timone NetMarketing
disponibile anche in italiano

Marketing in the internet - as seen from Italy

No. 39 – October 12, 1999



loghino.gif (1071 byte) 1. Editorial: Learning from mistakes

Mistakes have always been the basic tools of learning. Trial-and-error is the key to daily survival, as well as the origin of knowledge. It's the basis of any form of life. So it has always been; but at this stage of our evolution it has gained even greater importance as a crucial tool for intellectual advancement – as well as practical action. The turbulence of change blurs or vision; it confuses us if we seek certainties, rewards us when we get a glimpse of new, "infant" trends; that can be discovered by intuition but need to be verified by experiment. It's no coincidence that in the last two or three decades, not only in science but also in the culture of business management, there is discussion of chaos and complexity – or that the beginnings of the chaos theory came at the same time (give or take a few years) as the origins of the internet.

Mitchell Waldrop wrote in Complexity (1992):

The edge of chaos is where life has enough stability to sustain itself and enough creativity to deserve the name of life. The edge of chaos is where new ideas and innovative genotypes are forever nibbling away at the edges of the status quo; and where even the most entrenched old guard will eventually be overthrown.

"Chaos", of course, isn't "chaotic". It seems confused and incomprehensible only when we try to define it by the criteria of our established knowledge. So-called "complexity" isn't more complicated than our conventional perception of things. In fact, it may be simpler. But it seems mysterious because it doesn't fit into the pattern of our habits. Theoretical elaboration on these concepts can be quite subtle, but in practice we have an easy solution. Trial and error.

Modern philosophy points out that now, more than ever, «our knowledge increases in proportion to how much we learn from errors», as Karl Popper explained thirty years ago.

In science, as in life, learning is trial and error, and that means leaning from mistakes. The amoeba and Einstein proceed in the same manner, by trial and error; the only perceivable difference in the logic that governs their actions is that their attitudes are different. Einstein, unlike the amoeba, deliberately tries to do everything he can, whenever he stumbles on a new solution, to find it wrong; his attitude is consciously critical of his own ideas; so – while the amoeba will die because of its mistakes - Einstein will survive thanks to his errors.

These facts were obvious at a time when the internet was only a project in the minds of a few "visionaries". The net is not the origin of the problem, it's a tool to solve it.

What's new with the internet? A lot. Immediate response, multiple dialogue – and the fact that we can change things as we wish, at any time – give us a far greater opportunity than we've ever had of experimenting, testing, correcting and re-trying. Flexibility is the biggest single advantage of the net.


back to top


loghino.gif (1071 byte) 2. Is e-business dying? No, it isn't born

There's a lot of skepticism and disappointment about e-commerce – or generally e-business. Meager results, unsatisfactory experiments. "Automatic" devices that promise the moon and deliver nothing but problems. Websites put up for no good reason that don't achieve anything, so it's easy to draw a superficial conclusion: «See? It doesn't work... Let's sit and wait until something happens.»

According to a report published by Edupage on September 24, 1999, the Gartner Group says that "75 percent of e-business will fail".

Most companies launching electronic business projects neither fully understand the technologies behind their strategies, nor do they adequately plan their initiatives, and therefore 75 percent of e-business efforts will fail, according to a Gartner Group report. In order to succeed online, Gartner suggests that companies regard e-business as a tool, not as a final goal. Additionally, e-businesses should remember to use effective project management by ensuring that employees understand the technology being used, charting the project's progress, and using a step-by-step approach. Gartner also recommends companies check before deploying new technology to see whether a business goal exists for doing so. Furthermore, e-business strategies should plan ways to use new technologies to appeal to new markets. Finally, Gartner suggests that companies stay aware of competition and alert to new rivals.

How peculiar. That's pretty obvious, isn't it? Aren't these normal commonsense business practices? The problem (once again) is that common sense and sound business strategies seem to evaporate when companies are faced with information technologies – and especially the internet. They go online "just to be there", with no clear idea of why they are doing it. They apply technologies before they know what they are trying to do. It's quite surprising, under the circumstances, that the failure factor is "only" 75 percent.

