That sound you hear is the high-flying hopes of e-commerce being dashed on the rocks of reality. 2000 was a good year if you were a second-generation politician, but not so kind if you were a business with ".com" at the end of your name. You might think we'd all learn something from the dot-com shake out, but don't hold your breath.
It's too bad the curriculum of most business schools skips the classics. The dot-coms might have benefited from a little Greek. I'm thinking specifically of the old Icarus-Daedalus story. You remember Icarus and Daedalus? Boy meets wings, boy flies with wings, boy meets Sun, boy meets ocean, the end. So, has Silicon Valley learned its lesson? After watching proud Icarus take a header into the sea, is Silicon Valley now like Daedalus--a bit more humble and sober?
I wouldn't bet on it.
The latest swings of fortune are just another day in the life of high technology and business. Though investors and venture capitalists are now chaste and repentant, all it will take is one wild party for them to fall off the wagon. And there are two wild parties pumping up the volume: optical technologies and wireless.
I don't expect the wireless or optical technology parties to be quite as loud as the dot-com free-for-all, but they'll definitely keep the neighbors up past their bedtime.
So, as we start to get excited about the possibilities of terabyte optical bandwidth and buying stuff with our cell phones, it's time to review the immortal last words spoken by failed dot-coms: "Me too."
Many dot-coms were great ideas--at least, when someone first thought of them. Then everybody jumped on the bandwagon.
Not enough dot-coms were deterred by the fact that they were indistinguishable from every other dot-com business. In other words, they never asked, "What makes my dot-com selling pet food different from the three other dot-coms selling pet food?" And, don't answer "customer service" unless you've got customer service like Saks Fifth Avenue. Better service is a laudable goal, but a tough sell on the Web. And, it's really better for keeping customers, not getting new ones.
Every business--dot-com or not--needs to ask itself, "What unique advantage do I have that would make a person give me their business?" It might be one big thing or it might be a host of little things that add up. But, either way, you better have it.
Profitability: what's that?
Astute managers need a plan B, a way to cut expenses and make actual money the old-fashioned way.
Too many businesses were dependent on rose-colored forecasting; most businesses won't enjoy a market that grows $9 billion in five years and doubles it's customer base every six months. In fact, very few businesses will enjoy those numbers--so plan accordingly.
Market intelligence: an oxymoron
Some Internet businesses were just born of hubris--it was never clear who wanted this service or how the company could conceivably make a profit. Rice paper-thin margins with huge infrastructure and distribution cost make for a tough way to earn a living.
The classic business-plan fudge is waving away such concerns with a blithe "we'll attract an extremely loyal niche customer." There's loyalty, and then there's Secret-Service-taking-the-bullet-for-you loyalty. Best to avoid bullets altogether.
What competition?
Lastly, too many dot-coms believed brick-and-mortar was a dirty word. Why would anybody shop at their local store? They failed to realize that brick-and-mortar has its advantages--a lifetime of shopping habits, the social experience, the shopping environment, the real live people. Heck, just the convenience of dropping by the corner store is worthwhile to lots of people.
When David chucks a few rocks at Goliath, sometimes you get an upset, but usually the larger, entrenched player wins. Revolutions that topple the old order aren't as common as we'd like to think.
The funny thing about the dot-com shakeout is that it was predictable, inevitable, and ultimately, a good thing. Mother Nature is wise in her way--not necessarily nice, but she definitely breeds a lean, mean animal.
As the dot-coms flounder in the water, wireless and optical are just taking flight. There will certainly be some startling successes for both wireless and optical in the days to come, but you can also expect a lot of singed feathers.
Sean M. Dugan is a contributing editor for ComputerUser and InfoWorld magazines.
