Bookshelf: <I>Now or Never</I>

Mary Modahl's new book offers keen insights for businesses trying to woo Web consumers.
Author:
Publish date:

Now or Never: How Companies Must Change Today to Win the Battle for Internet Consumers

, by Mary Modahl; HarperBusiness; Nov. 19, 1999; 250 pages.

The problem faced by many Internet advice books is that they have the shelf life of bananas: Between the time an author finishes his or her opus and when the publisher gets it into print, the book can rot into irrelevancy because of breathless descriptions of a cyberworld that no longer exists, or because it makes naive predictions that already have been proved wrong.

Happily, that's not the case with

Now or Never

, written by Mary Modahl, vice president of research for the technology consulting firm

Forrester Research

. Though its insights are not always earth-shattering, this smoothly written book about Internet business strategy is thoughtful enough to remain a good read, no matter how the ever-evolving Net morphs into over the next weeks or months. And though it's targeted at businesses trying to reach consumers on the Internet, it addresses enough big issues to be of interest to any investor sorting through e-commerce opportunities on the Web.

Modahl avoids the usual questions, such as whether Internet-only upstarts or offline powerhouses will succeed on the Web. Instead, she looks at e-commerce elements that both sides need to address, or at least be aware of, in the world of competition -- starting with a picture of who online customers are.

Anyone who looks at Internet usage data knows there's a million ways that you can slice up the population to get a picture of who's online. Just for starters, there is age, gender, geography and wealth.

But what Modahl does, drawing upon research that Forrester dubs "technographics," is lead with another criterion: optimism about technology. That's the most important way to start segmenting customers, she says: Do those potential buyers believe complex technology such as computers will improve the quality of their lives?

Technological optimism cuts across other demographics, like wealth, education and age. And once you start grouping people by wealth as well, you can figure out whether people are early adopters of new technology (mostly high-income technology optimists), laggards (low-income technology pessimists) or somewhere in the mainstream (wealthy pessimists and nonwealthy optimists). Furthermore, you can classify people by their primary motivation for going online -- family, career or entertainment.

And why classify at all? Well, first, offline companies (and investors with the right information) can use this taxonomy to figure out what kind of online strategies best suit a company with an existing base of customers, or which kinds of new customers online operations should try to attract. One learns, for example, Forrester's counterintuitive discovery that among wealthy optimists, online grocery stores appeal more to younger, entertainment-focused "Mouse Potatoes" than they do to family oriented "New Age Nurturers."

Slightly more helpful is the section of the book devoted to Modahl's musings about the effect of the Internet on competition. From her description of a world in which companies respond quickly to current demand, she imagines a world in which the price of entertainment -- from music, movies and live concerts -- fluctuates as easily as

Amazon.com's

(AMZN) - Get Report

stock price. (It's funny:

Seagram

(VO) - Get Report

CEO Edgar Bronfman, Jr., met wide derision when he floated the idea of variable pricing in movie tickets, but Modahl gives the concept respectability.)

She also makes some subtle but intriguing points: On the Internet, it's the two-way consumer experience that brands a company, not the one-way transmission of an image via TV. To be really successful, says Modahl, Internet startups can't just undercut existing prices -- they must subvert the pricing structure and revenue mix of existing businesses. In other words, it wasn't enough for online travel agents to cut costs by going online; however, it

may

be enough for

priceline.com

(PCLN)

to change how airline tickets are sold.

The third section of the book explores the idea of inertia among old-line businesses going onto the Web -- or, as she puts it, escaping the gravitational pull of traditional ways. She points out that in any Internet business, technology personnel must work closely with consumer marketing and business strategy. And just as companies shouldn't be paralyzed by technology laggards among their customers, she advises they shouldn't let themselves be held back by old-line distributors trying to defend themselves against the rise of the Internet.

Modahl's theories aren't always the best explanation of the phenomena she writes about. For example, you don't have to fit into Forrester's technographics profile of a "New Age Nurturer" to figure out that previous incarnations of the

Toys R Us

(TOY)

Web site weren't consumer-friendly.

And Modahl sometimes leaves you hanging. She explains how Internet companies have to spend scary amounts of money on technology and marketing to achieve a certain scale. But she doesn't shed light on how you figure out what proper scale is. Nor does she disclose in the book who among the companies she praises or criticizes is a client of Forrester's. The book would have been even more compelling if it had been more reader-centric.

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