 Home |
|
|
|
India - News
|
News Updates - 16
April 2001 The 50 top performers - Business Week Bootstrapping to success - TEQ magazine The young and the cautious - The Industry Standard E-Curriculum - Fortune
With a bear market in full cry, uncertainty about the economy rampant, and much of Corporate America is deep in hunker-down mode. This year's BW 50 is heavily populated by old-economy companies that produce familiar products or services, from electricity to pain relievers, but excel by operating in novel ways. Only six banks or financial-services firms showed up in the top 50 in 2000. The tally this year: 11, reflecting the strong market for initial public offerings for much of last year. As our ranking so starkly shows, no one is guaranteed a safe haven in today's tumultuous economy - but there's still plenty of room for the swift, the smart, and the lucky to thrive. And many of 2001's fast climbers traveled far in the past year.
Aggressiveness comes naturally to the outfits that make up the BW 50, but they've also won their place in the sun by demonstrating tremendous consistency. While our list sizes up short-term winners, it gives pride of place to companies whose successes endure.
Few credit-card companies, are inclined to cut back on their ruthlessly competitive offers of credit even to hard-pressed consumers. But those that manage to thrive will have systems in place to protect them from unacceptably high losses. Providian Financial Corp., for instance, caters to high-risk credit-card users and it soared from No. 76 last year to No. 6, largely by keeping its cardholders from running up unmanageable balances. CEO Shailesh J. Mehta, a statistics whiz with a doctorate in computer science, has deployed sophisticated models that dictate just how much risk is acceptable among his 16 million customers. He's now paying close attention to a delinquency rate that climbed from 6.7% to 7.5% in the last three months of 2000. Providian staffers are carefully noting when customers suddenly start taking cash advances or use their accounts too liberally, and they can freeze or lower lines of credit swiftly. "That approach works whatever kind of economic environment you're in,"' says Providian Chief Financial Officer David J. Petrini. What business is really all about is meeting customer needs, staying innovative, and producing new ways to grow. While all companies set out to do this, those that make our list meet that challenge so well that they leave rivals in the dust. Doing so will be harder than ever if the economy continues to slacken. To make the BW 50, the bar is always high. Clearing it becomes all the more difficult when the earth is shifting under your feet. Bootstrapping on the Web No longer the darlings of the big-check set, dot.com entrepreneurs are trying to build businesses the old-fashioned way. Washington, Pa.-based scrapexchange.com was launched in April 1999, a tiny drop in that year’s tsunami of e-commerce companies and one of some 50 entrants into the online scrap metal business. It was born at a time when investors were dropping seven- or eight-figure checks on anything Internet, including Web-based scrap dealers and when the media was bloated with adds for dot-this and e-that. But scrap exchange founder Munir Chavla chose a different route, funding his company out of the earnings of his small recycling business, skimping on office décor, and limiting his advertising to targeted e-mail and occasional ads in trade journals. Two years later, Chavla is still in business – as are four or five of his 50 erstwhile competitors. “The majority of them had lots of money, and spent a lot of money on advertising, and most of them are gone,” Chavla says. He expects that scrapexchange, which connects recycled metal sellers and buyers, will turn a profit this year. With many investor checkbooks now closed to new Internet businesses, some dot.com dreamers are returning to an old business-building model: bootstrapping. They’re not all as scrappy as Chavla, but the CEOs and presidents of companies like A2Zmoonlighter.com, BusinessiTutor Corp., and Blue Fish Labs LP are writing programs, making marketing calls, painting the walls, and taking out the trash – or melting it down, in Chavla’s case – themselves. And though some are angling for outside capital, all are determined to bring their businesses to profitability, with or without big injections of outside investment. “I’ve seen this whole Internet bubble, this whole frenzy, going on,” says Inder Guglani, President of A2Zmoonlighter, “and I felt like I was being left behind.” While Guglani was toiling in his McCandless basement and spending $200,000 in angel investor money building a business, his biggest competitor, Guru.com, was burning about $20 million building its product and its brand. Though both companies try to fill businesses’ temporary personnel needs, they do so differently; A2Z, now of Oakland, PA, links client companies to professionals who do side jobs, while Guru.com helps them find full-time freelancers. Still, they’re similar enough that Guglani feared his space would be filled by his big-spending, San Francisco-based rival. Indeed Guru.com is the bigger of the two, listing 400,000 consultants to A2Z’s 37,000 moonlighters. But while Guru.com is still meditating about its revenue model, A2Z is ringing up $50 to $100 each time it connects a company to appropriate moonlighters. Guglani attributes his success in part to his lack of money. “You may not think through things hard enough or well enough when you have a lot of money,” he says. Guglani says venture capitalists were never really interested in companies like A2Z, which caters to small business and isn’t likely to become a billion dollar enterprise. Even if Guglani and other bootstrappers never land that big VC deal or go public, they can look to companies like Pair Networks for proof that their way can work as well as – and sometimes better than – the venture-driven route taken by the dot.coms of yesteryear.
The dot-com shakeout has deterred MBAs who saw a way to get rich quick, leaving the field open again for die-hard startup junkies. Many more students are entrepreneurs-in-waiting, biding their time until the economy recovers. While MBAs may be going back to traditional recruiters in the short term, the new spirit of entrepreneurialism is here to stay.
Hardeep Walia truly has seen the world. Since childhood, Walia has lived in India, Kuwait and England, and after graduating from Yale he continued his globe-trotting as a consultant at Boston Consulting Group in Chicago. His passion for finance, strategy and high-tech led him to Wharton's campus in Philadelphia, where 46 percent of his peers are non-U.S. natives. "Hardeep is one of the few people who really knows both technology and business," says assistant professor Balaji Padmanbhan. "The market needs people like him, now more than ever." The second-year student's résumé is already heavy with high-tech experience, including business development work at Trilogy Software in Austin, Texas, and Microsoft in Seattle, where he will return as a corporate development manager after graduation. "If there's one thing I've learned from [living outside] the U.S., it's that you need to have the ability to adjust," he says. "That's even more true in this tech-driven world." Walia is co-president of the popular Tech Club, and many Wharton students share his enthusiasm: about one-quarter end up at high-tech, e-business or startup companies. E-Curriculum: Easy Come, Easy Go 16 April 2001, FORTUNE magazine, By Ann Harrington Mohanbir Sawhney, who heads the e-commerce and technology major at Northwestern's Kellogg School, argues that the B-schools' emphasis on e-commerce made sense at the time, last year. "When this new phenomenon was starting," he says, setting Internet-oriented businesses apart "was useful to get focus." Wharton followed similar logic, initiating a major in managing e-commerce in 1999, about the same time Harvard Business School was putting new emphasis on entrepreneurship and adding scores of new-economy case studies. Says Sawhney: "I fully intend to dismantle our e-commerce group over time." Wharton's e-commerce major "may or may not survive a five-year period," according to deputy dean David Schmittlein. But that doesn't mean teaching about e-commerce is going away; indeed, some professors argue that the most valuable applications of the Internet are just getting started. Now, Sawhney says, business schools must teach "e-business for the rest of us" - that is, for large, established companies, not for dot-coms. He adds, "It's not so much about coming up with disruptive business models, but about overhauling infrastructure, your business processes, and your organization, and positioning it to capitalize on new technologies." In other words, the focus will become less "e" and more "t"--technology, that is.
|
News Updates
|
|
Questions
(FAQ's) or Comments (feedback) about this
site? Email to
damanig@diehardindian.com |
|
