Digital Matters - Issue 35

One of the benefits of writing a column for Fast Company is that CEOs, CIOs, and COOs of digital companies want to meet with me. Generally speaking, I conduct two or three of those meetings every week. One question keeps coming up -- the same question that comes up whenever I join cup-of-coffee conversations anywhere: What does it mean to be digital? Everybody understands that the Digital Revolution is real and that running the Internet through the heart of your business is critical. But what are the implications of all this? What are the rules of the Digital Road?

Here's my proposal: Let's talk about it. We've set up a bulletin board on the Fast Company Web site (www.fastcompany.com/fasttalk). Sign in to the site (if you've never used it before, you'll need to select a username and password) and navigate to the "Inspired by Print" discussion. See what other people have to say, and then offer your own comments. I'll kick off the conversation by offering my eight rules for the Digital Road.

Rule 1: Inflation is toast, and there's no such thing as a price increase. Think about your mortgage for a second. The bank sends you a monthly statement. You put the statement aside. Before the bill is due, you write out a check and send it in. But what if you paid your mortgage on the Web, and what if you paid in biweekly, instead of monthly, installments? That way, you would pay off a 30-year mortgage in 21 years -- and you would save a lot of money. At least one company, Paymap Inc., offers the kind of online mortgage-payment service that will make such arrangements possible.

Being able to cut your payments by nearly one-third over the course of a 30-year mortgage is more evidence of a central fact of the digital economy: There's no such thing as inflation. Everywhere you look, computing power is relentlessly cutting prices and costs. General Motors, DaimlerChrysler, and Ford have entered into a historic agreement to pool their buying power on the Web. Does anyone think that the cost of shatterproof windshield glass is going to go up in the near future -- or ever? Go to MobShop Inc.'s Web site (www.mobshop.com) and buy a DVD player. MobShop pools buyers of DVD players into a consortium and then says to Sony or Phillips, "We have 1,000 buyers for your best DVD player. What's your best price? And don't tell us that it's the list price."

What about OPEC, you say? Well, what about OPEC? It has managed to drive the price of oil up to $34 a barrel in the past seven months by restricting supply. Bad move on OPEC's part. As soon as businesspeople decide that the price of gasoline is likely to stay that high, they'll start using technology to cut back on their travel costs. And digital-economy companies will provide those businesses with products that enable people to work without leaving their home or office. Everything that businesses need to do, they will do over the Web. Demand for oil will fall. And OPEC will lower prices. Then, if OPEC is lucky, people will start traveling again. But they will know that they don't have to travel unless they want to -- and OPEC will never be able to raise prices again.

Rule 2: You'd better be wireless. Let's say that my friend Anders Brag is in Finland on business. He wraps up his work early and decides to take the afternoon flight to Stockholm. But time is short: He barely has time to pack and to check out of his hotel. So he figures that he'll take a chance and go directly to the airport. He catches a cab and explains his predicament to the cab driver, who says, "No problem. I'll use my cell-phone to see if there are any seats available." The driver then dials into Finnair's Web site, types in the flight number and the date, and -- bingo! -- a seating chart appears on his cell-phone. The driver hands Brag the phone, and Brag makes his seat selection, punches in his ticket number, and receives a confirmation of his reservation. Just like that.

The whole world is going wireless. Americans have a superiority complex when it comes to information technology, but we're not even close to the Scandinavians (or to other Europeans) when it comes to wireless technology. And once you get a taste for wireless service -- once you get used to communicating faster and more efficiently -- the world of "ordinary" service pales in comparison. The telecommunications system of the Digital Road will be wireless. And when speech-recognition technology becomes fully functional, it will be imperative for companies to work without wires.

Rule 3: There's nothing in the middle. In the Digital Age, companies have to be small, smart, and special -- or big, smart, and fast. Midsize companies aren't big enough to cover all of the bases that most customers need to have covered, nor are they small enough to provide the kind of specialization that most customers want.