Netpreneurs should also keep up on technological developments in order to gauge future growth. InfoPost is a marketplace where individuals and businesses can buy and sell digital content. According to InfoPost's 28-year-old co-founder, Josh Tang, "How fast the consumer is adopting these new technologies is a predictor of the speed of our growth."
Not keeping up with changing technology could actually eliminate some businesses. In fact, Spiegel's company recently updated its Web site to take advantage of one Net trend in particular: streaming video. Although her company started out marketing college admissions information to teens-they searched her Web site for videos, which she then mailed to them-an alliance with Precision Media, a streaming media company in Plymouth Meeting, Pennsylvania, now allows her to provide entire presentations via streaming video. Says Spiegel, "If I had stayed in video selling, everything would have passed me by."
But it's not enough for business owners to stay educated; they must educate their customers, too. Geoff Sherr, senior strategist with CarryOn Communication Inc., a PR firm in Beverly Hills, California, that specializes in cutting-edge Internet companies, illustrates the point. "We're always needing to educate clients about the online ways of thinking in PR," he says. "While the offline world measures results quantitatively, the online world is a dynamic setting. For instance, if Women.com does a story about a client, the story links to the client's Web site. The online world measures the result of that story about the company by the hits the company has gotten to its site from that link, not the offline thinking which would be the exposure in the story."
Spiegel is even more adamant: "If I was the only one educated about developments, I wouldn't have any customers. Take streaming video. My clients perceive the quality of the video to be inferior, so they don't think their audience will watch it. Yet research shows that teens are already watching videos on the Net, which is the number-one place they go to research a college." To educate clients, Spiegel posts new developments from her research in a biweekly newsletter.
Tomorrow's customer is as important as today's for business-to-consumer companies. Current Internet customers are largely urban-based professionals, a market that's been tapped and is widely known. Tomorrow's growth must come from somewhere else. "It's not the people who are on the Net that are the driving force behind the economy," says Sherr. "It's that broader audience. What truly makes a billion-dollar business is its ability to reach middle America, so what will affect the change are low-cost PCs, free Internet access and the major long-distance carriers expanding DSL connections to small towns."
But for dotcoms even to succeed tomorrow, they've got to be studying the industry's financing climate. Dotcom founders should track what deals are being done, how the deals are structured and who's getting funding from whom. Fashionmall.com's recent purchase of collapsed Internet retailer boo.com's domain name made front page news worldwide. The Time Warner/AOL merger has also played a role in shaping the Internet. Tang says that one of the top issues he follows in all his reading is which companies are getting new funding: "I want to know what dollars are out there and where they're going."Where is the heart of the high-tech world? Read "High-Tech Hot Spots" for the best breeding grounds to set up your business.