Here's to the New New Economy - Editorial

Chief Executive, The, April, 2001 by John Brandt

It's amazing how much the media -- especially the so-called new economy media -- can learn in a year.

Just a year ago, of course, most of the readers of this magazine (and traditional journalists like me) were, in the eyes of the new economy media, dinosaurs -- old-line thinkers doomed by the meteorite of e-commerce. The new economy media had discovered a new form of capitalism, it told us, one in which businesses -- or at least e-businesses -- didn't need profits, or even revenues, to succeed. Nevermind that this theory was contrary to everything ever written about economics. In something called the new economy, these breathless experts told us, traditional notions of profit and loss weren't just archaic, they were downright irrelevant. All that mattered was a business plan that could attract eyeballs and, more importantly, VC funds and lemming-like IPO investors. CEOs who didn't "get it," dullards who stubbornly asked dimwitted questions about sales and profits, were advised by new economy journalists to quit now rather than watch themselves made extinct by their newer, warmer-blooded e-competitors.

What a difference a year makes.

The same new economy journalists, who excoriated last year's dinosaur CEOs over their failure to lose money as fast as their e-competitors, have now reinvented themselves as the defenders of economic common sense. What were these new economy CEOs thinking, they ask with consummate indignation, when they took investors' money without a clue as to how to make a profit? What were the investors thinking, they ask incredulously, giving money to these bozos? Did they think the laws of economics had been rescinded?

What the new economy media has learned so far this year is that the first phase of the Internet is over. What's more, as the new economy journalists knew all along (just ask them), the real winners in the second phase of the Internet--call it the new newecono my--will be all those dinosaur CEOs who stuck to customers and value as a path to profitability (or [P2P strategy, in new economy-speak). Dinosaur CEOs who "get it"--those who adopt e-business as a sort of secular religion--will evolve their firms into the nimble primates of the new new economy, rulers of all they see.

Well, maybe. But if it's amazing how much the new economy media has learned in the last year, it's absolutely incredible what they've forgotten, especially when it comes to their own predictions. If I were a CEO, the last place I'd turn for evolutionary advice would be to someone with a memory no longer than my opposable thumb. Personally, I'd stick with customers and value, with e-business as one of many strategies--but not as an altar.

We can't talk about enduring value without noting that this issue marks the last appearance in these pages of J.P. Donlon's Editor's Column (see "Last Word," page 8), as the magazine's long time editor-in-chief leaves Chief Executive after a remarkable, and much remarked upon, 23-year tenure. Happily for us, the ever dapper, ever erudite Donlon isn't going far: Along with scratching an entrepreneurial itch as The Dilenschneider Group's newest principal, he will also continue to appear on CE's masthead as our newest--and only--editor-at-large. Please join us in wishing J.P. the best in his new--and old--endeavors.