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From the oyster fisherman's perspective, the time he spent in the actual business transaction was insignificant compared to the time he spent hauling oysters from the brackish waters in southern Louisiana and then transporting them to market. As a producer, he felt that selling was simply the final step in a long, arduous process. He didn't have time to consider his role in the value chain and what might happen if the fish market owner refused to buy his catch in favor of that of another fisherman who might accept a lower price. The oyster fisherman and the fish market owner had an unsigned deal-a relationship-that virtually guaranteed security for both of them.
From the fish market owner's perspective, the oyster fisherman was probably a normal, welcome partof his Saturday morning. After 15 minutes of haggling and another 15 minutes of the fish market owner's watching the oyster fisherman unload a dozen barrels of oysters, the oyster fisherman was gone. The time the owner invested in the relationship was the time spent transacting business. It was an efficient use of his time. Of course, it wasn't as simple as that. If the owner didn't at least satisfy the oyster fisherman's need for capital, he might have to invest time finding another reliable source of oysters.
It turns out that their relationship lasted over a decade. The demand for oysters declined and the oyster fisherman shifted to the more lucrative shrimping industry. As captain of a shrimp boat, his main concern was maximizing his weekly catch while managing a crew of six. He no longer dealt with sales; a salesman representing the shrimping cooperative negotiated with the big freezer companies for the best price. After another decade, faced with dwindling profits and fierce competition from shrimp producers in Mexico and Taiwan, the oyster fisherman graduated from hauling ice and shrimp to managing tugboats that transported drilling equipment to offshore platforms for multinational corporations.
Through the course of his work career, the oyster fisherman became involved in longer, more complex value chains. He advanced from delivering a product with a measurable quality to a service that was difficult to quantify. He moved from dealing one or two levels up from the end-consumer to dozens of levels up from domestic and international consumers. The oyster fisherman never experienced the Web, but his career illustrates a number of points relevant to the Web.
According to the cliches floating around the trade magazines, we're all operating in "Internet time," "power has shifted to the consumer," "revenue is in and profit is out," and "the Internet changes everything." There may be some truth to these revelations, but in each case, it's a matter of degree. Despite the widespread adoption of the telephone, email, and the Web, business is still about creating and nurturing relationships. What has changed is the real and perceived time required to form relationships, transact business, and-most importantly-dissolve and disrupt relationships.
It's fashionable to speak of things happening in Internet time because processes on the Web simply occur faster than in the physical world. Instant communications and gratification are not only possible, they are expected. It's as though, as a species, business has been transformed from a lumbering elephant, which lives seven or eight decades, to a sprightly fruit fly, which experiences an entire life cycle in less than a month.
The Web, like the telephone and the microcomputer, is really a time machine. Just as FedEx is a modern version of the transporter from "Star Trek," capable of moving objects from one point on the planet to any other point in about a day, the Web compresses the relationship building-sales cycle. A three-second sequence of mouse clicks can replace a one-or-two hour business meeting. Because of the ease and rapidity with which symbiotic relationships can be established, there's little motivation for either side to develop loyalty toward the other. Or is there?
Several factors affect the Internet business relationship: trust, is one factor. Each side assumes that the other will abide by the agreement to exchange goods, services, or money. Trust doesn't have to go very far if the business transaction involves trading a barrel of oysters for a few coins. Both sides get what they want out of the exchange or the deal is off. But consider a business transaction for services, such as a onemonth contract for house cleaning. A service, unlike a physical object, is difficult to quantify objectively. If a customer isn't satisfied by the quality or timing of the service, there may not be any recourse against the supplier other than simply not using that supplier again.
