Interviews – Technology – Martin Frost
Martin Frost, 49, is the non-executive chairman of Infobank, a business to business e-commerce software venture. He moved over from drinks and entertainment giant Seagram full-time in June 1999, after a long and successful career in the old economy, beginning as a graduate trainee for Unilever. He lives on Putney Heath in London with his wife Jane and two children
Can you explain what Infobank does?
Infobank is a provider of business to business e-commerce software that automates the corporate procurement and supply processes using intranet and Internet technologies. It’s about taking enormous running costs out of the supply and demand system.
How did you start out?
I actually started in medical research, doing a PhD in lung cancer, but I subsequently decided I wanted to learn about marketing. I missed the milkround but got interviews with a host of leading companies. In the end I went to Lever Brothers where I did their brilliant marketing programme.
After seven years, I was head of the Lever toiletries group, when Pepsico headhunted me as their marketing director for northern Europe. I went from marketing into general management, running the UK, Ireland and France, before being moved out to the Middle East. Coke were about to re-enter the region and I was sent out there to create barriers to entry. I ran eleven businesses and we were very successful.
When I was approached by Seagram to head their European sales and marketing I took my first staff job. The EEC was getting very exciting, and I needed to get back into Europe with the family. I was head of strategic planning and business development as well.
In 1995 I took over as president of the business in Europe, the Middle East and Africa, a job I held until June of 1999. I had a brilliant time, but I hit another point in my career where I thought I needed a move. The Internet was really starting to come to fruition and I wanted to be at the center of that. I also felt like I had spent my career with big companies and now was the time to put all that knowledge to use in an entrepreneurial environment.
I had become involved with Infobank in October 1997 and took over as non-executive chairman in September 1998; I left Seagram at the end of June 1999.
There has been a lot of re-evaluation of the longterm prospects for Internet companies as viable business propositions in recent weeks. Does this worry you?
The business to business e-commerce market has been estimated at being worth $7tn by 2004, 7% of global sales value. There is a definite market there. If you have a product that adds real value to business, I think the future is very promising.
When it comes to the business to consumer market, there is far less certainty. I have propositions landing on my desk every day and I would say 80% of them are likely to fail. The tragedy is that they have been getting funding.
I have three criteria that an Internet business has to fulfil before I would take any interest. Firstly, would the business survive without the Internet? Does it change cultures and behavior? And is it a sustainable, ownable concept?
A recent study suggested that there will be 1.6m IT vacancies in Europe by 2003. As chairman of an IT-based business, do you think Europe is way behind the US in terms of having enough properly-trained talent to meet demand in this rapidly expanding sector?
Inevitably yes. In all things technological the US seems to have a lead. However, I think things are changing very quickly. The US is fast maturing, while Europe is showing fast, exciting growth at a serious pace. As a company it is a nightmare providing high quality training and skill sets for people, because as soon as they are trained they are impossible to retain. I experienced this at Seagram, where the turnover of staff in our IT side was massive.
Do you see the provision of share options and equity in a company as one means of encouraging loyalty?
Certainly. As an employer one must try and do as much as possible – share options and equity may just be the start. Providing share options and big salaries is one thing but you have to give people a reason to look forward to getting up in the morning – that is more difficult.
Are the qualities required to be successful in business today the same as they were ten years ago?
The basic qualities have certainly remained the same: the ability to have a good idea, the determination to make that idea work, and the vision to be able to capture other people’s imagination.
In e-commerce the pace is far faster than in traditional business, so one must be very flexible and quick on one’s feet. You cannot quantify business accurately in this area, so you need to be able to follow a very rigid business strategy. Lastly, you’re breaking new ground, so you need to be creative.
Are traditional qualifications and MBA’s valued as highly by employers as they were before the advance of the Internet?
It depends on the nature of the role you’re looking to fill. If you’re looking for a programmer, you might be more concerned about their programmeming experience. However, you certainly can’t suggest that in e-commerce solid academic backgrounds won’t count for a great deal.
You’ve been very successful in your career. What would you say to those just starting out?
From my own experience I would say that getting good training from a great company was invaluable. My time at Unilever continues to help me make decisions even today.
Having a vision of where you want to go and having the courage to actually go there is the key. Not everyone will do it, because it is actually quite destabilizing leaving the security of one job behind to embark on a new venture.
The other thing I would say is very important is to know what you are good and bad at. I have done well because I know what I am bad at – and get people around me who will make up for those deficiencies.