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Speed has always been my life. As founder and chief executive officer of the first truly global Internet media company, Lycos (now Terra Lycos), I was lucky enough to have been on the front lines of the Internet revolution-a revolution that was powered by technology but driven by speed.
In fact, the story of the Internet has been one that defies conventional business time lines. It took radio 38 years and television 13 years to build audiences of 50 million in the United States. The Internet attracted this critical mass in a mere three and a half years. And the Internet has hardly been operating in a vacuum. Its impact has been felt on virtually every company in the world; it has accelerated the way business is conducted in every industry.
In the five-plus years I ran Lycos, I saw the company move from concept to founding-for a while I was the first and only employee-through its initial public offering, acquisitions, and mergers, and finally through its own purchase by Terra Networks.
We launched the company in April 1995. Just 9 months later, Lycos completed a public offering to become the fastest IPO (initial public offering) in NASDAQ history. Lycos evolved from a Web search engine-a gateway for users on their way to other destinations-into a hub, and from there, a comprehensive network of sites. We moved into Europe in 1996 via an alliance with the German media giant, Bertelsmann, and into Asia the next year. A series of acquisitions broadened our reach into homepage design and construction (Tripod), financial services (Quote.com), and online content (Wired Digital). We expanded into streaming media, music and videos, online shopping, investment information,and interactive entertainment. We broadened our role in Asia, Canada, and Latin America, and spun off our joint venture with Bertelsmann as Lycos Europe, a separate publicly traded business.
The Lycos Network has been described as the world's largest community. In any given month, nearly half of all Internet users-some 91 million people-visit Lycos to conduct searches, construct homepages, chat, look at news, check stocks, download files, or listen to the radio. Worldwide, its 61 million registered users view more than 350 million pages every day.
How did it all happen so quickly? The answer is that technology has taken us into a whole new dimension of time, what some call Internet time. It comes in three speeds: fast, faster, and instant, which means right now. With instant information and transactions, the Internet breaks all time barriers.
Brevity rules. On the Internet very little lasts, whether good or bad, and the wheel is being continually reinvented. Look at human communication. The Internet has quickly developed its own slang, symbols, and shorthand. Does anyone remember what writing a thank-you note with a fountain pen was like? Now imagine that same note sent as an instant message. Not only the form, but the content will be different. Less thoughtful? Perhaps. More direct and immediate? absolutely.
In this rapid new world, almost instant innovation is essential. For CEOs and managers leading the charge, this can be trying stuff. Like her counterparts at other big companies, Hewlett-Packard CEO Carly Fiorina is probably more exhilarated than exhausted, but it's a close call. At a recent work force gathering, one H-P employee asked her, "What keeps you up at night?" Her answer: "Time. Because time, I believe, is not on any of our sides. In today's economy, faster is always better than slower, and sooner is always better than later. Always. Always. Always. That's tough discipline. It also happens to be necessary for survival. In this technology-driven world, the future is now. Seconds tick by and it is too late."
Fiorina is hardly the only chief executive feeling the burn. AOL's Steve Case put it this way in a recent speech: "You know the song, 'What a Difference a Day Makes7' Well, in our business, the song we sing is more like, 'What a Difference a Nanosecond Makes.' "
Is there a limit to all this acceleration? A point where the laws of nature will force things to slow down? Dick Sabot-who was the chairman of Tripod, a homepage-building service, when Lycos bought his company, and who now runs eZiba, a handicrafts e-tailer-doesn't think so. "When we joined Lycos, Internet time was dog years, seven for one human year. That's no longer true. We now speed through our goals at a pace that's double dog years. But a friend of mine thinks we're moving to fruit-fly years-50 generations in one year."
It's not surprising, then, that "speed is life" became a Lycos credo, one of its guiding principles, and a cornerstone of its success.
In 1995, many companies were striving to become search destinations on the Web. Magellan, Point, Open Text, Infoseek and others clamored for market share. Then, in addition to our selves, Excite, Yahoo!, and Infoseek completed successful IPOs within weeks of each other. We became known in the industry as the "Four Horsemen." While the four of us grew, the others, unable to capture funding or the public confidence it brings, simply faded away.