To quote a sales cliche, "The fear of loss is greater than the prospect for gain." Or, as Spencer Johnson says in no Moved My Cheese?, "The more important your cheese is to you, the more you want to hold on to it" We-buyers, sellers, and bystanders-fear the unknown. This universally human trait provides the psychological basis for cultural development, patriotism, and loyalty. Since we are consumers in the service industry, this fear of the unknown also fuels our desire to stay with a service provider that has performed admirably for us in the past. Presumably, service providers appreciate the money paid to them for their services...
|1||Business in Internet Time||3|
|2||New Rules, New Game||15|
|Pt. 2||Technological Underpinnings||81|
|4||The Human-Computer Interface||83|
|5||Bots, Intelligent Agents, and Virtual Personalities||117|
|Pt. 3||Putting It All Together||165|
|9||Making Your Move||213|
The impact of distributed and intelligent communications has been felt, perhaps most intensely in the world of business. Despite dramatic mood swings on Wall Street, the seemingly extraordinary values often ascribed to so-called "e-companies" reflects a genuine perception: the business models that have sustained businesses for decades are in the early phases of a radical transformation. New models based on direct personalized communication with the customer will transform every industry, resulting in massive disintermediation of the middle layers of distribution that have traditionally separated the customer from the ultimate source of products and services.
The underlying technologies are all accelerating. It's not just computation that is growing exponentially, but also communication, networks, biological sciences (e.g., DNA sequencing), brain scanning, miniaturization (we are currently shrinking technology at a rate of 5.6 per linear dimension per decade), the accumulation of knowledge, and even the rate of paradigm shift itself. And the underlying technologies are becoming ever more intelligent, subtle, emotionally aware, that is, more human.
Expanding access to knowledge is changing power relationships. Patients increasingly approach visits to their physician armed with a sophisticated understanding of their medical condition and their options. Consumers of virtually everything from toasters, cars, and homes to banking and insurance are now using automated software agents ("bots") to quickly identify the right choices with the optimal features and prices.
The wishes and desires of the customer, often unknown even to herself, are rapidly becoming the driving force in business relationships. The well connected clothes shopper, for example, is not going to be satisfied for much longer with settling for whatever items happen to be left hanging on the rack of her local store. Instead, she will select just the right materials and styles by viewing how many possible combinations look on an image of her own body (based on a detailed three-dimensional body scan), and then having her choices custom manufactured.
The current disadvantages of Web-based commerce (e.g., limitations in the ability to directly interact with products and the frustrations of interacting with inflexible menus and forms instead of human personnel) will gradually dissolve as the trends move robustly in favor of the electronic world. By the end of this decade, computers will disappear as distinct physical objects. Displays will be written directly onto our retinas by devices in our eyeglasses and contact lenses. In addition to virtual high-resolution displays, these intimate displays will provide full immersion visual virtual reality. We will have ubiquitous very high bandwidth wireless connection to the Internet at all times. "Going to a web site" will mean entering a virtual reality environment—at least for the visual and auditory sense&#!51;where we can directly interact with products and people, both real and simulated. Although the simulated people will not be up to human standards, not by 2009, they will be quite satisfactory as sales agents, reservation clerks, and research assistants. The electronics for all of this will be so small that it will be invisibly embedded in our glasses and clothing. Haptic (i.e., tactile) interfaces will enable us to touch products and people. It is difficult to identify any lasting advantage of the old brick and mortar world that will not ultimately be overcome by the rich interactive interfaces that are soon to come.
If we go further out—to, say 2029, as a result of continuing trends in miniaturization, computation, and communication, we will have billions of nanobots—intelligent robots the same of blood cells or smaller—traveling through the capillaries of our brain communicating directly with our biological neurons. By taking up positions next to every nerve fiber coming from all of our senses, the nanobots will provide full immersion virtual reality involving all five of the senses. So we will enter virtual reality environments (via the web, of course) of our choice, interact with a panoply of intelligent products and services, and meet people, both real and virtual, only now the difference won't be so clear.
In his brilliant and entertaining book, Bryan Bergeron has provided a comprehensive and insightful roadmap to this e-revolution now in its infancy. Dr. Bergeron describes this era not as a single transformation, but as an ongoing churning that will continually uproot and exchange one set of business models for another. What is needed, Bryan tells us, is the right set of principles that can enable businesses to flourish through times of ever accelerating change. He discerningly bases these principles on the loyalty of the increasingly empowered customer. My advice would be to invest in any company that can successfully adopt Bryan Bergeron's principles of meeting the needs and desires of "the eternal e-customer."