MEET BRITAIN'S DIGITAL DOZEN - The digital revolution has given birth to a new club in the business world - and the UK already has an impressive membership. It includes young technophiles, established FTSE executives, internet entrepreneurs, visionary venture capitalists and bankers who have been paving the way with the infrastructure to support this booming economy. Matthew Lynn profiles the revolution's leading figures.
When the London estate agents De Groot Collis recently listed a three-bedroom flat across the road from Harrods in its sales literature, it was described as the most completely wired property in the country.
It included a video conferencing system, four separate phone lines as well as dedicated ISDN lines, and had wires into the Bloomberg dealing system wrapped into the sofa. All of which points to two facts: that the 'digerati' have truly arrived in Britain, and - given the flat's price tag of £2.5 million - that they have plenty of money.
As with many things digital, 'digerati' is an American term coined by Wired magazine, the slick bible of the internet. It refers to the big players in the emerging digital economy - entrepreneurs, venture capitalists, FTSE 100 executives, bankers and consultants who have established themselves in the past few years as people who can make things happen in a digital environment.
'Britain definitely has a digerati,' says John Taysom, the Reuters executive who was among early backers of companies such as Yahoo!. 'It is not a very large group of people, either.'
MT's definition of the digital economy is quite wide - purist definitions of the digerati are limited to internet businesses only, but this list includes people who are using some form of digital or computing technology to create new businesses.
So, Chris Gent, chief executive of Vodafone AirTouch, makes it onto the list; while not an internet company, Vodafone has just become the biggest mobile telephony business in the world. With the rapid convergence of telephony, the internet and computing, Gent has become one of the leading figures in deciding the future shape of the communications industry.
Charles Cornwall of Eidos is also on the list. The computer games company, best known for introducing Lara Croft to the world, is not an internet company, but it has created in Lara the first megastar of the digital economy. Even in cyberspace, brands are still going to be crucial to creating a successful long-term business as Cornwall has shown all too clearly.
Are the digerati all pimply nerds who spend their lives in dark rooms hunched over computer screens, swigging Pepsi and munching pizza? Some are, of course, but by no means all of them. In truth, the digerati are defined by their curiosity and ambition. Taysom at Reuters and John Pluthero at Freeserve are mainstream big company executives, but both have played decisive roles in moving their companies into new digital markets.
'The digerati consists of a group of people who share a vision of the way that connectivity is changing the economy and changing lifestyles,' says Taysom. There was nothing inevitable about Dixons creating the UK's most successful internet portal in Freeserve, nor about spotting that being the country's largest retailer of computers could make you a big player on the net. It took insight and initiative.
Reuters looked more likely to be a victim of the internet than a beneficiary, because lots of others could now offer the kind of real-time share prices and news that are its strengths. However, its investments in a string of start-ups, orchestrated by Taysom, have created a side business as a digital investment trust. On the London stock market this year, Reuters has been one of the leading performers precisely because of its internet shareholdings.
One factor common to all the digerati is an ability to move fast. Dan Wagner, for example, was creating a digital company before the d-word was heard outside of maths seminars. Essentially a marketing man, Wagner saw that demand for online business information would be huge. He created MAID, now renamed Dialog, and used his paper to take control of the struggling Knight-Ridder information operation in the US. Wagner has had ups and downs but has proved himself a survivor - and since no market has ever been as competitive as the online market, survival may be the greatest of all skills.
Other entrepreneurs on the list moved to set up digital businesses before most other people had heard the term; among them are Robert Bonnier at Scoot and Tim Jackson at QXL. Neither company is startlingly original - but they got there first.
'In the messianic sense, I don't count myself as a digerato,' says Jackson.
'I think the internet is great and can do lots of useful things, but you need to distinguish that from computer nerds who like sitting in front of computers all day. If you mean by digerati a network of people, then I don't think that existed in this country until about a year ago. What is so impressive about Silicon Valley is that you have scientists, engineers, brokers, venture capitalists, and so on, all in one place - and that makes it possible to start a company very quickly. That is just beginning to happen here, but it needs to become more professional, not just small cliques of people who all happen to know each other.'
The infrastructure of a digital economy is evolving rapidly in Britain.
Online businesses don't require much in the way of labour, raw materials or property - the usual essentials of a commercial enterprise - but they do consume vast quantities of capital. There are only two sources for that capital: the venture capital industry and the stock market. The two work hand in hand.
The venture capitalists provide the seed money and the initial financing.
The stock market provides the exit route that makes putting up the initial money worthwhile - as well as providing fresh capital. In this country, Peter Englander of Apax Partners has established himself as the first port of call for budding internet entrepreneurs. Once start-up funds are in place, Marc Odendall of the Credit Suisse First Boston technology group is the next man to see. Through the successful flotation of Freeserve, he has marked himself as the banker to the digerati - which will be a lucrative franchise for CSFB if it can maintain that position.
You don't have to be British to be among Britain's digerati - just work here. The digital economy does not respect borders and neither do its leading players. Both Odendall and Bonnier came from the Continent. Bonnier says he finds Britain more entrepreneurial than his native Holland while Odendall believes that London is the place to be if you want to operate in financial markets.
A key factor in the prosperity of different countries in the next few decades will be their ability to attract the digerati, then to keep them.
Digital businesses are by their nature highly mobile. So far, compared with the rest of Europe, Britain has its fair share. But there is little room for complacency. Germany has its rising stars of e-commerce - look at the recent success of Buecher.de, a competitor to Amazon.com on the Neuer Markt. So, too, does Scandinavia, and Milan is planning a new exchange to attract young digital companies. All of Europe still lags badly behind America, but the digerati are, in effect, the local representatives of a global community.