Venture capitalist Dan Nova saw business cycles compressed by years. "When I first started in venture capital," he told me not long ago, "you typically built a new business over a period of three to five years and took it public after five years of growth, development, and investment. But, suddenly, companies were going public almost overnight. In many cases, the old three-year cycle was reduced to a mere three months."
For managers, this new model changes everything. Years ago, Evelyn Wood devised "speed reading," a clever method that enabled managers to soak up long reports in what seemed like minutes. With a tip of the hat to Wood, I've written this chapter to be a "speed leading" course. It isn't intended for inveterate slowpokes who have no interest in what real speed is, except perhaps as a wake up call. It's aimed at high energy, or potential high-energy, employees and managers who appreciate speed and want to know how to exploit it for themselves and their organizations.
My "course" has six basic principles:
1. Be the first mover or very close to it
Amazon.com was the first mover in the e-tailing world of books, and has reaped enormous attention, and market share, as a result. Barnes and Noble was second and became a force by quickly adapting to the Internet demands of speed, ease, and reach. I'm not sure that it matters who was third because the game on that ballfield is over.
Success belongs to those who act first and pay close attention to detail. First movers beat the competition by setting a standard that anyone who follows has to not only match, but surpass.
In the early days, for instance, when Lycos was a search engine, the top contender in the browser market was Netscape. We attracted traffic to our site because we were accessible through a search button on Netscape's Web page. Many of our competitors had relationships with Netscape, but through hard work, perseverance, and a bit of luck, we won that coveted search button on their page. Suddenly, we leapt to the head of the pack.
A year later, we never would have nabbed that spot-too many companies were competing for it. We strengthened our brand by being first, which made Netscape want to renew our contract, and the process became cyclical. We were good because we were first, and we were first because we were good.
On December 30, 1997-the day before New Year's Eve-we were offered the chance to buy the Internet company Tripod. We only had a few minutes to decide and we immediately made an offer. If we hadn't acted quickly, Tripod would probably now be owned by America Online, and Terra Lycos wouldn't be the company it is today. I'll have more to say about the Tripod acquisition later in this book-my point here is that we were able to make the decision the moment it was presented to us.
Speed must be derived not from impulse or swagger but from being ever alert to opportunity and willing to seize it immediately. There is nothing haphazard about speed. A company must log many work hours, some slow and painstaking, in order to be ready to move instantly.
Caveat: We all know the warning "speed kills." It can and will-if not tempered by discipline, determination, and a balanced life. I obviously understand the need for speed in business, but is also important to balance speed with thought, study, research, discussion, or just sitting still. Ironically, sometimes slowing down will get you where you want to go more quickly.
Paul Tagliabue, commissioner of the National Football League, makes a useful distinction between the need to plan slowly and carefully-and execute rapidly. He stepped me through the League's Internet strategy as an example: "If you anticipate the future right and plan for it strategically, you can move quickly, nimbly, and flexibly, but it doesn't have to be off the seat of your pants. Speed to execute something that has been thought out and planned for strategically can be very importent. Our Internet network is an example. We spent about five years planning for it. We built a consensus in about six weeks, then we had to execute an entirely new concept in less than six months. But we succeeded. So speed was critical."
First-mover advantage is critical in every field, from art to science to politics. "Speed matters very much in the world of ideas," Richard Freeland, president of Northeastern University, told me: "Very often the scholar who produces an interesting new idea attracts publicity, comes to embody the idea, and gains tremendous advantages over his or her peers." In other words, even academia is a marketplace of ideas where first-movers win.
But if first-mover advantage is a universal truth, the Web gives it an entirely new business dimension. Companies can instantly spring a new product on a global scale, leaving competitors breathless. The catch is that those competitors are likely to respond much more quickly than in the past-and also globally. Like it or not, we do business in a world that is spinning even faster.
2. Speed is all about adaptability
Charles Darwin said, "It is not the strongest of the species that survive, but that which best adapts to change."
The market is littered with one-trick ponies, companies that had great ideas but were unable to turn them into sustainable businesses. If Lycos had remained solely a search engine, it would have lost its audience years ago. There are countless examples of companies and even industries that didn't understand the sea change taking place around them, and, as a result, stood by watching helplessly as their sandcastles were swept away. It's really quite simple: Adapt or die.
