ICON66 – Volume 3
Welcome
Wow – what an amazing 12 months. This time last year Red Herring's top trends for the next twelve months were the dominance of the e-tailers, b2b business exchanges and the ongoing expansion of the new breed of VCs – well it happened big time – and collapsed big time, all in far less than 12 months.
The whole Internet world of e-commerce changed with the high profile collapses of the major VC backed e-tailers and the plummet of the Internet stocks in April 2000. Like the millennium fireworks, these companies exploded with great fizz and anticipation and for many the sparkle has well and truly gone out. The high street retailers have not disappeared, indeed they still rule and will probably dominate cyberspace with their strong brands. The jury is out on b2b business exchange models and the new breed of VCs is contracting fast.
So as the bloodbath continues what does this mean for e-commerce? Well for those in the cross fire with massive infrastructure costs, little revenues and a long haul to profitability it is exceedingly bad news with little possibility of any new funding, so the inevitable law of the jungle will apply - sorry guys. However for those who were perhaps not so intent on building a burn rate to rival third world debt, creating an overnight brand strong enough to rival Coca Cola and were focused on the fundamentals, then their prospects are very exciting.
No one is saying e-commerce is not happening. There is no doubt that the Internet provides the most exciting and the most powerful dynamic for growing a business - but that is not an issue; the only issue is, no business can afford to lose sight of the fundamentals and that's what happened over the past twelve months. In business, if you throw out the fundamentals you will end up dead, never lose sight of the basics.
A BUSINESS
MUST
HAVE PEOPLE
WITH GREAT
DRIVE, ENERGY,
ENTHUSIASM & COMMITMENT
DELIVER GREAT
CUSTOMER SERVICE
HAVE A MARKET
FOR ITS PRODUCTS
AND SERVICES
MAKE SALES
GENERATE CASH
KEEP FOCUSSED
MAKE PROFITS
CONTROL COSTS
All of this you have to manage and deliver on, the quicker the better - but remember a business does not have to move at the same pace all the time - there is a time to turn it up and a time to turn it down.
A lot of people appeared to believe that building a business was all about building a web site with a catchy name - staggering! Building a successful business is one of the hardest things anyone can achieve; underestimate that at your peril. The Internet and the fast growth of e-commerce opens up tremendous new opportunities for fast business growth, but it does not mean that companies operate outside of the basic laws of business.
In spite of the change in sentiment, there are going to be some big winners across the whole e-commerce Internet space over the next three to five years and some fantastic businesses are being developed. These entrepreneurs and management teams are grafting away, getting on with it, keeping focused, keeping sight of the basics and creating great businesses with great shareholder value - keep it moving guys, the VCs will be there for you - it has only just begun!
