The Chicago BrainTrust - Vol 2 ,
 Welcome to this week's edition of The Chicago Brain Trust, "a humorous
look at the Chicago-area's e-business community." Starting today, we'll
be running the newsletter's content on the web site with a one-week
delay <http://chicagobraintrust.com/>. (For the investor, that means
you're a week behind if you read the archive on the site. Keep it
current and subscribe.)

As always, if you're looking for our signature cartoons, boogie on over
to <http://chicagobraintrust.com/retinalimages.htm>, and while you're at
it, check out our fine selection of daily comic strips at
<http://chicagobraintrust.com/comics.htm>.

And now, on with the show...

-Todd Allen
Chief Executive Smart-Ass
The Chicago Brain Trust

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==
Warning: There is no truth in any of the materials in this newsletter,
except by satirical inference.
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==

McDonald's Acquires Failed Web Firms, Sends Employees to Burger U.

(Oak Brook, IL) Fast food giant, McDonald's has entered the dot-com
world with a big splash, acquiring failed web firms at a breakneck pace.
 Not an ordinary technology investor, McDonald's is taking a corporate
raiding approach to these acquisitions.  Instead of utilizing acquired
firms to increase the corporation's Internet presence, McDonald's is
taking a new spin on the increasingly popular "Vulture Capital" role,
selling off patents and equipment, while retraining the acquired
staff.

"Getting employees that can make correct change and process orders
properly is much more difficult than one might imagine," McDonald's
spokesman Harrison Dent explained.  "There's also the issue of
convincing qualified teenagers that McDonald's is a cool place to work.
It all makes staffing very difficult for us.  We've found that most web
programmers have sufficient mathematical skill to make correct change,
as well as handle the digital read-outs on microwaves and French Fry
machines.   With the economic problems many web firms have been having,
compared with the cost of constantly recruiting new teenagers and
replacing them as they go off to college, it has become economical to
simply acquire a struggling web firm, sell-off whatever assets they
have, and send their staff to Burger U. for retraining in the business
of family dining."

Dent went on to say that the various positions at web firms mapped out
well with McDonald's staffing matrix.  Programmers, being mathematically
inclined, would process the customer orders and make correct change.
Quality assurance workers are sent back to the kitchen, making sure each
burger they flip is up to corporate standards.  Technical support makes
sure the grills and fryers stay in working order and that the floors are
clean.  Managers continue to manage and accountants still do the
books.

"Initially there were concerns that, due to the large number of foreign
programmers, that there might be some language problems with these
workers taking orders.  However, upon execution, it was found that the
problems with poor English skills were no greater than those currently
existing in our Chicago operations."

McDonald's largest problems in converting employees seem to be dress
code and unauthorized snacking.

"Unfortunately, the casual dress codes allowed at some of these firms
have caused a culture clash," Dent elucidated.  "We have had some issues
with employees showing up to work in dirty t-shirts, rather than in a
McDonald's uniform.  Similarly, many of the acquired firms provided free
and unlimited snacks and drinks, a policy which is not a staple of our
organization."

Still, Dent was upbeat about the prospects of transitioning the digital
economy to the burger economy.



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Brain Dead
The Next P2P
By The Big Head

In the battle of acronyms, the first P2P was path-to-profitability.
Then we had P2P as in peer-to-peer.  Though no one really knows if this
is Napster type P2P (central server based) or the SETI type P2P
(distributed computing).  Regardless, the next P2P will be
Private-to-Public, as in private-to-public exchanges.

The beginning of the B2B revolution was led by public "exchanges".
While the exchanges were nothing of the sort when one used to think of
true exchanges (Commodities, Futures, NASDAQ, NYSE), they did expose the
public to the Internet space.

These "exchanges" as they were called were really nothing more than
glorified auctions.  There was no exchanging going on because that is
not what they were designed to do.  The idea of these early companies
was to build a technology and then leverage the power of the Internet to
create buying communities.  Whether it was buyers or sellers, the
premise was the same.

If the company chose to work on sell side mechanics, then it was usually
excess inventory of some sort put out into a platform where the highest
bidder was the winner.
Conceptually, this was a good idea.

However, it was fraught with a few challenges.  First, you needed lots
of buyers to attract the sellers, and vice versa, thus liquidity was an
issue.

Second, none of these technologies took into account a payment mechanism
or payment platform, thus all settlement issues were handled offline.
While this may have been fine in modern times, the premise of the
Internet was to help eliminate such paper and time-based
inefficiencies.

If the company chose to work on buy side mechanics, then a buyer would
list his request and suppliers could jump at the chance to bid for the
opportunity.  This, as well, brought about it's own set of challenges.

Namely, the suppliers, who were necessary for the validity of the
auction, stayed away.  The figured it out pretty quickly that they would
only be bidding against themselves and their own margins.  Thus without
enough suppliers, you had no liquidity.

Where is the industry now?  On the "Private Exchange" model.  What the
industry failed to take into account was the value of RELATIONSHIPS.