Thirty plus years ago, believe it or not, the Justice Department considered IBM so powerful that it negotiated a consent decree restricting the company's market practices. It feared that IBM's strength was curbing competition. In fact, IBM was weak because it was inflexible, and it wound up curbing itself. In less than a generation, it missed three historic technology shifts.
The first occurred when IBM, fat and comfortable with its high-margin mainframe business, ignored the advent of the mini-computer, allowing upstarts such as Sun and Digital to take root. Next, IBM watched from the sidelines as the personal computer revolution transformed corporate data processing, and the PC pioneers-Compaq, Dell, Intel, and Microsoft-seized the field. Finally, ever-myopic Big Blue saw the Internet solely as a tool to sell more computers, not as an engine for generating entirely new products and revenue.
With all its power and might, IBM could have easily been a dominant provider, but it let others capture a first-mover advantage-because it was slow to adapt to change. Fortunately the company eventually adapted. With the arrival of Lou Gerstner, the company that was common fodder for criticism, learned to move quickly again. Once awakened, this sleeping giant moved swiftly. Almost overnight, its revenues shifted from hardware to services and Gerstner completed one of the greatest corporate repositionings ever.
"Nothing has changed the fundamental economics of business," James E. Copeland, Jr., CEO of Deloitte Touche Tohmatsu, told Chief Executive magazine not long ago. "It's still good to have a lot of capital. It's still good to be big. The problem is when you let your bigness make you slow, or when you let your experience lead you to believe your way is the best way. Established companies that prosper are those that don't allow their success to lull them to sleep. They stay nimble in the marketplace."
As General Electric's legendary leader Jack Welch has often said "If you're not fast and adaptable, you're vulnerable. This is true for every segment of every business in every country in the world."
Not only in business, but in every field from art to sport to war, speed requires adaptability. Just moving more quickly in the same direction is a prescription for obsolescence. But if your company is structured and primed to adapt rapidly, you can seize opportunity almost as quickly as you spot it. At really high speeds, you reach an edge that feels effortless, thoughtless, and paradoxically relaxing This is the edge known to athletes and fighter pilots. It is when all your practice and hard work pays off and the actual doing just happens.
One of the benefits of speed is that it forces you to be open-minded, receptive to unconventional ideas and trial-and-error experiments. "When you're experimental," Dick Sabot told me, "you expect to succeed some of the time and fail on other occasions. There's a tolerance for making mistakes and building on them."
Adaptability makes the difference between complacency and conquest. Let's compare the way two media giants, Time Warner and Bertelsmann, responded to the Internet. Though both embraced it, one sought to adjust the Internet to its own practices, while the other willingly adapted.
Time Warner, run by some very talented people, was quick to respond to the Internet. It launched its Pathfinder Web site in 1995. Pathfinder was a compilation of Time Warner's many fine publications, including Time, People, and Fortune magazines-and was operational before most media companies had even begun to plan their sites. What Time Warner missed, however, was that the new medium demanded new content. What worked in a magazine didn't necessarily work on the Web. Time Warner believed that the overwhelming power of their brands, given enough time, would attract users. And they assumed that a company earning billions of dollars a year had plenty of time.
They were wrong The people at Time Warner did not realize that the Web had spawned a personal revolution based on the power of individual choice. Through chats, message boards, and e-mail, users created a global village that let them research information, express their views, and connect with others who shared their interests and obsessions-all in the safety, comfort, and anonymity of their homes. Today, Pathfinder no longer exists.
Sites such as Tripod, on the other hand, provided the free software people needed to build their own Web sites. The reasons they built the sites was simple and primal-we all want attention, recognition, and a forum in which to share our accomplishments. Suddenly, there was a grass-roots movement of cyberspace site builders, and vast networks of new Web users cropped up at an incredible rate.
What you had was a personal publishing revolution on a planetary scale, and Time Warner's old-model Pathfinder didn't address any of it. Tripod and its peers understood that the Web's added value was interactivity and empowerment. By contrast, Pathfinder was simply Time magazine on the Web, People on the Web, Fortune on the Web. The end result was that in 2000, Time Warner, with all its might, was acquired by AOL, one of the companies it believed it could crush.
