April 18th 2002 notes on leadership, business and economics
Do people really value high-quality connections?
Absolutely. We always want the highest-quality connection we can have. Why don’t we use more videoconferencing? Because the quality of the connection is so poor. We value connection to the point where you’ll get on a plane and use a day for a two-hour meeting that you could have done in a video conference, but didn’t - because videoconferencing isn’t good enough.Wendell Weeks is the President of Corning Optical Communications. His point is that while the investment community is skeptical right now of fiber optics, he believes in the innate value of optical technology for the things that people and businesses need.
He also appears to have a really good handle on the supply-and-demand phenomenon of business and on the larger business landscape:
Corning Optical Communications is restarting to manufacture fiber because optical-fiber inventories of their customers have come down to a “level appropriate to our ongoing order rate. Restarting production will match our operations to demand.”
To his credit, Weeks does not view the lowered inventory and increased orders as a signal that the market has turned around. Instead, more reasonably, he views these as warranting the statement: “business conditions are not worsening.”
Weeks does believe that broadband will transform the Internet. Fiber optics is, of course, the vehicle by which more and more things go through fatter and fatter pipes (broadband) at much higher speeds than they could otherwise in the old telephone lines. Broadband will provide the “visual richness” (and speed, of course) that people value dearly in their efforts to connect.
He acknowledges that people got on the Internet bandwagon without really thinking through the needs and implications of their business: “People began to shift everything over to the Internet without paying attention to fundamental economics, such as having [the market] to actually pay for it [e.g., Netzero, "Defenders of the free world”]. Then classic economics stepped in, and the capital markets stopped giving money to every idea. First everything was good; not it’s all bad. It’ll [all] even itself out.”
Reference: French, T.D. & Subramaniam, S. (April 2002). The future of fiber. The McKinsey Quarterly.