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Are You a Deer in the Digital Headlights?

Published
  • October 01 1999, 1:00am EDT

There are some really good industry conferences out there. Hopefully we all get a chance to go to some, where we listen to a variety of speakers and try to retain a few good ideas to apply to our own situation. Occasionally a speaker reminds me that the world has changed by moving me out of my comfort zone and by forcing me to see something differently. So it was when I recently attended the GIGAWorld IT Forum. The speaker was Ann Winblad, partner, Hummer Winblad Venture Partners, a very successful Silicon Valley venture capital fund. I've thought about her message many times.

Ms. Winblad's presentation was on the entrepreneurial qualities that make for a good venture capital investment in the Internet economy. As a part of the presentation, she included a slide entitled, "Are you a deer in the digital headlights?" It had a picture of a deer, obviously frozen by the brightness around it, unable to move or run. The image was a compelling one. Ms. Winblad went on to explain some of the differences between deer in the digital headlights ­ people frozen by the brilliance of the exploding digital world ­ and entrepreneurs.

The first difference she noted was that deer in the digital headlights think about OLAP, MOLAP and HOLAP, while entrepreneurs think about one-to-one marketing. (Ouch! That one got me immediately into "uncomfortable" mode!) Deer in the digital headlights think about slice-and-dice analysis; entrepreneurs think instead about a real-time dashboard. She went on to say that deer in the digital headlights think about data mining versus entrepreneurs who think about customer loyalty and stickiness (the new term for creating barriers to exit). (That one really hurt, since data mining is one of my favorite topics to think about!) Deer in the digital headlights think about relationship management, while entrepreneurs think about customer adaptiveness. And another, deer in the digital headlights think about legacy databases; entrepreneurs, on the other hand, think about Web visitor logs, clickstream data, profile data and personalization. (You can imagine the level at which my interest was "piqued" at this point!)

Could I step back and take an objective look at the industry I've been associated with for over a decade? One message? Deer in the digital headlights think about "how you do it." Entrepreneurs think about "what you do with it once you have it." This is where we've come in data warehousing. We've amassed vast amounts of data. META Group estimated that by the end of 1999 nearly one-third of all data warehouses will be over one terabyte in size. That is a LOT of data! We have captured it, extracted it, transformed it, structured it, cleansed it, aggregated it and loaded it.

Data warehousing is now a mature industry. What we need to do now is to use the data ­ to measure, improve, enhance, predict, target, compete and innovate. We need to tie our warehouse data back to operational systems; we need to link and connect them.

Another message? Deer in the digital headlights are internally focused. They look to please business managers, where entrepreneurs look more to please customers and prospects. Entrepreneurs have taken information analysis and applied it externally, enabling customers and prospects to compare and contrast products, alternatives, features, options, prices, etc.

I guess that's what business intelligence is all about. The early entrepreneurs in data warehousing figured out that what matters isn't just finding an interesting pattern, but using that business insight to change operations to the company's advantage. The data may not have been perfect. It may have been dirty or incomplete. But they overcame those obstacles to uncover "killer" data that helped them determine a business value proposition for customers that was compelling and different. And they reaped gains in revenues, return on equity, price/equity ratios and market capitalization. Look at companies that have experienced phenomenal growth in market capitalization. They don't just gather information; they have found a way to use it. Read the analyst reports.

I'd like to thank Ann Winblad for changing my perspective. I know someone still needs to worry about "how you do it," but I believe her point was that right now, those with the entrepreneurial attitude who worry about "what you do with it" will be clear winners. While it may be painful to admit that some of our companies are frozen in the headlights of the digital economy, there is still time to break the spell of those lights and change the paradigm to use information effectively. Hey...shake things up! Get out of your comfort zone. It was about time for a paradigm shift anyway. Change your focus and think like an entrepreneur!

To read previously published columns or articles by this author, please visit http://www.dmreview.com/authors/.

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