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BizReport : Internet : June 15, 2000


Exclusive Interview with Scott Mednick, Chairman of Xceed

Scott Mednick speaks manically-almost urgently-about the need for businesses to integrate the Internet into everything they do. It's no wonder, considering that he's the chairman of Xceed, a New York City-based firm that advises companies on how to mind-meld with the elusive Web. To be sure, Mednick fills the air with more buzzwords and cyberese than a Silicon Valley coffee shop: Xceed, he says, is an "interactive architect" that helps companies uncover the "digital value network."

by Michael Grebb, Special Correspondent

Whew. It's the kind of talk that makes executives who don't quite get this whole e-business thing perk up and listen. After all, in the new millennium, refusing to embrace the Web could very well mean the death of your otherwise well-run venture. And a boon for your competitors.

Xceed tackles all sorts of clients (about two-thirds are what Mednick considers big companies while the rest are smaller firms). The roster is as diverse as Mednick's vocabulary. Healtheon/WebMD, E.W. Scripps, Starbucks, U.S. Chamber of Commerce, Pitney Bowes, Sprint, Planet Hollywood, and Eli Lily are just a few. And Mednick says businesses are finally starting to emerge from the "herk-and-jerk" period of just slapping up a Web site or becoming an e-tailer. Mednick, who was chairman and CEO of THINK New Ideas, before joining Xceed in 1998, just in March re-upped his two-year contract for another year.

MG: You talk about the digital value network, and being an "interactive architect." What does that mean?

SM: It's really about how you're going to deal with the digital future. There isn't a constituency that isn't affected dramatically by the digitization of business. Clearly, the Internet and variations thereof are the most efficient and effective ways not only to deliver communication but to create dialogue with those communities on a very specific platform.

MG: Let's say I'm an executive, and I've got a Web presence. I don't think I need you. What would you tell me?

SM: I really think we're at the point in the evolution of business and the Internet in which general solutions have pretty much been applied. Everyone put up a Web site. Then, they decided they should have e-commerce. Everybody wanted an auction engine. We have gone through that phase. Now, with great specificity, we're approaching each sector on a vertical basis and asking, how are they interacting with a specific audience in a specific way. You can no longer just apply the same technologies whether you're in oil and gas, or you're an e-tailer. We're trying to create unique brand and software applications that allow for differentiation.

MG: As the demand for e-business consulting increases, you're trying to expand. Yet you're stock is way down, and the entire Internet sector seems depressed. What issues does that present for you?

SM: I think everyone across the board struggles with how the market is treating the sector. When the Internet sector was taken down, our sector was taken down very hard. The reality is that no one is hurting for work in our sector. Clients and potential clients are continuing to utilize interactive and Internet technologies in their businesses. We are the arms suppliers in the interactive wars. We are not dot com businesses with no chance of profit or revenues on a consistent basis.

MG: Are you guys making a profit yet?

SM: We will be profitable before the end of the year... I see the whole space growing in leaps and bounds. The challenge that you're alluding to is that there are too many people who think they can do this business. We know this because we get second shots in which clients say, `okay, we've hired so-and-so, and it didn't work. Can you guys do it?'

MG: Speaking of your clients, what's the biggest thing companies are asking for these days? What's the biggest trend?

SM: There are two trends that we're seeing. First is the recognition from companies that they must change the way they interact with their internal employees and how that blends with their external brand and external marketplaces. That includes demand and supply chain activities. The other trend is a total re-evaluation of the sort of herk-and-jerk scenario in which they say, `Oh, we need to be an etailer. Oh, we need to do an auction. Oh, we need to do this.' People are now asking us to come in and go on aways with their executives for several days to sit and map out a business strategy that recognizes that the Internet is a process, not an event. It's so they can take a step back and understand that the Internet is here to stay and work with a company like ours to ask what they should be doing as a five-year plan and how they can grow into that.

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