Damn Dotcoms!

Keep a Good Attitude

Many traditional companies say that competition is the name of the game in the business world and that entrepreneurs should whine a lot less and grind a lot more.

"Being angry isn't going to get you anywhere," says Steve Meltzer, the 41-year-old founder and president of Utopia Distributors, Inc., a Coconut Creek, Florida-based wholesale distributor of perfumes with 1999 sales of $25 million. "Traditional businesses are going to have to face the fact that things are changing and nobody knows where it'll lead. But getting yourself more oriented toward the Internet can only be a good thing. That's what we're doing: building a business-to-business Web platform to help us compete."

Ever the optimist, Meltzer feels that traditional brick-and-mortar companies that have been run successfully for years are in a unique position to battle the Web-starts at their own game. "I believe brick-and-mortar companies with solid earnings can take out, or at least diminish, their dotcom competitors," he says. "How? By leveraging years' worth of substantial bottom-line net worth. The dotcoms that are struggling with revenues are already finding that they're also struggling with new sources of capital as a result of poor earnings. So who will the venture capital firms and the investors turn to if both companies have a Web presence, but only one has a great earnings track record? That's an easy decision."

Meltzer has a lot of company. At Leading Edge Air Logistics LLC, a Morris-town, Tennessee-based air-charter management service, CEO Robert Hunter says it's old-time business savvy that counts. "The fact that Web companies are dominating Wall Street doesn't bother me," says the 62-year-old, whose company garnered $30 million in sales in 1999. "I look at the Internet as another way to conduct business. Only someone smarter than me knows where dotcoms are going, but you've got to love these young CEOs' ambition."

Hunter believes that, in many ways, the success of Internet firms could mean a bigger cash cow for everyone. "Look at the venture capital world," he adds. "They're sitting on billions of dollars that they haven't even used, thanks to the money they made off the Internet firms-there's more money to spread. And those who get it will be the smart folks with the best ideas."

That sentiment sums up the thoughts of wizened CEOs who've been around the block a time or two. "Traditional businesses should be stimulated by dotcoms," says Farley Blackman, 34, CEO at StrategIM, an information-con-sulting and software-development company, and a former heavy-hitter at General Electric. "It's true that big companies feel the pinch when startups poach talent and attention, but the result should be a positive one focused around the customer, speed to market and implementation of change. It's this process of change that results in a more competitive and agile company."

Blackman speaks from experience. "During my tenure at GE, I viewed dotcoms as a catalyst for change," he adds. "They forced me to reinvent roles, hiring and management to combat the dotcom mystique. Traditional companies owe it to their shareholders to put aside bureaucracy and to keep up."

There you have it. Solid advice on how to slay the monster that's living in every individual who never saw the value of their stock options hit triple digits.

So be of good cheer, traditionalists: With a few moves, maybe you'll be the one with the Rembrandt hanging in the fifth bathroom you always wanted.

Brian O'Connell is a Framingham, Massachusetts, freelance business writer; His most recent book is Generation E: How Young Entrepreneurs are Changing the Corporate Landscape (Entrepreneur Press).

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This article was originally published in the August 2000 print edition of Entrepreneur with the headline: Damn Dotcoms!.

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