Connect The Dots

Should You Go?

Sound good? Is it good enough to persuade you to dot.com? Shut down a brick-and-mortar operation, go strictly cyber, and, whoosh, you've distanced yourself from monthly rent payments and dealing face-to-face with grumpy customers--and you've also positioned your business to sell globally. That's how it seems when you listen to the stories of PomExpress, Zebrick's travel agency, Egghead.com and so many more. But can you count on it happening for you?

"The decision to dot.com has to be made on a case-by-case basis. There's no one formula that will work for all businesses, all the time," warns Barbara Reilly, research director with GartnerGroup, an information technology consulting firm. What's more, adds Reilly, "there once was a lot of naiveté about how easy it is for a business to succeed on the Web. It isn't easy, but many businesses discover that the hard way."

Sure, there are overnight successes on the Internet, but for every dot.com that thrives, there are more that flop, says Mark Layton, 40-year-old president and CEO of Plano, Texas-based PSSweb Inc., a leading distributor of computer supplies, and author and publisher of .coms or .bombs . . . strategies for profit in e-business, which analyzes the difficulties of mounting an effective e-commerce site. "Many dot.coms will become dot.bombs--they'll fail," says Layton. "Just putting up a Web site gets you nothing. You have to take steps to build that business.

"Online or offline, you need a sustainable business model," adds Layton. "If you don't have that, you don't have a business."

When the Web was less cluttered a few years ago, virtually any sitecould attract attention simply because there weren't as many sites competing for it. But the dot.com space has spawned innumerable stores, which has triggered an economic Darwinism where the weak simply die--or get no meaningful traffic. "No one will know you're on the Web unless you tell them and motivate them to visit," says Layton. "Succeeding online has become very difficult."

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This article was originally published in the March 2000 print edition of Entrepreneur with the headline: Connect The Dots.

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