**Panel: Revolution Not Over
"I've always believed in first-mover advantage, just the first movers of the last century, not this century," said Robert Lessin, chairman/CEO of Wit SoundView Group Inc., New York, the largest online investment banking group focused solely on the Internet and technology.
"[Well-known traditional companies] have created the brand. They have the customer base. And if you are a young company, I think the way you survive at this point is to partner with a [traditional] company," he said, addressing 150 to 200 high-level executives at the Windows on the World restaurant at the top of the World Trade Center.
While dot-coms have burned a lot of cash very publicly on the front end, traditional companies have been focusing on cost cutting, he said. "They already have brand and are not going out to consumers [with their e-business initiatives] where the burn rate is high."
Also, the days of the Gen X start-up may be over, said Joseph Galli, president/CEO of VerticalNet Inc., Horsham, PA, a business-to-business e-commerce solutions provider.
"I think the days of seven people in a garage starting a company and being funded excessively by one [venture capitalist] are over, but the transformational nature of the Internet has just begun, and the cost savings and the growth that companies that embrace the Internet will enjoy have just begun," he said. "I think the flight to quality is on."
Meanwhile, finding talent is still high on CEOs' list of challenges. Forty percent of attendees in an electronic poll taken at the conference identified finding talent as the No. 1 problem that keeps them up at night.
"There's been an exciting migration of brain power and talent to start-ups," Galli said. "The missing element has been the Jack Welch [General Electric's fabled CEO] dimension, the experienced business leadership teaching young managers how to be good leaders.
"It's an interesting juxtaposition to the traditional world, where you have the management skills, but not so much on the entrepreneurial side," Galli said.
"Companies are all competing for the same people -- someone who knows the Internet, who's tech savvy, who knows marketing and who has the people skills to make it happen," Galli said. However, the market is too young to have produced enough of those people yet, he said.
What's more, Internet executives still face managing "hyper growth," panelists said.
The hockey stick curve -- where growth is represented by a curve that looks like a hockey stick on its back -- still applies for Internet executives, said Paul Gudonis, chairman/CEO of Internet services firm Genuity, Burlington, MA.
"I used to call it the 'universal Internet curve': It goes to the right and then goes up exponentially," he said. "For the last couple of years, it was used to describe everything: the number of users, amount of bandwidth. Now, [given the stock market,] I call it the 'almost universal Internet curve,' and I tell employees, 'Your challenge is to scale along this curve.'
"The curve is growing exponentially. Most people only have the capacity to grow linearly. 'At some point, [he tells executives,] unless you change your ability to manage, this job is going to outgrow you.' "