No matter where you look today, the “road kill” from the New Economy is everywhere:
The final death blow in the Internet’s tragic fall came just last week when Cisco, the mother of all New Economy stocks, failed to meet the street’s earnings expectations for the first time in seven years. How fast things have changed since 1998, when American business started drinking the New Economy Kool Aid. It was a lethal cocktail. Suddenly, reasonable businessmen accepted that revenue and earnings were less important than meaningless metrics like eyeballs, click-throughs and unique visitors. The scariest thing about all this is that corporate execs, venture capitalists and Wall Street actually bought this junk.
Now, the belief in a gravity-free economy is gone, and making money is back in style. I’m happy the New Economy is dead, but I’m also sad as hell. There was so much I loved and hated about the past two years:
I loved the fact that boring corporations were forced to think hard about their customers again. The threat of terrorist.com woke everyone up and made them realize how fragile customer loyalty can be. At the same time, I hated all the buzzwords that accompanied the discussion: customer-centric, CRM, one-to-one – ugh! Somehow humble discussions about the customer turned into Night of the Living Consultants.
I loved the young blood that the New Economy injected into corporate America. It was hilarious watching board rooms full of 60-year-old men listen intently as a pony-tailed kid named “Jared” explained the meaning of a Web page hit. Unfortunately, the young and hip business movement got arrogant and tiresome. Please, no more trendy feature stories on the dot.com kids who play ping pong in the board room, bring their pets to the office and work in their underwear.
I loved the New Economy’s focus on speed. One thing you have to give the dot.com kids – they have no patience. These companies were raising capital, recruiting managers and launching new products faster than traditional corporations take to approve the casual dress code. On the other hand, I hated how all this speed resulted in sloppy work and no attention to detail. Systems were thrown together and released before they worked. (Nothing is more frustrating than encountering the Java-script error or frozen screen when trying to do something a little more complex than buy a book or gawk at a naked woman.) It soon became a game of releasing the next truth-stretching press release instead of delivering functional products.
I loved the original concept of a portal – a single Web page that gives the visitor access to a bunch of useful stuff. Unfortunately, portals quickly started to look like cheap swap meets, full of banner ads and pop-up marketing messages. Web users were not amused by all the blatant commercialism and gave most e-commerce sites a resounding thumbs down.
Let’s face it – the vast majority of American business got carried away and started to believe in a gravity-free economy. Now, everyone is rubbing the sores from a hard landing and disillusioned by the Internet and new technology.
It’s too bad. The potential of the Internet is still huge. New ideas, speed and a real customer focus are needed more than ever, especially in the banking industry. I hope we don’t let the dot.com craze discourage bankers from challenging and rethinking their business with new strategies, organizations and technology.
The hype may be over, but the Internet continues to be an issue that cannot be taken lightly by banks. -sw