From the September 1999 issue of Startups

Time for a little science lesson: Time, space and mass are the fundamental dimensions of the universe. Your business is part of the universe. Therefore, time, space and mass are the fundamental dimensions of your business.

OK, you won't be tested on this--at least not with multiple-choice or essay questions. But your customers will be testing your business every moment, says Stan Davis, purveyor of the above theory with Christopher Meyer. The two are co-authors of Blur: The Speed of Change in the Connected Economy (Warner Books, $14, 212-522-7200).

But what does this theory mean in plain language? "Translate time into speed; translate space into connectivity; and translate mass into `what matters is no matter'--[in other words,] intangible economic values are more important than tangibles," explains Davis. With the focus on speed, connectivity and intangibles, business will be moving faster than ever before, resulting in changes occurring so quickly they become just a blur.

To keep up with customers, your business will have to become part of that blur. For speed: "What would it mean for your prices to change in real time?" For connectivity: "Once you connect a lot of dumb things into a smart system, it changes the way you do business." Davis' example: If a soda vending machine "knew" what the temperature was outside, it could change the price of sodas--raising the price when it's 100 degrees, lowering the price when it's 50 degrees. And for "no matter": "Improvements in products have migrated from the hardware to the software, from tangible to intangible." Which means instead of trading in old products for newer models, customers will want upgrades.

So how can you see through the blur to understand what your customers need and to keep up with those needs? Davis offers the following advice:

  • Anything, any time, anyplace: Business in a blurred world requires constant availability. Depending on the type of business you have, this could mean anything from staying open 24 hours a day to having a fax-on-demand system available for customers to providing a special area on your Web site where clients can access their personal accounts whenever they want.
  • Custom culture: Products and services need to be fully customizable for every customer. "If it's a tangible [product], then the customization can be made at the time of manufacture," says Davis. "If your product has a chip in it and the chip can connect with something else, then you have an infinitely gradable, customizable offer."
  • Psychic customer service: Anticipate your customers' desires before someone else can. "Don't get into a transactional mode with customers. Get into a relationship mode," Davis urges. If you're regularly in contact with them and know what their needs are, you can look for buying patterns and offer appropriate products and services before customers even ask.
  • Open communication: An extension of predicting your customers' desires and developing an ongoing dialogue with customers is making your offer interactive. "Imagine two products that do the same thing, except one of them has the ability to communicate with the user and the other one doesn't," says Davis. "Which would you use?"
  • Product into service or service into product: Businesses fall into two categories: product or service, right? No more. If your main business is a product, you must build service into that product. Add a service guarantee or training for your product. Or install an actual service within the product, like the navigational systems now in some cars. If you own a service business, build product into it by providing something tangible, like software or a newsletter, for customers.

If you want to keep up, you have to start seeing things a different way. Business procedures like price changes or performance reviews will occur so often, they'll eventually be continual. What your customers desire and what your business values will be intangible, like the knowledge and expertise you and your employees offer, or your virtual store and work space. And all these things will be woven into a tapestry where the essential business functions are interdependent and impossible to separate. It's OK if it seems a bit blurry. That's the goal.