At the other extreme was Bertelsmann, the 100-year-old German media giant. Bertelsmann, the most global of all media companies and parent of the publisher of this book, conducts business in 54 countries and is a leader in music, publishing, magazines, and television production. It, too, understood the significance of the Internet thanks to Thomas Middelhoff, its charismatic chairman and chief executive. I first met Thomas in 1997. We sat in his office in Germany and discussed the creation of a Lycos European joint venture. At that time, he was the executive in charge of Bertelsmann's multimedia business and had a reputation for extraordinary vision. Our conversation on that February day was all about the future. Using a hockey analogy, Thomas was never about where the puck has been, he was all about where the puck was going.
Rather than try to squelch the market shifts, Middelhoff has always welcomed them. He convinced his company to purchase 5 percent of AOL, accepted a seat on its board of directors, and, through a joint venture, ran AOL Europe. (The AOL-Time Warner combination resulted in the dissolution of the joint venture; in return, Bertelsmann will receive a payment of up to $8.25 billion.)
By means of these alliances Bertelsmann developed a worldwide audience for its products and content and has seen the return on its investment grow into billions.
Never resting, however, and showing his ability to embrace change, Middelhoff moved again. He boldly aligned its music division in support of Napster, the software that gave music away and that many feared was the industry's gravest danger. Once again, he looked change in the face, invited it in, and adapted accordingly. Darwin would be proud.
3. Fast and good is better than slow and perfect
Though I don't know if Bill Gates would agree, it strikes me that this principle is one of the cornerstones of the Microsoft empire. The first version of virtually every Microsoft winner, from Office to Windows, has gone to market in far less than perfect form-but well ahead of the competition. This timing is no accident: Microsoft uses first releases to draw customers who then help refine the product by finding the bugs that Microsoft doesn't want to slow down to address. Once customers pinpoint what's wrong, Microsoft promptly fixes it.
Some customers may feel a bit like guinea pigs, part of a grand Microsoft experiment in nudging the limits of customers' tolerance. The company's success, however, speaks for itself. EMC's Dick Egan agrees, pointing out that putting an imperfect product in a customer's hands is often the best and sometimes the only way to get needed feedback. "You can go out and do surveys and sometimes your audience will respond," he told me, "but if you actually have a product there in front of them, the attention and feedback you get is much better thought out and certainly more comprehensive." Kevin Kelley, the respected editor of Wired magazine, holds a similar point of view: "Wealth in the new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown."
The product that beats the competition is seldom the best, and it's never perfect. The longer you hold out for perfection, the less likely you are to achieve it, and you'll lose whatever competitive edge you may have-a lesson we learned the hard way at Lycos.
Yahoo! developed what is probably their strongest franchise with its financial-services products. After initially providing basic stock quotes, it evolved into one of the most comprehensive finance offerings on the Internet.
Long before Yahoo! launched its service, I envisioned a similar site. My mistake, however, was attempting to build a product so big and bold that I ended up building nothing. After conceiving the idea, we aligned with a division of Intuit operating out of Pittsburgh. Four months later, we were still perfecting our blueprint. Yahoo! in the meantime had launched a site and was gathering customers. Sure, we saw all the bugs in their release, but they had the first-mover advantage, and the market loved it. Every day, the concept became less novel.
We shifted potential partners many times during this search for perfection until finally, on a Friday, out of pure frustration, we set an up-and-running deadline of the following Monday. We just couldn't wait any longer. We met the deadline and eventually built a strong financial-services presence. Still, it was a sobering lesson. That we finally got our concept together in three days showed me that we could have completed it long before we did. We had a great idea and should have been satisfied with a good offering, instead we wasted time seeking the perfect one. As a result, we lost a sizeable piece of market share.
I should have listened to Warren Buffett, the fabled fount of Old-Economy wisdom, who once said, "I don't try to jump over seven-foot bars. I look around for one-foot bars that I can step over."
Don't misunderstand me: I'm not suggesting that it is ever acceptable to deliver shoddy products. Striving for quality should be a passion. Never stop thinking of ways to make your products better, but don't get stuck trying to achieve perfection. Release the product and, at the same time, continue to refine it.
