Thursday,
May 24, 2001
by Jacquelyn Horkan, Editor
DEFICIT DOVES
For anyone still wavering between the opposing
camps of the deficit hawks and those who favor tax cuts over debt
reduction, here’s an interesting historical tidbit, courtesy of Steve
Conover, a Texas writer, whose commentary appeared on April 5 in National
Review Online (http:www.nationalreview.com).
Since 1776, there have been seven periods of
significant debt reduction (the current effort being the latest). The
United States has also experienced six depressions or severe economic
contractions (1819, 1837, 1857, 1873, 1893, and 1929), each occurring in
the middle or immediately after a debt-reduction episode. Conover asks,
"Will we go seven-for-seven?"
He goes on to calculate the ratio of public
debt ($3.4 trillion) to the nation’s gross domestic product ($10.1
trillion) to arrive at a government debt burden of 34 percent. Another
historical oddity: during the prosperous 1950s, the debt burden average 52
percent; during the stagflation 1970s, it hovered around 25 percent.
ANGELS GO MIA
The open wallets of venture capitalists have
snapped shut. On May 16, Red Herring magazine reported the grim
news from Venture Economics and the National Venture Capital Association:
funds raised by U.S.-based VCs dropped 32 percent between the last quarter
of 2000 ($23.8 billion) and the first quarter of 2001 ($16.1 billion). The
number of funds collecting new capital also shrank, from 147 in the last
three months of last year to 95 in the first three months of this year.
The good news for entrepreneurs: there’s
still plenty of money to invest. The hard part is convincing VCs to part
with it.
NEWS to B2B: CUSTOMERS STILL MATTER
Accenture, a New York-based management and
technology consulting firm, has delivered a reminder to
business-to-business e-commerce companies: don’t forget marketing
basics.
The firm revealed that customer service and a
reputation for reliability matter the most to buyers. Steven Dull, author
of the study, called the results counterintuitive. After all, most experts
theorized that the ease and cost-savings of B2B marketplaces on the
Internet would give an overwhelming advantage to whomever arrived first on
the scene. Instead, B2B winners appear to be those who took the time to
work out the kinks before going on line.
The fundamental failure of B2B shows up in a
comparison to the flailing business-to-consumer industry; 52 percent of
B2C customers say they were very satisfied with their online shopping
experience, while B2Bs earn approval from less than 50 percent of its
buyers.
Research by Jupiter Media Metrix underscores
the problem. While 67 percent of online B2Bs list a toll-free customer
service number on their Web sites, only four percent offered immediate
online support through instant messaging. Of all the companies surveyed by
Jupiter, only 41 percent surveyed responded to e-mail questions within six
hours; only half of those provided adequate answers to the queries.
It should come as no surprise then that
Accenture found that only about half of all businesses purchase goods over
the Internet. Of those, 45 percent make less than five percent of their
acquisitions online
