Tech on the Road

Early in April 2000 I headed to the airport for a flight to LA. Spring Internet World was upon us once again. I wondered what new twists would come of well-funded imaginations this time! No matter: just sit back and see. Or rather, walk and scan the endless aisles and floors in the growing convention center display. Even with two and a half days scheduled, I’d have a hard time reviewing all the exhibitors.

I resolved to travel light. There was a time when I thought that dragging a 15 pound, state of the art GRID Systems “luggable” computer to a convention was the coolest thing. I yearned to have portable computing tools to take notes in sessions. However, side glances at my distracting beeps encouraged me to shut the thing down.

In recent years I had used slimmer laptops in hotel rooms, writing notes from meetings before much was forgotten. As an added benefit, I could track my stock portfolio. On such a quick trip south, however, I’d be scrambling to jot notes with my trusty paper and pen. Not ‘til I returned to the office was I likely to have time to transcribe and organize. Palm Pilot, paper, and pen was all I’d bring.

Still, I wanted to make some trades. Money had just come through from a deposit to my E-Trade account. I wanted to buy an Over The Counter stock of a Canadian wireless company I couldn’t get on Datek. I’d read that they were about to float a secondary offering on the Toronto exchange at a much higher price than it was trading on its U.S. ticker. Maybe people weren’t watching it very closely, or didn’t have good access to the Canadian market. But it seemed low risk with a quick upside.

For this trade I would use the trusty old telephony device. After I’d checked in at the gate, I found a pay phone. The call holding time almost made me miss my scheduled “second tranch” as Southwest called passengers 31-60. Still, I got the confirmation and pushed my way past the 61-90 crowd now massing near the access door. Well, that worked! We departed for the sprawling flatlands of LA.

Making note of local services for future reference was part of the Art of Conventioneering. On a past trip I’d noticed the Mission Hotel, well situated within walking distance of the convention center. Headquartered there, I wouldn’t have to drive, park, or generally deal with traffic uncertainties of downtown LA. It had the added benefit of being only two blocks from “Original Joe’s,” a well established restaurant that had the look of a classic breakfast dive. Such culinary and cultural diversions were a favorite pastime of mine during business travel. Besides, I tried to avoid the junk food on the floor and a long day of walking would require nourishment. Altogether I considered this arrangement far preferable — for Itochu and myself — to staying at the Luxe and eating in an expensive hotel restaurant in LALA-land. I checked in and headed down the street.

The glass convention center was overflowing this year. Paid hawkers accosted the incoming flood of attendees with papers and trinkets. Exhibits were taking over new wings in the Center. Wading through all this was going to be harder this year, yet again.

Navigation strategy through this whirlwind was always a problem, now accentuated by the entry of scores of new companies. Somehow this seemed appropriate, as the Internet itself , with massive volumes of data connected across the globe, required the navigational assistance of search engines.

The original search companies had evolved into portals, each trying to be a one-stop-shop to capture the attention and loyalty of web surfers. Other companies pursued a more customized path to providing utility to the lost wanderer. On the floor I walked past a company called Neobutler, offering a bookmark strategy that let surfers group and arrange sites they liked. I recalled two other companies with similar approaches. There were just too many contenders in this race.

I continued on, endlessly amused by the creative company naming. In the on-line marketing arena for instance, I saw many with a certain implied logic – Marketswitch, Annuncio and Informative. Others ventured further afield: Boldfish, Blue Martini and Neteos. Straddling the line between the logical and the hip were Beenz and FreeRide, giving points as web currency to surfers who voluntarily exposed themselves to ad blasts.

Service companies to support these lean start-ups were everywhere. CoreMetrics and e.Piphany were hawking their marketing capabilities, along with many email blaster firms. ASPs – Application Service Providers – were becoming the new buzzword on the block. Emerging companies with venture cash but limited resources could stay focused on core competitive strengths.

So many enthusiastic competitors! But would there be equally enthusiastic customers? Would the interconnected public understand and embrace all this new technology? It wasn’t so much a question of the worth of all these products and services; I could understand the value proposition that most were targeting. I was more concerned with the resilience and adaptability of the customer base. Could so much of our lives be converted into this ethereal, virtual world? It required vision and unaccustomed behaviors – almost a new culture. Could people adapt so quickly? My experience suggested that we were slow to be re-designed, accelerated or otherwise changed and improved. We, as users of this technology, were the choking point.

