Inc. magazine's editor-in-chief discusses the evolution of E-culture, start-ups that help other new companies out of the gate, competing against a monopolistic American icon, and Bessemer Venture Partners' "anti-portfolio."
Last February's cover story, "I Was Seduced by the New Economy," turned out to be so popular that we decided to do it again this year, but with a twist. In "I Was Seduced by the Web Economy," we focus on the mistakes companies make as they take on the challenges of doing business in a digital age. There are two things I love about this package. First, it doesn't focus on strategy or valuations, unlike most other Internet coverage these days. Beyond that, it has a sense of authenticity that can only come from on-the-ground reporting. Consider the case of NetGrocer.com Inc., which got into trouble and turned for salvation to a retail and merchandising master whose background was in ... laundry detergent.
This month's column by Rosabeth Moss Kanter ("Are You Ready to Lead the E-Cultural Revolution?") marks the beginning of a project we've undertaken with her and a host of other players -- the Harvard Business School, where she teaches; the World Economic Forum, just wrapping up its annual conference in Davos, Switzerland; EarthWeb, an on-line provider of tools and services for IT professionals; Mainspring, an E-strategy consulting firm; and Theglobe.com, an on-line community.
The project will explore how technology is changing the way every aspect of business is being conducted in all types of companies -- large and small, new and old, traditional and cutting edge. To kick things off, we're teaming up with our partners to conduct a survey of corporate leaders around the world. It will provide benchmarks we can use to compare different E-cultures and see how they evolve over time. If you'd like to participate, you can find the survey by going to www.inc.com/poll. We'll publish the results in a future issue, along with commentary by Professor Kanter and articles by Inc. staff members on some of the most interesting cultures and practices we come across.
This month's Upstarts section features Linda Kellogg, the founder and CEO of Start-up Resources, which handles all the back-office work involved in getting a new business off the ground. Strategically located in San Jose, Kellogg's company specializes in helping technology start-ups reduce the crucial period between the conception of an idea and the rush to market. As hot as those companies are these days, the smart money says that services such as Kellogg's will be the next big thing, and not just in Silicon Valley.
If you find the digital economy a little too, well, abstract for your taste, there's a brawl taking place in "Turf Wars." The combatants are upstart FieldTurf and its archrival, AstroTurf, which is owned by the American Sports Product Group and claims 75% of the North American market for artificial playing surfaces. There's nothing abstract about this battle. To all appearances, these guys really don't like each other. What's more, they have all sorts of nasty things to say about each other's products.
Of course, there's nothing new about that sort of competition. It's as American as Monday Night Football. And while it can get pretty ugly at times, I suspect there's a thing or two that young Internet types could learn by watching these two companies go at it.
Need a little comic relief at the turn of the century? Look up the "Anti-portfolio" at the Web site of Bessemer Venture Partners, one of the nation's oldest and most venerable venture-capital firms. There you'll find a listing of some of the companies that Bessemer has decided not to invest in for one reason or another, including Apple Computer, eBay, Intel, Lotus, Compaq, and Intuit. As for Federal Express's Fred Smith, Bessemer said absolutely, positively no to him an incredible seven times.
"Our reasons for passing on these investments varied," says Bessemer in its introduction to the list. "In some cases, we were making a conscious act of generosity to another, younger venture firm, down on their luck, who we felt could really use a billion dollars in gains. In other cases, our partners had already run out of spaces on the year's Schedule D and feared that another entry would require them to attach a separate sheet."
I guess that when you've picked as many winners as Bessemer has lately, you can afford to laugh about the ones that got away.