I have lived in Los Angeles for over 25 years, having first come out here from Chicago to attend undergraduate school at USC. I always felt Los Angeles was the 'new frontier' and the 'land of opportunity', and I was particularly proud to build an Internet company here in Southern California. When I first started GeoCities, I had many folks ask me when was I going to move GeoCities up to Silicon Valley, where the 'real' Internet companies were being built. Well, I never did move the company up north, and I believe one of the reasons GeoCities was so successful was because we were in LA instead of Northern California. I felt there was greater access to a diversity of talent here in Los Angeles, and one of the strengths of our team was the fact that folks came from so many different companies and industries.
One of the things we couldn't attract initially in Southern California was capital. I provided the seed funding and initial start-up capital for GeoCities, but when it was time to raise venture financing, I was unable to find a VC firm here in Southern California who was interested or willing to take the risk of investing in GeoCities. Our first VC investor was CMGI, and I was working primarily with the CMGI team in Silicon Valley. It was only in subsequent rounds of financing were we able to attract VC's in Southern California to participate.
I started GeoCities in November of 1994. This was before the first banner ad ever appeared on the web, before the first Internet IPO, and even before Microsoft had launched its own web browser, Internet Explorer.
I was 38 years old, and had made my career in the software business having held a variety of positions in finance and accounting, as well as in operations and marketing. I'd worked for a number of companies, large and small, and had been exposed to a wide variety of industries and individuals.
I didn't start GeoCities with the idea of launching a successful IPO, or selling the company to a Yahoo! or America Online. I started GeoCities with the idea of building a real business based on providing a useful and valuable service to our end users, and by giving our customers the best service possible and a superior return on their investment.
My idea for GeoCities was all about my passion for empowering others, giving everybody a voice, and the chance to contribute and participate in the new medium of the Internet. GeoCities developed the tools and utilities that made it easy for anyone to create their own free personal home page on the Web.
We gave everyone the opportunity to meet other people and join a community of interest, be it about sports or music or politics or finance. This strategy tapped into the unique strengths of the Web, and generated a tremendous amount of traffic to our Web site, which we leveraged by selling advertising and sponsorships, as well as incorporating e-commerce within each of our communities.
I think that true success in business is not just building a big web audience or developing an e-commerce Web site; real and tangible success comes to those who follow their hearts as well as their minds. Finding that thing which you are passionate about above all else, and pursuing that activity which you love to do, these are the keys that unlock every door.
There is a lot being talked about and written lately about the demise of the dot-com economy, about falling valuations for Internet stocks, and the hard reality of building a real business based on real revenues and profits.
Business Week recently published an article talking about the 'Six myths that drove the boom in technology stocks', and Fortune magazine has a cover story about 'Dot-coms and the 12 truths about how the Net really changes business'. Just as surely had the pendulum swung to the far edge of hysterical optimism, we can count on the current gloom and doom scenario to be just as over hyped and over done. The reality, as it always is, lies somewhere between the unfounded optimism and valuations of the past, and the current cycle of desperation and skepticism.
There is no doubt that a shakeout is underway, that stock prices are coming down to earth, and that, in the words of one venture capitalist. 'Darwin is at work', meaning, only the strongest companies will survive this current evolutionary cycle. Many folks are calling this current period 'the end of the beginning' and I tend to agree with that assessment. The 'dot-com' era of hype and unrealistic expectations is over, but the 'era of the Internet', and the Internet's affect on all aspects of business, is still just getting started.
I think there are two factors that will continue to drive innovation going forward: First, that the Internet eliminates time based and information based inefficiencies in all forms of commerce, government, and interpersonal communication. This leads to a rapid diffusion of knowledge and information among as wide an audience as necessary. Because the Internet makes so much information readily available, it is very difficult, for example, for producers and manufacturers to maintain pricing advantages based on the difficulty gathering competitive data.
Secondly, as well described in the recent Fortune article, 'while the Internet may not have disrupted the old industrial order, it has disrupted the old way of doing business-particularly the relationship between customers and corporations'. Consider the power that companies must now put at the customers' disposal, like it or not', such as competitive information, lowest price bidding mechanisms, decision-making data, and user feedback and reviews. Consumers, whether they are individuals or corporations, are moving from being passive product-takers, to active product-makers.
I call this the 'prove it to me' phenomena. The Internet, and the power of the information and collaborative communication tools available, gives everyone the ability to negotiate the best prices, compare experiences with other consumers, and in general take command of the driver's seat in terms of who is the vendor and who is the customer. The Internet make is possible for consumers to have a strong voice in the marketplace, saying, in effect, 'Prove it to me' that you have the lowest prices, 'Prove it to me' that your product is superior to the competition, 'Prove it to me' that I should do business with you, and 'Prove it to me' that it's worth my time to visit your web site again.
My idea all along for GeoCities was to give the power to the users to create their own media and entertainment experience. I wasn't attempting to displace traditional entertainment programming such as television or newspapers or movies, but what I was trying to do what tap into the unique strengths of the Internet and give the users the power and ability to create their own communities, by providing them the tools and utilities that put them in control of expressing their ideas and passions.
So, what's the next big thing? Wireless, optical networking? I'm afraid I don't really know. But I am confident that although we're at the end of the 'dot-com' cycle, we're still just seeing the beginning stages of how the Internet will impact the way we do business.
I think the smart money is backing individuals and companies who understand the strength of the Internet is in empowering the consumer, be it an individual or a corporation, and in providing value and efficiency at each stage in the business process that can't be gained through traditional means.
Again, I want to thank the Los Angeles Business Journal for this award, and I look forward to seeing Los Angeles continue its leadership as the dominant center for technology and commerce in the New Economy.