The relationship between buyers and sellers is a long term and trusted
item.  Some relationships go back a hundred years.  Take Ford and
Firestone for instance.  That relationship has been in existence since
the dawn of the automobile.

You don't just build a technology and expect to steal those existing
bonds away overnight.  Therefore, the premise of the public exchange is
to leverage the existing relationship between the buyers and sellers of
companies, industries and verticals.

The companies are saying, give me a better way to deal with my own
suppliers.  I trust these companies, I know them, I know their pricing,
and their deliverables, heck, I play golf with their CFO.  I want to
keep them.

However, I want to do it more efficiently.  What can technology and the
web do to make my life easier in dealing with the known quantities that
exist within my own company realm?

So now, the push is to private exchanges.  A way to take big companies
with hundreds or thousands of existing relationships and bring them to
the web.  This creates immediate liquidity among groups of companies
used to doing business with each other.

That makes sense and should be where the market focus was all along.
What will the evolution of this be?  That is where the new P2P comes
in.

What is P2P, you ask?  Private-to-Public exchanges.

While a private exchange focuses on existing customers, a public
exchange holds the promise of more buyers and sellers.  Thus, more
liquidity creates potentially more sales or more savings.

Ask yourself, "If I were a company would I be interested in new buyers
and sellers for my goods?"  Invariably, the answer is yes.  A private
exchange automates my existing relationships.  However, find a way to
provide me access to more buyers and sellers as well, and know you
really have my attention.

Where is the future of exchanges?  It should move toward a
private-to-public marketplace.

First, make it easier to deal with my existing customer and supplier
base.
Second, give me more buyers and sellers for my goods.

Whether this means a melding of the different private exchanges in the
future, or several overlying technologies that provides access across
many borders, is yet to be seen.  I'm willing to bet the future of B2B
commerce will lie somewhere in the neighborhood of the new P2P.


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New Tissue Headlines of the Week - May 23, 2001

(Chicago, May 21) NEWS FLASH! The McKinsey Report Does Exist!  In a
brilliant piece of skullduggery, CBT staff members, Luke N. Forlove and
Little Debbie, were able to penetrate the $50 million dollar security
screen erected around Katherine Gehl's office and copy the entire
document. "Well, we kinda waited 'till she went to lunch and while Luke
distracted her assistant with his masculine charms, I copied the entire
25,000 page document on my Brownie camera," Debbie revealed.

While we intend to release the document piecemeal to obviously milk it
for all it's worth, here are the names of some of the various Chapters,
just to whet your appetite: "Intro - Boy Do We Have Problems"; "Chapter
Two - No Silicon Found in Prairie"; "Chapter Five - divine Should
Consider Software Approach"; "Chapter Nine - Tech Jobs Not as Important
as Broadband Plays"; "Chapter 13 - Horse Racing Revenue Possible Funding
Source"; Chapter 42 - More MBAs Needed".

Starting next week, we intend to publish actual material from the
report, so don't miss our next issue!


(Chicago, May 21) Microsoft Misses Boeing - Heads to Chicago Too.  In a
surprise announcement, Bill Gates, Microsoft guru and founder told the
press that he had decided to move the company's headquarters to Chicago.
 "I was shocked an surprised to see that Boeing moved, but then I
checked out their rationale and concluded they were right," Gates said.
Pointing to a PowerPoint presentation that no one could decipher, Mr.
Gates remarked: "After all, when you take into account, climate,
available human resources, the transportation capabilities, it's a
no-brainer."

Sources close to Gates indicated that when Bill found out that the
Playboy Building was available, he jumped at the chance to move.  It's
rumored that Bill has visions of taking on the mantra of Hefner now that
he's stepped down as CEO of the world's largest software company.


(Evanston, May 22) Northwestern University's Mohan Sawhney Makes
Internet Prediction that Comes True! Yes, that's right, Professor
Sawhney has actually made a prognostication that was borne out! Last
week the Professor predicted that Microsoft would move to Chicago.
"After all, when you take into account, climate, available human
resources, the transportation capabilities, it's a no-brainer," Sawhney
cited at a meeting of Internet gurus.

Sources close to Sawhney said that when the Professor heard that the
Playboy Building was available, he easily made the prediction.
"Business is all about collaboration, work flow and relationships. And
who was better at relationships that Hugh Hefner. If Mr. Gates can pick
up where Mr. Hefner left off, Microsoft should be a winner." Sawhney
said.

In a related story, a spokesperson for Viagra was heard to remark, upon
hearing the news, "If Bill uses the Hefner model, he'd better stock up
on our product.  After all, if Windows were a man, not only would there
be performance problems, but shutting down in the middle of a session is
just not going to cut it.

Others in Chicago said that perhaps that was the real reason for the
move.  "Maybe moving to the Playboy Building will inspire them to create
products that get issued to the public prematurely. Premature issuance
is a real problem, especially when, well, you know," a local government
official was quoted as remarking. Most Chicagoans felt that that least
the Windows wallpaper would likely be a bit less dull in the next
Windows product line should Gates be ensconced in town.


