John Sculley

John Sculley was the mastermind behind the "Pepsi Generation" marketing campaign in the 1970s. Next, he helped build Apple Computer into a multi-billion dollar powerhouse. Today, Sculley has left the corporate world far behind and is funding and building Internet-based electronic commerce solutions. He spoke about business impact of the Internet at the 12th Annual Regional Economic Outlook Conference in Naples on Oct. 20.

"Cheaper, better, faster" is the mantra for the business model that works on the Internet, according to Sculley. He maintains that the Internet enables "friction-free commerce" -- that is, the number of stages between buyer and seller are minimized. There is a much tighter bond between what the client really wants and what the vendor can deliver. Not only can a business or a consumer get a customized solution to his needs, he can get it quickly and cheaply as well.

In an earlier era, the typical marketing model was to create "good, better, best" products that would fit artificial niches and be priced according to assumptions about the customer's willingness to pay a lot or a little. Heaven help the consumer who wanted the best, but wanted it cheap and fast as well.

Sculley gave Dell Computer as a classic example of a "friction-free" business. Even before it moved to the Internet, Dell delivered custom PC solutions to buyers with no middleman. But the Internet has enabled Dell to do an even better job of letting the customer (whether a big corporation or an at-home business person) select exactly what he or she wants. The buyer configures the system on the fly and sees the changes in price as the options are added and deleted. And there is no human intervention on the vendor side.

Everyone involved in this transaction wins. Dell gains access to millions of clients from a single site. Dell saves money by minimizing staffing per transaction. The customer gets exactly what he wants at a great price and can order 24 hours a day, 365 days a year. In fact, Dell expects to sell $20 billion of computers on the Net by 2001.

Sculley himself seeks out opportunities to deliver solutions that are better, faster, and cheaper. And, he has been finding them on the Internet. He seeks out new paradigms that create powerful incentives for changed business or consumer behavior. He noted that "people won't change unless what you offer is ten times better" than what they are doing now.

One such technology is offered by Live Picture Inc. which enables web users to zoom in on images such as a catalogue image, a panoramic landscape, or a sports shot.

The technology enables vendors to provide variable resolution photos so that a Web site isn't bogged down by huge graphic files, but enables a user to zoom in on a necktie or a painting for careful inspection.

This technology is already very useful in order to get custom close ups. The user decides whether to zoom in on an object. Live Picture technology will be even more useful as the power of computers increases to render moving images more effectively and as Internet bandwidth increases so that web surfers can take panoramic, zoomable tours of exotic places at high speed.

"Selling something isn't what it's all about," emphasized Sculley. The Internet enables customer lock-in as never before, whether in computers, books, music, travel, or virtually any product category. Savvy Internet sites track and even anticipate buyer behavior, stay in touch with clients, make buying suggestions, and send reminders to stock up when supplies run low.

A powerful analogy summed up Sculley's view of the Internet's importance. He suggested that the Internet today is like electricity 100 years ago. Important, but not essential for everyone. Sculley predicted that in just 10 years the Internet will be just as important to our daily business and personal lives as electricity is today. Almost none of us will be able to live comfortably without it.