It's important to balance the sometimes competing needs for speed and quality. Neither one can be allowed to dominate at the expense of the other. Work for a superb product at a breakneck pace until one objective begins to undercut the other-and then recalibrate. The goal is to maintain a healthy tension and keep the needs in tandem, while making sure that you're growing in ways that give you an edge over the competition.
In an imperfect world, the quest for perfection often leads to blind alleys, frustration, and failure. Be content with being first and sweeten your victories with pride in your product as you continue to improve it. As Ford Motor crowed: "Quality is job one." Great slogan and great ideal-as long as you don't confuse quality with perfection.
In certain industries, of course, perfection is mandatory, especially when safety is at stake. We need look no further than the Firestone crisis to appreciate the human and business costs associated with poor products. When weighing the issue of perfection versus speed, I find that answering a few basic questions helps me strike the right balance and make the right decision:
What are the costs of delay?
What are the costs of a less-than-perfect product?
From my customers' perspective, do I hurt or strengthen the company with a rollout today?
How quickly can my competitors respond?
These questions apply to all businesses.
4. Follow your gut
"I sometimes feel like I'm behind the wheel of a race car," America Online's CEO Steve Case noted during a recent speech. "I need to keep my eyes on the horizon, but I also need to keep my attention on the rear-view mirror to see who's gaining on me. From the passenger seat, consumers are tellng me where they want to be dropped off and when, and behind me my shareholders and business partners are engaged in loud back-seat driving. One of the biggest challenges is that there are no road signs to help navigate. And, in fact, every once in a while, a close call reminds me that no one has even yet determined which side of the road we're supposed to be driving on. And the finish line is a long, long way away."
I think anyone who has worked in today's economy can relate all too well to that comment. In these unnerving times, top managers can't afford much introspection and had best convince their most important audience-themselves-that they know what they're doing. If they don't know, who does? As Hewlett-Packard's plainspoken Fiorina: "Know yourself, trust your whole self, and don't blink."
While I'd like to say that all our moves at Lycos were models of deliberation, fit for business textbooks, the truth is messier and much more interesting. At times, events moved so fast that we had to rely on our gut instincts and precious little else. We often brought out new products for one reason-because we could-and for the most part, this approach worked.
Lycos' IPO came about in a similar way. I had no experience with investment banking or public offerings, and so, as with so much else at that time, I found myself in the middle of a crash course. In late 1995, I received a call from a research analyst who had been part of a team courting the company. He told me he was about to begin working with a competitor of ours but wanted to give us one final opportunity to move forward with his firm. Would we be interested?
I spent much of the night on the phone talking to our directors. The timing was well ahead of anything we had enviaioned, but it was a striking opportunity. My instincts told me to seize it, and our initial public offering was completed 100 days later.
Relying on your gut is usually a pretty effective way to hire people, as well. When interviewing a candidate, I often knew within the first five minutes whether or not I was interested. I found myself either coaxing the person to come to join us, or looking at my watch to figure out how quickly I could end the interview. I wasn't looking for perfection, I was looking for chemistry-a certain indefinable connection that told me this person and I could work together.
Ted Philip, our chief financial officer, is an example of one such hire and among the best decisions I've ever made. When I first met him, it only took me a few seconds, literally, to realize that he was a winner and I wanted him on the Lycos team. As we spoke, his obvious leadership skills, wisdom, and presence only increased my excitement-and I pursued him aggressively. At that time, Ted was happy in his position at Disney, and it took me over a month to persuade him to leave. Ted was a spectacular fit. Some thought that his low-key style made us temperamental opposites, but they didn't know the whole Ted. He's a black belt at Tae Kwon Do, races jet skis at 80 miles an hour, and snowmobiles at 120. His is a life that operates very much in the fast lane.
I learned, in a few cases, the hard way, that when I was unsure about a candidate and had to work through the pros and cons, I shouldn't hire that person. Good chemistry, which either manifests at the first meeting or not at all, leads to productive working relationships, and, without it, an essential ingredient will always be missing
5. Speed is a cultural value
When Lycos started out, we not only lacked a long-range business plan, but we saw no reason to have one. We assumed that given the nature of the Internet, any plan would be obsolete in three months. Instead; we chose to be flexible, intuitive, and pragmatic. We scrambled for market share anywhere we thought we could find it. While hungrily seeking revenue, we focused on trying to differentiate ourselves in the market.
