Software entrepreneur Michael Saylor has a dream: "a crystal ball on every desktop" that lets companies and consumers find out about anything, anywhere, at any time. Thanks to the Web, it's a dream that Saylor believes is within reach. "If we have a billion phone calls a day, why not a billion questions a day?" he asks. "Who's the best doctor to go to, what's the best stock to buy, where's the best auto dealership?"
Saylor, 32, is founder and president of MicroStrategy Inc., a leader in the booming field of data warehousing. Saylor's bleeding-edge outfit builds software that lets companies target vast markets with pinpoint precision. MCI uses MicroStrategy's software to analyze terabytes of data on more than 100 million current and potential customers. Other clients include S.C. Johnson Wax, Hallmark, and Victoria's Secret.
But data mining is just the beginning. The Web's potential for interactive targeting, Saylor believes, will revolutionize every aspect of how people and companies interact. He compares the potential of the Web to the here-and-now realities of the telephone. Today when you pick up a phone, the dial tone marks an electronic path to the hundreds of millions of other phones on the planet. Within a few years, Saylor claims, you'll jack into the Web and get a query tone — a gateway to a global mesh of online infobases.
From company headquarters in Vienna, Virginia, Saylor talked to Fast Company about the five phenomena of the Web that he says will shape the future of buying and selling.
The Wal-Mart Effect
The Web is about distributing information to everyone. That's basically what Wal-Mart does. It takes hundreds of thousands of disparate items, pounds them into best price, lowest risk, best offering format, and then distributes them. Wal-Mart does that for $100 billion worth of stuff every year.
The Web is going to be a similar kind of channel — but for products and services. People are already querying the Web for the cheapest price on any car. The Wal-Mart Effect will extend to airline travel, insurance, banking, you name it. It's power to the people. The Web squeezes out the undifferentiated companies. It brings everyone down to a standard cost position, so companies have to compete on things other than price.
The Intel Effect
Gordon Moore, Intel's former chairman, says the power of computer chips doubles every 18 months. Moore's Law affects the Web too. When you deploy a service over the Web, you change its very nature. You "productize" it.
Think about trading stocks. For 50 years, people bought and sold stocks the same way. Now the business changes every quarter. It's a short step from "I buy stocks on the Web" to "I get recommendations on which stocks to buy" to "I get analytical charts" to "my Web service incorporates advanced hedging strategies" to "my service uses holographic imaging to help me with decisions" to "Warren Buffett looks at me and talks to me." Until finally, "Warren Buffett walks out of my computer into my living room, and chats with me about my investing strategy." Stock trading becomes software, which means it follows the laws of technology.
The New York Effect
Why is it so hard to get good Thai food in the suburbs? Because the typical suburban town has maybe 30,000 people, 1% of whom are interested in Thai food. So the market regresses to burgers and pizzas, the lowest common denominator.
In New York City, you've got French, Italian, German, Spanish, Russian, Ethiopian — every food you can imagine. That's because 1% of the people in New York is a large number. New York creates a critical mass by squeezing everyone together.
That's what the Web does. You've got between 20 million and 50 million people squeezed onto one network. That creates the opportunity for an explosion of niches. There's a place for a service that optimizes real estate filings for nonprofit organizations; and there's a place for a service that teaches you how to cook South Indian Bengali style food.
The Bombay Effect
The Bombay Effect is all about exporting services. This is the most interesting geopolitical effect I can think of. A few years ago all the naysayers claimed America was going to be second-rate because we'd given up our manufacturing base and gone to a service economy. That argument makes sense — if you can't export services.
But the Web has turned that logic on its head. Stock brokerage used to be a service, but it's a product again — and that means you can export it. There's no reason why the best trading program on the Web can't be used to buy and sell stocks in Bombay as well as the NASDAQ. And just like that, we're exporting a service.
It's the same thing with banking. Banking's a service — if you just have customers who are local. But if Bank of America has the best home-banking program on the Web, people in Switzerland will tap into it. All of a sudden, we're exporting banking.
The Domino's Effect
People have only a certain amount of open space in their mind, so mind-share is critical. You have to dominate your niche. That's why Domino's is so successful. It may not make the best pizza, but if you want to order a pizza the easiest thing to do is pick up the phone and say, "Give me Domino's."
The Web's like that too. It is simultaneously revolutionary, evolutionary, and reactionary. On the one hand, it opens up opportunities that are new and different. On the other hand, it lets companies with dominant capabilities in the physical world — powerful brands, distribution capabilities, or service programs — get more leverage to expand their dominance.
With technology, the rich get richer. They use it to leverage their existing assets. Lots of new companies are forming during the current Web craze. But for every new company that makes it, nine existing companies will have used the Web to make themselves stronger.
Lewis Perelman (email@example.com) is president of the Kanbrain Institute, based in Alexandria, Virginia, and executive editor of Knowledge Inc. You can visit MicroStrategy on the Web, http://www.strategy.com .
A version of this article appeared in the April/May 1997 issue of Fast Company magazine.