If that's true in America, it's even worse on this side of the ocean; especially in a "backward" country such as Italy. For years we've been laughing rather sadly at the repetitive predictions that "the takeoff will be next year". But this time it's happening. In the second half of 1998, and more so in 1999, there's a considerable increase in the number of people online, as shown by research findings that were summarized in netmar37.htm#heading02issue 37 of this newsletter. What is not happening is a sound development of e-business. The (relatively) good news is that, in spite of the hype, the problem is beginning to come out in the open. In a meeting of Italy's economic and political leaders in Cernobbio on September 3, 1999, for the first time it was clearly stated that our companies, large and small, are confused about the internet and unable to use it properly. As I said in an article in September, diagnosis is the first step in facing an illness; though there seem to be very confused ideas about which treatment is needed.

This year, thank heavens, I avoided the awful menagerie called Smau (the yearly trade fair for electronics and office equipment). But friends of mine that ventured into that mess told me that there was a whole floor of stands offering "web solutions", at very convenient prices (some vendors promise to provide "full e-commerce service" free of charge to whoever uses them as an internet or telecommunications provider.) I don't want to discuss technical solutions; they can be good or bad depending on the needs of each company. But it's plainly impossible for any of those devices to replace a clear strategy and a strong commitment to making it happen. I hope most companies will be wise enough to see through the smokescreen. But if any fall into the technology-before-strategy trap, the probability of failure is likely to be closer to 99 than 75 percent.

Actually a 3 to 1 failure factor isn't too bad when we move into a new territory. It seems sort of normal, if not optimistic. And the solution is so easy... as I said in the #heading01editorial of this issue. The net is an ideal environment for trial and error, testing and experimenting.

back to top


loghino.gif (1071 byte) 3. An anthology of confused thinking

Let me start with a disclaimer. I don't know Riccardo Chiaberge and I have no reason to argue with him. I'm not picking his article in Corriere della Sera (September 29) because it's any worse than most. In fact, it's better than average and I agree with some of his comments. But it happens to be an anthology of the way of thinking that seems to dominate newsmedia, universities, economic and political powers – in Italy as well as across Europe and in several other places. That's why I think it's worth analyzing.

In the world of computers the hero of Europe's retaliation is called Linus Torvalds, the kid from Finland, author of a new operating system competing with Windows.
A sort of Willam Tell of the digital age, confronting the Bill Gates empire with naked hands.

The good side of this is that finally – though several years late – mainstream media are becoming aware of Linux. Though they still don't understand the broader perspective of opensource and compatibility.

The description is quite romantic, though of course it doesn't fit reality. At thirty, Linus Torvalds is young for the success he has gained; but he's no kid. He is even a parent (his daughter is called Patricia Miranda Torvalds). Linux isn't "new"; it's been there since 1991 (and it's based on Unix, that was around ten years before Windows). Maybe in the beginning it was really like a brave archer facing the empire with "naked hands". But now it's an established technology, supported by big business.

And this is no European renaissance. Torvalds was born and bred in Finland, but he lives in California. (The same thing happened with the world wide web; originally conceived by an Englishman in Geneva, but developed in the US; and Tim Berners-Lee now is at MIT). The heart of opensource development in the United States (though programmers from all over the world are contributing – and developing as they please). The problem in Europe is that it's even more subjugated than the US by non-compatible and cumbersome software. There can't be a level playing field, but chances for European developers would be much greater if they were based on opensource.

The plan for computer literacy announced in July – and confirmed by the government in September – appeared serious. But in a few weeks it has disappeared from the budget. Someone in treasury or finance has removed computers from the shopping list and left only pecorino cheese. Unfortunately, unlike cheese, the net doesn't ferment by itself. It needs politics.