I remembered my recent trip home to Minnesota. I took dad shopping for a computer with a 19 inch screen for easy reading. He hunt and peck the keys but soon sent an email to an old war buddy. He’d put up with the hen-pecking slowness to type messages, forward jokes and – when we set him up with a Datek account — make stock trades. Over the next few months, he spent an amazing amount of time on-line. He was off and running!

My dad made this technology a part of his day – a significant part during the winter when golf and sometimes even transportation out of the house were precluded. To me this represented an incredible behavioral shift. By the looks of things, many people across all ages were adapting in similar fashion. The same appeared true for gender.

In the first years of the Internet, analysts and prognosticators debated the coming role of women in the technology. Male users were outnumbering them by about four to one. I myself had confidence in this demographic. To me, the Internet was about communication. New things were not coming from faster gizmos or smaller form factors; rather, the real power was from connecting the dots … all those people, all around the country, around the world. It reminded me of the synapses in the brain. I had read that more connections between cerebral sections equated to better mental function and higher intelligence. In a way, we were connecting a global mind. It was starting to sound like a sci-fi thriller.

That was the essential thing: if the Internet was about communication, women have to be involved. I could make a wholly unnecessary review of the feminine need for talking and emoting and empathizing and expressing. Research I did for my greeting card start-up after biz school concluded that women represented 85% of that market. They are communicators who now have an instant-delivery mail system at their nimble fingertips.

More and more, the Internet was also about shopping! I had absolutely no doubt that this medium would attract women. Figures continued to bear me out. As fears of credit card fraud eased, women joined in. Guys and girls both were ordering books and videos from Amazon and Barnes&Noble. From there, it was supposed that guys went to electronics while girls looked for clothes.

I had under-estimated the purchasing technique of the fairer gender and the skill of their marketers. Return policies! Just as liability limits had reduced the risk of credit card payments, returns had made it easy for women to make purchases. Better yet, this pattern had been well established through mail-order. This meant minimal change of behavior, or at least it created a familiar and more receptive environment. Don’t like the color or the fit? Send it back, just as you would with a catalog company. Service guaranteed!

Christmas season after season, on-line buying revenues impressed the analysts by sheer volume and growth. Profitability remained to be seen, as on-line retailers were reported to be pulling management from their desks to the shipping line in late December. The joke on Amazon, hallmark of on-line marketing and first in grabbing the mindshare of connected Americans, was that they were losing $5 on every book but making it up on volume. At some point, we knew the balance sheets had to equalize. We just didn’t know when.

Enough for one day. I merged with the exiting throng, thankful that I had only a walk between me and my hotel. When I entered the lobby, I could see young, enthusiastic faces clustering around tables and talking. As for myself, getting off my feet for a while had a strong appeal. Departing the elevator on floor seven, I saw an older gent – engineering-type – sporting a t-shirt that said “SuperSSD.” I started up a conversation.

“SSD; is that Solid State Disk?” He looked understandably surprised: not many people would know the abbreviation. One of my portfolio companies was in that business and I felt a little competitive research was in order.

“Yeah, I know some of your competitors. What’s your system about?”

“We make the fastest solid state disk around. NASA uses it to download huge volumes of data from satellites. Lots of defense stuff.”

“Where are you based? How many guys are in the company?”

“Most of us are in Houston, Texas. The company is Texas Memory Systems. We have 14 engineers and a couple of marketing and sales people. It’s still privately owned.”

I remembered seeing them before, although I couldn’t say exactly where or when. They had good engineering but the product marketing seemed weak. The box they used was a non-standard form factor. It didn’t fit easily in server racks and it didn’t have power back-up. The whole thing about SSD was its volatility. If power dropped, all that data that was so efficiently getting moved around would just vanish. That was a bit scary for some people.

We talked a bit more and I told him I’d stop by his booth tomorrow.

“Come on down. Maybe I’ll get you a t-shirt!”

The next morning I was back in the convention center. There were an untold number of companies trying to do some kind of commerce on-line. Too many. Do I really want to order my pet food electronically as opposed to stopping by the pet store? For a break, I turned toward some hardware exhibits. The Ciscos and Suns exhibited at InterOp, land of hardcore networking and telecom. Here were smaller companies with modems and accelerators of different types. The World Wide Wait continued to be a constraint, but DSL companies the telcos used were being blessed in the financial market. Cable companies were pushing their modems and the public was responding with more acceptance than I had forecast.

I wandered into a booth with bright graphics suggesting an image portal of some kind. Kablink! was hosting digital photos for customers. I engaged a marketing fellow, and after some introduction I asked why people would want the service.

“People can upload their photos for others to see. Families can share albums. Companies can store images in a single place for distribution to sales partners and clients.”

