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Published in U.S. 1 Newspaper on February 16, 2000. All rights
Internet’s Promise: Dan Schulman
When William Shatner, a.k.a Captain Kirk, calls
"big," it gets people’s attention. Here is a man who spent
several decades traveling the universe at warp speed, making eloquent
speeches on profound cosmic matters, and yet this website is
just too awesome for words.
The commercial is tongue in cheek, of course, but if you ask Priceline
president Dan Schulman
over the past year or two, you hear echoes of the same optimism and
awe. "It’s sort of a digital tornado," says Schulman, who
joined Priceline eight months ago after working for AT&T. "It
doesn’t just touch down in one industry. It completely alters the
landscape, sucks up different industries, spits out different
trains, and redefines the way things are done."
The Internet, suggests Schulman, can even rewrite the rules of
"The Digital Revolution: A Look Ahead," will be the topic
Schulman explores at a free lecture sponsored by the Princeton Child
Development Institute on Thursday, February 24, at 7:30 p.m. at McCosh
50 at Princeton University. Call 609-924-6280.
Schulman grew up on Snowden Lane in Princeton and was a quarterback
at Princeton High. His mother was the associate dean at the graduate
school of psychology at Rutgers; his dad was vice president of
at Morton Thiokol. Schulman graduated with a BA in economics and
Class of 1980, from Middlebury College. Although he now works in
where Priceline is based, Schulman lives in Warren with his wife,
Jennie Kassanoff, a professor of American literature at Barnard, and
Schulman earned an MBA from NYU and, from 1981 to 1999, worked at
AT&T in Basking Ridge. As chief of marketing for the company’s $24
billion business markets group, Schulman led integration of wireless,
E-commerce and local services into innovative bundles.
Once bitten by the Internet bug, Schulman craved the excitement of
launching a new business. So he joined Priceline, entering a new
of sorts. "The vast majority of the company is in their 20s so
it’s a whole different frenetic energy level," he says. "I
can send E-mails to 20 people at 11 at night, and 18 will respond
within five minutes."
Priceline’s business concept is simple: one price doesn’t fit all.
A consumer may be willing to pay retail for a brown sweater, but will
only purchase the blue sweater at a discounted price. That means a
supplier could end up with a lot of blue sweaters. Likewise, airlines
don’t sell every seat, and certain brands of soap just sit on the
shelves at supermarkets. A supplier can move the items at a discount,
presumably, but again one price does not necessarily fit all.
Priceline, therefore, comes in as an intermediary between consumer
and supplier, choreographing supply and demand in a true buyers
Customers bid on a product, and suppliers respond to the bid according
to demand. It requires some flexibility on the part of consumers —
they have to be willing to take an earlier flight or use a different
brand of laundry detergent, for example. Meanwhile, suppliers get
a chance to step back and look at the real demand curve — rather
than a hypothetical demand curve — and factor that into their
pricing. It’s "data-rich pricing," says Schulman: "For
the first time ever suppliers aren’t thinking about a hypothetical
demand curve, they’re looking at an actual demand curve, and they
can figure out how and when to capture it."
And capitalism — as we know it — is forever changed. "For
the last 100 years the predominant way of selling items is the
suggested retail price," says Schulman. "But with the Internet
a tremendous amount of power is shifting from the producer to the
buyer of goods. With the Internet you can do comparison shopping,
and a lot of the inefficiencies will move out of the market place.
It’s consumer-driven commerce."
Last year Priceline was selling 5,000 airline tickets a week, says
Schulman, compared to 80,000 a week now. The company just rolled out
an online grocery shopping feature that allows consumers to bid for
certain products at reduced rates. "In 12 weeks, two percent of
the entire New York City marketplace shopped using Priceline.com,"
High volume is only one of the challenges that face Priceline’s
teams — size is becoming a major issue. "Our biggest issue
is ensuring ourselves that anything we put in place has the
to go 10 times within a year," says Schulman. "If we put a
database in, we know it has to be able to expand to 10 times its
It looks like just a website, but in the background you have huge
databases interacting on a real-time basis with all our different
supplier partners, who are looking at demand curves. You need to be
able to juggle balls, chainsaw, and a bowling ball all at the same
To accommodate growth, Priceline revamps its site roughly once
a quarter, gearing up for the day when more than two percent of New
York City hits the site for groceries. That time may not be far off.
Eventually, Schulman hopes that Priceline will be less of a novelty,
and more of fact of every-day life for the middle-class.
When asked to predict what the Internet will look like a few years
from now, Schulman sounds less like an executive and more like the
company’s famous spokesperson. "I feel like we’re at the end of
the beginning," says Schulman. "Two years from now you won’t
have the same kind of frontiers that you had six months ago."
Those frontiers, says Schulman, are voice recognition, wireless
and broadband. "It’s going to reshape the way people live and
conduct commerce and it will be pervasive," says Schulman.
recognition will open it up to the masses, wireless will make it
and broadband will open it up to a torrent of applications. This idea
of talking to the Net — that isn’t a science fiction type of thing
— five years now that will be a reality."
— Melinda Sherwood
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