The argument that many of the start-ups pose is that they are simply buying land while land is cheap. That is, they will spend a lot of money today to build mindshare, and that leads to market share and, ultimately, profitability in the future.

OK, but you can only finance mind-share if you have the cash flow. You had exactly the same arguments in the 1920s, although the term “mindshare” didn’t exist. “Market share” was also an unknown term. The terms are new, but the illusions or promises are old and they were the same in all of the other booms. Typically, the speculative boom precedes the growth of real businesses by 10 years.

The first great speculative boom of our modern economy was with the railroads. The great English railroad boom in the 1830s led to a collapse of many of the first companies in the early 1840s. After that, railroad building began in earnest. The same happened in this country after the Civil War. The railroad boom was in the 1860s. But railroad building, and profit-making, only began in earnest with the transcontinental railroad after the Civil War.

Does that 10-year beginnings-to-boom timetable still apply? Do you think it will take a decade before we see the real champions of the New Economy emerge?

Yes. The promise in any new business in any new industry is that you have to buy back every penny you spend. But if you don’t have the cash flow, you must depend on ever-growing infusions of new money: Investment capital. If you don’t get what you call “mindshare” translating into market share, you must depend on stock market gains rather than business gains. And that is very, very risky. It makes you exceedingly vulnerable to even the slightest downturn.

If so many new Net companies are stock market gambles, what about the established old-line companies? How are they faring online? We all, including myself, greatly underrated the speed at which old businesses have been able to adapt to e-commerce and actually become leaders.

Some overrated it fantastically, and still do. Let me give you one example: Some fifteen years ago I told one of the world’s very large automobile companies they would have to go on the Internet. They listened politely, which means they didn’t throw stones at me. But they thought I was absolutely crazy.

Now this same company has started an Internet buying collective and is working with at least two, and probably four or five, other big automobile companies. The buying co-op will turn into a worldwide auctions market, and they are moving very aggressively. But it took ten years. And they also still only focus on their own brands, instead of being multi-brand as the dot-com people are. Both sides still need to learn from each other.

Is it important to be a multi-brand organization? It’s critical. If you are, let’s say, Ford, and you go on the Internet, you sell Ford cars to Ford dealers. If you’re one of the dot-com companies, however, you sell every brand and find the dealer for it. That gives the dot-coms an enormous advantage, but only for the time being. I don’t know which of the big automobile companies is going to realize that its marketing strength enables it to become the seller of all brands and especially of the brands that don’t have the volume. From all I know, they’re all working on it. Give it another six months. They have severe internal problems with these things, however – with dealers, with their own people. They must overcome that.