(Chicago, May 23) Britannica and Online Unit to Combine - Move Books
Through the Internet. Citing the slower sales of the paper-based
encyclopedia and the struggling revenue model for their e-commerce site,
Britannica spokesperson Winston Miles said: This will really cut down on
expenses.  All we have to do is figure out how to stuff those heavy
books through the wires and we'll really show some progress."

Sources close to Britannica's president say that when he heard that
"broadband" was now widely available, he said, "OK, so if it's broad
enough, then the big fat book should fit, right?"


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Shock Therapy
Digging Through the Archives - Do You See A Pattern Here?

By I.P. Daley
Editor In Chief

Hello fellow CBT'ers.  I'm a bit more lucid this week, having been
allowed a lesser dose of my medicine - and while my frontal lobes are
clear, I took some time to visit the hospital's library.  You would be
so surprised to see just how many things were collected ON PAPER before
the Internet reared its ugly head.

The facility actually has a wonderful collection of old newspapers -
yes, a paper document where content was placed on a daily basis and -
you'll never believe this, dear readers - people actually paid to read
it! Really!  I'm not kidding!

Anyway, what I found enervating was that there were real-life stories in
these newspaper things, you know something called "news" that didn't
entail a wonderfully endowed woman or a plastic faced man to interpret
it for us. Think of this crude idea; a person called a "reporter" went
to the site of some "news event" and - now I know you won't believe this
- wrote down the FACTS!  Then, and this is even more fantastic, the
"editor" (a person who actually read all the written down stuff to see
if it made reading sense) let the reporter person put it in the paper
exactly like it happened - he didn't need to "spin" it or check with the
advertisers first!  WOW! No wonder newspapers have ceased to exist.

But I digress. The article I snipped out of the paper seemed vaguely
familiar to me, but I couldn't place it.  No problem, I called Mohan
Sawhney, my old buddy at Kellogg (If he's at Kellogg and he's so famous,
why is it, he's never been on the Corn Flakes box?) and asked him if he
could make the connection for me.  After 1 hour and 45 minutes of
phraseology like: "Strategic Insights into eBusiness Transformation", I
thanked him and rang off. While he didn't provide further illumination,
he did tell me that Kansas was in the Midwest.

Rather than try to figure it out myself, I decided to let you, the
reader, provide me with clues to why this tickled my subconscious.
Please let me know, as I have to go back into confinement and won't be
allowed back into the library until July 17th 2003. All e-mails should
be sent to ipdaley@thechicagobraintrust.com.
Kansas Sun-Times
Hullabaloo Kansas, Dec. 19, 1903.
For Produce Farmer, Automobile Failed Against Horse and Wagon
For 3 generations Samuel L. Ross's family has adopted the latest
technology to keep their farm's production at the head of the class.
"Everyone here abouts knows my father was the first to buy a Deere
reaping machine back in '73," he was quoted as saying during our recent
interview.
But there's one thing you won't see on Ross's farm - any of those new
fangled inventions called the automobile.  "That new fangled horseless
carriage isn't going to cut it when it comes to getting my produce to
market." Ross said while standing along side his farm wagon and team of
horses. "Why the dang thing needs gasoline every 10 miles and it only
hauls 
 ton, compared to 2 ton I can fit on my wagon. Even worse, it
scared the dickens out of Joe Roy's filly."
Ross said he was approached by Ransom E. Olds last year and talked into
purchasing an REO Speed Wagon to use to move his produce to market in
Salinas, over 20 miles away. Eager for a competitive advantage, Ross
jumped at the change to try the auto. But shortly after he purchased the
horseless carriage problems came up. "They didn't tell me you needed
gasoline to run the dang thing - hell I've got lots of oats, but I got
to go into Salinas once a week to get 50 gallons of that stuff. Then I
learned it's even more flammable than kerosene, I can't keep it anywhere
near the stove!"
Sam went on to say that the REO needed things like a "tune up" and
"spark advance" - things he wasn't qualified to do - so he needed to
hire a "mechanic". "Hell, if I'da known that, I'da never bought the
thing."
Seems that the idea behind the auto was wrong. Olds invented the speed
wagon for smaller deliveries in towns like Salinas, and when he tried to
sell it outside of town, it just didn't catch on. In fact, Olds has left
the truck business and is concentrating on carriages for homeowners.
"Hell, he'll fail even faster with that model," Sam said. "No way
families are going to use that."
But all is not lost, Sam's been approached by a gentleman named Francis
E. Stanley, out of Maine who is trying to sell Ross a steam powered
wagon. "Now I'm really considering that," he said, "Steam - that's a
proven technology - just like my tractor and all them locomotives."
Next week, Sam is taking delivery of the steam wagon. "The automobile is
dead, but this here steam wagon, now that's the future. You know, taking
proven technology and applying it to something else."
In an unrelated story, Orville and Wilbur Wright had the audacity to
announce that commercial air travel will be the norm in less than 50
years - this after their "flight" of 120 feet in South Carolina this
week.


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