Searching for New Directions

Talk about a detour on the highway to the future. Even before the September 11 attack on America, 2001 was shaping up to be a brutal year for the digital economy. There were layoffs, dotcom bankruptcies, and a steady migration of people back to the more solid (if more stolid) world of the old economy.

But all bad things come to an end. This year-end edition of Net Company looks at the road ahead for innovation, for business-to-business e-commerce, for the Internet itself. Will we manage to get back in the fast lane of growth? We asked for directions from eight people with experience in and insights on the Internet economy. We asked them to discuss what they thought was true two years ago that is now no longer true. We asked them to offer practical lessons that they learned from the meltdown. And we asked them to identify the seeds of renewal.

One note: We received most of these commentaries before September 11. We chose not to go back and ask for reflections on the impact of terror. The business lessons our experts identified are as relevant as ever, and we are reckoning with the aftermath of September 11 extensively in the magazine and on our Web site. In this case, we thought that keeping our eyes on the economic and strategic fundamentals was the way to drive into the future.

Maria Bartiromo

Anchor > CNBC > Fort Lee, New Jersey

Two years ago, I believed, as did a lot of other people, that massive investment in information technology was based on long-term strategic needs. Some of it was, of course. But the vast majority of IT spending was artificial and unsustainable, driven more by the moment we were living through than anything else.

I recently had dinner with the CEO of a financial-services company. He said, "Maria, my company purchased 25,000 PCs in 1999. Is there any reason to purchase anything near that number anytime soon?" The answer, of course, was no. His company bought all those computers because of Y2K. Once they were installed, that onetime problem was solved.

So dotcom hype wasn't the only factor behind the surge in technology spending. And getting beyond Internet mania, which we have, won't, by itself, get IT spending back on track.

That said, there is no shortage of things to be excited about. We are living in a period of unprecedented technological advancement. Consider medicine: You've got the genomics revolution, dozens of companies are working feverishly to find cures for cancer, and many of us are living beyond 100 years old.

Let's also not forget that we have become a nation of investors. More than half of all Americans own stocks. Whether the market goes up or down, the democratization of finance won't go away. So financial services will continue to be an exciting area for years to come.

Maria Bartiromo reports from the floor of the New York Stock Exchange. She also anchors segments of CNBC's Street Signs and Market Wrap and co-produces Market Week With Maria Bartiromo. She recently published her first book, Use the News: How to Separate the Noise From the Investment Nuggets and Make Money in Any Economy (HarperBusiness, June 2001).

Marina Hatsopoulos

CEO > Z Corp. > Burlington, Massachusetts

The economy has slowed dramatically, but our company is still growing fast -- up 30% this year. That's because we solve a tangible, high-impact problem: How do companies shorten their product-development cycles by quickly generating physical models of new designs? We're just one example of a reality that's easy to ignore in this downturn: If you're building a product or delivering a service that solves a real problem, you can do well and grow fast -- even in a difficult business environment.

It's a simple point that's easy to forget. Internet-enabled business is like any other business: To be successful, you must have something that no one else has. You need superior technology, but you also need a demonstrable advantage over any competing method of doing business. Differentiation matters, especially to customers with real problems.

That's what we've done. My company has commercialized a printer that builds three-dimensional models automatically from a computer. It's the fastest and cheapest way to get physical prototypes to designers and engineers. That's our promise. In today's economy, every new technology product needs to be justified before it can be purchased. We try to help our customers see that even though our printers are new and visionary, they're practical and applicable to existing processes. With so much pressure to reduce time to market and to produce increasingly complex devices quickly, we are selling into a real need: the opportunity to cut costs and generate revenue more quickly. That kind of logic works in any business environment.

Marina Hatsopoulos (marina@zcorp.com) has degrees in mathematics and music from Brown University and a master's degree from MIT in mechanical engineering. She spent her early career on Wall Street. In 1994, she visited the MIT Technology Licensing Office with the goal of finding a technology to commercialize. There, she discovered 3-D printing. She licensed the technology, and Z Corp. was born.