Well... it's sad that information technology isn't getting as much attention as it should. But I don't agree with the reasoning. The net is a live thing, a biological system; it does "ferment" and grow by itself. Before we call for the intervention of politics we should have a better understanding of how it works.

Before worrying about how much money is invested by the government to support the internet, we should be much more serious about the quality of the incentives. It's better if politics stays away from the net until it has understood what it should do – and especially what it should not do. We've already seen so much poorly conceived and worse executed intervention that it might be better if they just left it alone.

And... they should stop talking about technical literacy (a nickname for oppressive and hostile indoctrination) and try to understand the real (human and cultural) values of communication networks.

Our Prime Minister is right when he says that the internet should become a status symbol – as were mobile phones (but maybe they aren't any more.)

Is he? Why should we get into anything as silly as status symbols? The net is growing because people are beginning to understand that it's useful; there's no need to turn it into a fashion or a fad. We've got enough problems with companies and institutions setting up useless, cosmetic websites as "status symbols".

The internet is the backbone of the new economy, the way of the future.

Yes, it is. But we need more than rhetoric.

Our companies, with few exceptions, use the net only to show off; 130 thousand are online but there are only 650 e-commerce websites, with a total yearly volume under 700 million lire (less than 400 thousand dollars – or ecus.)

Yes. Here the article hits the heart of the problem. I don't know where the author found those figures; and, as usual, the definition of e-business is very restrictive (selling things on a website). But, more or less, that's the picture. Pretty awful.

The article also points to another fact. There are many more Italians buying things from sites abroad than there are Italian companies selling online to the world. And it's likely to get worse. If Italy has 1 percent of the worldwide net (see issue 38) there is a 99 percent probability that, if and when online buying develops, it will do no good to our trade balance. Conversely, 99 percent of the potential market is outside our borders. The name of the game is export or die.

back to top

loghino.gif (1071 byte) 4. The "convergence" myth (Gerry McGovern)

Here's one more quotation of my favorite author, Gerry McGovern. On October 4, 1999 he published an article on The limits of convergence.

Did you hear about the new TarmaAquaAir from GM? It's a car that turns into a boat that turns into a plane. You haven't? Well, neither have I. Because while most of us use road, water and air transport, it just doesn't make sense to create a multi-purpose transport vehicle.
Again and again I get asked about convergence. Principally, there is a constant question about how long it will take for the internet and television to converge? My answer is that it will take about as long as it takes GM to launch the TarmaAquaAir.
What is television? What is the internet? My answer is that it doesn't matter what a television is or what the Internet is. What is important is what they do. What is important is what the "function" of the tool is, not what the tool is itself. It's like defining a hammer as something that hammers nails into wood, not a tool with a wooden handle and a metal head.
As the Digital Age matures, the construction and even name of the tool may change, but the original and primary function of television and the Internet will remain the same as long as people want to be entertained and people want to be informed/educated. Yes, there will be convergence at the edges but the basic functions of entertainment and education will remain separated.
Let's think ahead for a moment. In five years many homes will be networked with digital systems. There will be a central server computer through which programming and information will enter the home. Most rooms will have a screen and keyboard/remote control device. (In fact, many of the functions may well be voice controlled.) Some rooms, such as the sitting-room, will have very large screens placed on walls, others, such as the study, will have smaller screens placed on a desk.
When you "turn on the television" in 2005 you will probably be relaxing in the sitting-room after a hard day's work, wanting to vegetate. You will want to be broadcasted "at". You will have no special interest in interacting unless something very unusual occurs. Because a great many of us watch "television" to be entertained; to allow our minds to relax, not to tax our brains with interaction.
Let me let you in on a secret. There's a lot of people in the world who really like being spectators, who really like being part of the audience, who would come out in a rash if they were told they had to "interact" with strangers through their television.
Back to 2005. When you need to do some work you will most likely go to your study, call up a word processor, access some information, whatever. You might call it using the computer or accessing the internet, but that will be because you got into the habit of using those terms.
Today, too many people who should get it don't. Don't get confused between the tool (television, computers, internet) and the function (broadcasting entertainment and news, doing work, accessing information). Because it really doesn't matter what you call it. What matters is how and why you use it.

