Start-up offers long-term Web strategies

Internet consulting start-up Groundswell is trying to crack a highly competitive market by offering services that give companies a home on the Web now--and an on-call adviser later.

4 min read
Internet consulting start-up Groundswell is trying to crack a highly competitive market by offering services that give companies a home on the Web now--and an on-call adviser later.

Like a slew of other Internet consulting firms that have jumped into the lucrative Web services market--including Scient, Viant and Razorfish--Groundswell helps companies with Web development, strategy, design, integration work and marketing with the promise of getting them up and running in about 90 days. But after that work is complete, Groundswell will continue to counsel companies about their site and business plans.

Founded by three former KPMG executives and armed with $100 million in funding from Behrman Capital, Groundswell said it is striving to foster long-term relationships with its clients, consulting for them beyond Web site development. The San Francisco-based firm hopes in late May to make an entrance that affirms the meaning behind its name: a sudden gathering of force.

Groundswell is entering a lucrative playing field, wide open for business. As more and more companies move their businesses online or expand their Internet strategy, the demand for Internet consulting services continues to surge. According to Cambridge, Mass.-based Forrester Research, the U.S. market for Internet services is expected to grow from $19.6 billion this year to $64.8 billion by 2003.

The start-up's co-founder and chief strategy officer, Dean Alms, said the firm is really focused on building "e-business communities," aiming to help the client get the best use out of its Web presence. It also aims to help companies find ways to improve relationships with their customers, employees and partners via the Internet, rather than just "slapping up a Web site."

"There's a sea of information out there on your Web site, (and we ask clients) how do you make that relevant to the people that you're targeting, to your partners, to your customers?" said Alms. "We're really about building a strong e-business community."

Analysts say Groundswell is off to a strong start, armed with a lot of cash and an experienced management team. But like any new start-up, it faces the challenges of creating brand awareness and attracting consulting talent from what is currently a very shallow pool.

"There are so many players out there, but very few brand names out there," said Christine Ferussi Ross, an analyst at Forrester Research. "Their challenge is to get themselves above the fray and explain themselves very clearly."

"At this point, they've got a solid plan, solid management team, solid funding," added Preston Dodd, an analyst at Jupiter Communications. "The challenge will be: can they execute on those things? There is always room for innovation in this space, but innovation is proven rather than talked about."

Tom Rodenhauser, an analyst who heads ConsultingInfo.com, said that while Groundswell may not be offering a completely new set of services, the firm is "definitely pitching a different approach."

"They're really pitching a more holistic approach than what Scient and Viant claim to be doing," said Rodenhauser. "They're trying to blend the allure of the e-services firm with the sustainability of a traditional consulting firm. Groundswell is going to be just as fast as their competitors, but with a more thoughtful approach."

Rodenhauser said Groundswell is trying to help clients build a long-term Internet strategy by continuing to "keep coming up with other avenues of growth for the company."

"It's a bit of a risky maneuver because they're betting that the hype of the Internet and the fact that you have to be so fast (to move your business on the Web) is going to die down a bit," said Rodenhauser. He added that the company will "no doubt make money" simply because of the market it is tackling.

This growing crop of smaller Net services firms have garnered favorable attention on Wall Street, proving to be eye-catchers among investors and luring away top executive talent from older, more established services firms such as EDS and Computer Sciences. Even the larger consulting firms, such as KPMG and Andersen Consulting, have been busy shifting their focus to the Net in order to nab a piece of the action and reinvent themselves as viable Internet strategists.

The company, which currently has about 150 employees, said it plans to focus on its recruiting efforts in the coming months. Alms, 39, helped found the company with former KPMG colleagues Paul Stich and John Corpus, who all worked together at the Big Five consulting firm during the early 1990s. Led by Stich, the firm's management team consists of former executives from competitors such as iXL, Organic and what was formerly known as USWeb/CKS.

Groundswell also has offices in New York, Los Angeles, San Diego and Pleasanton, Calif.