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Walter Wriston, former chief executive of Citicorp: "Information about money is getting to be as important as money itself."
Larry Summers, the deputy secretary of the Treasury, tells this story about how widely the Internet is taking hold: He says that before he went to Mozambique last summer he was told that it is the poorest country in the world. Per-capita income is just $90 a year. Sure enough, the country seemed desolate. Even when he noticed a modern-looking, 15-story building, the U.S. ambassador told him the building was unoccupied. There had been a dispute about bills, so the contractor poured concrete in the elevator shafts and rendered the building unusable. Working conditions were hopeless. At lunch that day, Mr. Summers turned to the Mozambiquan businessman next to him and asked how his business was doing. "I'm worried," the man replied. "Oh," Mr. Summers said, "about what?" "I'm currently the only Internet access provider in Mozambique," the businessman replied. "But competition is coming."
Steve Case, chief executive of AOL, on his realization that his on-line service is still far too complicated: "The proof is that we have 5,500 people on the phones talking to users, explaining to them why something we think is simple is, in fact, something they think is too hard."
Jerry Storch, president of credit and new business at the Target department store chain: "The reality of the Internet today is this: Sales are low; it's an inferior channel for most merchandise; and it can commoditize your brand."
When the Galaxy 4 satellite broke down earlier this year, it didn't just wipe out service for a huge percentage of pagers throughout the U.S. The failure also cut the link between National Public Radio and its affiliates nationwide. NPR's All Things Considered stopped in mid-sentence. While it took many hours to restore satellite transmission of the radio broadcast, quick-witted NPR technicians realized that the Internet—oft-maligned for the kind of breakdown that the Galaxy 4 satellite had just suffered, catastrophically—could be used to continue the show. NPR began transmitting its signal to radio stations over the Internet, and some affiliates were back up within an hour. For many rush-hour commuters, broadcasting resumed before they pulled into the driveway.
Hoping to sell add-on products to its most valued customers, a financial institution (which would rather remain nameless) set out to mail an offer to 2,000 of its richest clients. A computer programmer set up a fairly standard program to select qualified customers and write personalized letters. Like any responsible fellow, he tested his work beforehand by inserting a fictitious name into the program. Alas, the mailing went out using the test name instead of actual customer names. The institution's best customers received letters that began: "Dear Rich Bastard."
Talk about efficiency. Dell Computer—which mass customizes its computers, meaning it doesn't make anything until it receives an order—currently turns over its parts inventory every eight days. That's a small fraction of the industry average—yet Dell now says it expects to cut that to four days over the next 12 months or so. Already, Dell has a cash-conversion cycle of negative eight days. That means Dell gets paid by its customers eight days before it has to pay its suppliers. Nice work, if you can get it.
It used to be that companies could deal with screaming customers in private. Now, the Internet can make customer-service problems oh-so-public. For instance, United Airlines finds itself dealing with the "Untied" Web site, which was started by a frustrated passenger and serves as a gathering spot for unhappy customers. (United says it reads the complaints and responds when it can.)
Here is part of an e-mail making the rounds on a supposedly revolutionary new technology: BOOK. "BOOK is a breakthrough in technology: no wires, no electric circuits, no batteries, nothing to be connected or switched on. It's so easy to use that even a child can operate it. Opaque Paper Technology (OPT) allows manufacturers to use both sides of a sheet, doubling the information density. The 'browse' feature allows you to move quickly to any page. "Portable, durable, and affordable, BOOK is being hailed as a precursor of a new entertainment wave. Look for a flood of new titles soon." Would that all technologies worked as well as BOOK.
Companies that venture into electronic commerce often don't think through all the details of how consumers want to do business—or at least underestimate the passion of some of the technophiles who are, at the moment, the most fervent customers. Here's a complaining letter that was sent to American Airlines by a frequent-traveler friend of ours:
I was hoping this would be a letter of congratulations on your new aa.com site. Instead, all I can ask is: How much money did you waste? You've introduced a Web site where people can buy tickets, but your current customers can't use it. I can't log in without a PIN and won't be assigned one for three WEEKS?! How could you not have thought to mail all your current AAdvantage customers PINs in advance? And you're going to send my PIN to me in an ENVELOPE?! Why didn't you bother to ask my e-mail address when I tried to sign up for this new service? ALL I WANT TO DO IS GIVE YOU MY MONEY! If you want me, I'll be at travelocity.com, where I can buy my tickets right now. |
