Two-Way Street PR, events and incentives – Collaboration & communication ideas for demanding businesses from The Castle Group’s Mark O’Toole

Excerpt from: FACING THE ABYSS, by Scott Kirsner, The Boston Globe, September 24, 2001

Just before the hijackings, I’d been planning to write about how some of the online travel companies based in the Boston area seemed well-positioned to weather the continuing economic turbulence. Travel planning and ticket buying online seemed to be booming – it was one clear area of our lives where the Net had really changed consumer behavior.

On my list of companies to watch were ITA Software, which provides the technology that runs Orbitz.com; VacationCoach.com of Maynard, which offers personalized vacation recommendations; e-Travel in Waltham, a corporate travel portal; and Passkey.com in Quincy, which helps to simplify the booking of large blocks of hotel rooms.

Suddenly, with businesspeople limiting their travel plans through the end of the year and consumers postponing vacations, companies in the online travel space will have to fight harder than before to stay alive, let alone continue along their earlier growth trajectories.

Rob Roberts, the CEO at VacationCoach, says there are a few reasons he and his employees aren’t despairing. “All our deals in the pipeline are still alive,” he says. In addition to being used on Travelocity, VacationCoach’s software will be deployed this fall on a new travel site from Cendant Corp., which operates chains like Avis and Howard Johnson. And, he adds, “even if we do take a little bit of a hit in the travel industry, [travel sites] are going to be continuing to look to differentiate themselves. If it’s a smaller pie in the short term, [sites] will want more of it.”

At ITA, vice president of marketing Cara Kretz acknowledges that the terrorist attacks “absolutely” will have an impact on the company’s growth rate. But she says, “We think this is a short-term disruption, and that the long-term prospects are still good. [Airlines] need our technology” – which helps them manage information about flight options and prices – “for [operating] efficiencies and keeping their costs down.”

But even as people travel less often, it’s possible prospects could brighten for other kinds of technology companies. Publicly traded videoconferencing equipment makers saw their stock prices jump last week, on the assumption that when the worries and hassles surrounding air travel increase, people may be more willing to use videoconferencing as a tool for conducting meetings.

Howard Anderson, founder of YankeeTek Ventures in Cambridge, is requiring all of his portfolio companies to install videoconferencing gear so they can communicate with partners, prospective customers, and other investors without hopping a plane.

“It’s a response not only to [trying to reduce] travel costs, but to the increasing impossibility of travel,” he says. “The idea that you can do two meetings a day in two different cities, showing up 20 minutes before a flight and doing your O.J. Simpson routine through the airport – that’s gone.”

Don Gibbs, chief executive of a Montreal telecom company called VIPswitch, made a prediction at a conference in Boston last week. As air travel bogs down, he said, business users will be more amenable to adopting not just videoconferencing, but Internet telephony, and storage networks, where data is backed up safely off-site by a vendor. “The bandwidth hogs are back,” Gibbs said, referring to applications that require lots of communications bandwidth.

When I spoke with him after his presentation, he observed, “The events of Sept. 11 may be the catalyst that drives people to wider use of videoconferences and online collaboration. It’s a hell of a catalyst, though.”

Anderson at YankeeTek predicts that fledgling companies face an exhausting march that will last between two and four years.

“It has never been tougher” to sustain and grow young companies, Anderson says. But he points out that while many venture firms seem to be on pause, focusing on their existing portfolio companies, YankeeTek is still making investments; Anderson has funded three new software and telecom companies in the past month.

 In America, Anderson says, “We have always viewed those who start companies as our own economic heroes. Our way of life is dependent on their ability to start, finance, and grow insanely great companies. That’s what makes our economy unique.”

Maybe the ability to tune out the chaos, and the nauseating plunges of the Nasdaq, is essential to the entrepreneur. Maybe the ability to concentrate on company-building at all costs is both pathological and inspiring.

“Not everybody works for the Red Cross,” says Roberts at VacationCoach. “But my personal philosophy is, you create value where you can.”