an evening with the stars of e-commerce
part 6: Mark Walsh: hard, expensive,
proprietary and scary
Thank you. It's kind of surreal being at this table. I'm not sure if I stumbled into a
family reunion or I'm on The Truman Show, which is this Internet worldwide broadcast, and
for those of you watching us on the Net, it's a lot more fun here than it is where you are
My company is named VerticalNet. We run 16 sites on the Net. I'll read the 16 names
rapidly and I think you'll get the idea. The sites are named Water Online, Pollution
Online, Public Works.com, Power Online, Solid Waste.com, Food Online, Chemical Online,
Pharmaceutical Online, Hydrocarbon Online, Pulp And Paper.com, Photonics Online, Test and
Measurement.com, Medical Design, Computer OEM Online, Wireless Design, Fiber-optics Online
and Property and Casualty.com. Each of them has vendor listings and search engines for
vendors, news and editorial content, chats, forums, job listings, auctions and e-commerce.
However, I come to you tonight to tell you that e-commerce is a bust. It's a fallacy.
Why? Because we keep focusing on markets where any rational disintermediation would win,
like flowers, airlines, stocks, books and cars.
In all the places we say we have declared victory, the customer is always ticked off
and the seller is always confusing the buyer. Of course e-commerce will win then, because
disintermediation is a natural imperative, as opposed to a lot of places we expect
e-commerce to win where disintermediation might never occur. E-commerce today will
continue to be a bust as long as it is technology-driven. E-commerce in 1998 is just like
X.25 online services in 1988. They are hard, expensive, proprietary and scary.
They will never win until we acknowledge one truth about the e-commerce industry,
specifically the business-to-business sector of it. Consumers and business users of online
services are exactly the same people. They behave the same way. They demand the same
value. They insist upon the same ubiquity, utility and meaning for the service. That is
because online services are the only technology that have come from our house to our desk.
All other business technologies have had the exact reverse direction. We first used a PC
in our company. We first had conferencing and transfer buttons on phones at our desk. We
first started using FedEx at our corporation. We first used a cell phone or a pager when
our company bought it for us. We first used Document Management in the Wang department in
1982 in our steno pool. But each of those products, now, we use as consumers universally
and without any thought.
But interactive servicesas a way to communicate, to buy things, to join together
in cyberspace as a work unithappened in our den and now we are bringing them to our
desk. Because of that amazing reversal, the consumer is actually the person we should be
looking toward to drive business-to-business e-commerce.
My example is that EDI and e-commerce will work in the business environment when the
CEO sits home one night, and he or she uses it to pay the mortgage, the kid's tuition, the
house painter or the credit card bill. They will go to work the next day and say,
"Why can't I do this at work?" Those are four different payment channels, four
different types of commerce, four different types of money, and all easily done.
I, as a consumer, figure out it should happen, and that it should happen at my
business. What we see in the e-business, or e-commerce side for business-to-business, is a
cycle of life in cyberspace where content attracts eyeballs, context secures
eyeballspeople like me in an industry that I care about. Commerce engages those
visitors to try something.
But what wins? Community. Community wins in the business-to-business sector just like
it won in the consumer sector. A place in cyberspace that makes you a better business
person is a place you will go and a place where you will buy things. The Internet and
e-commerce are not about Beany Babies, books and flowers. The Internet and e-commerce are
not about EDI standards and video conferencing. What it is about is accelerating and
facilitating leads that connect buyers and sellers.
Let me read to you some leads that came through some of our sites in the last 30 days.
These are pieces of email from visitors around the globe to individual vendors on our
sites. This one, from Lexington, Massachusettes, "I need a price quote on an exhaust
jacket assembly to be used in the filling operations of 180 to 320-gallon tote bins with
hydrazine. The assembly must cover the bung opening and surround the filling lance
completely. It should have a collapsible accordion outer sleeve."
This from France to Chemical Online, "We're looking for a solids level probe
capable of localizing the top of a solids accumulation in a liquid-filled vessel, range
zero to six feet approximate. Must be able to operate under at least 100 bar and if
possible up to 690 bar. Electrical output must be 4-20 mHz, or common industrial
This from Water Online from Canada, "I have a textile dying wastewater treatment
recycling project in China. The wastewater has the following specs: COD 650 mg per liter,
etc. The new expansion would be 100,000 cubic ml a day. If your company can treat this
type of water, would you please send me your technical info with price tags on 20,000 to
100,000 ml a day. I look forward to receiving your early reply. Truly, JCU, China."
This is e-commerce. It is not about disintermediation, it is about reintermediation
because, in most business-to-business environments, the middleman adds value. Unlike
flowers, unlike stocks, unlike airline seats, unlike books, unlike records, the middleman
adds value in the real world outside of these doors. I would suggest that when we study
e-commerce, we keep reminding ourselves, it isn't going to happen until we make it easy
for all of us to use.
With that, I will introduce the next guest. I have not met Jack before tonight, but I
enjoyed sitting next to him because I think he is a core technology guy for what this is
all about. He had significant stints at the Electronic Industries Association (EIA), and,
as an old X.25 guy like me, spent some time at Tymnet. Those were the days, huh? Selling
that 900 baud and 300 baud stuff? He spends a lot of time with the Electronic Funds
Transfer Association (EFTA), and you've heard his connections to the rest of the panel.
With that, it's my pleasure to introduce Jack McDonnell.
next: part 7: Jack
McDonnell: you have to be a little crazy >
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