies, it's culture. Some in the largest companies, however, like Jack Welch at GE, are getting it -- fast. "He's taken the 'Net and shoved it down everyone's throats at GE," said Bert Ellis, CEO of web consulting firm iXL. "Every single business unit at GE has to come up with a plan. It's DestroyYourBusiness.com." [Now, how's that for a soundbite?]

It's Only Human:

* Tuck Rickards, 'Net Practice Leader at recruiting firm Russell Reynolds, followed up by noting that the talent challenge is now finding global, multichannel people--not just those with web experience.

* Getting people focused and managing the pace is the big challenge in this environment, said Chuck Davis, president/EC of Buena Vista Internet Group. "Something like 20 to 25 Internet startups are being launched per day now." [And, dude, that's just the richly funded ones.]

* "Used to be CEOs had ideas about making $5-10 million," said Kevin Fong, who's logged 10 years as a VC at Valley powerhouse Mayfield Fund. "Now, they want to make $50-100 million"! [The exclamation point is mine--he said it almost calmly.]

* But all seemed to agree that the biggest thing people want today is to be part of a good group, and be creatively and intellectually challenged.

Le Web Internationale:

* We'll be seeing a lot more web action overseas, according to Josh Grotstein, division executive/global EC for CitiGroup. He's seeing much interest, with VCs entering the fray--especially GE Capital. "They're the only ones aggressively investing in non-US e-commerce right now," he said. His firm is looking at international infrastructure, such as the widely adopted GSM wireless standard in Europe and elsewhere--as a platform for C-to-C, he hinted (that's consumer-to-consumer commerce for the acronym-challenged). [Think of the market just for buying & selling World Cup soccer cards by cell phone -- wow! Listening Dave?]

* Blair LaCorte, Sr VP/strategy at VerticalNet, says his firm is already moving their rapidly growing B-to-B portal business into Europe and Asia.

* Dan Nordstrom, head of newly announced Nordstrom.com, noted that "doing Web stores in international flavors is incredibly hard." [So the takeaway here is maybe that B-to-B and C-to-C will be happening ahead of B-to-C. Got that now?]

The Web As Giant Incubator:

* Jake Winebaum, former Disney Online head, teamed up with Earthlink founder Sky Dayton recently to launch eCompanies, based in Santa Monica. (Where they will house all their startups under one roof initially.) Jake had some interesting things to say about this latest of white-hot Internet trends, the startup incubator. "I think 'accelerator' is a better term for what we do," he said. "We have a 90-100 day accelerated model." Here's how it works: they have a Strategy Group that does the plan, a Finance Group that sets up the options tables and capitalizes the company, a People Group to recruit the team, a UI Group to design the web interface, a Business Development group to do partnerships, and a Marketing Group to get the word out.

* The real value of the incubator, Jake said, is the "knowledge base" that develops. Kevin Fong of Mayfield Fund agreed that the reason-for-being for incubators is not cost-savings, but *expertise*. It would be even better if the incubator model could scale, Jake noted. "We can only do maybe 8 to 10 startups a year."

* Fong actually called the templating process easy. "There are lots of service providers in the Valley to help us with that." But the reason so many incubators are happening, he said, is because launching technology and web startups is "a very labor-intensive, skills-based business." And Jake Winebaum concluded by noting the real value is in "helping CEOs deal with the right issues....so they can get to market in 90 days."

More later, folks. My long taxi ride in New York just ended--time to bag up the Powerbook.

yours in hatching dot-coms,
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Graeme Thickins, Founder & Principal Consultant
GT&A Strategic Marketing Inc.
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