George Colony, CEO, Forrester Research, explains which stores will soon have vanished from the main shopping streets due to the prere of e-commerce
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 over 15 countries, with primary research centers in Cambridge, Amsterdam, and London. A graduate of Harvard University, George 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?
George Colony: 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 dotcom 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. What would you rate as the Top Five factors required for a country to succeed in the Internet age??
George Colony: 1) Enlightened and open public policy. Do not over-tax or over-regulate. 2) The size of the communications pipes in the country. The wider the pipes, the faster the country will move in the Internet economy. 3) Developed capital markets — especially venture capital. 4) A wide supply of smart, risk-taking managers. 5) A trustworthy, solid business ethic. Which industries do you see as likely to be most challenged by new Internet formats and technologies?
George Colony: If you sell products which can be reduced to bits (tickets, music, film, financial services, content, books, magazines, newspapers, money, 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 they will be there. Many of them (the insurance agent, the music store, the book store, the newspaper stand) will go the way of the horse drawn carriage. What are the key impacts the Net has had over the past years in B2B e-commerce?
George Colony: 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?
George Colony: 1) Wireless will do well, but it will not live up to some of the overly-optimistic predictions that are being propagated by cellular providers. 2) G3 will gain a small beachhead this year — but most of its promise lies ahead. 3) 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?
George Colony: 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 meta trend of convenience will necessitate this merger of content and commerce. Who do you view as your competition, and how do you stack up against them?
George Colony: Our competitor is Jupiter Communications. Jupiter is a well-run, fast-growing company that does a great job in B2C and events. Our strength lies in the "whole view" of eBusiness — helping companies meld their technology, ecommerce strategy, and customer connection — the three critical elements of an eBusiness. What are the Top Three misconceptions you notice in the way companies are approaching e-business??
George Colony: 1) Over-marketing before building value. A good example is Boo.Com, which flopped in Europe. 2) An over-focus on getting public. 3) Building only a dotcom. 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?
George Colony: 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"!!
George Colony: 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. How does India fit into your global plans?
George Colony: 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?
George Colony: Want to make a lot of money? Watch what is happening in the U.S. And "regionalise" 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.
Madnmohan Rao is a technology journalist based in Bangalore, India.