Back to the Future

The Vision Thing

In assessing the fallout from September 11, the conference's panel of appointed visionaries -- Benson, Cullinet Software founder John Cullinane, Massachusetts State Rep Barry Finegold, corporate futurist Thornton May, and Village Ventures cofounder Bo Peabody -- engaged in plenty of hand-wringing but conceded that the new reality offers some appealing opportunities as well.

Peabody was honeymooning on September 11 and says that he returned from Nantucket to a starkly changed economic terrain. "More people were interested in our concept after September 11," he said. "People began saying no one would want to live in big cities anymore. But I felt strange profiteering from this tragedy."

Since the attacks, people have fundamentally changed the way they think about life, work, and family, and Peabody said that he's poised to fund businesses in places they might want to be: Hanover, Middlebury, Boise, Tucson, Burlington. Peabody said that over the past 18 months, he raised $300 million in 13 such cities.

Other panelists saw opportunities in corporate data and security systems, infrastructure, and information gathering. In light of the anthrax scare, some discussed eliminating all paper mail. But Finegold noted that electronic communication may aggravate the digital divide because many low-income residents do not have Web access. In addition, the move toward email would wipe out the direct-mail business, which is valued at about $530 billion per year -- twice the size of the domestic advertising business.

But hard times can spur innovation, and there's money available for any business that can identify and mend a customer pain point within a short time span, Peabody said. In fact, Benson said that more startups are launching today than during the new-economy heyday. "When things aren't as comfortable, entrepreneurs try new things," he said.

Bring in 'Da Noise

The biggest problem facing technology customers today is figuring out what to buy and when. Combating a constant bombardment of information was the theme of a session on technology strategies featuring Blaise Heltai, managing director of Internet strategy for FleetBoston Financial; Michael Prince, CIO of Burlington Coat Factory; Steve Randich, CTO of the Nasdaq; Elisabeth Robert, CEO of the Vermont Teddy Bear Co.; and Alva Taylor, from the Tuck School of Business at Dartmouth.

"Good things don't filter through because you can't get beyond the noise," Prince said.

All panelists said they listen to vendors recommended by friends and to proposals that address mission-critical problems. And they all tune out when vendors start babbling about "scalable enterprise-software solutions." "To me, those sound like 12 random words strung together," said Heltai.

Randich said that 60% of corporate expenditures at the Nasdaq are for technology, and despite the market's losses, the amount of daily trading this year is higher than last, with 2.2 billion shares traded daily.

Panelists agreed with his assessment: "Any investment in a noncritical area that doesn't have ROI in less than a year gets very careful scrutiny."

Excess technology inventory is still a problem, Heltai said. "We're continuing to invest, but at a much slower pace," he said. "We bought so much that now we're trying to figure out how to digest it, how to use it."

No Exit (Strategy)

Future Forward's gloomiest session featured four venture capitalists who were "Forecasting the Financial Markets."

"How are VC firms operating now?" began moderator Michael Horvath.

"Very poorly," shot back John Landry, of angel-investment firm Lead Dog Ventures.

One of his funds, Common Angels, made its first 2001 investment this week, Landry said. His other firm, Walnut Ventures, has made none. The problem? Angels need to hand off their investments to later-stage investors who aren't taking on new businesses until the IPO market rebounds. "We've got to get the rat through the snake," said Village Ventures' Matt Harris, charmingly summing up the problem.

"Forecasting the Financial Markets" -- a panel of venture capitalists at Future Forward 2001.