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|August 26, 1998||
CyberCash CEO William Melton delivers the keynotePriya Ganapati at Pragati Maidan
Money means different things to different people. To some it represents power and to others the key to the material world. But for William Melton, founder and CEO, CyberCash, it has a very philosophical definition.
In a 45-minute keynote address that he delivered on the first day of IIW '98 here, Melton attempted to change the way we look at money.
Melton, who is revered among IT professionals for his knowledge of financial complexities and his entrepreneurial abilities, delivered his address after the inauguration by Chandrababu Naidu, chief minister of Andhara Pradesh.
He was elated by Naidu's speech. "It is an honour to follow a speaker and visionary like Naidu," he enthused.
In a presentation filled with humour and style, Melton captured attention with a well-sketched and simple address that explained the most fundamental aspects of trading on and off the Internet.
"Eight-hundred years ago, central Europe was going through major changes. It was coming out of what is now called the Dark Age. Central Europe was entering a new age of information with the discovery of the printing press that brought a wave of knowledge and learning with it. That transition can be compared to the introduction of the Internet and the changes it will bring with it," he said.
Melton compared the alchemists of that era with the business managers today. "Alchemists were a group of people with a strange mixture of knowledge, trying to create gold out of lead. They felt that there would be infinite wealth if they could succeed. Today, 800 years later, we are trying to figure out a way to create gold out of the lead of information."
Next, the talk focussed on the definition of money and wealth and their creation out of the information we deal with on a regular basis.
Melton then revealed his definition of money. "Money is nothing but hope and despair," he declared.
The reaction from the delegates was of shock and then a quiet murmur filled the room.
"For those who follow the Bombay or New York stock exchanges, money is only about hope and despair. If you watch the New York exchange and see $1 billion moving, there is hope. But when you see the market crash the next day and you see the money evaporate in a moment there is only despair," he pontificated.
Melton feels that modern-day alchemy is intangible, yet simple. It is all about grabbing the attention of the consumer and building a community.
"If I can have your attention I can sell it. If I can get you to watch a television show or a movie or read a paper I can sell that attention and convert it to gold," he pointed out.
The method of focussing attention would be to build "communities". There could be different kinds of communities. These could include domains that would include businesses and schools. Affinity groups of retired persons, loyalty programmes like grocery stores and frequent-buyer schemes like the frequent-flyer clubs of airlines. These are the ways of having communities.
Melton, however, cautioned that responsibility, work and action are important if hope does not have to evaporate into despair.
"The Internet destroys distance because there is no geography in it. The entire world is just a mouse click away. This is good but then it is also bad because you have to work harder to grab attention. There is so much information on the Web that it becomes a white neural or intellectual kind of noise after some time," he explained.
Melton then quoted some statistics to give an understanding of the "incredible market capitalisation of attention". "Consider AOL which has a market cap of $24 billion or Yahoo with a value of $9 billion. Even other companies like @home and Netscape have a market value of $4 billion and $2 billion respectively," he said.
Talking about the differences in terms of economics between the physical world and the Internet space, he said "In the real world real estate is very valuable but eyeballs is what counts on the Net. Food and clothing are important in the real world but on the Net content is what matters. Transportation makes the difference in the physical world but bandwidth is an important factor in Internet space," he pointed out.
In terms of what is valuable on the Net, distribution channels, bandwidth and peering relations are considered as factors that could make all the difference.
Melton then revealed the secret of the modern-day alchemist - "30 per cent."
"In order for commercial transactions the business must spend 25 to 60 per cent on sales and marketing, on an average, I call it 30 per cent. If this is tapped we can harness it in many other ways," he elaborated.
Melton defined money as actuarial, liquidity and even something that could be exchanged for value.
As for the different competing standards today, he predicts that there would be no one definite winner in terms of currency. There would be many competitors in different domains.
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