Much of our challenge lay in figuring out what would work. We wanted to take everyday items and experiences and put them online: yellow pages, dating services, weather updates, and road maps. Whenever I read a press release touting a competitor's new product or service, I thought, "Damn, we can do that." Being fast and first was vital because, in addition to new customers, it provided exceptional media coverage.
We worked to build a culture in which getting things done quickly was the organizing principle. In his book, Business at the Speed of Thought, Bill Gates wrote: "Speed of business has been limited by moving information around, but with digital tools moving that information at the speed of light, the only constraint is how well you use your knowledge workers, your thinkers, to react to what is going on, to plan new products to make sure you are using all of your resources in the right way." Technology gives us abundant information. Putting it to work effectively is the job of people. Creating a culture that encourages lightning-fast implementation is the duty of the company's leaders.
Jan Horsfall, now president and CEO of Phonefree.com, was marketing vice president at Lycos during this turbulent time, In a recent conversation with me, remembered those early day like this:
The real win for Lycos was speed. Web users wanted easy access to information, but Yahoo! had already carved out that feature. So we focused instead on the fact that users also wanted things faster. We ended up making the site quicker to use by cutting out size. We did a ton of usability studies: speed involved not only site performance but also how fast people could find things. It forced us to get into the navigational structure of the site to understand how people moved around. We did very intensive user studies just to figure out how people clicked from place to place.
All this forced the company to really focus on what the consumer felt was important. We brought numerous engi neers to Waltham, who feverishly looked for ways to make the Lycos site go faster, whether it was the way we were hosted, whether it was the size of the pages. Before long, the entire company was wrapped around this idea of speed.
So many business maxims-"Cut your losses" or "Damn the torpedoes, full speed ahead"-are based on the need to move relentlessly forward as fast as possible. Speed is the essence, and needs to be ingrained throughout the organization. With products, marketing, distribution, even people, you need to act swiftly. If you're a pro football coach, for instance, trying to build a winning team in a few pre-season weeks, you can't afford to gently nurture someone's nascent talent. You build on the strong players and cut the weak.
I made a mistake with our first marketing executive. It was clear we were never going to be on the same wavelength. Four months after I hired him, I fired him. Firing employees isn't something to be proud of, but all too often I see organizations delaying the inevitable, creating a "death by a thousand cuts" scenario that leaves both the employee and the company harmed.
Do what works as fast as you can, and don't waste time worrying about how closely your methods fit the models in business textbooks, because these days those textbooks are out of date almost as soon as they're printed.
6. Avoid analysis paralysis
Looking back on his seemingly flawless record at General Electric, even the mighty Jack Welch once acknowledged, "My biggest mistake was agonizing too long over difficult decisions. I should have done it faster."
Nothing is more exasperating than what I call analysis paralysis or freeze-ups. You're facing a big challenge and suddenly your mind goes blank, your tongue thickens, your limbs slacken. Freeze-ups can happen to anyone-an actor forgets lines, a salesperson blocks the top customer's name, a new chief executive botches a speech to skeptical stockholders. They can affect star athletes: A superb fielder like the Yankees' Chuck Knobloch can't throw to first base; Tiger Woods begins slicing into sand traps on the fifteenth hole; U.S. Open defending champion Serena Williams is unable to avoid serving one double-fault after another.
Why do people freeze-up? Often, it's because they start analyzing what they're doing instead of just doing it. Even if you achieve the acrobatic grace of, say, a fighter pilot maneuvering at supersonic speeds, your spell can be broken. Fear intrudes; you become self-conscious. Focus vanishes; you panic and are paralyzed. Your moment passes and you fail.
I have spent a lifetime resisting analysis paralysis, in both my business and personal life. Speed has been the secret weapon, the weapon without which battles are lost, fortunes squandered, and breakthroughs undiscovered. Speed is liberating because those with quick minds and quick steps accept no limits.
As Ralph Waldo Emerson put it: "In skating over thin ice our safety is in our speed." Life is too fleeting to waste precious moments avoiding, dithering, fearing, hesitating, or regretting. To act is to live. To act fast is to live fully.