One thing that can't be ignored about the digerati list is that it is overwhelmingly male. It could have included some women but its gender bias is not a total surprise. Think about it, when did you last hear a man complain that his partner was spending too much time on her computer? Traditionally, men have been more interested in gadgets. But there is now a plethora of web sites being targeted specifically at women and the best customers for the emerging e-tailers are turning out to be busy working mothers. In two years' time, expect any list of Britain's digerati to include a few women.
Also expect it to include a fair few casualties. The digital economy moves at lightening speed and people drop off the bandwagon as quickly as they climb on.
Impatient not to 'miss out', Ahmed dropped out of a business course at Bath University five years ago to found his own new media company, AKQA.
Now valued at £26 million, it is the UK's largest independent digital media consultancy, and lists BMW, Microsoft, Orange and Durex among its clients. Ahmed, now 27, hopes to turn some of his paper millions into cash with plans to float 40% of the company on Nasdaq by 2002.
Dutchman Bonnier, not yet 30, has already built one of the few listed e-businesses in Britain. Freepages, now called Scoot, was started to provide electronic competition to Yellow Pages. Callers ring a free number and get access to listings of businesses in any area of the country. They can do the same over the web. Scoot recently announced a link-up with Vodafone AirTouch to provide free interactive information services to Vodafone users.
Cornwall, the Eidos chief executive, is the man who unleashed Tomb Raider on the world. A former banker, Cornwall, 36, saw the potential to create a big company out of Britain's fragmented computer games industry. Since acquiring Derby's Core Design (creators of Lara Croft) Eidos has come up with other hits including Championship Manager. With Paramount shooting a Lara Croft film, there should be more growth ahead.
Englander is the man British e-entrepreneurs call on for cash.
The head of technology investments at venture capitalists Apax, Englander, 38 has been one of the most enthusiastic supporters of new digital companies. Among his investments are QXL, Computacenter, which listed at £1.3 billion and Dr Solomon's group, which was bought by Network Associates of the US for more than £400 million.
At 50, Gent may seem a little old for a digerato, but after creating the world's largest mobile phone company through the merger of Britain's Vodafone with AirTouch of the US, he has emerged as a major player in the digital economy. The convergence of telephony, computing and the internet will create the key technology of the new century, and Vodafone AirTouch will be one of the few serious European companies to master it.
Tim Jackson began his career as a journalist before starting an internet column for the FT. Now, at 34, he is more often making headlines than writing them. He founded QXL, which is quickly establishing itself as one of Europe's leading online auction houses, selling everything from PCs to holidays. When it floats in the autumn, it is expected to have a value of £750 million, making it the UK's biggest internet business after Freeserve.
The chief executive of ECsoft, Laugerud is one of the few people actually to have made hard profits from the digital economy. His consultancy ECsoft installs web sites and internet ordering systems for big companies. Clients include British Telecom, Esso and Unisys. ECsoft listed on Nasdaq in 1996 and floated on the London market last year. It now has a market value of more than £200 million.
Straight out of university, Lynch, now 34, founded a company called Neurodynamics.
Out of that was spun Autonomy, a business that advises other companies on how to manage the internet. His clients may not be making money yet from the web, but Lynch certainly is. Based in Cambridge, Autonomy is listed on Europe's Easdaq market with a value of £170 million and is looking towards a listing on Nasdaq as well.
CREDIT SUISSE FIRST BOSTON
Odendall personifies the transnational nature of the digital universe.
The 41 year old has dual French and German nationality but heads the technology group at Credit Suisse First Boston in London, where he has a reputation as the banker to the digerati. Odendall has advised on the flotations of Freeserve and the ECsoft Group in the UK, as well as the listing of Graphisoft on Frankfurt's Neuer Markt.
A 35 year old accountant who read economics at the LSE, Pluthero worked at P&O and Bass before becoming head of financial planning at Dixons six years ago. In 1998 he was put in charge of Dixons' internet service, Freeserve.
The twist was to get rid of subscription charges and collect a cut of the phone calls. Floated with a value of £1.5 billion, Freeserve is now Britain's largest pure internet business.
At 45, Taysom has emerged as one of the global players in the digital economy. Spotting the potential of the net early on Reuters established a greenhouse fund to exploit the technology and put Taysom in charge of it. Taysom invested in American companies such as Yahoo! and Infoseek - investments that have multiplied many times. Taysom also advises the European Union on technology issues.
Danny Wagner, 36, has been wired into the digital economy longer than most. In 1985 he founded MAID to sell electronic business information to companies long before anyone had heard of the internet. He is now in charge of the Knight Ridder news agency in the US. So far he has yet to convince the City that he can turn that troubled business around but his spirit and chutzpah make him a force to be reckoned with.
HOW TO JOIN THE DIGERATI
Buy the fastest modem you can find. You'll never find the digerati slowed down by a 14.4.
Rewire your office and your house. No ISDN line in the bathroom? You cannot be serious!
Learn the language. Digerati never muddle their portals with their ISPs, their hits with their eyeballs or their passwords with their URLs.
Put the word digital in front of everything, no matter how irrelevant.
A boring old marketing manager can suddenly become an exciting digital marketing manager; a dull ad campaign can be transformed into a snazzy digital ad campaign; even secretaries can become digital assistants (thereby trebling their salaries).
Invent a new business model. Essential for persuading venture capitalists that a company which charges nothing for anything is still going to make a fortune.
Hire a good stockbroker. This is the person who can convert your exciting new digi-cash into plain old-fashioned folding money.