Eight months ago the public market viewed the dot-com world as a game for the young and swift, that there was no way the large, slow corporate giants could compete with the responsive little startups. Now, because of the market meltdown, the philosophy has changed, and the money is on old-line corporate companies that have strong capital, existing customer relationships, experience and brand loyalty. Just add some clicks to your mortar and you're an e-business, right?
I'm not so sure of that. I'm convinced this is a dangerous sign of complacency. With a few minor exceptions, the companies that listen to what their customers want and rethink ways to service them better are the ones that will be unhindered by old philosophies that don't work in the new economy. While the Internet has produced some stupid business models, it has also brought us some unbelievably brilliant ones focused on customer needs and ways to fill them quickly and efficiently with both technology and market know-how.
What corporate America seems to refuse to get is that it takes more to being an e-business than just an Internet strategy. It takes a whole new way of thinking about how business has been done in the past and how the Internet is changing the way it will be done in the future. It takes new corporate structures to be able to adapt to the changing demands of the customers. It takes a complete revamping of your existing business model, maybe several times, to develop a win-win plan for both business and customers. It takes new attitudes toward both employees and customers. To succeed at the clicks and mortar, you just can't add Web-ordering capability. You need to be willing to make bold advances into completely uncharted territory.
The notion that dot-coms are suddenly hitting the wall is just plain laughable. Most startups fail. In fact, venture capitalists will tell you that 9 out of 10 startups fail in the sense that they don't go all the way to becoming full-fledged operating companies. Dot-coms are startups, and startups mainly fail. It has always been true, and it will likely always be true. In today's market, it has never been easier to start a company – it's just that more and more people are starting dot-coms.
With so many dot-coms competing with each other, this means that only the strong ones with the best business plans, best execution and best management should survive. Forrester Research released a dire prediction that most dot-com retail companies will be out of business by next year. By one estimate, this will eliminate 25,000 out of 30,000 Internet companies.
With the market growth that the Internet promises, however, companies can't afford to stand on the sidelines waiting to see what happens. They must act and react in order to keep pace with change. The most successful businesses today realize and understand the markets they serve and have the experience to adapt to changes in the markets. They know and understand the customers they serve, as well as the need for change to stay competitive.
No one said it was going to be easy. Customers aren't waiting for big companies to figure it out. They are looking around, trying to find the best deal. They are playing and experimenting with the Internet. In this kind of atmosphere, complacency can be fatal to anyone who is not ready for the change in times. Just because some dot-coms have faltered doesn't mean that old-line companies shouldn't stay scared.
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