Like Gerry, I don't see much potential in the internet marrying television. There's much more to be achieved in the cross-fertilization of the net and publishing. There's already al lot of "digital publishing" but most of it is superficial. As Alan Cooper says, it's like a dancing bear: the dancing is awful, but it's peculiar because it's a bear. Electronic publishing will mature when nobody will be intrigued by just having a book on a disc or looking at pretty pictures, but the power of the hypertext structure will be used to its full potential in managing content. And of course there is a powerful marriage in e-publishing: the combination of static supports (cd-rom, dvd, or whatever) with the internet. E-publishing is not as immature as e-commerce, but it's still in its childhood. There's a lot to be done.

back to top


loghino.gif (1071 byte) 5. The fable of the baby millionaire

On October 5, 1999 there was a carefully staged presentation by Mediaforce in Milan called Insight 2010 – A story of technologies and human beings. The keynote speaker was Arno Penzias (Nobel prize for physics) and he discussed some pretty serious stuff, such as how to control an increasing multitude of electronic devices that often don't understand human language, how companies should be managed in the light of increasing customer power, how life is changing in a network economy and how we need to manage technology so that it works for people.

But none of that appeared in newspapers the next morning. The headlines were about a "baby millionaire". I had a bit of a nightmare. If more such stories hit the media, we could see an eager mother, after she has pushed her daughter into a beauty contest or a casting couch, rush to a computer store and buy the latest equipment – hoping to turn her younger child into another money-making machine. Hold it, ladies. It's not as easy as that.

The Insight 2010 presentation included teleconference connections and one of them was with an "entrepreneur" in the US. It was a deliberately planned surprise. When he appeared on the screen the audience discovered that he is a kid. Not a very impressive kid, either. He didn't have the attitude or the behavior of a computer genius or a star salesman or, in any way, an enfant prodige. He was obviously embarrassed – his (bland and stereotyped) answers to questions were prompted by someone off-screen.

Ben Blonder is 12, his brother Keith is 10. They live in Summit, New Jersey. Their tiny company, Shop Summit, offers service to small local traders that want to go online. Some of their friends help as salesmen. By looking at their site we find that their prices range from 5 to 20 dollars a month. They have fourteen clients – a shoe repair shop, a grocery, a gym, a stationery, a baker, a wine store, etc. So... five or six kids share an income somewhere between 70 and 200 dollars a month. More than they would make delivering newspapers or selling lemonade; but not "millions".

What's so interesting in this story? Of course the net isn't a playing ground for baby businessmen. But it shows that there are all sorts of opportunities for someone offering "the right thing at the right time". And, even if you are selling to the world and not (like the Summit boys) just to local customers, neighborhood roots are important.



back to top back to summary


Home Page Gandalf

List of links

For the convenience of readers that print the text before they read it, here is a list of the links.

Chaos and complexity: "curves" for reasoning http://gandalf.it/netmark/netmar10.htm#heading03
Edupage http://www.educause.edu/pub/edupage/edupage.html
More people online in Italy http://gandalf.it/netmark/netmar37.htm#heading02
Will Italy wake up? http://gandalf.it/offline/off18_en.htm
The un-level playing field http://gandalf.it/netmark/netmar26.htm#heading01
The cultivation of the internet http.//gandalf.it/offline/off19_en.htm
Which "literacy"? http://gandalf.it/netmark/netmar34.htm#heading01
Numbers worldwide http://gandalf.it/netmark/netmar38.htm#heading02
Gerry McGovern "The limits of convergence" http://nua.ie/newthinking/archives/newthinking342/
The value of hypertext http.//gandalf.it/netmark/netmar25.htm#heading06
Shop Summit http://www.shopsummit.com