I remained unconvinced but still interested. “Wouldn’t families just send photos as email attachments?”

“This way they can just upload one time and relatives can view it anytime through a browser instead of a long email download.” Well, that made sense. He had 36 categories of ways people could send captured images. “Insurance companies, Realtors, auto salesmen could all use images to help sell products or process their services.” He’d certainly done some thinking about it. I gave him my spiel about Itochu: money and distribution.

Still, less than five percent of on-line users had digital cameras, according to his figures. Until more did so acquire, he was planning on people going to third party sources. Have an accident? Go to Mailboxes Etc. to have a picture taken of the damage to send to the insurance company.

Nice concept, but this seemed a bit of a stretch. As had become second nature by now, I asked myself if this was truly a compelling use. Did customers really need him to be in the middle? While my salesman continued his song and dance, I looked around his booth. Apparently to increase awareness of this pressing need, he was giving away small digital cameras. My daughters might enjoy using one and I could learn from their exploration. But what chance does one business card have in a fishbowl?

I voiced this concern, to which he replied: “The drawing is open to all customers. But there are regular customers and important customers. If you give your business card to me, let’s just say your chances to win are better.” I handed him my card, thanked him and maneuvered myself once again into the flow.

At another booth, I was looking into a software display at one of their kiosks. I overheard an employee speaking with a former company employee.

“I hear you’re going to have a good quarter!”

“Yeah. We just closed a big sale. Revenues are going to be up again. Earnings should be announced tomorrow.”

They talked for a while and I wandered on. If this news hadn’t hit the street yet, I wondered if the stock would be rising. Of course, I remembered an old adage that Dave Carlick, now of Vantage Point Partners, told me as I voiced my consternation about falling stock on strong earnings. “What do investors want?” I implored the gods.

He had answered succinctly: “Up on the rumor; down on the news.” The stock could be at its peak with the analyst forecasts, waiting to plummet as the results proved only “spectacular” and no longer “surprising.”

Yet this on-line investing was enticing me to play on. I looked around for another booth with a standard browser. The Netscape logo glowed from the upper corner of a web demo. Switching to Datek, I looked up the stock and graphed the last week. Strong, but no big swings. Why not put in the ante? But not here. I didn’t want my Datek account up on a browser, waiting for someone to hit the back button. Unlikely, but caution was due.

Once again I found the trusty pay phone. Somewhere in my wallet … yes, the tele-trade menu surfaced. I dialed, listened and pushed more buttons. In about two minutes I’d purchased one hundred shares. Nothing to do now but wait and see. Tired but pleased with the move, I returned to the fray. Endless aisles, banners, pens and freebies awaited the weary researcher.

After two and a half days of this, I was ready to return home — having reached a saturation point where new information refuses to soak in. Besides, I figured I’d done a pretty thorough scan. Now I had to sift through the scores of finalists to see which would be worth pitching to Itochu. Networking stuff for CTC was an easier pick, though not necessarily an easier sell. At this show, I had to look at virtual businesses, not just products. Fortunately, there was the occasional software or hardware play – more tangible things that could be seen, touched, evaluated … and explained. But processing through all this wouldn’t happen ‘til Monday. On this Friday, I’d hit my limit.

Before I left the hall I stopped to use a PC to check my stock purchases of the week. Both had risen. By using a mix of telephony and Internet technologies, I had been able to trade quickly and relatively easily. With an investment of only $2,500, I was up a thousand dollars in less than three days. I could do so while on the road and with publicly available access equipment. This was getting way cool! Emerging into the warm LA afternoon, I thought to myself that maybe I could make some money after all.

In line at the airport again, I wondered whether it was worthwhile to wait for an early number in the Southwest shuffle. You spent almost as much time as the flight itself standing uncomfortably for the chance at a better seat! Still, I enjoyed the view of the California Coastal range as we flew north. So I waited for my number and grabbed a quick bite before boarding. Once seated, I chatted with a weary young man next to me. He was with Exodus, a web hosting service that had grown tenfold since its IPO. My Itochu associate Eric was now driving a $90,000 Porsche, due largely to a 10k investment he’d made at its offering.

“Would you like one of these drink tickets?” I asked him as the flight attendant approached us. His face screwed up in denial. “No, I’ve had enough beer. Last night … .” His voice trailed off in a way that conveyed the image of excess and temporary insanity. At his age, I had indulged more often than now. I understood his pain and was glad not to feel it. This lifestyle wasn’t always easy — but it was indeed one hellavuh ride!